SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V, A LIMITED PARTNERSHIP
(Name of Subject Company)
OLDHAM INSTITUTIONAL TAX CREDITS LLC
(Bidder)
UNITS
(Title of Class
of Securities)
100650407
(CUSIP Number of Class
of Securities)
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Michael H. Gladstone, Esq.
c/o Boston Financial Securities, Inc.
101 Arch Street
Boston, MA 02110
(617) 439-3911
Copies to:
Joseph T. Brady, Esq.
Peabody & Brown
101 Federal Street
Boston, MA 02110
(617) 345-1000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
Calculation of Filing Fee
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Transaction Amount of
Valuation* Filing Fee
$9,546,000 $1,909.20
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*For purposes of calculating the filing fee only. This amount assumes the
purchase of 17,200 Units of limited partnership interests ("Units") of the
subject company for $555.00 per Unit in cash.
{ } Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing.
Amount previously paid: N/A
Filing party: N/A
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Cusip No.:100650407 14D-1
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
OLDHAM INSTITUTIONAL TAX CREDITS LLC
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2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) { }
(b) {X}
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF; BK
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5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(e) or 2(f)
{ }
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6. Citizenship or Place of Organization
Massachusetts
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
The Reporting Person does not own any Units. However, the Reporting
Person is an affiliate of the general partners of the Subject Company.
Arch Street V Limited Partnership, one of the general partners of the
Subject Company acquired 5 Units in the Subject Company in 1989 as the
initial limited partner of the subject company in connection with the
original formation of the Subject Company.
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8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
{ }
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9. Percent of Class Represented by Amount in Row (7)
Less than 1%.
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10. Type of Reporting Person (See Instructions)
OO
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Cusip No.:100650407 14D-1
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WEST CEDAR MANAGING, INC.
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2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) { }
(b) {X}
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF; BK
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5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(e) or 2(f)
{ }
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6. Citizenship or Place of Organization
Massachusetts
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
The Reporting Person does not own any Units. However, the Reporting
Person is an affiliate of the general partners of the Subject Company.
Arch Street V Limited Partnership, one of the general partners of the
Subject Company acquired 5 Units in the Subject Company in 1989 as the
initial limited partner of the subject company in connection with the
original formation of the Subject Company.
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8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
{ }
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9. Percent of Class Represented by Amount in Row (7)
Less than 1%.
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10. Type of Reporting Person (See Instructions)
CO
Page 3
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Item 1. Security and Subject Company.
(a) The name of the subject company is Boston Financial Qualified Housing
Tax Credits L.P. V, A Limited Partnership, a Massachusetts limited partnership
(the "Partnership"), which has its principal executive offices at 101 Arch
Street, Boston, Massachusetts 02110.
(b) This Schedule 14D-1 relates to the offer by Oldham Institutional Tax
Credits LLC, a Massachusetts limited liability company ("the Purchaser"), to
purchase up to 17,200 issued and outstanding Units ("Units") of limited
partnership interests in the Partnership ("Limited Partnership Interests") at
$555.00 per Unit, net to the seller in cash (the "Purchase Price"), without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated July 24, 1997 (the "Offer to Purchase") and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively. Information concerning the number of outstanding Units
is set forth in the Introduction to the Offer to Purchase and is incorporated
herein by reference.
(c) The information set forth in Section 13 ("Purchase Price
Considerations") of the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) The information set forth in Section 10 ("Certain Information
Concerning the Purchaser") and Schedule I to the Offer to Purchase is
incorporated herein by reference.
(e) and (f) During the last five years, neither the Purchaser nor, to the
best of its knowledge, any of the persons listed in Schedule I or referred to in
Section 10 ("Certain Information Concerning the Purchaser") of the Offer to
Purchase (i) have been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) were a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding were or are subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, Federal or
state securities laws or finding any violation of such laws.
(g) The information set forth in Schedule I to the Offer to Purchase is
incorporated herein by reference.
Item 3. Past Contacts, Transactions or Negotiations With the Subject
Company.
(a) The Purchaser is an affiliate of both Arch Street, V, Inc., the
managing general partner of the Partnership, and Arch Street V Limited
Partnership, the other general partner of the Partnership. Accordingly, the
information contained in Section 9 ("Certain Information Concerning the
Partnership") of the Offer to Purchase, including the terms of the Partnership's
amended and restated agreement of limited partnership, as amended to date (the
"Partnership Agreement"), is incorporated herein by reference. Additionally, the
information set forth in Section 10 ("Certain Information Concerning the
Purchaser") and Schedule I to the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in Section 11 ("Background of the Offer") of
the Offer to Purchase is incorporated herein by reference.
Page 4
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Item 4. Source and Amount of Funds or Other Consideration.
(a)-(c) The information set forth in Section 12 ("Source of Funds") of the
Offer to Purchase is incorporated herein by reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the
Bidder.
(a)-(b) The information set forth in Section 8 ("Purpose of the Offer;
Future Plans") of the Offer to Purchase is incorporated herein by reference.
(c)-(e) Not applicable.
(f)-(g) The information set forth in Section 7 ("Effects of the Offer") of
the Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a) The information set forth in the Introduction and Section 10 ("Certain
Information Concerning the Purchaser") of the Offer to Purchase is incorporated
herein by reference.
(b) None.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
The information set forth in Section 10 ("Certain Information Concerning
the Purchaser") and Section 11 ("Background of the Offer") of the Offer to
Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 16 ("Certain Fees and Expenses") of
the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
Not applicable.
Item 10. Additional Information.
(a) None.
(b)-(d) The information set forth in Section 15 ("Certain Legal Matters")
of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal is incorporated herein in its entirety by reference.
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Item 11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase, dated July 24, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Cover Letter, dated July 24, 1997, from Oldham Institutional
Tax Credits LLC to the Limited Partners.
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
Page 6
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 24, 1997
OLDHAM INSTITUTIONAL TAX CREDITS LLC
By: West Cedar Managing Inc., its managing member
By: /s/ Jenny Netzer
-----------------------------------
Name: Jenny Netzer
Title: President
WEST CEDAR MANAGING, INC.
By: /s/ Jenny Netzer
------------------------------------
Name: Jenny Netzer
Title: President
Page 7
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EXHIBIT (a)(1)
Page 8
<PAGE>
Exhibit (a)(1)
OFFER TO PURCHASE
UP TO 17,200
UNITS
in
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V, A LIMITED PARTNERSHIP
for
$555.00 NET PER UNIT IN CASH
by
OLDHAM INSTITUTIONAL TAX CREDITS LLC
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THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON AUGUST 21, 1997, UNLESS EXTENDED.
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Oldham Institutional Tax Credits LLC, a Massachusetts limited liability
company (the "Purchaser") and an affiliate of the general partners of the
Partnership (as defined below), hereby offers to purchase up to 17,200 of the
issued and outstanding Units ("Units") of limited partnership interests
("Limited Partnership Interests") in Boston Financial Qualified Housing Tax
Credits L.P. V, A Limited Partnership, a Massachusetts limited partnership (the
"Partnership"), at a purchase price of $555.00 per Unit, net to the seller in
cash (the "Purchase Price"), without interest thereon, upon the terms and
subject to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal, as each may be
supplemented, modified or amended from time to time (which together constitute
the "Offer"). LIMITED PARTNERS WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED TO
PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES. The 17,200 Units sought
pursuant to the Offer represent, to the best knowledge of the Purchaser,
approximately 25% of the Units outstanding as of the date of this Offer.
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THE PURCHASER AND THE GENERAL PARTNERS OF THE PARTNERSHIP ARE AFFILIATED.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING TENDERED.
SEE SECTION 14 ("CONDITIONS OF THE OFFER").
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Before tendering, Limited Partners are urged to consider the following factors:
o Limited Partners who have a present or future need for the low-income
housing credits and/or tax losses from the Units may prefer to retain
their Units and not tender them pursuant to the Offer, or any other
tender offer.
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o Although the Purchaser cannot predict the future value of the
Partnership's assets on a per Unit basis, the net after-tax benefit that
would be realized from retaining ownership of Units together with any cash
distributions from operations and any net proceeds from a future sale of
the properties owned by the Partnership (the "Properties") could differ
significantly from the Purchase Price. See Section 13 ("Purchase Price
Considerations").
o If the Purchaser is successful in acquiring a significant number of Units
pursuant to the Offer, the Purchaser could be in a position to
significantly influence all Partnership decisions on which Limited Partners
may vote, including decisions regarding removal of any General Partner,
certain amendments to the Partnership Agreement (as defined in the
Glossary) and dissolution of the Partnership.
Page 10
<PAGE>
IMPORTANT
Any (i) Limited Partner, (ii) beneficial owner, in the case of Units owned
by Individual Retirement Accounts or Keogh Plans (a "Beneficial Owner"), or
(iii) person who has purchased Units but has not yet been reflected on the
Partnership's books as a transferee of such Units (an "Assignee"), desiring to
tender any or all of such person's Units should either (1) complete and sign the
Letter of Transmittal, or a facsimile copy thereof, in accordance with the
instructions in the Letter of Transmittal and mail or deliver the Letter of
Transmittal, or a facsimile copy thereof, and any other required documents to
The Herman Group, Inc. (the "Administrative Agent/Depositary"), at the address
or facsimile number set forth below, or (2) request his or her broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
him or her. Unless the context requires otherwise, references to Limited
Partners in this Offer to Purchase shall be deemed to also refer to Beneficial
Owners and Assignees. Questions concerning the Offer to Purchase may be directed
to the Purchaser at the toll-free telephone number set forth below. Questions
on, or requests for assistance in, completing the documentation or requests for
additional copies of this Offer to Purchase, the Letter of Transmittal and other
related documents may be directed to the Administrative Agent/Depositary at the
address and toll-free telephone number set forth below.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER
THAN AS CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. NO SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
EACH LIMITED PARTNER IS URGED TO READ CAREFULLY THE ENTIRE OFFER TO
PURCHASE, THE LETTER OF TRANSMITTAL AND RELATED DOCUMENTS.
For Additional Information Concerning the Offer to Purchase
contact:
Oldham Institutional Tax Credits LLC
101 Arch Street
Boston, Massachusetts 02110
Telephone: (800) 829-9213, extension 12
For Assistance in Completing the Letter of Transmittal and Related Documentation
or Additional Copies of the Offer to Purchase, Letter of Transmittal and
Related Documents contact:
The Herman Group, Inc.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201
Telephone: (800) 243-8440
Facsimile: (214) 999-9323 or (214) 999-9348
Return the Letter of Transmittal and Related Documentation to:
The Herman Group, Inc.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201
Telephone: (800) 243-8440
Facsimile: (214) 999-9323 or (214) 999-9348
Page 11
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TABLE OF CONTENTS
Page
INTRODUCTION.................................................................13
THE TENDER OFFER.............................................................16
1. TERMS OF THE OFFER......................................................16
2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.................17
3. PROCEDURES FOR TENDERING UNITS..........................................18
4. WITHDRAWAL RIGHTS.......................................................20
5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT......................21
6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................22
7. EFFECTS OF THE OFFER....................................................24
8. PURPOSE OF THE OFFER; FUTURE PLANS......................................26
9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP..........................27
10. CERTAIN INFORMATION CONCERNING THE PURCHASER............................33
11. BACKGROUND OF THE OFFER.................................................34
12. SOURCE OF FUNDS.........................................................34
13. PURCHASE PRICE CONSIDERATIONS...........................................35
14. CONDITIONS OF THE OFFER.................................................37
15. CERTAIN LEGAL MATTERS...................................................38
16. CERTAIN FEES AND EXPENSES...............................................39
17. MISCELLANEOUS...........................................................40
Page 12
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To the Limited Partners of Boston Financial Qualified Housing Tax Credits
L.P. V, A Limited Partnership:
INTRODUCTION
Oldham Institutional Tax Credits LLC, a Massachusetts limited liability
company ("the Purchaser") and an affiliate of the General Partners of the
Partnership (as defined below), hereby offers to purchase up to of 17,200 the
issued and outstanding Units ("Units") representing limited partnership
interests in Boston Financial Qualified Housing Tax Credits L.P. V, A Limited
Partnership, a Massachusetts limited partnership (the "Partnership"), at a
purchase price of $555.00 per Unit, net to the seller in cash (the "Purchase
Price"), without interest, upon the terms and subject to the conditions set
forth in this Offer to Purchase (the "Offer to Purchase") and in the related
Letter of Transmittal, as each may be supplemented, modified or amended from
time to time (which together constitute the "Offer"). Limited Partners who
tender their Units will not be obligated to pay any commissions or Partnership
transfer fees. The 17,200 Units sought pursuant to the Offer represent, to the
best knowledge of the Purchaser, approximately 25% of the Units issued and
outstanding as of the date of this Offer.
The Purchaser is affiliated with Arch Street V, Inc. (the "Managing General
Partner") and Arch Street V Limited Partnership (the "Co-General Partner"), the
general partners of the Partnership (collectively, the "General Partners").
The Purchaser's Offer is being made to provide Limited Partners who have a
present or anticipated need for liquidity with an opportunity to sell their
Units. See Section 11 ("Background of the Offer").
The Purchaser is making this Offer because it believes that the Units
represent an attractive investment at the price offered based upon, in part, the
expected remaining Low-Income Housing Credits and tax losses. There can be no
assurance, however, that the Purchaser's judgment is correct, and, as a result,
ownership of Units (either by the Purchaser or Limited Partners who retain their
Units) will remain a speculative investment. The Purchaser is acquiring the
Units for investment purposes and does not intend to make any effort to change
current management or the operations of the Partnership. Because the Purchaser
is affiliated with the General Partners, the Purchaser's acquisition of Units
may have the effect of making any future change of current management more
difficult. The Purchaser has no current plans for any extraordinary transaction
involving the Partnership.
Factors to be considered by Limited Partners. In considering the Offer,
Limited Partners are urged to consider the following factors:
o Limited Partners who have a present or future need for the Low-Income
Housing Credits and/or tax losses from the Units may prefer to retain their
Units and not tender them pursuant to the Offer, or any other tender offer.
o Although the Purchaser cannot predict the future value of the
Partnership's assets on a per Unit basis, the net after-tax benefit that
would be realized from retaining ownership of the Units together with any
cash distributions from operations and any net proceeds from a future sale
of the properties owned by the Partnership (the "Properties") could differ
significantly from the Purchase Price. See Section 13 ("Purchase Price
Considerations").
o There may be a conflict between the desire of the Purchaser to acquire the
Units at a low price and the desire of the Limited Partners to sell their
Units at a high price. Therefore, Limited Partners might receive greater
value if they hold their Units, rather than tender, continue to be
Page 13
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allocated Low-Income Housing Credits and tax losses, and receive any
distributions from operations and any proceeds, if any, from the
liquidation of the Partnership. Alternatively, Limited Partners may prefer
to receive the Purchase Price now rather than wait to be allocated future
Low-Income Housing Credits and tax losses and uncertain future cash
distributions. The return to Limited Partners could be higher or lower than
the Purchase Price for persons who retain their Units.
o The Purchaser has been formed and the Offer is being made in order to
acquire Units for investment purposes. The Purchaser intends to sell
membership interests in the Purchaser to third parties with a need for the
Low-Income Housing Credits and/or tax losses attributable to the tendered
Units. The aggregate sales price of the Purchaser's membership interests to
third parties will be equal to the aggregate Purchase Price for the
tendered Units plus the Purchaser's expenses in conducting and consummating
this Offer and financing the purchase of the tendered Units. Neither the
Purchaser nor its current members will derive a profit from the sale of the
Purchaser's membership interests. Affiliates of the Purchaser, however,
expect to arrange the sale of membership interests of the Purchaser to
third parties upon conclusion of the Offer. In connection with such sales
and in consideration for structuring this transaction, it is expected that
those affiliates will earn fees. These fees will be, in part, dependent on
the amount third parties are willing to pay for membership interests and
the amount of membership interests sold. There can be no assurance,
however, that any membership interests in the Purchaser will be sold or at
what price.
o If the Purchaser is successful in acquiring a significant number of Units
pursuant to the Offer, the Purchaser could be in a position to
significantly influence all Partnership decisions on which Limited Partners
may vote. Additionally, because the Purchaser is affiliated with the
General Partners, the Purchaser's acquisition of Units may have the effect
of making any future change of the Partnership's current management more
difficult. If the maximum number of Units sought by the Purchaser is
tendered and accepted for payment pursuant to the Offer, the Purchaser will
own approximately 25% of the outstanding Units. The ownership of tendered
Units by the Purchaser could effectively (i) prevent non-tendering Limited
Partners from taking actions they desire but that the Purchaser opposes and
(ii) enable the Purchaser to take actions desired by it but opposed by
certain non-tendering Limited Partners. Under the Partnership Agreement,
Limited Partners holding more than 50% of the outstanding Units are
entitled to take action with respect to a variety of matters, including:
approving the dissolution of the Partnership; approving the removal of any
General Partner and proposing and approving a replacement therefor; and
most types of amendments to the Partnership Agreement. Although the
Purchaser does not have any current intentions with regard to any of these
matters, it will vote the Units acquired pursuant to the Offer in its
interest, which may, or may not, be in the best interest of non-tendering
Limited Partners.
o According to the Partnership's Form 10-K for the fiscal year ended March
31, 1997 (the "Form 10-K"), all of the properties owned by the Local
Limited Partnerships in which the Partnership has an interest have
completed construction or rehabilitation and initial leaseup. The Form 10-K
indicates that the amount of the Low-Income Housing Credits claimed by the
Partnership was $150.99 per Unit for the 1996 calendar year, $150.99 per
Unit for the 1995 calendar year and $ 151.09 per Unit for the 1994 calendar
year. Low-Income Housing Credits are generally available for 10 years.
According to the Form 10-K the Low-Income Housing Credits are expected to
remain stable through the year 2000 then decrease as certain properties
reach the end of the ten year credit period. Although there can be no
assurances as to whether Low-Income Housing Credits will continue to be
available, the Purchaser estimates that a total of approximately $645
Low-Income Housing Credits per Unit will be available during the period
beginning September 1, 1997 and ending December 31, 2003. In addition,
although there can be no assurances as to whether tax losses will continue
to be available, each Unit will have been allocated approximately $493 of
tax losses through August 31, 1997 and the Purchaser estimates that each
Page 14
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Unit will be allocated approximately $496 of tax losses from September 1,
1997 through December 31, 2008. Actual future tax benefits may differ
significantly from the foregoing estimates. Tax losses are less valuable
than Low-Income Housing Credits because tax losses can reduce income
(thereby resulting in a savings equal to the product of the tax loss and
the taxpayer's applicable tax rate) and require a reduction in tax basis
(which may cause taxable income to be recognized in subsequent
years),whereas Low-Income Housing Credits result in a dollar-for-dollar
reduction in tax liability. In addition, the use of tax losses is subject
to limitations imposed by the passive activity rules. Limited Partners
should consider whether the Purchase Price is more valuable to them than
the present value of anticipated future tax benefits.
Limited Partners may no longer wish to continue with their investment in
the Partnership for a number of reasons, including:
o Although limited resale mechanisms are available to the Limited Partners
wishing to sell their Units, there is no formal or organized trading market
for the Units. The Form 10-K states: "There is no public market for the
Units, and it is not expected that a public market will develop."
Accordingly, Limited Partners who desire resale liquidity may wish to
consider the Offer. The Offer affords a significant number of Limited
Partners with an opportunity to dispose of their Units for cash, which
alternative otherwise might not be available to them.
o The Offer will provide Limited Partners with an immediate opportunity to
liquidate their investment in the Partnership without the usual transaction
costs associated with market sales or partnership transfer fees.
o Although not necessarily an indication of value, the $555.00 Purchase
Price is competitive with the weighted average selling price for Units
reported in the limited and sporadic secondary market during the 12-month
period ended June 30, 1997. See Section 13 ("Purchase Price
Considerations").
o The Offer may be attractive for Limited Partners whose circumstances have
changed such that anticipated future allocation of Low-Income Housing
Credits and tax losses may no longer be beneficial to them.
o Acceptance of the Offer will eliminate any future risk to the selling
Limited Partners of recapture of the Low-Income Housing Credits received,
since such risk will be borne by the Purchaser.
o General disenchantment with real estate investments and with long-term
investments in limited partnerships because of, among other things, their
illiquidity.
o The Offer may be attractive to certain Limited Partners who wish in the
future to avoid the continued additional expense, delay and complication in
filing income tax returns which result from an ownership of Units.
o The Offer provides Limited Partners with the opportunity to liquidate
their Units and to reinvest the proceeds in other investments should they
desire to do so.
o The Purchaser believes that the Units represent an attractive investment
at the Purchase Price based upon, in part, the expected remaining
Low-Income Housing Credits and tax losses. There can be no assurance,
however, that this judgment is correct. Therefore, ownership of Units will
remain a speculative investment.
Following the completion of the Offer the Purchaser and its affiliates
may acquire additional Units. Any such acquisitions may be made through private
purchases, through one or more future
Page 15
<PAGE>
tender offers or by any other means deemed advisable, and may be at prices
higher or lower than the price to be paid for the Units purchased pursuant to
the Offer. See Section 8 ("Purpose of the Offer; Future Plans").
The Offer is not conditioned upon a minimum number of Units being tendered
If, as of the Expiration Date, more than 17,200 Units are validly tendered and
not properly withdrawn, the Purchaser will only accept for purchase on a pro
rata basis 17,200 Units, subject to the terms and conditions herein. See Section
14 ("Conditions of the Offer").
Limited Partners are urged to consider carefully all of the information
contained herein before accepting the Offer.
The Purchaser expressly reserves the right, in its sole discretion and for
any reason, to terminate the Offer at any time and to waive any or all of the
conditions of the Offer, although the Purchaser does not presently intend to
waive any such conditions. See Section 7 ("Effects of the Offer").
According to the Form 10-K, as of March 31, 1997 there were 68,929 Units
issued and outstanding and 3,753 record holders of Units.
Except as otherwise indicated, information contained in this Offer to
Purchase is based upon documents and reports publicly filed by the Partnership
with the Commission. Although the Purchaser has no information that any
statements contained in this Offer to Purchase are untrue, the Purchaser does
not take responsibility for the accuracy or completeness of any information
contained in this Offer to Purchase which is derived from such public documents,
or for any failure by the Partnership to disclose events which may have occurred
and may affect the significance or accuracy of any such information but which
are unknown to the Purchaser.
Each Limited Partner must make his or her own decision based on his or her
particular circumstances. Limited Partners should consult with their respective
advisors about the financial, tax, legal and other implications to them of
accepting the Offer. Limited Partners are urged to read this Offer to Purchase,
the related Letter of Transmittal and the other accompanying materials carefully
before deciding whether to tender their Units.
THE TENDER OFFER
1. Terms of the Offer.
Upon the terms of the Offer (including the terms and conditions of any
extension or amendment of the Offer), the Purchaser will accept for payment and
pay for up to 17,200 Units that are validly tendered on or prior to the
Expiration Date (as hereinafter defined) and not withdrawn in accordance with
Section 4 ("Withdrawal Rights"). The term "Expiration Date" shall mean 12:00
midnight, Eastern time, on August 21, 1997, unless the Purchaser, in its sole
discretion, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall refer to the latest time
and date at which the Offer, as so extended by the Purchaser, will expire.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE PURCHASE
PRICE OFFERED TO LIMITED PARTNERS, SUCH INCREASED PURCHASE PRICE SHALL BE PAID
FOR ALL UNITS ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER, WHETHER OR NOT SUCH
UNITS WERE TENDERED PRIOR TO THE INCREASE IN CONSIDERATION.
The Offer is conditioned on satisfaction of certain conditions. See Section
14 ("Conditions of the Offer"). The Purchaser reserves the right (but shall not
be obligated), in its sole discretion, to
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waive any or all of such conditions. If, on or prior to the Expiration Date,
any or all of such conditions have not been satisfied or waived, the Purchaser
may (i) decline to purchase any of the Units tendered, terminate the Offer and
return all tendered Units to tendering Limited Partners, (ii) waive all the then
unsatisfied conditions and, subject to complying with applicable rules and
regulations of the Commission, purchase all Units validly tendered, (iii)
extend the Offer and, subject to the right of Limited Partners to withdraw
Units until the Expiration Date, retain the Units that have been tendered during
the period or periods for which the Offer is extended, or (iv) amend the Offer.
This Offer to Purchase, the related Letter of Transmittal and, if required,
any other relevant materials are being mailed, at the Purchaser's expense, by
the Administrative Agent/Depository based on name and address information
provided by the Partnership at the Purchaser's request, to Limited Partners to
the extent their names and addresses are reflected on the books and records of
the Partnership.
2. Proration; Acceptance for Payment and Payment for Units.
If more than 17,200 Units are validly tendered on or prior to the
Expiration Date and not properly withdrawn on or prior to the Expiration Date,
the Purchaser will only accept for payment, upon the terms and subject to the
conditions of the Offer, and pay for an aggregate of 17,200 Units so tendered,
pro rata according to the number of Units validly tendered and not properly
withdrawn on or prior to the Expiration Date, with appropriate adjustments to
avoid purchases that would violate the transfer restrictions in Section 7.1 of
the Partnership Agreement (the "Transfer Restrictions"). If the number of Units
validly tendered and not properly withdrawn on or prior to the Expiration Date
is less than or equal to 17,200 Units, the Purchaser will purchase all Units so
tendered and not properly withdrawn, upon the terms and subject to the
conditions of the Offer.
In the event that proration of tendered Units is required, and because of
the difficulty of determining the proration results, the Purchaser may not be
able to announce the final results of such proration until at least
approximately seven business days after the Expiration Date. Subject to the
Purchaser's obligation under Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to pay Limited Partners the Purchase
Price in respect of Units tendered or return those Units promptly after the
termination or withdrawal of the Offer, the Purchaser does not intend to pay for
any Units accepted for payment pursuant to the Offer until the final proration
results are known.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase, by accepting for payment, and will
pay for, all Units validly tendered and not withdrawn in accordance with Section
4 on or prior to the Expiration Date as promptly as practicable following the
Expiration Date. In addition, subject to applicable rules of the Commission, the
Purchaser expressly reserves the right to delay acceptance for payment of, or
payment for, Units pending receipt of any regulatory or governmental approvals
specified in Section 15 ("Certain Legal Matters") or pending receipt of any
additional documentation required by the Letter of Transmittal. In all cases,
payment for Units accepted for payment pursuant to the Offer will be made only
after timely receipt by the Administrative Agent/Depositary of (a) the Letter of
Transmittal properly completed and duly executed and (b) any other documents
required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment tendered Units when, as and if the Purchaser gives oral or written
notice to the Administrative Agent/Depositary of the Purchaser's acceptance for
payment of such Units pursuant to the Offer. No tender of Units will be deemed
to have been validly made until all defects and irregularities with respect to
such tender have been cured or waived.
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If any tendered Units are not purchased pursuant to the Offer for any
reason, the Letter of Transmittal with respect to such Units will be destroyed
by the Administrative Agent/Depositary. If, for any reason whatsoever,
acceptance for payment of or payment for any Units tendered pursuant to the
Offer is delayed or the Purchaser is unable to accept for payment, purchase or
pay for Units tendered pursuant to the Offer, then, without prejudice to the
Purchaser's rights under Section 14 ("Conditions of the Offer"), the
Administrative Agent/Depositary may, nevertheless, on behalf of the Purchaser
and subject to Rule 14e-1(c) under the Exchange Act, retain tendered Units, and
such Units may not be withdrawn except to the extent that the tendering Limited
Partner is entitled to withdrawal rights as described in Section 4 ("Withdrawal
Rights").
3. Procedures for Tendering Units
Valid Tender and Delivery of Letter of Transmittal. For Units to be validly
tendered pursuant to the Offer, a Letter of Transmittal, properly completed and
duly executed, together with any other documents required by the Letter of
Transmittal, must be received by the Administrative Agent/Depositary at its
address on the back cover page of the Offer to Purchase on or prior to the
Expiration Date. See Instruction 1 to the Letter of Transmittal.
In order for a tendering Limited Partner to participate in the Offer, Units
must be validly tendered and not withdrawn on or prior to the Expiration Date,
which is 12:00 midnight, Eastern time, on August 21, 1997, unless extended.
The method of delivery of the Letter of Transmittal and all other required
documents is at the option and risk of the tendering Limited Partner and
delivery will be deemed made only when actually received by the Administrative
Agent/Depositary. If delivery is by mail, registered mail with return receipt
requested is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery. See Instruction 1 to the Letter of Transmittal.
Backup Federal Income Tax Withholding. To prevent the possible application
of backup federal income tax withholding with respect to payment of the Purchase
Price pursuant to the offer, a tendering Limited Partner must provide the
Purchaser with such Limited Partner's correct taxpayer identification number or
social security number (the "TIN") by certifying in the Substitute Form W-9
included in the Letter of Transmittal that the TIN provided on the front cover
of the Letter of Transmittal is correct or such TIN, as corrected, is correct.
See Instruction 4 to the Letter of Transmittal. This requirement does not apply
to corporations.
FIRPTA Withholding. To prevent the withholding of federal income tax in an
amount equal to 10% of the sum of the Purchase Price plus the amount of
Partnership liabilities allocable to each Unit purchased, each Limited Partner
must complete the FIRPTA Affidavit included in the Letter of Transmittal
certifying such Limited Partner's TIN and address and that the Limited Partner
is not a foreign person. See Instruction 4 to the Letter of Transmittal.
Appointment as Proxy; Power of Attorney. By executing and delivering the
Letter of Transmittal, a tendering Limited Partner irrevocably appoints the
Purchaser and the designees of the Purchaser and each of them as such Limited
Partner's proxies, in the manner set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of such Limited Partner's
rights with respect to the Units tendered by such Limited Partner and accepted
for payment by the Purchaser (and with respect to any and all other Units or
other securities issued or issuable in respect of such Units on or after the
date hereof). All such proxies shall be considered irrevocable and coupled with
an interest in the tendered Units. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Units for payment. Upon such
acceptance for payment, all prior proxies given by such Limited Partner with
respect to such Units (and such other Units and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
subsequent written consents executed (and, if given or executed, will not be
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deemed effective). The Purchaser and its designees will, with respect to the
Units (and such other Units and securities) for which such appointment is
effective, be empowered to exercise all voting and other rights of such Limited
Partner as it in its sole discretion may deem proper pursuant to the
Partnership's Amended and Restated Agreement of Limited Partnership dated as of
March 2, 1990, as amended to date (the "Partnership Agreement") or otherwise.
The Purchaser may assign such proxy and/or power of attorney to any person with
or without assigning the related Units with respect to which such proxy and/or
power of attorney was granted. The Purchaser reserves the right to require that,
in order for Units to be deemed validly tendered, immediately upon the
Purchaser's payment for such Units, the Purchaser must be able to exercise full
voting rights with respect to such Units and other securities.
In addition, pursuant to such appointment as attorneys-in-fact, the
Purchaser and its designees each will have the power, among other things, (i) to
seek to transfer ownership of such Units on the books and records of the
Partnership (and execute and deliver any accompanying evidences of transfer and
authenticity any of them may deem necessary or appropriate in connection
therewith, including, without limitation, any documents or instruments required
to be executed under the Partnership Agreement or a "Transferor's (Seller's)
Application for Transfer" created by the NASD, if required), (ii) to be
allocated all Low-Income Housing Credits and tax losses and to receive any and
all distributions made by the Partnership after the Expiration Date, and to
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Units in accordance with the terms of the Offer, (iii) to execute and
deliver to the Partnership and/or the General Partners (as the case may be) a
change of address form instructing the Partnership to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer in respect of tendered Units to the address specified in such form, and
(iv) to endorse any check payable to or upon the order of such Limited Partner
representing a distribution, if any, to which the Purchaser is entitled pursuant
to the terms of the Offer, in each case on behalf of the tendering Limited
Partner.
Assignment of Entire Interest in the Partnership. By executing and
delivering the Letter of Transmittal, a tendering Limited Partner irrevocably
assigns to the Purchaser and its assigns all of the, direct and indirect, right,
title and interest of such Limited Partner in the Partnership with respect to
the Units tendered and purchased pursuant to the Offer, including, without
limitation, such Limited Partner's right, title and interest in and to any and
all Low-Income Housing Credits and tax losses and any and all distributions made
by the Partnership after the Expiration Date in respect of the Units tendered by
such Limited Partner and accepted for payment by the Purchaser, regardless of
the fact that the Partnership Agreement provides that transfers are effective on
the first day of the fiscal quarter following the fiscal quarter in which the
transfer occurs. The Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to any third party, the right to purchase
Units tendered pursuant to the Offer, together with its rights under the Letter
of Transmittal, but any such transfer or assignment will not relieve the
assigning party of its obligations under the Offer or prejudice the rights of
tendering Limited Partners to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
Determination of Validity. All questions as to the form of documents and
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Units will be determined by the Purchaser, in its sole discretion,
whose determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders determined by it not to
be in proper form, or the acceptance of or payment for which may, in the opinion
of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender of Units of any particular Limited Partner whether or
not similar defects or irregularities are waived in the case of other Limited
Partners.
Assignee Status. Assignees must provide documentation to the Administrative
Agent/Depositary which demonstrates, to the satisfaction of the Purchaser, such
person's status as an assignee of a Unit.
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The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender of Units will be deemed to have been validly made until
all defects and irregularities with respect to such tender have been cured or
waived. None of the Purchaser, any of its affiliates or assigns, if any, the
Administrative Agent/Depositary or any other person will be under any duty to
give any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
The Purchaser's acceptance for payment of Units tendered pursuant to the
procedures described above will constitute a binding agreement between the
tendering Limited Partner and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. Withdrawal Rights.
Tenders of Units made pursuant to the Offer are irrevocable, except that
Units tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time after September 21, 1997.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Administrative
Agent/Depositary at the address set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name(s) of the
person(s) who tendered the Units to be withdrawn, the number of Units to be
withdrawn and the name(s) of the registered holder(s) of the Units, if different
from that of the person(s) who tendered such Units. Such notice of withdrawal
must also be signed by the same person(s) who signed the Letter of Transmittal
in the same manner as the Letter of Transmittal was signed. If the Units are
held in the name of two or more persons, all such persons must sign the notice
of withdrawal. Any Units properly withdrawn will be deemed not validly tendered
for purposes of the Offer, but may be re-tendered at any subsequent time prior
to the Expiration Date by following the procedures described in Section 3
("Procedures for Tendering Units").
If, for any reason whatsoever, acceptance for payment of any Units tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Units tendered pursuant to the Offer, then, without prejudice
to the Purchaser's rights set forth herein, the Administrative Agent/Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Units and such
Units may not be withdrawn except to the extent that the tendering Limited
Partner is entitled to and duly exercises withdrawal rights as described herein.
The reservation by the Purchaser of the right to delay the acceptance or
purchase of or payment for Units is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires the Purchaser to pay the consideration
offered or return Units tendered by or on behalf of Limited Partners promptly
after the termination or withdrawal of the Offer.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, any of its affiliates or assigns, if any, the Administrative
Agent/Depositary or any other person will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. Extension of Tender Period; Termination; Amendment.
The Purchaser reserves the right, in its sole discretion and regardless of
whether any of the conditions set forth in Section 14 ("Conditions of the
Offer") shall have been satisfied, at any time
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and from time to time, (i) to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and the payment for, any
Units, (ii) to terminate the Offer and not accept for payment any Units not
already accepted for payment or paid for, and (iii) to amend the Offer in any
respect by giving oral or written notice of such amendment to the Administrative
Agent/Depositary.
If the Purchaser increases or decreases either the number of the Units
being sought or the consideration to be paid for any Units pursuant to the Offer
and the Offer is scheduled to expire at any time before the expiration of a
period of 10 business days from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner specified
below, the Offer will be extended until, at a minimum, the expiration of such
period of 10 business days. If the Purchaser makes a material change in the
terms of the Offer (other than a change in price or percentage of securities
sought) or in the information concerning the Offer, or waives a material
condition of the Offer, the Purchaser will extend the Offer, if required by
applicable law, for a period sufficient to allow Limited Partners to consider
the amended terms of the Offer.
The Purchaser also reserves the right, in its sole discretion, if any of
the conditions specified under Section 14 ("Conditions of the Offer") shall not
have been satisfied and so long as Units have not theretofore been accepted for
payment, to delay (except as otherwise required by applicable law) acceptance
for payment of or payment for Units or to terminate the Offer and not accept for
payment or pay for Units.
If the Purchaser extends the period of time during which the Offer is open,
delays acceptance for payment of or payment for Units or is unable to accept for
payment or pay for Units pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Administrative
Agent/Depositary may, on behalf of the Purchaser, retain all Units tendered, and
such Units may not be withdrawn except as otherwise provided under Section 4
("Withdrawal Rights"). The reservation by the Purchaser of the right to delay
acceptance for payment of or payment for Units is subject to applicable law,
which requires that the Purchaser pay the consideration offered or return the
Units deposited by or on behalf of Limited Partners promptly after the
termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public announcement
other than by making a release to the Dow Jones News Service. In the case of an
extension of the Offer, the Purchaser will make a public announcement of such
extension no later than 9:00 a.m., Eastern time, on the next business day after
the previously scheduled Expiration Date.
6. Certain Federal Income Tax Consequences.
The following summary is a general discussion of certain expected federal
income tax consequences of a sale of Units pursuant to the Offer. This summary
is based on the Internal Revenue Code of 1986, as amended (the "Code"),
applicable Treasury Regulations thereunder, administrative rulings, practice and
procedures and judicial authority as of the date of the Offer. All of the
foregoing are subject to change, and any such change could affect the continuing
accuracy of this summary. In particular, legislation is current pending in both
Houses of Congress which could make significant changes in the Federal tax laws,
including tax rates applicable to long-term gains. This summary does not discuss
all aspects of federal income taxation that may be relevant to a particular
Limited Partner based on such Limited Partner's specific circumstances or to
certain types of Limited Partners subject to special treatment under the federal
income tax laws (for example, foreign persons, dealers in securities, banks,
insurance companies and tax-exempt entities), nor does
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it discuss any aspect of state, local, foreign or other tax laws. Sales of
Units pursuant to the Offer will be taxable transactions for federal income tax
purposes, and may also be taxable transactions under applicable state, local,
foreign and other tax laws. EACH LIMITED PARTNER SHOULD CONSULT HIS OR ITS TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH LIMITED PARTNER OF SELLING
UNITS PURSUANT TO THE OFFER, INCLUDING, WITHOUT LIMITATION, FEDERAL, STATE AND
LOCAL TAX CONSEQUENCES.
Consequences to Tendering Limited Partner. A Limited Partner will recognize
gain or loss on a sale of Units pursuant to the Offer equal to the difference
between (i) the Limited Partner's "amount realized" on the sale and (ii) the
Limited Partner's adjusted tax basis in the Units sold. The "amount realized"
with respect to a Unit sold pursuant to the Offer will be equal to the sum of
the amount of cash received by the Limited Partner for the Unit plus the amount
of Partnership liabilities allocable to the Unit as determined under Code
Section 752. The amount of a Limited Partner's adjusted tax basis in Units sold
pursuant to the Offer will vary depending upon the Limited Partner's particular
circumstances, and will be adjusted by allocations of Partnership income, gain
or loss to a Limited Partner with respect to such Units. In this regard,
tendering Limited Partners will be allocated a pro rata share of the
Partnership's taxable income or loss with respect to Units sold pursuant to the
Offer through the effective date of the sale.
A Limited Partner who acquired Units pursuant to the original offering of
Units by the Partnership is expected to have an "amount realized" in excess of
his or its adjusted tax basis and therefore will recognize a taxable gain on a
sale of Units pursuant to the Offer. Even if the Limited Partner is subject to
the passive activity loss limitation discussed below, any unused tax losses from
prior years will generally be available to offset gain from the sale of Units.
In general, the character (as capital or ordinary) of Limited Partner's
gain or loss on a sale of a Units pursuant to the Offer will be determined by
allocating the Limited Partner's amount realized on the sale and his adjusted
tax basis in the Units sold between "Section 751 items," which are
"substantially appreciated inventory" and "unrealized receivables" (including
depreciation recapture) as defined in Code Section 751, and non-Section 751
items. The Purchaser believes that all or substantially all of any taxable gain
realized on a sale of Units pursuant to the Offer will be treated as a capital
gain under these rules.
A Limited Partner's capital gain or loss on a sale of Units pursuant to the
Offer will be treated as long-term capital gain or loss if the Limited Partner's
holding period for the Units exceeds one year. Under current law, long-term
capital gains of individuals and other non-corporate taxpayers are taxed at a
maximum marginal federal income tax rate of 28%, whereas the maximum marginal
federal income tax rate for other income of such persons is 39.6%. Capital
losses are deductible only to the extent of capital gains, except that
non-corporate taxpayers may deduct up to $3,000 of capital losses in excess of
the amount of their capital gains against ordinary income. Excess capital losses
generally can be carried forward to succeeding years (a corporation's
carryforward period is five years and a non-corporate taxpayer can carry forward
such losses indefinitely). In addition, corporations, but not non-corporate
taxpayers, are allowed to carry back excess capital losses to the three
preceding taxable years.
Under Code Section 469, a non-corporate taxpayer or personal service
corporation can deduct passive activity losses in any year only to the extent of
such person's passive activity income for such year, and closely held
corporations may not offset such losses against so-called "portfolio" income. If
a Limited Partner is subject to these restrictions and has unused tax losses
attributable to the Partnership from prior years, such tax losses will generally
become available to offset any taxable income of the Limited Partner, provided
the Limited Partner sells all his Units. If a Limited Partner is unable to sell
all his Units (for example, because the Offer is oversubscribed and the
Purchaser must make a pro-rata reduction in Units purchased, as described under
Section 2. "Proration; Acceptance for Payment and Payment for Units"), the
deductibility of such losses would continue to
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be subject to the passive activity loss limitation until the Limited Partner
sells his remaining Units, except that such losses can be used to offset the
gain from the sale of Units or other passive activity income of the Limited
Partner. See Section 7 ("Effects of the Offer").
A Limited Partner who acquired his or her Units pursuant to the original
offering of Units by the Partnership is expected to recognize a long-term
capital gain of approximately $91 per Unit in connection with a sale pursuant to
this Offer. This would result in a tax liability of approximately $25.48 per
Unit based on a 28% tax rate. Additionally, if such Limited Partner was unable
to utilize his share of previously allocated tax losses of approximately $493
per Unit as a result of the passive activity limitations discussed above and
such Limited Partner sells all of his Units, such losses will no longer be
subject to the passive activity restrictions and will be available to offset
taxable income of the Limited Partner from any source. Under these
circumstances, assuming a 35% marginal net tax rate, a sale pursuant to the
Offer could generate tax savings for a Limited Partner of approximately $141 to
$145 per Unit from the transaction.
In certain cases, the transfer of an interest in a Partnership from which
Tax Credits were allocated can result in a recapture of the Tax Credits
(Low-Income Housing Credits and Rehabilitation Tax Credits are referred to
collectively as "Tax Credits") to the seller (i.e., the seller would be required
to pay an additional amount of tax equal to the credit "recaptured"). The
Purchaser anticipates that no Rehabilitation Tax Credits will be recaptured
because all of the properties that generated Rehabilitation Tax Credits in which
the Partnership has an interest were placed in service more than five years ago.
Furthermore, based on an exception to the recapture rule related to Low-Income
Housing Credits which is provided for partnerships with 35 or more partners,
such as the Partnership, the Purchaser anticipates that the sale of Units will
not cause a recapture of Low-Income Housing Credits.
A Limited Partner (other than corporations and certain foreign individuals)
who tenders Units may be subject to 31% backup withholding unless the Limited
Partner provides a taxpayer identification number ("TIN") and certifies that the
TIN is correct or properly certifies that he is awaiting a TIN. A Limited
Partner may avoid backup withholding by properly completing and signing the
Substitute Form W-9 included as part of the Letter of Transmittal. If a Limited
Partner who is subject to backup withholding does not properly complete the
Substitute Form W-9, the Purchaser will withhold and pay over to the Internal
Revenue Service ("IRS") 31% from payments to such Limited Partner. See
Instruction 4 to the Letter of Transmittal. These withholding requirements are
applicable even if the Limited Partner recognizes a loss with respect to the
sale of his or her Units.
Gain realized by a foreign Limited Partner on a sale of a Unit pursuant to
the Offer will be subject to federal income tax. Under Section 1445 of the Code,
the transferee of a partnership interest held by a foreign person is generally
required to deduct and withhold a tax equal to 10% of the amount realized on the
disposition. The Purchaser will withhold 10% of the amount realized (which will
include the amount of indebtedness attributable to such sold Units) by a
tendering Limited Partner from the Purchase Price payable to such Limited
Partner unless the Limited Partner properly completes the FIRPTA Affidavit
included as part of the Letter of Transmittal certifying such Limited Partner's
TIN, that such Limited Partner is not a foreign person and such Limited
Partner's address. Any amounts which are withheld would be creditable against a
foreign Limited Partner's federal income tax liability and a refund of any
excess could be obtained from the IRS by filing a U.S. income tax return.
Consequences to a Non-Tendering Limited Partner. The Purchaser does not
anticipate that a Limited Partner who does not tender his or her Units will
realize any material tax consequences as a result of the election not to tender.
The Purchaser has retained a law firm which will deliver an opinion letter that
consummation of the Offer will not result in the Partnership being treated as a
publicly-traded partnership for federal income tax purposes. There can be no
assurance, however,
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that the IRS will agree with the conclusions reached in such opinion. There is
no precedent governing whether the Offer will cause the Partnership to be
treated as a publicly-traded partnership for federal income tax purposes. If the
IRS successfully asserted that the Partnership should be treated as a
publicly-traded partnership, Limited Partners who are subject to the passive
activity loss rules would not be able to use tax losses derived from the
Partnership to offset passive taxable income from sources other than the
Partnership prior to the Limited Partner's disposition of his entire interest in
the Partnership. However, because 90% of the Partnership's gross income is
expected to be derived from rents and other qualifying income, the Partnership
should not be taxable as a corporation even if it becomes publicly traded.
Under recently revised Treasury Regulations, if, as a result of the Offer,
there is a sale or exchange of 50% or more in Partnership capital and profits
within a 12-month period, a termination of the Partnership for federal income
tax purposes would occur, and the taxable year of the Partnership would close.
In the case of such a sale or exchange, the Properties (subject to related debt)
of the Partnership would be treated as contributed by the Partnership to a new
partnership for federal income tax purposes, and following the deemed
contribution, a deemed distribution of interests in the new partnership would be
made to the Partnership and by the Partnership to its partners. The consequences
of a termination of the Partnership could include changes in the methods and
timing of depreciation available to the Partnership for tax purposes, changes in
the tax basis of the Partnership's assets, possible recognition of taxable gain
resulting from any deemed cash distribution in excess of the non-tendering
Limited Partner's tax basis in his or her Units, and a recapture of Low-Income
Housing Credits. In addition, a termination of the Partnership could cause the
Partnership or its assets to become subject to unfavorable statutory or
regulatory changes enacted or issued prior to the termination but previously not
applicable to the Partnership or its assets because of protective "transitional"
rules. The Purchaser has reserved the right not to purchase Units to the extent
such purchase would cause a termination of the Partnership for federal income
tax purposes.
7. Effects of the Offer.
Certain Restrictions on Transfer of Interests. The Partnership Agreement
restricts transfers of Units if, among other things, such transfer would cause a
termination of the Partnership for federal income tax purposes (which
termination would occur when Units that represent 50% or more of the total
Partnership capital and profits are transferred within a twelve-month period).
Consequently, sales of Units in the secondary market and in private transactions
during the twelve-month period following completion of the Offer may be
restricted, and requests for transfers of Units during such twelve-month period
may not be recognized. The Purchaser does not intend to purchase Units to the
extent such purchase would violate the transfer restrictions set forth in the
Partnership Agreement. See Section 6 ("Federal Income Tax
Considerations--Consequences to a Non-Tendering Limited Partner"). Based on
information provided by the Partnership, for the period from July 1, 1996 to
July 1, 1997, approximately 1058 Units (representing approximately 1.5% of the
outstanding Units) were transferred. Therefore, the Purchaser does not believe
the number of Units sought in the Offer will violate the Transfer Restrictions.
Effect on Trading Market; Registration Under Section 12(g) of the Exchange
Act. If a substantial number of Units are purchased pursuant to the Offer, the
result will be a reduction in the number of Limited Partners. In the case of
certain kinds of equity securities like the Units, a reduction in the number of
security holders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. The Form 10-K states:
"There is no public market for the Units and it is not expected that a public
market will develop." Therefore, the Purchaser does not believe a reduction in
the number of Limited Partners will materially further restrict the Limited
Partners' ability to find purchasers for their Units through secondary market
transactions.
Page 24
<PAGE>
Partnership Profiles, Inc., which publishes the Partnership Spectrum,
tracks recent trades in certain limited partnership interests. The most recent
issue of the Partnership Spectrum (May/June 1997) indicates that 1,031 Units
traded in the period from June 1, 1996 through May 31, 1997.
The Units currently are registered under Section 12(g) of the Exchange Act,
which means, among other things, that the Partnership is required to file
periodic reports with the Commission and to comply with the Commission's proxy
rules. The Purchaser does not expect or intend that consummation of the Offer
will cause the Units to cease to be registered under Section 12(g) of the
Exchange Act. If the Units were to be held by fewer than 300 persons, the
Partnership could apply to de-register the Units under the Exchange Act. Because
the Units are widely held, however, the Purchaser expects that even if it
purchases the maximum number of Units in the Offer, the Units will continue to
be held of record by substantially more than 300 persons.
Influence Over All Limited Partner Voting Decisions By Purchaser. Pursuant
to the Partnership Agreement, the Purchaser will have the right to vote each
Unit purchased by it pursuant to the Offer. If the Purchaser is successful in
acquiring a significant number of Units pursuant to the Offer, the Purchaser
could be in a position to significantly influence all Partnership decisions on
which Limited Partners, may vote. If the maximum number of Units sought by the
Purchaser is tendered and accepted for payment pursuant to the Offer, the
Purchaser will own approximately 25% of the outstanding Units. The ownership of
tendered Units by the Purchaser could effectively (i) prevent non-tendering
Limited Partners from taking actions they desire but that the Purchaser opposes
and (ii) enable the Purchaser to take actions desired by it but opposed by
non-tendering Limited Partners. Generally, under the Partnership Agreement,
holders of more than 50% of the outstanding Units are entitled to take action
with respect to a variety of matters, including, approving the removal of any
General Partner and proposing and approving a replacement therefor; approving
the dissolution of the Partnership; and most types of amendments to the
Partnership Agreement. However, no such votes have ever been taken and the
General Partners have indicated that none are presently scheduled or expected.
Although the Purchaser does not have any current plans or intentions with regard
to any of these matters, it will vote the Units acquired pursuant to the Offer
in its interest, which may, or may not, be in the best interest of non-tendering
Limited Partners.
It is likely that the Purchaser, which is affiliated with the General
Partners, will vote all of its Units to continue the General Partners as general
partners of the Partnership and in a manner that is otherwise consistent with
the decisions and recommendations of the General Partners, including as they
relate to matters involving transactions between the Partnership and affiliates
of the Purchaser. Therefore, the Purchaser's acquisition of Units may have the
effect of making any future change of the Partnership's policies and/or current
management more difficult.
8. Purpose of the Offer; Future Plans.
Purpose of the Offer. The purpose of the Offer is to enable the Purchaser
to acquire a significant interest in the Partnership for investment purposes
based on its expectation that the Partnership will continue to generate
Low-Income Housing Credits and tax losses attributable to the Units. The
Purchaser intends to sell membership interests in the Purchaser to third parties
(either directly or through an affiliate in which such third parties invest)
with a need for Low-Income Housing Credits and/or tax losses. The purchase of
the Units will allow the Purchaser to benefit from any of the following: (a) any
and all Low-Income Housing Credits and tax losses attributable to such Units;
(b) any cash distributions from Partnership operations in the ordinary course of
business; (c) distributions, if any, of net proceeds from the sale of any
Properties after the Partnership has satisfied its liabilities; and (d) any
distributions of net proceeds from the dissolution of the Partnership. Since the
formation of the Partnership, corporations have shown increasing interest in
investing in programs benefiting from Low-Income Housing Credits and passive tax
losses.
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<PAGE>
Individuals usually cannot fully use passive tax losses since current tax laws
restrict the use of such losses by individuals (See Section 6. "Certain Federal
Income Tax Consequences"), whereas corporate investors, in addition to utilizing
such Low-Income Housing Credits, are able to fully utilize passive tax losses.
The aggregate sales price of the Purchaser's membership interests to third
parties will be equal to the aggregate Purchase Price for the tendered Units
plus the Purchaser's expenses in conducting and consummating the Offer and
financing the purchase of the tendered Units. Neither the Purchaser nor its
currrent members will derive a profit from the sale of the Purchaser's
membership interests. There can be no assurance, however, that any membership
interests will be sold. Alternatively, the Purchaser may sell such membership
interests at a price equal to its cost. In such a case affiliates of the
Purchaser may earn fees for structuring such a transaction.
Future Plans. The Purchaser does not currently intend to make any effort to
change current management or the operation of the Partnership nor does it have
any current plans or intentions for any extraordinary transaction involving the
Partnership. However, the Purchaser's plans with respect to its investment in
the Units could change at any time in the future. If such plans with respect to
the Partnership change in the future, the ability of the Purchaser to influence
actions on which Limited Partners have a right to vote will depend on the
Limited Partners' response to the Offer (i.e., the number of Units tendered). If
the Purchaser acquires only a small number of Units pursuant to the Offer, it
will not be in a position to influence matters over which Limited Partners have
a right to vote. Conversely, if the maximum number of Units sought are tendered
and accepted for payment pursuant to the Offer, the Purchaser will own
approximately 25% of the issued and outstanding Units and, as a result, will be
in a position to exert significant influence over matters on which Limited
Partners have a right to vote.
Following the completion of the Offer, the Purchaser and its affiliates may
acquire additional Units. Any such acquisition may be made through private
purchases, through one or more future tender offers or by any other means deemed
advisable, and may be at prices higher or lower than the price to be paid for
the Units purchased pursuant to the Offer. Additionally, the Purchaser intends
to sell membership interests in the Purchaser to third parties (either directly
or through an affiliate in which such third parties invest) with a need for
Low-Income Housing Credits and/or tax losses. The aggregate sales price of the
Purchaser's membership interests to third parties will be equal to the aggregate
Purchase Price for the tendered Units plus the Purchaser's expenses in
conducting and consummating the Offer and financing the purchase of the tendered
Units. Neither the Purchaser nor its current members will derive a profit from
the sale of the Purchaser's membership interests. Affiliates of the Purchaser
expect to arrange the sale of membership interests of the Purchaser to third
parties upon conclusion of the Offer and to earn fees for structuring this
transaction and arranging the sale. These fees will be, in part, dependent on
the amount third parties are willing to pay for membership interests in excess
of the Purchase Price per Unit and the amount of membership interests sold.
There can be no assurance, however, that any membership interests in the
Purchaser will be sold or at what price.
9. Certain Information Concerning the Partnership.
Information included herein concerning the Partnership is derived from the
Partnership and its publicly-filed reports. Additional financial and other
information concerning the Partnership is contained in the Partnership's Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the
Commission. Such reports and other documents may be examined and copies may be
obtained from the public reference facilities maintained at the principal
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and at the Commission's World Wide Web site at
http://www.sec.gov. Copies should be available by mail upon payment of the
Commission's customary charges by writing to the Commission's principal offices
at 450 Fifth Street, N.W., Washington, D.C.
Page 26
<PAGE>
20549. The Purchaser disclaims any responsibility for the information included
in such reports and extracted in this Offer to Purchase.
The Partnership's Assets and Business
The Partnership is a limited partnership formed in 1989, under the laws of
the Commonwealth of Massachusetts. Its principal executive offices are located
at 101 Arch Street, Boston, Massachusetts 02110. Its telephone number is (617)
439-3911. The Partnership's fiscal year ends March 31st.
The Partnership was formed to invest, as a limited partner, in other
limited partnerships (referred to herein as "Local Limited Partnerships") each
of which owns one or more leveraged low-income multifamily residential complexes
("Apartment Complexes" or "Properties") that are eligible for the low-income
housing tax credit ("Low Income Housing Credit") enacted in the Tax Reform Act
of 1986, some of which were eligible for the historic rehabilitation tax credit
("Rehabilitation Tax Credit"). Some of the Apartment Complexes benefit from one
or more other forms of federal or state housing assistance. The Partnership's
interest in profits and losses from normal operations and Low-Income Housing
Credits in each Local Limited Partnership is equal to 99% of such items with the
exception of two Local Limited Partnerships, in one of those two Local Limited
Partnerships the Partnership's interest in such items is equal to 95% of such
items and in the other the Partnership's interest in such items is equal to
88.6% of such items. According to the Form 10-K, as of March 31, 1997, all of
the net proceeds from the original offering of Units was invested in 27 Local
Limited Partnerships. The Partnership does not anticipate making any additional
investments.
SLP, Inc. is the special limited partner in all 27 Local Limited
Partnerships and is an affiliate of each General Partner of the Partnership.
SLP, Inc. has certain rights and obligations in its role as special limited
partner which permit SLP, Inc. to execute control over the management and
policies of the Local Limited Partnerships.
According to the Form 10-K, the stated investment objectives of the
Partnership are to:
1. Provide investors with current tax benefits in the form of Tax Credits
which they may use to offset their federal income tax liability;
2. Preserve and protect the Partnership's capital;
3. Provide limited cash distributions from property operations which are
not expected to constitute taxable income during the expected duration of the
Partnership's operation; and
4. Provide cash distributions from sale or refinancing transactions.
According to the Form 10-K, there can be no assurance that the Partnership
will achieve its investment objectives.
Generally, Low-Income Housing Credits are available over a ten year period
from the date the Apartment Complex is placed in service; referred to herein as
the "Credit Period". Each of the Local Limited Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agency the authority to recognize Low Income Housing Credits to be
claimed during the Credit Period provided that the Local Limited Partnership
satisfies the rent restriction, minimum set-aside and other requirements for
eligibility for the Low Income Housing Credits at all times during the 15-year
period commencing at the beginning of the Credit Period (the "Compliance
Period"). Once a Local Limited Partnership has become eligible to receive Low
Income Housing Credits, it may lose such eligibility and suffer an event of
"recapture" if (i) the Local Limited Partnership ceases to meet qualification
requirements, (ii) there is a decrease in the qualified basis of
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<PAGE>
the projects, or (iii) there is a reduction in the taxpayer's interest in the
project at any time during the 15-year Compliance Period that began with the
first tax year of the Credit Period. According to the Form 10-K, none of the
Local Limited Partnerships in which the Partnership has acquired an interest has
suffered an event of recapture.
According to the Form 10-K, the Partnership generated Low-Income Housing
Credits per Unit of $150.99, $150.90 and $151.09, during the calendar years
1996, 1995 and 1994, respectively. Also according to the Form 10-K, the annual
Low-Income Housing Credits per Unit stabilized in 1993 at approximately $151.00
per Unit and are expected to remain stable through the year 2000 and then
decrease as certain properties reach the end of the ten year Credit Period.
Together the 27 Local Limited Partnerships own 27 Apartment Complexes.
According to the Form 10-K, the properties owned by the Local Limited
Partnerships are located in ten states and the Virgin Islands. Five of the
properties, totaling 612 units, are existing and underwent rehabilitation;
twenty-two properties, consisting of 1,762 units, are new construction. All
properties have completed construction or rehabilitation and initial lease-up.
Attached to this Offer to Purchase as Schedule II is a schedule of these Local
Limited Partnerships (the "Local Limited Partnership Schedule"), including
certain information concerning their respective Apartment Complexes. Attached to
this Offer to Purchase as Schedule III is additional information concerning
these Local Limited Partnerships and their Apartment Complexes, including
information relating to mortgage encumbrances and accumulated depreciation.
According to the Form 10-K, the duration of the leases for the Properties owned
by the Local Limited Partnerships range from six to twelve months. The Managing
General Partner believes the Properties are adequately covered by insurance.
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<PAGE>
Selected Financial Data. Set forth below is a summary of certain financial
data for the Partnership which has been excerpted from the Form 10-K. More
comprehensive financial and other information is included in such report and
other documents filed by the Partnership with the Commission, and the following
summary is qualified in its entirety by reference to such report and other
documents and all the financial information and related notes contained therein.
Statements of Operations
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ --------
<S> <C> <C> <C>
Revenue:
Investment $ 191,349 $ 146,575 $ 109,711
Other 13,334 77,437 62,152
------------ ------------ ------------
Total Revenue 204,683 224,012 171,863
------------ ------------ ------------
Expenses:
General and administrative
(includes reimbursements to an affiliate
in the amounts of $117,763, $115,696
and $116,177) 237,545 225,369 275,733
Asset management fee, related party 231,035 224,953 219,149
Amortization 29,451 30,521 40,522
------------ ------------ ------------
Total Expenses 498,031 480,843 535,404
------------ ------------ ------------
Loss before equity in losses
of Local Limited Partnerships (293,348) (256,831) (363,541)
Equity in losses of Local Limited
Partnerships (4,044,413) (4,695,617) (4,747,136)
------------ ------------ ------------
Net Loss $ (4,337,761) $ (4,952,448) $(5,110,677)
============ ============ ===========
Net Loss allocated:
General Partners $ (43,378) $ (49,524) $ (51,107)
Limited Partners (4,294,383) (4,902,924) (5,059,570)
------------ ------------ ------------
$ (4,337,761) $(4,952,448) $(5,110,677)
============ =========== ===========
Net Loss per Limited Partnership
Unit (68,929 Units) $ (62.30) $ (71.13) $ (73.40)
=========== =========== ===========
</TABLE>
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<PAGE>
Summary Selected Financial Data.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenue $ 204,683 $ 224,012 $ 171,863 $ 232,489 $ 509,911
Equity in losses of Local Limited
Partnerships (4,044,413) (4,695,617) (4,747,136) (4,698,334) (4,658,311)
Net loss (4,337,761) (4,952,448) (5,110,677) (4,982,538) (4,714,671)
Per Limited Partnership Unit (A) (62.30) (71.13) (73.40) (71.56) (67.71)
Cash, cash equivalents and
marketable securities 3,289,694 3,342,899 3,269,031 3,605,476 6,249,982
Investment in Local Limited
Partnerships, at original cost 56,559,793 56,559,793 56,346,293 56,226,293 53,834,379
Total assets (B) 33,871,495 38,246,869 42,985,386 48,069,381 53,134,553
Cash Distributions - - - - -
Other data:
Passive loss (C) (5,154,301) (5,187,774) (5,204,384) (5,177,324) (5,616,384)
Per Limited Partnership Unit (A,C) (74.03) (74.51) (74.75) (74.36) (80.67)
Portfolio income (C) 281,707 350,417 233,083 379,338 1,154,692
Per Limited Partnership Unit (A,C) 4.05 5.03 3.35 5.45 16.58
Low-Income Housing Tax Credit (C) 10,512,996 10,506,229 10,519,636 10,447,764 8,528,518
Per Limited Partnership Unit (A,C) 150.99 150.90 151.09 150.06 122.49
Local Limited Partnership interests
owned at end of period (D) 27 27 27 28 28
</TABLE>
(A) Per Limited Partnership Unit data is based upon 68,929 outstanding Units.
(B) Total assets include the net investment in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Partnership
for income tax purposes.
(D) On January 1, 1994, Strathern Park and Lorne Park merged.
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<PAGE>
Cash Distributions.
No cash distributions were made during the year ended March 31, 1997. According
to the Form 10-K, in prior years, cash available for distribution was derived
from the interest earned on the temporary investment of the Partnership's funds,
at money market rates, prior to the funds being contributed to the Partnership's
Local Limited Partnership investments. According to the Form 10-K, based on the
results of 1996 operations, the Local Limited Partnerships are not expected to
distribute significant amounts of cash to the Partnership because such amounts
will be needed to fund Property operating costs. In addition, many of the
Properties benefit from some type of federal or state subsidy, and as a
consequence, are subject to restrictions on cash distributions. Therefore, it is
expected that only a limited amount of cash will be distributed to investors
from this source in the future.
Liquidity and Capital Resources.
At March 31, 1997, of the Partnership had cash and cash equivalents of
$449,567 compared with $243,644 at March 31, 1996. According to the Form 10-K,
this increase is attributable to proceeds from sales and maturities of
marketable securities and cash distributions received from Local Limited
Partnerships, partially offset by net cash used for operations and purchases of
marketable securities.
According to the Form 10-K, as of March 31, 1997, approximately $2,735,000
of marketable securities has been designated as Reserves by the Managing General
Partner. The Reserves were established to be used for working capital of the
Partnership and contingencies related to the ownership of Local Limited
Partnership interests. According to the Form 10-K, management believes that the
interest income earned on Reserves, along with cash distributions received from
Local Limited Partnerships, to the extent available, will be sufficient to fund
the Partnership's ongoing operations. Reserves may be used to fund operating
deficits, if the Managing General Partner deems funding appropriate.
According to the Form 10-K, since the Partnership invests as a limited
partner, the Partnership has no contractual duty to provide additional funds to
Local Limited Partnerships beyond its specified investment. Thus, as of March
31, 1997, the Partnership had no contractual or other obligation to any Local
Limited Partnership, which had not been paid or provided for.
The Form 10-K states that, in the event a Local Limited Partnership
encounters operating difficulties requiring additional funds, the Partnership
might deem it in its best interests to provide such funds, voluntarily, in order
to protect its investment. No such event has occurred to date.
Results of Operations.
1997 versus 1996.
The Partnership's results of operations for the year ended March 31, 1997
resulted in a net loss of $4,337,761 as compared to a net loss of $4,952,448 for
the same period in 1996. According to the Form 10-K, the increase in net loss is
primarily attributable to a decrease in equity in losses of Local Limited
Partnerships and an increase in investment revenue, offset by a decrease in
other revenue. The decrease in equity in losses of Local Limited Partnerships is
due to rental subsidy receipts in 1996 which were reserved in the prior year.
Investment revenue increased because of improved returns expired on investments
in securities during the fiscal year ended March 31, 1997.
1996 versus 1995.
The Partnership's results of operations for the year ended March 31, 1996
resulted in a net loss of $4,952,448 as compared to a net loss of $5,110,677 for
the same period in 1995. This improved net loss position is primarily
attributable to lower general and administrative expenses and an
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<PAGE>
increase in investment and other revenue. General and administrative expenses
decreased primarily because of a decrease in investor reporting expenses.
Investment and other revenue increased because of improved returns earned on
investments in securities during fiscal year 1996.
The Partnership Agreement.
The General Partners of the Partnership are Arch Street V Limited
Partnership (the "Co-General Partner") and Arch Street V, Inc. (the "Managing
General Partner") (the Co-General Partner and the Managing General Partner are
referred to collectively as the "General Partners"). The General Partners and
their affiliates have received or will receive certain types of compensation,
fees or other distributions in connection with the operations of the
Partnership. The arrangements for payment of compensation and fees set forth in
the Partnership Agreement were not determined in arm's-length negotiations with
the Partnership.
In accordance with the Partnership Agreement, the Partnership is required
to pay certain fees to and reimburse expenses of the Managing General Partner
and others in connection with the organization of the Partnership and the
offering of its Units. Commissions, fees and accountable expenses related to the
sale of the Units totaling $9,499,984 have been charged directly to Limited
Partners' equity. In connection therewith, $5,858,935 of selling expenses and
$3,641,049 of offering expenses incurred on behalf of the Partnership have been
paid to an affiliate of the Managing General Partner. The Partnership is
required to pay a non-accountable expense allowance for marketing expense equal
to a maximum of 1% of gross offering proceeds; this amount is included in total
offering expenses. The Form 10-K states that the Partnership has paid $50,000 in
organization costs to an affiliate of the Managing General Partner. Total
organization and offering expenses exclusive of selling commissions did not
exceed 5.5% of the gross offering proceeds and organizational and offering
expenses, inclusive of selling commissions and underwriting advisory fees did
not exceed 14.0% of the gross offering proceeds. No organizational fees and
expenses or selling expenses were paid during the years ended March 31, 1997,
1996 and 1995.
In accordance with the Partnership Agreement, the Partnership is required
to pay acquisition fees to and reimburse acquisition expenses of the Managing
General Partner or its affiliates for selecting, evaluating, structuring,
negotiating, and closing the Partnership's investments in Local Limited
Partnerships. Acquisition fees total 7% of the gross offering proceeds.
Acquisition expenses, which include such expenses as legal fees and expenses,
travel and communications expenses, costs of appraisals, accounting fees and
expenses, totalled 1.5% of the gross offering proceeds. As of March 31, 1997
acquisition fees totaling $4,825,005 for the closing of the Partnership's
investments in Local Limited Partnership were paid to an affiliate of the
Managing General Partner. Acquisition expenses totaling $899,430 were reimbursed
to an affiliate of the Managing General Partner. No acquisition fees or expenses
were paid during the three years ended March 31, 1997.
Pursuant to the Partnership Agreement, an affiliate of the Managing General
Partner is entitled to a fee (the "Asset Management Fee") for its services in
connection with the administration of the affairs of the Partnership. The Asset
Management Fee is payable annually and is calculated by multiplying 0.275% by
the consumer price index and then multiplying the product by the gross proceeds
of the offering. According to the Form 10-K, this formula currently results in
the amount of .343% being multiplied by the gross proceeds of the offering. The
Asset Management Fees earned during the years ended March 31, 1997, 1996 and
1995 are as follows:
1997 1996 1995
---- ---- ----
Asset Management Fees $231,035 $224,953 $219,149
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<PAGE>
According to the Partnership Agreement, the Managing General Partner or an
Affiliate is also entitled to receive a subordinated disposition fee (the
"Subordinated Disposition Fee") for services rendered in connection with the
sale of a property or the sale of the Partnership's interest in a Local Limited
Partnership. Payment of such fee shall be subordinated to the Limited Partners
receiving their 6% return as set forth in the Partnership Agreement. Each
Disposition Fee is equal to 1% of the sale price in respect of any such sale
(including the principal amount of any mortgage loans and any related seller
financing with respect to a property to which such sale is subject). For the
year ended March 31, 1997, neither the Managing General Partner nor an Affiliate
earned any Subordinated Disposition Fee.
According to the Form 10-K, the Partnership does not have any employees,
but an affiliate of the Managing General Partner is reimbursed for the cost of
the Partnership's salaries and benefits expenses. The reimbursements are based
upon the size and complexity of the Partnership's operations. Reimbursements
paid or accrued during the years ended March 31, 1997, 1996 and 1995 are as
follows:
1997 1996 1995
---- ---- ----
Salaries and benefits
expense reimbursements $117,763 $115,696 $116,177
The General Partners and their respective officers and directors, are each
entitled to indemnification under certain circumstances from the Partnership
pursuant to provisions of the Partnership Agreement. Generally, the General
Partners are also entitled to reimbursement of expenditures made on behalf of
the Partnership.
Under the Partnership Agreement, the General Partners are entitled to
receive 1% of cash distributions to the partners of the Partnership. However,
according to the Form 10-K, the Partnership has not paid any cash distributions
to the General Partners in the three years ended March 31, 1997.
In accordance with the Partnership Agreement, an affiliate of the General
Partners (SLP, Inc.) is entitled to receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if such affiliate is
still a limited partner of that Local Limited Partnership at the time of such
transaction.
In addition, under the terms of the Partnership Agreement, upon the removal
of a General Partner by the Limited Partners or upon the occurrence of an "Event
of Withdrawal", as defined in the Partnership Agreement, the removed General
Partner may be entitled to receive the fair market value of its interest, which
will be payable over a five-year period.
10. Certain Information Concerning the Purchaser.
The Purchaser was organized for the purpose of acquiring the Units pursuant
to the Offer. The principal executive office of the Purchaser is at 101 Arch
Street, Boston, Massachusetts 02110. The managing member of the Purchaser (the
"Managing Member") is West Cedar Managing, Inc., a Massachusetts corporation.
The directors of the Managing Member are Michael H. Gladstone, William E.
Haynsworth and Jenny Netzer. The business address for each of Ms. Netzer and
Messrs. Gladstone and Haynsworth is 101 Arch Street, Boston, Massachusetts
02110.
For certain information concerning the executive officers and directors of
the Managing Member, see Schedule I to this Offer to Purchase. The persons set
forth on Schedule I, who effectively control the Purchaser, are also officers of
Arch Street V, Inc. the Managing General Partner and the general partner in
control of Arch Street V Limited Partnership, the Co-General
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<PAGE>
Partner of the Partnership. Therefore, the Purchaser and Arch Street V, Inc. and
Arch Street V Limited Partnership, subject to their fiduciary duties, may have a
conflict of interest with respect to certain matters involving Limited Partners
and/or the Partnership.
Arch Street V Limited Partnership acquired 5 Units in the Partnership in
1989 as the initial limited partner of the Partnership in connection with the
original formation of the Partnership. Except as otherwise set forth in this
Offer to Purchase or Schedule I hereto, (1) neither the Purchaser, the Managing
Member and, to the best of the Purchaser's knowledge, the persons listed on
Schedule I, nor any affiliate of the foregoing beneficially owns or has a right
to acquire any Units, (2) neither the Purchaser, the Managing Member and, to the
best of the Purchaser's knowledge, the persons listed on Schedule I, nor any
affiliate thereof or director, executive officer or subsidiary of the Managing
Member has effected any transaction in the Units within the past 60 days, (3)
neither the Purchaser, the Managing Member and, to the best of the Purchaser's
knowledge, any of the persons listed on Schedule I, nor any director or
executive officer of the Managing Member has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies, (4)
there have been no transactions or business relationships which would be
required to be disclosed under the rules and regulations of the Commission
between any of the Purchaser, the Managing Member, or, to the best of the
Purchaser's knowledge, the persons listed on Schedule I, on the one hand, and
the Partnership or its affiliates, on the other hand, and (5) there have been no
contracts, negotiations or transactions between the Purchaser, the Managing
Member or, to the best of the Purchaser's knowledge, the persons listed on
Schedule I, on the one hand, and the Partnership or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
11. Background Of The Offer.
The purpose of the Offer is to allow Limited Partners who have a current or
anticipated need or desire for liquidity to sell their Units.
In early July 1997, representatives of the Purchaser met with
representatives of the Partnership in order to discuss the Offer. The
Partnership expressed concern that consummation of the Offer would cause it to
be classified as a "publicly-traded partnership" (a "PTP") for federal income
tax purposes and, therefor, suffer adverse tax consequences. To address this
concern, the Purchaser agreed to retain a law firm to deliver a legal opinion to
the Partnership that consummation of the Offer will not result in it being
treated as a PTP.
The Purchaser requested the names and addresses of the Limited Partners
from the Partnership in order to be able to have the Administrative
Agent/Depositary mail this Offer to Purchase, the related Letter of Transmittal
and other relevant material. On July 24, 1997, the Purchaser was notified that
such materials were mailed at the Purchaser's expense and the Offer was
commenced.
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<PAGE>
12. Source Of Funds
The Purchaser expects that an aggregate of approximately $9,546,000
(exclusive of fees and expenses) will be required to purchase the Units sought
pursuant to the Offer, if tendered. The Purchaser presently contemplates that it
will borrow all of such funds from one of its affiliates, on substantially the
same economic terms and conditions that such affiliate borrows such funds under
an existing credit facility that such affiliate has available to it with Fleet
Bank of Massachusetts, N.A. (the "Lender").
The existing credit agreement is between the Lender and an affiliate of the
Purchaser. The interest rate is the "Prime Rate" (as publicly announced by the
Lender, from time to time) plus .125%, which is presently equal to 8.625% per
annum or the "LIBOR Rate" (the annual rate of interest equal to 2.75% above
LIBOR), as elected by such affiliate.
An alternative, the Purchaser may seek financing from the Lender or other
national banks on other terms.
The Purchaser expects to repay all amounts borrowed from its affiliate by
selling additional membership interests to persons or entities that have a need
for the Low-Income Housing Credits and/or tax losses from the Units. No plans or
arrangements have been made with regard to the payment of periodic interest
required by the terms of the loan. However, it is expected that if interest
payments are due and payable, the Purchaser may borrow those funds from its
affiliate(s).
13. Purchase Price Considerations
The Purchaser has set the Purchase Price at $555.00 net per Unit. The
Purchaser considered the recent trading prices for the Units in the secondary
market and the estimated present value of the expected remaining Low-Income
Housing Credits in setting the offer price.
The Form 10-K states that: "There is no public market for the Units and it
is not expected that a public market will develop." At present, privately
negotiated sales and sales through intermediaries (e.g., through the trading
system operated by Chicago Partnership Board, Inc., which publishes sales by
Limited Partners) are the only means available to Limited Partners to liquidate
an investment in Units (other than the Offer) because the Units are not listed
or traded on any exchange or quoted on any NASDAQ list or system. The
Partnership maintains an internal database of all the Units traded, both through
privately negotiated sales and through intermediaries. Chicago Partnership
Board, Inc. also maintains a database of all Units which are sold through their
services. Both the Partnership and Chicago Partnership Board, Inc. have provided
the Purchaser with copies of the data relating to the sales of Units from July
1, 1996 through June 30, 1997. The table below sets forth the high and low sales
prices and the weighted average sales prices derived from the information
provided by the Partnership and Chicago Partnership Board, Inc. for this period.
It should be noted that trades over 20 Units tend to result in higher prices
than smaller sales. The prices in the table below are the "net" prices received
by the sellers of Units after the payment of any sales commissions and
transactions costs:
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<PAGE>
WEIGHTED AVERAGE AND HIGH AND LOW TRADING PRICES
THROUGH JUNE 30, 1997
<TABLE>
<CAPTION>
CHICAGO PARTNERSHIP
PERIOD PARTNERSHIP DATA BOARD, INC. DATA
- - ------ ---------------- -------------------
High/Low Weighted Average High/Low Weighted Average
<S> <C> <C> <C> <C>
April-June 97 $603/$500 $555 $542/$542 $542
January-March 97 $617/$375 $511 $581/$581 $581
October-December 96 $654/$500 $627 $667/$529 $663
July-September 96 $590/$501 $537 $542/$542 $542
</TABLE>
Sales prices of Units may also be obtained from Partnership Spectrum, an
independent third-party industry publication which reports such information;
however, the gross sales prices reported by Partnership Spectrum do not
necessarily reflect the net sales proceeds received by sellers of Units, which
typically are reduced by commissions and other secondary market transaction
costs to amounts less than the reported prices. Based on information provided to
the Purchaser by the Partnership, for a typical 10 Unit trade, sales commissions
generally range from 5% to 8.75% of the gross sales price of the Units and the
transfer fee is $100. The Partnership Spectrum indicates that , for the period
from April 1, 1997 through May 31, 1997, a total of 88 Units traded at per Unit
prices between $595 and $580 with a weighted average of $585.11 per Unit. For
the period from February 1, 1997 through March 31, 1997, a total of 40 Units
traded at per Units prices between $600 and $600 with a weighted average of $600
per Unit. For the period from December 1, 1996 through January 31, 1997, a total
of 679 Units traded at per Unit prices between $667.25 and $525 with a weighted
average of $637.99 per Unit. For the period from October 1, 1996 through
November 30, 1996, a total of 43 Units traded at per Unit prices between $635.04
and $550 with a weighted average of $583.14 per Unit. For the period from August
1, 1996 through September 30, 1996, a total of 116 Units traded at per Unit
prices between $600 and $550 with a weighted average of $593.53 per Unit.
Finally, for the period from June 1, 1996 through July 31, 1996, a total of 65
Units traded at per Unit prices between $600 and $566 with a weighted average of
$573.85 per Unit.
In view of the foregoing, the Purchaser believes that the Purchase Price is
competitive with the current weighted average secondary market prices. In
addition, the Purchaser believes that the Purchase Price compares favorably with
the estimated present value of the future Low-Income Housing Credits that a
Limited Partner who chooses to remain in the Partnership may receive. The
aggregate present value of the Low-Income Housing Credits over the remaining
seven years of the Credit Period is $526. This present value of the Low-Income
Housing Credits was calculated by using a discount rate of 6.44%, which
represents the rate for U.S. Treasury Strips maturing in November, 2008.
According to the Form 10-K, all the properties invested in by the partnership
will have reached the end of the 15 year Low-Income Housing Credits Compliance
Period in 2008.
Limited Partners who sell Units pursuant to the Offer will receive a cash
payment of $555.00 per Unit sold. In addition, Limited Partners who sell all
their Units who have been unable to use the passive losses from the Partnership
will be able to use those suspended passive losses, estimated to be up to $493
per Unit from the sale to offset their income from the sale and any other
taxable income of such Limited Partner. Alternatively, if Limited Partners keep
their Units, it is possible that they will eventually receive proceeds when the
properties are sold or refinanced. Additionally, they may receive the tax
benefit of their allocable share of additional passive operating losses and of a
capital loss if they ultimately do not receive a return of their original
capital. See Section 6 ("Certain Federal Income Tax Consequences").
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<PAGE>
The Purchase Price represents the price at which the Purchaser is willing
to purchase Units. Other measures of the value of the Units may be relevant to
Limited Partners. Limited Partners are urged to consider carefully all of the
information contained herein and consult with their own advisors, tax, financial
or otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.
14. Conditions of the Offer.
Notwithstanding any other provisions of the Offer and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion, the Purchaser shall not be required to accept
for payment, subject to Rule 14e-1(c) under the Exchange Act, any tendered Units
and may terminate the Offer as to any Units not then paid for if, prior to the
Expiration Date, (i) the Purchaser shall not have confirmed to its reasonable
satisfaction that, upon purchase of the Units pursuant to the Offer, the
Purchaser will have full rights to ownership as to all such Units and the
Purchaser will become the transferee of the purchased Units for all purposes
under the Partnership Agreement, (ii) the Purchaser shall not have confirmed to
its reasonable satisfaction that, upon the purchase of the Units pursuant to the
Offer, the Transfer Restrictions will have been satisfied, or (iii) all
authorizations, consents, orders or approvals of, or declarations or filings
with, or expirations of waiting periods imposed by, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, necessary for the consummation of the transactions
contemplated by the Offer shall not have been filed, occurred or been obtained.
Furthermore, notwithstanding any other term of the Offer, the Purchaser will not
be required to accept for payment and may terminate or amend the Offer as to
such Units if, at any time on or after the date of the Offer and before the
Expiration Date, any of the following conditions exist:
(a) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or the
over-the-counter market in the United States, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) the commencement or escalation of a
war, armed hostilities or other national or international crisis involving the
United States, (iv) any limitation (whether or not mandatory) imposed by any
governmental authority on, or any other event that might have material adverse
significance with respect to, the nature or extension of credit by banks or
other lending institutions in the United States, or (v) in the case of any of
the foregoing, a material acceleration or worsening thereof; or
(b) any material adverse change (or any condition, event or development
involving a prospective material adverse change) shall have occurred or be
likely to occur in the business, prospects, financial condition, results of
operations, properties, assets, liabilities, capitalization, partners' equity,
licenses, franchises or businesses of the Partnership and its subsidiaries taken
as a whole; or
(c) there shall have been threatened, instituted or pending any action,
proceeding, application, audit, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, or by or before any court
or governmental, regulatory or administrative agency, authority or tribunal,
domestic, foreign or supranational, which (i) challenges the acquisition by the
Purchaser of the Units or seeks to obtain any material damages as a result
thereof, (ii) makes or seeks to make illegal, the acceptance for payment,
purchase or payment for any Units or the consummation of the Offer, (iii)
imposes or seeks to impose limitations on the ability of the Purchaser or any
affiliate of the Purchaser to acquire or hold or to exercise full rights of
ownership of the Units, including, but not limited to, the right to vote any
Units purchased by them on all matters, (iv) may result in a material diminution
in the benefits expected to be derived by the Purchaser or any of their
affiliates as a result of the Offer, (v) requires divestiture by the Purchaser
of any Units, (vi) might materially adversely affect the business, properties,
assets, liabilities, financial condition,
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<PAGE>
operations, results of operations or prospects of the Partnership or the
Purchaser, or (vii) challenges or adversely affects the Offer; or
(d) there shall be any action taken, or any statute, rule, regulation,
order or injunction shall have been enacted, promulgated, entered, enforced or
deemed applicable to the Offer, or any other action shall have been taken, by
any government, governmental authority or court, domestic or foreign, other than
the routine application to the Offer of waiting periods that has resulted, or in
the reasonable good faith judgment of the Purchaser could be expected to result,
in any of the consequences referred to in clauses (i) through (vii) of paragraph
(c) above; or
(e) the Partnership or any of its subsidiaries shall have authorized,
recommended, proposed or announced an agreement or intention to enter into an
agreement, with respect to any merger, consolidation, liquidation or business
combination, any acquisition or disposition of a material amount of assets or
securities, or any comparable event, not in the ordinary course of business
consistent with past practices; or
(f) the failure to occur of any necessary approval or authorization by any
federal or state authorities necessary to the consummation of the purchase of
all or any part of the Units to be acquired hereby, which in the reasonable
judgment of the Purchaser in any such case, and regardless of the circumstances
(including any action of the Purchaser) giving rise thereto, makes it
inadvisable to proceed with such purchase or payment; or
(g) Purchaser shall become aware that any material right of the Partnership
or any of its subsidiaries under any governmental license, permit or
authorization relating to any environmental law or regulation is reasonably
likely to be impaired or otherwise adversely affected as a result of, or in
connection with, the Offer; or
(h) the Partnership or any of its General Partners shall have amended, or
proposed or authorized any amendment to, the Partnership Agreement or the
Purchaser shall have become aware that the Partnership or any of its General
Partners have proposed any such amendment.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
(including, without limitation, any action or inaction by the Purchaser or any
of its affiliates) giving rise to such condition, or may be waived by the
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise the foregoing rights will not
be deemed a waiver of such rights, which will be deemed to be ongoing and may be
asserted at any time and from time to time. Any determination by the Purchaser
concerning the events described in this Section 14 will be final and binding
upon all parties.
15. Certain Legal Matters.
Except as set forth in this Offer to Purchase, based on its review of
publicly available filings by the Partnership with the Commission and other
publicly available information regarding the Partnership, the Purchaser is not
aware of any licenses or regulatory permits that would be material to the
business of the Partnership, taken as a whole, and that might be adversely
affected by the Purchaser's acquisition of Units as contemplated herein, or any
filings, approvals or other actions by or with any domestic or foreign
governmental authority or administrative or regulatory agency that would be
required prior to the acquisition of Units by the Purchaser pursuant to the
Offer as contemplated herein, other than the filing of a Tender Offer Statement
on Schedule 14D-1 (which has been filed) and any required amendments thereto.
Should any such approval or other action be required, there can be no assurance
that any such additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Partnership's business, or that certain parts of the Partnership's or the
Purchaser's businesses might
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<PAGE>
not have to be disposed of or held separate or other substantial conditions
complied with in order to obtain such approval or action in the event that such
approvals were not obtained or such actions were not taken.
Appraisal Rights. Limited Partners will not have appraisal rights as a
result of the Offer.
State Anti-takeover Laws. A number of states have adopted anti-takeover
laws which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations or other entities which are incorporated or organized
in such states or which have substantial assets, securityholders, principal
executive offices or principal places of business therein. Although the
Purchaser has not attempted to comply with any state anti-takeover statutes in
connection with the Offer, the Purchaser reserves the right to challenge the
validity or applicability of any state law allegedly applicable to the Offer and
nothing in this Offer to Purchase nor any action taken in connection therewith
is intended as a waiver of such right. If any state anti-takeover statute is
applicable to the Offer, the Purchaser might be unable to accept for payment or
purchase Units tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obliged to accept
for purchase or pay for any Units tendered.
ERISA. By executing and returning the Letter of Transmittal, a Limited
Partner will be representing that either (a) the Limited Partner is not a plan
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code, or an entity deemed to hold
"plan assets" within the meaning of 29 C.F.R. ss.2510.3-101 of any such plan; or
(b) the tender and acceptance of Units pursuant to the Offer will not result in
a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code.
Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.
Antitrust. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice and the FTC and certain waiting period requirements
have been satisfied. The Purchaser does not believe any filing is required under
the HSR Act with respect to its acquisition of Units contemplated by the Offer.
16. Certain Fees and Expenses.
Except as set forth in this Section 16, the Purchaser will not pay any fees
or commissions to any broker, dealer or other person for soliciting tenders of
Units pursuant to the Offer. The Purchaser has retained The Herman Group, Inc.
of Dallas, Texas to act as Administrative Agent/Depositary in connection with
the Offer. The Purchaser will pay to the Administrative Agent/Depositary
reasonable and customary compensation for its services, plus reimbursement for
certain reasonable out-of-pocket expenses, and has agreed to indemnify it
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws. The Purchaser will also
pay all costs and expenses of printing and mailing the Offer and its legal fees
and expenses.
17. Miscellaneous.
The Offer is being made to all Limited Partners to the extent their names
and addresses are reflected on the books and records of the Partnership. The
Purchaser is not aware of any state in which the making of the Offer is
prohibited by administrative or judicial action pursuant to a state
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<PAGE>
statute. If the Purchaser becomes aware of any state where the making of the
Offer is so prohibited, the Purchaser will make a good faith effort to comply
with any such statute or seek to have such statute declared inapplicable to the
Offer. If, after such good faith effort, the Purchaser cannot comply with any
applicable statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) Limited Partners in such state.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, the Purchaser has filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, furnishing certain
additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained at the same places and in the same manner as set forth with respect to
information concerning the Partnership in Section 9 ("Certain Information
Concerning the Partnership") (except that they will not be available at the
regional offices of the Commission).
No person has been authorized to give any information or make any
representation on behalf of the Purchaser not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.
Oldham Institutional Tax Credits
LLC
July 24, 1997
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<PAGE>
APPENDIX A
GLOSSARY OF DEFINED TERMS
"Administrative Agency/Depositary" means The Herman Group, Inc. of Dallas,
Texas.
"Assignee" means a person or entity who has purchased Units but is not
recognized on the books and records of the Partnership as a registered holder of
such Units.
"Beneficial Owner" means a Limited Partner in the case of Units owned by
Individual Retirement Accounts or Keogh plans.
"Business Day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time, and any time period of business days will be computed in
accordance with Rule 14d-1(c)(6) under the Exchange Act.
"Code" means the Internal Revenue Code of 1986, as amended.
"Co-General Partner" means Arch Street V, Limited Partnership, a
Massachusetts limited partnership.
"Commission" means the Securities and Exchange Commission.
"Credit Period" has the meaning set forth in Section 9.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.
"Form 10-K" means the Partnership's Form 10-K for the fiscal year ended
March 31, 1997.
"FTC" means the Federal Trade Commission.
"General Partners" means the Co-General Partner and the Managing General
Partner.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"IRA" means an individual retirement account.
"Limited Partner" means any person who is a limited partner, whether an
Initial Limited Partner, the Original Limited Partner, an Additional Limited
Partner or any other person or entity who is admitted as a Substituted Limited
Partner, at the time of reference thereto, in such person's or entity's capacity
as a limited partner of the Partnership.
"Limited Partnership Interest" means the ownership interest of a Limited
Partner, including its interest in distributions, including liquidating
distributions, and profits and losses of the Partnership and all of its other
rights, duties and obligations under the Partnership Agreement.
"Low-Income Housing Credits" means the tax credit allowed under Section 42
of the Code for qualified low-income housing projects.
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<PAGE>
"Managing General Partner" means Arch Street V, Inc., a Massachusetts
corporation.
"Managing Member" means West Cedar Managing, Inc., a Massachusetts
corporation and the managing member of the Purchaser.
"NASD" means the National Association of Securities Dealers, Inc.
"Offer" has the meaning set forth in the Introduction.
"Offer to Purchase" means this Offer to Purchase dated July 24, 1997.
"Partnership" means Boston Financial Tax Credit Fund V, A Limited
Partnership, a Massachusetts limited partnership.
"Partnership Agreement" means the Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of March 2, 1990, as amended to date,
by and among Arch Street V Limited Partnership, a Massachusetts limited
partnership, and Arch Street V, Inc. as General Partners, Arch Street V Limited
Partnership, as Original Limited Partner of the Partnership and those persons or
entities admitted to the Partnership from time to time as Limited Partners.
"Purchase Price" has the meaning set forth in the Introduction.
"Purchaser" means Oldham Institutional Tax Credits LLC, a Massachusetts
limited liability company and an affiliate of the General Partners.
"Rehabilitation Tax Credits" means any historic rehabilitation credits to
tax allowed to the Partnership and its partners under Section 47 of the Code.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Substituted Limited Partner" means any person or entity admitted to the
Partnership as a Limited Partner pursuant to the provisions of Section 7.3 of
the Partnership Agreement.
"Tax Credits" means Rehabilitation Tax Credits and Low-Income Housing
Credits.
"TIN" means taxpayer identification number.
"Transfer Restrictions" has the meaning set forth in Section 2.
"UBTI" means unrelated business taxable income.
"Unit" means a unit of limited partner interest in the Partnership,
representing a cash contribution of $1,000 to the capital of the Partnership.
Reference to a majority, or specified percentage, in the interest of the Limited
Partners means Limited Partners who, in the aggregate, own greater than 50%, or
such specified percentage, respectively, of the total number of Units.
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SCHEDULE I
EXECUTIVE OFFICERS AND DIRECTORS OF WEST CEDAR MANAGING, INC.
Set forth below is the name, current business address, present principal
occupation, and employment history for at least the past five years of each
executive officer and director of WEST CEDAR MANAGING, INC. (the "Managing
Member"). Each person listed below is a citizen of the United States.
The principal officers and directors of West Cedar Managing, Inc. are:
Jenny Netzer President and Treasurer
William E. Haynsworth Managing Director, Chief Operating Officer
Michael H. Gladstone Managing Director
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
Randolph G. Hawthorne Vice President
The Managing Directors of West Cedar Managing, Inc. comprise its board of
directors and also collectively perform the function of chief executive officer
of West Cedar Managing, Inc. Each Managing Director will serve as a director of
West Cedar Managing, Inc. until his or her successor is elected and qualified.
All the above-officers occupy executive positions in The Boston Financial Group
Limited Partnership ("Boston Financial"), an affiliate of the Purchaser.
Jenny Netzer, age 41, is a graduate of Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. She joined Boston Financial in 1987 and is a Senior Vice President
leading the Institutional Tax Credit Team, which is responsible for developing,
marketing and managing institutional tax credit products. Previously, she led
the company's new business initiatives, helping guide the company's efforts in
the areas of publicly-traded real estate securities and senior housing. She is
also a member of the Senior Leadership Team of Boston Financial, which is
responsible for the strategic direction of the company. Previously Ms. Netzer
managed the firm's Asset Management division. Before joining Boston Financial,
she was Deputy Budget Director for the Commonwealth of Massachusetts. Ms. Netzer
was also Assistant Controller at Yale University and has been a member of the
Watertown Zoning Board of Appeals.
William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard
Law School. Mr. Haynsworth was Acting Executive Director of the Massachusetts
Housing Finance Agency, where he was also General Counsel, prior to becoming a
Vice President of Boston Financial in 1977 and a Senior Vice President in 1986.
He has also served as Director of Non-Residential Development of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin, Procter
& Hoar in Boston. Mr. Haynsworth is a member of the Senior Leadership Team and
Board of Directors of Boston Financial and is the senior executive responsible
for structuring and acquiring real estate investments.
Michael H. Gladstone, age 41, graduated from Emory University (B.A. 1978)
and Cornell University (J.D., MBA 1982). He joined Boston Financial in 1985, and
currently serves as a Vice President and the company's General Counsel. Mr.
Gladstone is also a member of the Senior Leadership Team of Boston Financial.
Prior to joining Boston Financial, Mr. Gladstone was associated with the law
firm of Herrick & Smith. Mr. Gladstone is a member of the National Realty
Committee and serves on the advisory board to the Housing and Development
Reporter, a national publication on housing issues.
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Paul F. Coughlan, age 53, is a graduate of Brown University (A.B., 1965)
and served in the United States Navy before entering the securities business in
1969. He was employed as an investment broker by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 as a Vice
President in the real estate investment marketing area and was named a Senior
Vice President in 1986. Mr. Coughlan is a member of the Institutional Tax Credit
Team with responsibility for the marketing of real estate investments.
Peter G. Fallon, Jr., age 59, graduated from the College of the Holy Cross
(B.S. 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, and is currently a Senior Vice President and
a member of the Institutional Tax Credit Team with responsibility for the
marketing of real estate investments.
Randolph G. Hawthorne, age 46, is a graduate of Massachusetts Institute of
Technology and Harvard Graduate School of Business. He has been associated with
Boston Financial since 1973 and has served as the Treasurer of Boston Financial
and manager of the company's Investment Real Estate division. Currently a Senior
Vice President of Boston Financial, Mr. Hawthorne's primary responsibility is
structuring and acquiring real estate investments and development new business
opportunities. He also serves on the Board of Directors of Boston Financial. Mr.
Hawthorne currently serves as Chairman of the National Multi-Housing Council and
is a former President of the National Housing and Rehabilitation Association. He
is also a member of the Urban Land Institute's Multifamily Residential Council
and a member of the Advisory Board of the University of California, Berkeley
Real Estate Center.
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SCHEDULE II
Local Limited Partnership Schedule
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- - --------------------------------- ------------ --------------- ---------------- -------------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Strathern Park/Lorne Park, a
California Limited Partnership (1)
Strathern Park/Lorne Park
Los Angeles, CA 241 $8,418,667 $8,418,667 $17,552,451 None 100%
Maiden Choice Limited
Partnership
ParkCaton
Catonsville, MD 101 2,513,300 2,513,300 4,050,000 None 100%
Cedar Lane I, Ltd.
Cedar Lane I
London, KY 36 288,587 288,587 1,122,677 None 100%
Silver Creek II, Ltd.
Silver Creek II
Berea, KY 24 193,278 193,278 771,586 None 100%
Tompkins/Rosecliff, Ltd.
Rosecliff
Sanford, FL 168 3,604,720 3,604,720 5,617,392 None 90%
Brookwood L.D.H.A.
Brookwood
Ypsilanti, MI 81 2,373,295 2,373,295 3,042,439 None 95%
Water Oak Apartment, L.P.
Water Oak
Orange City, FL 40 293,519 293,519 1,260,655 None 100%
Page 45
<PAGE>
SCHEDULE II
Local Limited Partnership Schedule
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- - --------------------------------- ------------ --------------- ---------------- -------------------- ------------ ----------
Yester Oaks, L.P.
Yester Oaks
Lafayette, GA 44 319,254 319,254 1,291,670 FmHA 88%
Ocean View Apartments, L.P.
Ocean View
Fernandina Beach, FL 42 334,177 334,177 1,371,628 None 100%
Burbank Limited Partnership I
Wheeler House
Nashua, NH 17 300,531 300,531 713,772 Section 8 100%
Archer Village, Ltd.
Archer Village
Archer, FL 24 171,380 171,380 711,860 FmHA 95%
The Oaks of Dunlop Farms, L.P.
Oaks of Dunlop
Colonial Heights, VA 144 2,791,280 2,791,280 4,453,719 None 99%
Timothy House Limited
Partnership
Timothy House
Towson, MD 112 3,064,250 3,064,250 2,572,215 None 100%
Westover Station Associates, L.P.
Westover Station
Newport News, VA 108 1,972,947 1,972,947 2,674,741 None 94%
Page 46
<PAGE>
SCHEDULE II
Local Limited Partnership Schedule
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- - --------------------------------- ------------ --------------- ---------------- -------------------- ------------ ----------
Christiansted Limited Dividend
Housing Association
Carib III
St. Croix, VI 24 322,260 322,260 1,489,054 FmHA 92%
St. Croix II Limited Partnership
Carib II
St. Croix, VI 20 347,680 347,680 1,407,642 FmHA 85%
Whispering Trace Apartments,
A Limited Partnership
Whispering Trace
Woodstock, GA 40 1,093,330 1,093,330 1,408,471 None 95%
Historic New Center Apartments
Limited Partnership
New Center
Detroit, MI 104 2,899,000 2,899,000 3,519,360 Section 8 90%
Huguenot Park Associates, L.P.
Huguenot Park
New Paltz, NY 24 982,358 982,358 1,400,000 None 100%
Cobblestone Place Townhomes,
A Limited Partnership
Hillwood Pointe
Jacksonville, FL 100 2,356,133 2,356,133 2,993,869 None 97%
Kensington Place Townhomes,
A Limited Partnership
Pinewood Pointe
Jacksonville, FL 136 3,153,173 3,153,173 4,053,614 None 99%
Page 47
<PAGE>
SCHEDULE II
Local Limited Partnership Schedule
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- - --------------------------------- ------------ --------------- ---------------- -------------------- ------------ ----------
Westgate Apartments Limited
Partnership
Westgate
Bismark, ND 60 935,893 935,893 1,389,836 None 95%
Woodlake Hills Limited
Partnership
Woodlake Hills
Pontiac, MI 144 4,154,670 4,154,670 3,875,742 None 94%
Bixel House, a California
Limited Partnership
Bixel House
Los Angeles, CA 76 710,677 710,677 1,442,282 Section 8 96%
Harmony Apartments, a California
Limited Partnership
Magnolia Villas
North Hollywood, CA 65 3,203,996 3,203,996 3,124,470 None 95%
Schumaker Place Associates, L.P.
Schumaker Place
Salisbury, MD 96 2,910,453 2,910,453 2,941,443 None 92%
Circle Terrace Associates Limited
Partnership
Circle Terrace
Lansdowne, MD 303 5,811,234 5,811,234 9,962,770 Section 8 98%
------- ------------ ------------ -------------
2,374 $ 55,520,042 $ 55,520,042 $ 86,215,358
======= ============ ============ =============
</TABLE>
Page 48
<PAGE>
SCHEDULE II
Local Limited Partnership Schedule
* FmHA This subsidy, which is authorized under Section 515 of the
Housing Act of 1949, can be one or a combination of different types
of financing. For instance, FmHA may provide 1) direct
below-market-rate mortgage loans for rural rental housing; 2)
mortgage interest subsidies which effectively lower the interest
rate of the loan to 1%; 3) a rental assistance subsidy to tenants
which allows them to pay no more than 30% of their monthly income as
rent with the balance paid by the federal government; or 4) a
combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II of the
Housing and Community Development Act of 1974, allows qualified
low-income tenants to pay 30% of their monthly income as rent with
the balance paid by the federal government.
(1) On January 1, 1994, Lorne Park merged into Strathern Park in a
business combination accounted for as a pooling of interests. Lorne
Park's total assets, liabilities and partners' equity were combined
with Strathern Park at their existing book value, and neither
partnership recognized a gain or loss on the merger. The combined
Partnerships constructed a 241 Unit apartment project (Lorne Park:
72 Units, Strathern Park: 169 Units) for tenants whose income is
very low to moderate.
Page 49
<PAGE>
Boston Financial Qualified Housing Tax Credits L.P. V Schedule III - Real Estate
and Accumulated Depreciation of Property Owned by Local Limited Partnerships in
which Registrant has invested March 31, 1997 (continued)
<TABLE>
<CAPTION>
NET
IMPROVEMENTS
NUMBER TOTAL BUILDINGS/ CAPITALIZED BUILDINGS
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO AND
DESCRIPTION UNITS BRANCES* LAND & EQUIPMENT ACQUISITION LAND IMPROVEMENTS TOTAL
- - ----------- ----- -------- ---- ----------- ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment
Complexes
Strathem Park/Lome 241 $17,552,451 $4,369,500 $10,513,639 $10,993,326 $5,889,320 $19,897,145 $25,876,465
Park
Los Angeles, CA
Maidens Choice 101 4,050,000 807,791 2,103,769 3,391,316 807,791 4,405,085 6,212,876
Baltimore, MD
Cedar Lane 36 1,122,677 40,000 1,375,512 11,854 40,000 1,387,366 1,427,366
London, KY
Silver Creek, 24 771,586 20,000 946,812 0 20,000 946,812 966,812
Berea, KY
Rosecliff 168 5,617,392 1,200,000 3,304,950 4,578,797 1,120,000 7,963,747 9,083,747
Orlando, FL
Brookwood 81 3,042,439 91,470 344,580 4,519,699 79,178 4,876,571 4,955,749
Ypsilanti
Township, MI
Water Oak 40 1,260,655 98,058 1,467,944 4,343 98,058 1,472,287 1,570,345
Orange City, FL
Yester Oaks 44 1,291,670 47,105 1,574,145 2,489 47,105 1,576,634 1,623,739
Lafayette, GA
Ocean View 42 1,371,628 112,620 1,600,421 7,347 112,620 1,607,768 1,720,388
Ferandina Beach. FL
Wheeler House 17 713,772 42,000 1,139,412 25,527 42,000 1,164,939 1,206,939
Nashua, NH
Archer Village 24 711,860 40,000 861,288 38,860 40,000 900,157 940,157
Archer, FL
Oaks of Dunlop 144 4,453,719 631,959 6,492,444 109,440 631,959 6,601,884 7,233,843
Colonial Heights,
VA
Timothy House 112 2,572,215 11,368 6,344,664 396,246 11,638 6,740,910 6,752,548
Towson, MD
Westover Station 108 2,674,741 305,645 4,299,613 3,757 305,645 4,303,370 4,609,015
Newport News, VA
Carib Villas III 24 1,489,054 107,582 1,802,466 2,764 239,009 1,673,803 1,912,812
St. Croix, VI
Carib Villas II 20 1,407,642 57,720 1,787,528 2,764 197,195 1,650,817 1,848,012
St. Croix, VI
Whispering Trace 40 1,408,471 218,000 2,413,145 (486,409) 218,000 1,926,736 2,144,736
Woodstock, GA
New Center 104 3,519,360 79,652 3,534,776 2,930,224 96,116 6,448,538 6,544,652
Detroit, MI
Huguenot Park 24 1,400,000 83,000 2,088,664 0 83,000 2,088,664 2,171,664
New Paltz, NY
Hillwood Pointe 100 2,993,869 454,185 5,103,711 1,459 454,185 5,105,170 5,559,355
Jacksonville, FL
Pinewood Pointe 136 4,053,614 555,093 6,809,808 445,908 555,093 7,255,716 7,810,809
Jacksonville, Fl
Westgate 60 1,389,836 215,168 2,152,519 22,471 236,689 2,153,469 2,390,158
Bismark, ND
Woodlake Hills 144 3,875,742 233,690 6,481,250 2,386,284 187,588 8,913,636 9,101,224
Pontiac, MI
Bixel House 76 1,442,282 190,746 2,294,879 50,061 190,746 2,344,940 2,535,868
Los Angeles, CA
Harmony 65 3,124,470 0 7,020,696 117,826 0 7,138,522 1,7,138,522
North Hollywood,
CA
Schumaker Place 96 2,941,443 531,776 1,627,716 3,603,531 536,153 5,226,870 5,763,023
Salisbury, MD
Circle Terrace 303 9,962,770 0 7,884,733 8,495,063 1,104,269 15,275,527 16,379,796
Lansdown, MD
=======================================================================================================
Totals
2,374 $86,215,358 $10,544,398 $93,281,084 $41,654,956 $13,343,35 $132,137,081 $145,480,438
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LIFE ON
WHICH
DEPRECIATION
ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION DEPRECIATION BUILT (YEARS) ACQUIRED
- - ----------- ------------ ----- ------ --------
<S> <C> <C> <C> <C>
Low and Moderate
Income Apartment
Complexes
Strathem Park/Lome $4,438,048 1991 various 07/05/90
Park
Los Angeles, CA
Maidens Choice 1,193,185 1991 various 08/17/90
Baltimore, MD
Cedar Lane 269,462 1991 various 09/10/90
London, KY
Silver Creek, 189,935 1990 various 08/15/90
Berea, KY
Rosecliff 1,856,102 1991 various 09/18/90
Orlando, FL
Brookwood 984,488 1992 various 10/01/90
Ypsilanti
Township, MI
Water Oak 315,058 1991 various 01/10/91
Orange City, FL
Yester Oaks 349,631 1991 various 01/01/91
Lafayette, GA
Ocean View 366,864 1991 various 01/01/91
Ferandina Beach. FL
Wheeler House 225,657 1991 various 01/01/91
Nashua, NH
Archer Village 209,079 1991 various 01/01/91
Archer, FL
Oaks of Dunlop 1,711,138 1991 various 01/01/91
Colonial Heights,
VA
Timothy House 883,228 1992 various 03/05/91
Towson, MD
Westover Station 724,351 1991 various 03/30/91
Newport News, VA
Carib Villas III 401,707 1992 various 03/21/91
St. Croix, VI
Carib Villas II 386,389 1991 various 03/01/91
St. Croix, VI
Whispering Trace 562,439 1990 various 05/01/91
Woodstock, GA
New Center 1,64,004 1992 various 06/27/91
Detroit, MI
Huguenot Park 435,847 1991 various 06/26/91
New Paltz, NY
Hillwood Pointe 1,212,626 1991 various 07/19/91
Jacksonville, FL
Pinewood Pointe 1,569,667 1991 various 07/31/91
Jacksonville, Fl
Westgate 421,740 1991 various 07/25/91
Bismark, ND
Woodlake Hills 1,092,535 1992 various 08/01/91
Pontiac, MI
Bixel House 656,472 1991 various 07/31/91
Los Angeles, CA
Harmony 1,596,510 1991 various 07/31/91
North Hollywood,
CA
Schumaker Place 581,838 1992 various 09/20/91
Salisbury, MD
Circle Terrace 2,369,146 1993 various 12/06/91
Lansdown, MD
===========
Totals
$26,076,146
===========
</TABLE>
(1) The aggregate for the Federal Income Tax purposes is approximately
$145,480,000.
* Mortgage notes payable generally represent non-recourse financing
low-income housing projects payable with terms of up to 40 years with
interest payable at rates ranging from 9.75% to 12%. The Partnership has not
guaranteed any of these mortgages notes payable.
Page 50
<PAGE>
Schedule III - Certain Information Concerning
Each Property owned by Local Limited
Partnerships in Which the Partnership
has Invested at March 31, 1997
(continued)
Summary of property owned and accumulated depreciation:
<TABLE>
<CAPTION>
Property owned December 31, 1996 Accumulated Depreciation December 31, 1996
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at beginning of period $145,304,421 Balance at beginning of period $ 21,269,750
Additions during period: Additions during period:
Other acquisitions 13,520 Depreciation 4.805.396
------------
Improvements etc. 162,497 Balance at close of period $ 26,076,146
------- ============
176,017
Deductions during period:
Cost of real estate sold 0
Reclassification to intangible assets 0
-------
0
------------
Balance at close of period $145,480,438
============
Property owned December 31, 1995 Accumulated Depreciation December 31, 1995
- - ------------------------------------------------------------------------------------------------------------------------------------
Balance at beginning of period $145,215,379 Balance at beginning of period: $ 16,571,920
Additions during period: Additions during period:
Other acquisitions 27,195 Depreciation 4.697.830
Improvements etc. Balance at close of period $ 21,269,750
=============
13,1,065
--------
158,260
Deductions during period:
Cost of real estate sold (69,218)
-------
Reclassification to intangible assets 0
-------
(69,218)
-----------
Balance at close of period $145,304,432
------------
Property owned December 31, 1994 Accumulated Depreciation December 31, 1994
- - ------------------------------------------------------------------------------------------------------------------------------------
Balance at beginning of period $145,650,432 Balance at beginning of period: $ 11,565,575
Additions during period: Additions during period:
Other acquisitions 31,594 Depreciation
5.006.345
-------------
Improvements etc. Balance at close of period $ 16,571,920
=============
37,945
-------
69,539
Deductions during period:
Cost of real estate sold (504,592)
-------
Reclassification to intangible assets 0
-------
(504,592)
------------
Balance at close of period $145,215,379
- - -------------------------- ------------
</TABLE>
Page 51
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and
duly executed, will be accepted. Questions on, and requests for assistance in,
completing the documentation or requests for additional copies of this Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
obtained from The Herman Group, Inc. (the "Administrative Agent/Depositary") by
calling the toll free number below. The Letter of Transmittal and any other
required documents should be sent or delivered by each Limited Partner to the
Administrative Agent/Depositary at its address set forth below. To be effective,
a duly completed and signed Letter of Transmittal must be received by the
Administrative Agent/Depositary at the address set forth below before 12:00
midnight, Eastern Time, on Thursday, August 21, 1997. For additional information
with regard to the Offer to Purchase, call the Purchaser at the toll-free number
set forth below.
For Additional Information with regard to the Offer to Purchase Call:
Oldham Institutional Tax Credits LLC
(800) 829-9213, extension 12
101 Arch Street
Boston, Massachusetts 02110
For Assistance in Completing the Letter of Transmittal and Related Documentation
or Additional Copies of the Offer to Purchase, Letter of Transmittal and
Related Documents contact:
The Herman Group, Inc.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201
Telephone: (800) 243-8440
Facsimile: (214) 999-9323 or (214) 999-9348
Return Letter of Transmittal and other Related Documents
By Mail/Hand or Overnight Delivery:
Administrative Agent/Depositary
The Herman Group, Inc.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201
Telephone: (800) 243-8440
Facsimile: (214) 999-9323 or (214) 999-9348
Page 52
<PAGE>
Exhibit (a)(2)
Page 53
<PAGE>
LETTER OF TRANSMITTAL
TO
TENDER UNITS
IN
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V, A LIMITED PARTNERSHIP
PURSUANT TO THE OFFER TO PURCHASE DATED JULY 24, 1997
BY
OLDHAM INSTITUTIONAL TAX CREDITS LLC
Tax I.D. No.:__________________
Number of Number of (1) Purchase Price
Units Owned Units Tendered Per Unit _____
----------- -------------- --------------
(1) If no indication is marked in the Number of Units Tendered Column, all
Units issued to you will be deemed to have been tendered
(Please indicate changes or corrections to the address and Tax I.D. number
above, if necessary.)
================================================================================
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT,
EASTERN TIME, ON THURSDAY, AUGUST 21, 1997 (THE "EXPIRATION DATE") UNLESS SUCH
OFFER IS EXTENDED.
The undersigned hereby tender(s) to Oldham Institutional Tax Credits LLC,
a Massachusetts limited liability company (the "Purchaser"), the number of Units
("Units") representing limited partnership interests in Boston Financial
Qualified Housing Tax Credits L.P. V, A Limited Partnership, a Massachusetts
limited partnership (the "Partnership"), specified above, pursuant to the
Purchaser's offer to purchase up to 17,200 of the issued and outstanding Units
at a purchase price of $555.00 per Unit, net to the seller in cash (the
"Purchase Price"), without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated July 24, 1997 (the "Offer to
Purchase") and this Letter of Transmittal (the "Letter of Transmittal", which,
together with the Offer to Purchase and any supplements, modifications or
amendments thereto, constitute the "Offer"), all as more fully described in the
Offer to Purchase. LIMITED PARTNERS WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED
TO PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES. Receipt of the Offer to
Purchase is hereby acknowledged. Capitalized terms used but not defined herein
have the respective meanings ascribed to them in the Offer to Purchase.
By executing and delivering this Letter of Transmittal, a tendering
Limited Partner irrevocably appoints the Purchaser and the designees of the
Purchaser and each of them as such Limited Partner's proxies, each with full
power of substitution, to the full extent of such Limited Partner's rights with
respect to the Units tendered by such Limited Partner and accepted for payment
by the Purchaser (and with respect to any and all other Units or other
securities issued or issuable in respect of such Units on or after the date
hereof). All such proxies shall be considered irrevocable and coupled with an
interest in the tendered Units. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Units for payment. Upon such
acceptance for payment, all prior proxies given by such Limited Partner with
respect to such Units (and such other Units and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
subsequent written consents executed (and, if given or executed, will not be
deemed effective). The Purchaser and its designees will, with respect to the
Units (and such other Units and securities) for which such appointment is
effective, be empowered to exercise all voting and other rights of such Limited
Partner as it in its sole discretion may deem proper pursuant to the Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of March
2, 1990, as amended to date (the "Partnership Agreement") or otherwise. The
Purchaser may assign such proxy to any person with or without assigning the
related Units with respect to which such proxy and/or power of attorney was
granted. The Purchaser reserves the right to require that, in order for Units to
be deemed validly tendered, immediately upon the Purchaser's payment for such
Units, the Purchaser must be able to exercise full voting rights with respect to
such Units and other securities, including voting at any meeting of Limited
Partners.
By executing and delivering this Letter of Transmittal, a tendering
Limited Partner also irrevocably constitutes and appoints the Purchaser and its
designees as the Limited Partner's attorneys-in-fact, each with full power of
substitution to the extent of the Limited Partner's rights with respect to the
Units tendered by the Limited Partner and accepted for payment by the Purchaser.
Such appointment will be effective when, and only to the extent that, the
Purchaser accepts the tendered Units for payment. Upon such acceptance for
payment, all prior powers of attorney granted by the Limited Partner with
respect to such Unit will, without further action, be revoked, and no subsequent
powers of attorney may be granted (and if granted will not be effective).
Pursuant to such appointment as attorneys-in-fact, the Purchaser and its
designees each will have the power, among other things, (i) to seek to transfer
ownership of such Units on the books and records of the Partnership maintained
by the General Partners (and execute and deliver any accompanying evidences of
transfer and authenticity any of them may deem necessary or appropriate in
connection therewith, including, without limitation, any documents or
instruments required to be executed under the Partnership Agreement or a
"Transferor's (Seller's) Application for Transfer" created by the NASD, if
required), (ii) to be allocated all Low-Income Housing Credits and tax losses
and to receive any and all distributions made by the Partnership after the
Expiration Date, and to receive all benefits and otherwise exercise all rights
of beneficial ownership of such Units in accordance with the terms of the Offer,
(iii) to execute and deliver to the Partnership and/or the General Partners (as
the case may be) a change of address form instructing the Partnership to send
any and all future distributions to which the Purchaser is entitled pursuant to
the terms of the Offer in respect of tendered Units to the address specified in
such form, and (iv) to endorse any check payable to or upon the order of such
Limited Partner representing a distribution, if any, to which the Purchaser is
entitled pursuant to the terms of the Offer, in each case on behalf of the
tendering Limited Partner. If legal title to the Units is held through an IRA or
KEOGH or similar account, the Limited Partner understands that this Letter of
Transmittal must be signed by the custodian of such IRA or KEOGH account and the
Limited Partner hereby authorizes and directs the custodian of such IRA or KEOGH
to confirm this Letter of Transmittal. This power of attorney shall not be
affected by the subsequent mental disability of the Limited Partner, and the
Purchaser shall not be required to post bond in any nature in connection with
this power of attorney. The Purchaser may assign such power of attorney to any
person with or without assigning the related Units with respect to which such
power of attorney was granted.
By executing and delivering this Letter of Transmittal, a tendering
Limited Partner irrevocably assigns to the Purchaser and its assigns all of the
direct and indirect, right, title and interest of such Limited Partner in the
Partnership with respect to the Units tendered and purchased pursuant to the
Offer, including, without limitation, such Limited Partner's right, title and
interest in and to any and all Low Income Housing Credits and tax losses and any
and all distributions made by the Partnership after the Expiration Date in
respect of the Units tendered by such Limited Partner and accepted for payment
by the Purchaser, regardless of the fact that the record date for any such
distribution may be a date prior to the Expiration Date. The Purchaser reserves
the right to transfer or assign, in whole or from time to time in part, to any
third party, the right to purchase Units tendered pursuant to the Offer,
together with its rights under the Letter of Transmittal, but any such transfer
or assignment will not relieve the assigning party of its obligations under the
Offer or prejudice the rights of tendering Limited Partners to receive payment
for Units validly tendered and accepted for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (a) the undersigned is not a plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. {sec}2510.3-101 of any
such plan or (b) the tender and acceptance of Units pursuant to the Offer will
not result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
By executing this Letter of Transmittal, the undersigned represents that
this transfer has not been effected through an established securities market or
through a broker-dealer or matching agent which makes a market in Units or which
provides a widely available, regular and ongoing opportunity to the holders of
Units to sell or exchange their Units through a public means of obtaining or
providing information of offers to buy, sell or exchange Units.
The undersigned recognizes that, if proration is required pursuant to the
terms of the Offer, the Purchaser will accept for payment from among those Units
validly tendered on or prior to the Expiration Date and not properly withdrawn,
the maximum number of Units permitted pursuant to the Offer on a pro rata basis,
with adjustments to avoid purchases which would violate the terms of the Offer,
based upon the number of Units validly tendered prior to the Expiration Date and
not properly withdrawn.
The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in Section 2 ("Proration; Acceptance
for Payment and Payment for Units") and Section 14 ("Conditions of the Offer")
of the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the Units tendered hereby. In such event, the undersigned
understands that any Letter of Transmittal for Units not accepted for payment
will be destroyed by the Purchaser. Except as stated in Section 4 ("Withdrawal
Rights") of the Offer to Purchase, this tender is irrevocable, provided Units
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date. The undersigned acknowledges that (i) upon acceptance of, and
payment for, tendered Units, the undersigned shall no longer be entitled to any
benefits as a Limited Partner.
Page 54
<PAGE>
BOX A
SUBSTITUTE FORM W-9
(See Instruction 4)
The person signing this Letter of Transmittal hereby certifies the following to
the Purchaser under penalties of perjury:
(i) The Taxpayer Identification Number ("TIN") as printed (or corrected) on the
front furnished in the space provided for that purpose in the Signature Box of
this Letter of Transmittal is the correct TIN of the Limited Partner; or if no
TIN is provided above and this box [ ] is checked, the Limited Partner has
applied for a TIN. If the Limited Partner has applied for a TIN, a TIN has not
been issued to the Limited Partner, and either: (a) the Limited Partner has
mailed or delivered an application to receive a TIN to the appropriate Internal
Revenue Service ("IRS") Center or Social Security Administration Office, or (b)
the Limited Partner intends to mail or deliver an application in the near
future, it is hereby understood that if the Limited Partner does not provide a
TIN to the Purchaser within sixty (60) days, 31% of all reportable payments made
to the Limited Partner thereafter will be withheld until a TIN is provided to
the Purchaser; and
(ii) Unless this box [ ] is checked, the Limited Partner is not subject to
backup withholding either because the Limited Partner (a) is exempt from backup
withholding, (b) has not been notified by the IRS that the Limited Partner is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) has been notified by the IRS that such Limited Partner is no
longer subject to backup withholding
Note: Place an "X" in the box in (ii) above, if you are unable to certify that
the Limited Partner is not subject to backup withholding.
BOX B
FIRPTA AFFIDAVIT
(See Instruction 4)
Under Section 1445(c)(5) of the Code and Treas. Reg. 1.1445-11T(d), a
transferee must withhold tax equal to 10% of the amount realized with respect to
certain transfers of an interest in a partnership if 50% or more of the value of
its gross assets consists of U.S. real property interests and 90% or more of the
value of its gross assets consists of U.S. real property interests plus cash or
cash equivalents, and the holder of the partnership interest is a foreign
person. To inform the Purchaser that no withholding is required with respect to
the Limited Partner's interest in the Partnership, the person signing this
Letter of Transmittal hereby certifies the following under penalties of perjury:
(i) Unless this box [ ] is checked, the Limited Partner, if an individual, is a
U.S. citizen or a resident alien for purposes of U.S. income taxation, and if
other than an individual, is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the Code and
Income Tax Regulations);
(ii) the Limited Partner's U.S. social security number (for individuals) or
employer identification number (for non-individuals) is correct as furnished in
the blank provided for that purpose on the front of this Letter of Transmittal;
and
(iii) the Limited Partner's home address (for individuals), or office address
(for non-individuals), is correctly printed (or corrected) on the front of this
Letter of Transmittal. If a corporation, the jurisdiction of incorporation is
The person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchaser and that any false
statements contained herein could be punished by fine, imprisonment, or both.
BOX C
SUBSTITUTE FORM W-8
(See Instruction 5)
By checking this box [ ], the person signing this Letter of Transmittal hereby
certifies under penalties of perjury that the Limited Partner is an "exempt
foreign person" for purposes of the backup withholding rules under U.S. federal
income tax laws, because the Limited Partner:
(i) Is a nonresident alien or a foreign corporation, partnership, estate or
trust;
(ii) If an individual, has not been and plans not to be present in the U.S. for
a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business that has
effectively connected gains from transactions with a broker or barter exchange.
SIGNATURE BOX (ALL OWNERS)
(See Instruction 2)
Please sign exactly as your name(s) is printed (or as corrected) on the Letter
of Transmittal. For joint owners, each joint owner must sign. The signatory
hereto hereby certifies under penalties of perjury the Taxpayer Identification
Number (i.e., the signatory's social security number) printed (or as corrected )
on the Letter of Transmittal and the statements in Box A, Box B and, if
applicable, Box C. The undersigned hereby represents and warrants for the
benefit of the Partnership and the Purchaser that the undersigned owns (or
beneficially owns) the Units tendered hereby and has full power and authority to
validly tender, sell, assign, transfer, convey and deliver the Units tendered
hereby and that when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good, marketable and unencumbered title thereto, free and
clear of all liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale or transfer thereof, such
Units will not be subject to any adverse claims and, the transfer and assignment
contemplated herein are in compliance with all applicable laws and regulations.
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and any obligations of the undersigned shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned.
X----------------------------------- X--------------------------------------
(Signature of Owner) (Date) (Signature of Joint-Owner)
Name and Capacity Area Code and Telephone No. (Eve)
(if other than individual)
- - ------------------------------------ --------------------------------------
Title: Area Code and Telephone No. (Day)
- - ------------------------------------ --------------------------------------
For Units to be accepted for purchase, a Limited Partner should complete and
sign this Letter of Transmittal in the Signature Box and return it in the
self-addressed, postage-paid envelope enclosed, or by hand or overnight courier
to: The Herman Group, Inc. 2121 San Jacinto Street, 26th Floor, Dallas, TX 75201
or by facsimile to: (214) 999-9323 or (214) 999-9348. Delivery of this Letter of
Transmittal or any other required documents to an address other than the one set
forth above or transmission via facsimile other than as set forth above does not
constitute valid delivery.
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<PAGE>
INSTRUCTIONS FOR COMPLETING LETTER OF TRANSMITTAL
Forming Part of the Terms and Conditions of the Offer
FOR ASSISTANCE IN COMPLETING THE LETTER OF TRANSMITTAL OR ADDITIONAL INFORMATION
OR MATERIALS, CALL: (800) 243-8440
1. Valid Tender and Delivery of Letter of Transmittal. For convenience in
responding to the Offer, a self-addressed, postage-paid envelope has been
enclosed with the Offer to Purchase. However, to ensure receipt of the
Letter of Transmittal, it is suggested that you use an overnight courier
or, if the Letter of Transmittal is to be delivered by United States mail,
that you use certified or registered mail, return receipt requested.
To be effective, a duly completed and original of the signed Letter of
Transmittal must be received by the Administrative Agent/Depositary at the
address (or facsimile number) set forth below before the Expiration Date,
12:00 Midnight, Eastern Time on Thursday, August 21, 1997, unless extended.
Letters of Transmittal which have been duly executed, but where no
indication is marked in the "Number of Units Tendered" column, shall be
deemed to have tendered all Units pursuant to the Offer.
By Mail/Hand or Overnight Delivery: THE HERMAN GROUP, INC.
2121 San Jacinto
26th Floor
Dallas, Texas 75201
By Facsimile : (214) 999-9323
or
(214) 999-9348 (If faxing the
Letter of Transmittal, the
original should also be mailed
to the Administrative
Agent/Depositary.)
For Additional Information
Regarding the Offer Call: (800) 829-9213, ext. 12
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of a Letter of Transmittal will be determined by
the Purchaser and such determination will be final and binding. The
Purchaser's interpretation of the terms and conditions of the offer officer
(including these instructions for the Letter of Transmittal) also will be
final and binding. The Purchaser will have the right to waive any
irregularities or conditions as to the manner of tendering. Any
irregularities in connection with tenders must be cured within such time as
the Purchaser shall determine unless waived by it.
The Letter of Transmittal will not be valid unless and until any
irregularities have been cured or waived. Neither the Purchaser nor the
Administrative Agent/Depositary is under any duty to give notification of
defects in a Letter of Transmittal and will incur no liability for failure
to give such notification.
THE METHOD OF DELIVERY OF THE LETTER OF THE TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING LIMITED
PARTNER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED
BY THE ADMINISTRATIVE AGENT/DEPOSITARY. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
2 Signatures. All Limited Partners must sign in the Signature Box of the
Letter of Transmittal. If the Units are held in the names of two or more
persons, all such persons must sign the Letter of Transmittal. When signing
as a general partner, corporate officer, attorney-in-fact, executor,
custodian, administrator or guardian, please give full title and send
proper evidence of authority satisfactory to the Purchaser with this Letter
of Transmittal. With respect to most trusts, the Partnership will generally
require only the named trustee to sign the Letter of Transmittal. For Units
held in a custodial account for minors, only the signature of the custodian
will be required. Please sign exactly as your name(s) is printed (or
corrected) on the Letter of Transmittal.
If tendered Units are registered in more than one account, it will be
necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations. Each account has been
mailed a separate Letter of Transmittal.
3. Documentation Requirements. In addition to information required to be
completed on the Letter of Transmittal, additional documentation may be
required by the Purchaser under certain circumstances including, but not
limited to those listed below. Questions on documentation should be
directed to (800) 243-8440.
<TABLE>
<S> <C>
Deceased Owner (Joint Tenant) - Certified Copy of Death Certificate.
Deceased Owner (Others) - Certified Copy of Death Certificate
(See also Executor/Administrator/Guardian below).
Executor/Administrator/Guardian - (i) Certified Copies of court Appointment Documents for Executor or Administrator
dated within 60 days of the date of execution of the Letter of Transmittal;
OR (ii) a copy of applicable provisions of the Will (Title Page, Executor(s)'
powers, asset distribution); OR (iii) Certified copy of Estate distribution
documents.
Attorney-in-Fact - Current Power of Attorney.
Corporations/Partnerships - Certified copy of Corporate Resolution(s) (with raised corporate seal), or other
evidence of authority to act. Partnerships should furnish copy of Partnership
Agreement.
Trust/Pension Plans - Copy of cover page of the Trust or Pension Plan, along with copy of the
section(s) setting forth names and powers of Trustee(s) and any amendments to such
sections or appointment of Successor Trustee(s).
</TABLE>
(Continued on Back)
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<PAGE>
4. Tax Certification-U.S. Persons. A Limited Partner who or which is a United
States citizen OR a resident alien individual, a domestic corporation, a
domestic partnership, a domestic trust or a domestic estate (collectively,
"United States Persons") as those terms are defined in the Code and Income
Tax Regulations, should follow the instructions below with respect to
certifying Boxes A and B (on the reverse side of the Letter of
Transmittal).
Taxpayer Identification Number. To avoid 31% federal income tax backup
withholding, the Limited Partner must furnish his, her or its TIN as
printed (or corrected) on the front of the Letter of Transmittal and
certify under penalties of perjury, Box A, B and, if applicable, Box C.
WHEN DETERMINING THE TIN TO BE FURNISHED, PLEASE REFER TO THE FOLLOWING
NOTE AS A GUIDELINE:
NOTE: Individual Accounts should reflect their own TIN. Joint Accounts
should reflect the TIN of the person whose name appears first. Trust
Accounts should reflect the TIN assigned to the Trust. Custodial accounts
for the benefit of minors should reflect the TIN of the minor. Corporations
or other business entities should reflect the TIN assigned to that entity.
Box A-Substitute Form W-9.
(i) In order to avoid 31% federal income tax backup withholding, the
Limited Partner must certify that the TIN as printed (or corrected) on
the Letter of Transmittal to the Purchaser and certify, under penalties
or perjury, that such Limited Partner is not subject to such backup
withholding. The TIN being provided on the Substitute Form W-9 is that
of the registered Limited Partner as indicated on the front of the
Letter of Transmittal. If a correct TIN is not provided, penalties may
be imposed by the IRS, in addition to the Limited Partner being subject
to backup withholding. Certain Limited Partners (including, among
others, all corporations) are not subject to backup withholding. Backup
withholding is not an additional tax. If withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
(ii)DO NOT CHECK THE BOX IN BOX A, PART (ii), UNLESS YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
Box B - FIRPTA Affidavit. To avoid withholding of tax pursuant to Section
1445 of the Code, each Limited Partner who or which is a United States
Person (as defined in Instruction 4 above) must certify, under penalties of
perjury, the Limited Partner's TIN and address, and that the Limited
Partner is not a foreign person. Tax withheld under Section 1445 of the
Internal Revenue Code is not an additional tax. If withholding results in
an overpayment of tax, a refund may be obtained from the IRS. CHECK THE BOX
IN BOX B, PART (i) ONLY IF YOU ARE NOT A U.S. PERSON, AS DESCRIBED THEREIN.
CORPORATIONS SHOULD INSERT THE STATE OF INCORPORATION IN THE BLANK PROVIDED
FOR THAT PURPOSE IN BOX B.
5. Box C - Foreign Persons. In order for a Limited Partner who is a foreign
person (i.e., not a United States Person as defined in Instruction 4 above)
to qualify as exempt from 31% backup withholding, such foreign Limited
Partner must certify, under penalties of perjury, the statement in Box C of
this Letter of Transmittal attesting to that foreign person's status by
checking the box in such statement. UNLESS SUCH BOX IS CHECKED, SUCH
FOREIGN PERSON WILL BE SUBJECT TO 31% WITHHOLDING OF TAX UNDER SECTION 1445
OF THE CODE.
6. Conditional Tenders. No alternative, conditional or contingent tenders will
be accepted.
7. Assignee Status. Assignees must provide documentation to the Administrative
Agent/Depositary which demonstrates, to the satisfaction of the Purchaser,
such person's status as an assignee.
8. Inadequate Space. If the space provided herein is inadequate, the numbers
of Units and any other information should be listed on a separate schedule
attached hereto and separately signed on each page thereof in the same
manner as this Letter of Transmittal is signed.
For Information Regarding the Offer,
contact the Purchaser at:
(800) 829-9213, ext. 12
For assistance in completing the Letter of Transmittal
OR
For additional copies of the Offer to Purchase, call
(800) 243-8440
The Letter of Transmittal
should be sent to the Administrative Agent/Depositary at:
THE HERMAN GROUP
2121 San Jacinto Street, 26th Floor
Dallas Texas 75201
Telephone: (800) 243-8440
Facsimile: (214) 999-9323
or
(214) 999-9348
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<PAGE>
Exhibit (a)(3)
Page 58
<PAGE>
Oldham Institutional Tax Credits LLC
101 Arch Street
Boston, MA 02110
July 24, 1997
OFFER TO PURCHASE UNITS OF BOSTON FINANCIAL QUALIFIED HOUSING
TAX CREDITS L.P. V, A Limited Partnership
Dear Limited Partners of Boston Financial Qualified Housing Tax Credits L.P. V:
The enclosed information is very important to all Limited Partners owning Units
in Boston Financial Qualified Housing Tax Credits L.P. V, A Limited Partnership
(the "Partnership"). Limited Partners are being provided a convenient
opportunity to sell their Units in the Partnership.
The Offer
Oldham Institutional Tax Credits, LLC, a Massachusetts limited liability company
(the "Purchaser"), an affiliate of the General Partners, is offering to purchase
Units up to 17,200 of the Partnership for a cash purchase price of $555 per
Unit, net to seller subject to the terms and conditions in the attached Offer to
Purchase, dated July 24, 1997 (the "Offer"). The selling Limited Partners will
not be charged any commissions or transfer fees. Subject to the proration
discussion in Section 2 of the attached Offer, the Purchaser will accept any
number of units tendered by a Limited Partner. The offering period is scheduled
to expire at midnight, Eastern time, August 21, 1997 and payment to selling
Limited Partners will be made promptly after the expiration date.
Reasons for the Purchase Offer
The Partnership generates both tax credits and passive tax losses. Since the
formation of the Partnership, corporations have shown increasing interest in
investing in programs benefiting from tax credits and passive tax losses.
Individuals usually cannot fully use passive tax losses since current tax laws
restrict the use of such losses by individuals, whereas corporate investors, in
addition to utilizing such tax credits, are able to fully utilize passive tax
losses. The Purchaser intends to buy these Units and then expects to sell
interests in the Purchaser to corporate investors.
Sales Opportunity
The Purchaser believes that the cash purchase price of the Offer compares
favorably with current average secondary market prices and the present value of
the remaining tax credits. For additional discussion of the benefits of selling
these Units as compared to continuing ownership, please review Section 13 in the
enclosed Offer to Purchase.
Benefits to selling Limited Partners include the opportunity to liquidate a
long-term investment without incurring transfer costs and commissions,
simplification and potential cost reduction of tax return preparation,
convenient access to the secondary market at a competitive price and exiting an
investment which investors may feel no longer meets their investment objectives.
In addition, for some Limited Partners, selling these Units may permit the use
of suspended passive losses against other forms of taxable income, providing
additional tax benefits in the year of sale.
A Limited Partner's decision to sell his/her Unit should be based on many
factors including investment objectives, ability to use the Partnership's
current benefits and the willingness to wait for potential property sale
proceeds for an additional nine years or more. It is possible that the overall
benefits of continuing ownership of the Units could exceed the benefits of
selling now. However, it is also possible that if a Limited Partner does not
sell his/her Units now he/she will not realize benefits equal to those
obtainable by accepting the Offer.
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<PAGE>
Partnership Status
Partnership operations appear to have stabilized in 1993 and are generating
approximately $151 per Unit (a 15.1% return) in tax credits per year. The
General Partners expect that the Partnership will continue to generate annual
tax credits of approximately $151 per Unit through 2000, the end of the tax
credit period for a majority of the properties. To satisfy tax credit
requirements, the Partnership will generally not be able to begin selling its
properties and liquidating Limited Partners' interests until 2006.
Summary
A Limited Partner's decision to sell or not to sell his/her units in the
Partnership should be based on many factors including investment objectives,
ability to use the Partnership's current benefits and the willingness to wait
for property sale proceeds for an additional nine years or more. In today's
secondary market, the Offer presents a competitive price. However, if a Limited
Partner wishes to remain in the Partnership, it is possible that the overall
benefits of continuing ownership could exceed the benefits of selling now. It is
also possible that current estimates will not be achieved and a remaining
Limited Partner will not realize benefits equal to this Offer. THE ATTACHED
INFORMATION SHOULD BE READ VERY CAREFULLY. IT PROVIDES SPECIFIC DETAILS ABOUT
THE TERMS OF THE SALE AND ITS CONSEQUENCES TO YOU AND CONTAINS INSTRUCTIONS FOR
COMPLETING THE SALE DOCUMENTS. YOU SHOULD CONSULT WITH YOUR ADVISORS ABOUT THE
FINANCIAL, TAX, LEGAL AND INVESTMENT IMPLICATIONS TO YOU OF ACCEPTING THE OFFER.
To accept the Offer, complete and sign the enclosed Letter of Transmittal and
return it in the enclosed envelope. The Purchaser has engaged The Herman Group,
Inc. to assist in the administration of this Offer. You may be contacted by them
to discuss the enclosed documentation. In addition, please feel free to call
Oldham Institutional Tax Credits LLC at 1-800-829-9213 ext. 12 if you have any
questions.
Sincerely,
Oldham Institutional Tax Credits LLC
Page 60
