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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d) (1) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ____________)
Boston Capital Tax Credit Fund IV L. P.
- --------------------------------------------------------------------------------
(Name of Subject Company [Issuer])
Everest Tax Credit Investors, LLC
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(Bidder)
Series 24 of Beneficial Assignee Certificates
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(Title of Class of Securities)
None
- --------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Christopher K. Davis
Everest Properties II, LLC
199 S. Los Robles Ave., Suite 440
Pasadena, CA 91101
Telephone (800) 611-4613
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation: $2,603,848(1) Amount of Filing Fee: $520.77
(1) Calculated as the product of the number of BACs on which the Offer is made
and the gross cash price per BAC.
[ ] 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 the date of its filing.
Amount previously paid: Not Applicable Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
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Schedule 14D-1
CUSIP No : None
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Everest Tax Credit Investors, LLC
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP* (b) [ ]
Not Applicable
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
California
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES [ ]
CERTAIN SHARES
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Not Applicable
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
2
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This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates
to an offer by Everest Tax Credit Investors, LLC, a California limited liability
company (the "Purchaser") to purchase up to 325,481 beneficial assignee
certificates ("BACs") in Series 24 of Boston Capital Tax Credit Fund IV L. P.
(the "Partnership") at $8.00 per BAC, without interest, less the amount of
Distributions (as defined in the Offer to Purchase) per BAC, if any, made to BAC
Holders by the Partnership after March 1, 1998 and less any tax credits
allocable to selling BAC Holders after May 31, 1998, and less any Partnership
transfer fees, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated April 20, 1998, as it may be supplemented or amended
from time to time (the "Offer to Purchase"), and the related Agreement of
Transfer and Letter of Transmittal, as it may be supplemented or amended from
time to time (the "Letter of Transmittal," which, together with the Offer to
Purchase, constitutes the "Offer"), copies of which are filed as Exhibits 99.1
and 99.2 hereto, respectively. Capitalized terms used but not defined herein
have the meaning ascribed to them in the Offer to Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Boston Capital Tax Credit Fund IV
L. P., a Delaware limited partnership (the "Partnership"). The address of the
Partnership's principal executive offices is One Boston Place, Suite 2100,
Boston, Massachusetts 02108.
(b) The class of equity securities to which this Statement relates is
Beneficial Assignee Certificates in Series 24 of the Partnership. Reference is
hereby made to the information set forth on the cover page and in the
"Introduction" of the Offer to Purchase, which is incorporated herein by
reference.
(c) Reference is hereby made to the information set forth in the
"Introduction Purpose of the Offer" and "Determination of Purchase Price -
Trading History of the BACs" of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) Reference is hereby made to the information set forth on the cover
page and in the "Certain Information Concerning the Purchaser" and Schedule I
("Directors and Executive Officers") of the Offer to Purchase, which is
incorporated herein by reference.
(e)-(f) During the last five years, neither the Purchaser nor, to the best
of its knowledge, any of the persons listed in Schedule I ("Directors and
Executive Officers") of the Offer to Purchase has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding any such person was or is
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) Reference is hereby made to the information set forth in Schedule I
("Directors and Executive Officers") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) Reference is hereby made to the information set forth in "Certain
Information Concerning the Partnership - Prior Acquisitions of BACs and Prior
Contacts" of the Offer to Purchase, which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth in "Certain
Information Concerning the Purchaser - Source of Funds" of the Offer to
Purchase, which is incorporated herein by reference.
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(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction - Purpose of the Offer," "Future Plans of the Purchaser" and
"Effects of the Offer" of the Offer to Purchase, which is incorporated herein by
reference. Except as set forth in the Offer to Purchase, the Purchaser does not
have any present plans or proposals which would relate to, or would result in,
any transaction, change or other occurrence with respect to the Partnership or
the BACs as is listed in paragraphs (a) through (g) of Item 5 of Schedule 14D-1.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction" and "Certain Information Concerning the Partnership - Prior
Acquisitions of BACs and Prior Contacts" of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES
None.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in "Certain Legal
Matters Fees and Expenses" of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF BIDDER.
Not applicable. Certain information regarding the ability of the Purchaser
to finance the Offer is set forth in "Certain Information Concerning the
Purchaser - Source of Funds" of the Offer to Purchaser and is incorporated
herein by reference. The incorporation by reference herein of the above
referenced information does not constitute an admission that such information is
material to a decision by a holder of the BACs as to whether to sell, tender or
hold BACs being bought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(d) Reference is hereby made to the information set forth in "Certain
Legal Matters" of the Offer to Purchase, which is incorporated herein by
reference.
(e) To the best knowledge of the Purchaser, no such proceedings are
pending or have been instituted.
(f) Reference is hereby made to the entire text of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Cover Letter to BAC Holders and Offer to Purchase, dated April 20,
1998.
99.2 Agreement of Transfer and Letter of Transmittal.
99.3 Summary Publication.
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SIGNATURE
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: April 20, 1998
EVEREST TAX CREDIT INVESTORS, LLC
By: EVEREST PROPERTIES II, LLC, Manager
By: /s/ DAVID I. LESSER
------------------------------------
David I. Lesser
Executive Vice President
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Cover Letter to BAC Holders and Offer to Purchase, dated April 20, 1998.
99.2 Agreement of Transfer and Letter of Transmittal.
99.3 Summary Publication.
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EVEREST TAX CREDIT INVESTORS, LLC
199 SOUTH LOS ROBLES AVENUE, SUITE 440
PASADENA, CALIFORNIA 91101
April 20, 1998
$8.00 PER BAC CASH OFFER
TO ALL HOLDERS OF BENEFICIAL ASSIGNEE CERTIFICATES OF
BOSTON CAPITAL TAX CREDIT FUND IV L. P. - SERIES 24
Dear BAC Holder:
Enclosed is an OFFER TO PURCHASE up to 325,481 beneficial assignee
certificates ("BACs") in Series 24 of Boston Capital Tax Credit Fund IV L. P.
(the "Partnership") for a cash price of $8.00 per BAC, without interest, less
the amount of Distributions (as defined in the Offer to Purchase) per BAC made
to you by the Partnership after March 1, 1998 and less any tax credits which are
allocated to selling BAC Holders after May 31, 1998 (allocable at the rate of
approximately $0.1125 per month per BAC), and less any Partnership transfer
fees.
PLEASE CONSIDER THE FOLLOWING POINTS:
- THIS OFFER EXCEEDS BY $1.25 PER BAC (18.5%) THE RECENT OFFER MADE BY
VALLEY CREEK CAPITAL, LLC.
- BAC Holders who tender to Everest will be withdrawing any tender
they have already made and will instead receive the higher price for
all BACs accepted for payment by Everest.
- Everest must receive an executed Letter of Transmittal no later than
May 14, 1998 to ensure the timely withdrawal of any prior tenders
made by a BAC Holder who tenders to Everest.
- Everest estimates, based on the Partnership's public filings and
assuming a sale date of May 31, 1998, that most individual sellers
will receive the following for each BAC sold to Everest:
<TABLE>
<CAPTION>
1998 Effects* Total Benefit*
-------------------------------------------------------------- --------------
<S> <C>
Cash............................................ $ 8.00
Tax deduction against ordinary income........... $1.50
Tax benefit.................................. $ 0.54
Long-term capital loss.......................... $0.50
Tax benefit.................................. $ 0.10
Estimated tax credits received by 5/31/98....... $ 2.34
------
TOTAL BENEFIT*.................................. $10.98
</TABLE>
* Assumes: the BACs were held from the inception of the series;
prior Series 24 passive losses have not been utilized; ordinary
income and capital gain federal tax rates of 36% and 20%,
respectively. See "CERTAIN FEDERAL INCOME TAX MATTERS."
- The Offer is an immediate opportunity for BAC Holders to liquidate
their investment in the Partnership, but BAC Holders who tender
their BACs will be giving up the opportunity to participate in any
potential future benefits, including allocations of tax credits,
from ownership of BACs.
We encourage you to read the Offer to Purchase completely and to return
your completed Letter of Transmittal promptly. The Offer is scheduled to expire
on May 22, 1998.
For answers to any questions you might have regarding these materials or
our Offer, or assistance in the procedures for accepting our Offer and tendering
your BACs, please contact us at (800) 611-4613 (toll free).
Sincerely,
Everest Tax Credit Investors, LLC
<PAGE> 2
OFFER TO PURCHASE FOR CASH
UP TO 325,481 BENEFICIAL ASSIGNEE CERTIFICATES OF
BOSTON CAPITAL TAX CREDIT FUND IV L. P. - SERIES 24
FOR
$8.00 PER BAC
BY
EVEREST TAX CREDIT INVESTORS, LLC
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME ON FRIDAY, MAY 22, 1998
UNLESS THE OFFER IS EXTENDED.
Everest Tax Credit Investors, LLC, a California limited liability company,
(the "Purchaser" or "Everest"), is offering to purchase up to 325,481 beneficial
assignee certificates ("BACs") in Series 24 of Boston Capital Tax Credit Fund IV
L. P., a Delaware limited partnership (the "Partnership"), at a net cash price
of $8.00 per BAC (the "Purchase Price"), without interest, less the amount of
the Distributions (as defined below) per BAC, if any, made to the holders of
BACs ("BAC Holders") by the Partnership after March 1, 1998 and less any tax
credits allocated to selling BAC Holders after May 31, 1998 (allocable at
approximately $0.1125 per month per BAC), and less any transfer fees imposed by
the Partnership for each transfer. The Offer is subject to certain terms and
conditions. This Offer (as defined below) is upon the terms set forth in this
Offer to Purchase (the "Offer to Purchase") and in the related Agreement of
Transfer and Letter of Transmittal (the "Letter of Transmittal"), as each may be
supplemented or amended from time to time. The Offer to Purchase and the Letter
of Transmittal constitute the "Offer." The Offer is not conditioned upon
financing.
------------------
For More Information or for Further Assistance Please Call
or Contact the Purchaser at:
EVEREST PROPERTIES II, LLC
(MANAGER)
199 SOUTH LOS ROBLES AVENUE
SUITE 440
PASADENA, CALIFORNIA 91101
(626) 585-5920
(800) 611-4613 (TOLL FREE)
April 20, 1998
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TABLE OF CONTENTS
PAGE
INTRODUCTION......................................................... 1
PURPOSE OF THE OFFER............................................ 1
DETAILS OF THE OFFER................................................. 2
1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION.............. 2
2. ACCEPTANCE FOR PAYMENT AND PAYMENT OF
PURCHASE PRICE.............................................. 2
3. PROCEDURE TO ACCEPT THE OFFER............................... 3
4. DETERMINATION OF VALIDITY; REJECTION OF BACS; WAIVER
OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS......... 4
5. WITHDRAWAL RIGHTS........................................... 4
6 EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.......... 4
7. CONDITIONS OF THE OFFER..................................... 5
8. BACKUP FEDERAL INCOME TAX WITHHOLDING....................... 6
9. FIRPTA WITHHOLDING.......................................... 6
CERTAIN INFORMATION CONCERNING THE PARTNERSHIP....................... 6
GENERAL......................................................... 6
OUTSTANDING BACS................................................ 7
SELECTED FINANCIAL AND PROPERTY RELATED DATA.................... 7
PRIOR ACQUISITIONS OF BACS AND PRIOR CONTACTS................... 7
DETERMINATION OF PURCHASE PRICE...................................... 8
TRADING HISTORY OF THE BACS..................................... 8
REMAINING TAX CREDITS........................................... 8
CERTAIN INFORMATION CONCERNING THE PURCHASER......................... 8
THE PURCHASER................................................... 8
GENERAL......................................................... 8
SOURCE OF FUNDS................................................. 9
FUTURE PLANS OF THE PURCHASER........................................ 9
EFFECTS OF THE OFFER................................................. 9
FUTURE BENEFITS OF BAC OWNERSHIP................................ 9
LIMITATIONS ON RESALES.......................................... 9
INFLUENCE ON VOTING DECISIONS BY THE PURCHASER.................. 9
CERTAIN FEDERAL INCOME TAX MATTERS................................... 9
CERTAIN LEGAL MATTERS................................................ 11
GENERAL......................................................... 11
STATE TAKEOVER STATUTES......................................... 11
FEES AND EXPENSES............................................... 11
MISCELLANEOUS................................................... 11
SCHEDULE I - DIRECTORS AND EXECUTIVE OFFICERS........................ 13
APPENDIX A........................................................... A-1
PART I - SELECTED FINANCIAL DATA................................ A-1
PART II - PROPERTY DESCRIPTIONS................................. A-5
i
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INTRODUCTION
The Purchaser hereby offers to purchase up to 325,481 BACs in Series 24 of
the Partnership at a cash purchase price of $8.00 per BAC, without interest,
less the amount of Distributions per BAC, if any, made to BAC Holders by the
Partnership after March 1, 1998, less tax credits allocated after May 31, 1998
(allocable at approximately $0.1125 per month per BAC), and less any transfer
fees imposed by the Partnership for each transfer.
PURPOSE OF THE OFFER. The purpose of the Offer is for the Purchaser to
acquire a substantial equity interest in the Partnership primarily for
investment.
In considering the Offer, BAC Holders may wish to consider the following:
- THIS OFFER EXCEEDS BY $1.25 PER BAC (18.5%) THE RECENT OFFER MADE BY
VALLEY CREEK CAPITAL, LLC.
- BAC Holders who tender to Everest will be withdrawing any tender
they have already made, including any tender to Valley Creek
Capital, LLC pursuant to its offer dated April 14, 1998 (the "Lower
Offer"). Everest will send the notice of such withdrawal.
- Everest must receive an executed Letter of Transmittal no later than
May 14, 1998 to ensure the timely withdrawal of any prior tenders
made by a BAC Holder who tenders to Everest.
- The Partnership's publicly filed documents state that there is no
established public trading market for the BACs and it is not
anticipated that any public market will develop. Partnership
Spectrum, an independent industry publication, reflects only one
transfer of Series 24 BACs since May 1997 (at $8.75, before
commissions), and only three transfers since the series commenced
issuance in June 1995.
- The Purchaser estimates, based on the Partnership's public filings
and assuming a sale date of May 31, 1998, that most individual
sellers will receive the following for each BAC sold to Purchaser:
<TABLE>
<CAPTION>
1998 Effects* Total Benefit*
-------------------------------------------------------------- --------------
<S> <C>
Cash............................................ $ 8.00
Tax deduction against ordinary income........... $1.50
Tax benefit.................................. $ 0.54
Long-term capital loss.......................... $0.50
Tax benefit.................................. $ 0.10
Estimated tax credits received by 5/31/98....... $ 2.34
------
TOTAL BENEFIT*.................................. $10.98
</TABLE>
* Assumes: the BACs were held from the inception of the series;
prior Series 24 passive losses have not been utilized; ordinary
income and capital gain federal tax rates of 36% and 20%,
respectively. See "CERTAIN FEDERAL INCOME TAX MATTERS."
- The Purchaser estimates, based on the Partnership's public filings,
that the value of the remaining tax credits in Series 24 is
approximately $11.16 per BAC from June 1998 through December 2007.
Current tax laws restrict individual use of both tax credits and
passive losses. The Purchaser is offering a guaranteed $8.00 in cash
now, and sellers of BACs can avoid the risk of tax credit recapture
after 1998.
- The Offer allows BAC Holders to dispose of their BACs without
incurring the sales commissions (approximately 5% to 10%) typically
associated with transfers of BACs arranged through brokers or other
intermediaries.
- BAC Holders who accept the Offer for all their BACs will receive no
further Partnership K-1's after the 1998 K-1.
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- The Purchaser is making the Offer with a view to making a profit for
itself. Accordingly, there is a conflict between the desire of the
Purchaser to purchase BACs at a low price and the desire of the BAC
Holders to sell their BACs at a high price.
- The Offer is an immediate opportunity for BAC Holders to liquidate
their investments in the Partnership, but BAC Holders who tender
their BACs will be giving up the opportunity to participate in any
potential future benefits, including allocations of tax credits,
from ownership of BACs.
Each BAC Holder must make its own decision, based on the BAC Holder's
particular circumstances, whether to tender BACs and, if so, how many BACs to
tender. BAC Holders should consult with their respective advisors about the
financial, tax, legal and other implications of accepting the Offer.
DETAILS OF THE OFFER
1. Terms of the Offer; Expiration Date; Proration. On the terms and
subject to the conditions of the Offer, the Purchaser will accept and purchase
up to 325,481 BACs that are validly tendered in accordance with the procedures
set forth in Section 3 on or prior to the Expiration Date and not withdrawn in
accordance with the procedures set forth in Section 5 ("Properly Tendered). For
purposes of the Offer, the term "Expiration Date" means 12:00 Midnight, New York
City time on Friday, May 22, 1998, unless the Purchaser in its sole discretion
extends the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date to which the Offer is
extended by the Purchaser.
If, prior to the Expiration Date, the Purchaser increases the Purchase
Price offered to the BAC Holders pursuant to the Offer, the increased Purchase
Price will be paid for all BACs accepted for payment pursuant to the Offer,
whether or not the BACs were tendered prior to the increase in consideration.
If more than 325,481 BACs are Properly Tendered (or if the number of BACs
that are Properly Tendered exceeds the number that can be transferred without
imposing limitations on resales) the Purchaser will, upon the terms and subject
to the conditions of the Offer, accept for payment and pay for an aggregate of
325,481 BACs (or, if less, the maximum number of BACs which can be transferred
without imposing limitations on resales), pro rata, according to the number of
BACs that are Properly Tendered by each BAC Holder, with appropriate adjustments
to avoid purchases of fractional BACs. If the number of BACs that are Properly
Tendered is less than or equal to 325,481 BACs (or, if less, the maximum number
of BACs which can be transferred without imposing limitations on resales), the
Purchaser will purchase all BACs that are Properly Tendered, upon the terms and
subject to the conditions of the Offer.
All BACs tendered pursuant to the Offer shall be withdrawn by Everest from
the Lower Offer. The number of BACs sought by Everest is higher than that in the
Lower Offer.
If proration of tendered BACs is required, the Purchaser may not be able
to announce the final results of the proration until at least seven business
days after the Expiration Date because of the difficulty of determining the
proration results. The Purchaser does not intend to pay for any BACs accepted
for payment pursuant to the Offer until the final proration or other adjustment
results are known.
If on or prior to the Expiration Date any or all of the conditions of the
Offer have not been satisfied or waived, the Purchaser reserves the right to:
(i) decline to purchase any of the BACs tendered, terminate the Offer and return
all tendered BACs, (ii) waive the unsatisfied conditions and, subject to
complying with applicable rules and regulations of the Securities and Exchange
Commission (the "Commission"), purchase all BACs that are Properly Tendered,
(iii) extend the Offer and, subject to the right of BAC Holders to withdraw BACs
until the Expiration Date, retain previously tendered BACs for the period or
periods for which the Offer is extended, and (iv) amend the Offer.
2. Acceptance for Payment and Payment of Purchase Price. On the terms and
subject to the conditions of the Offer, the Purchaser will purchase and will pay
for up to 325,481 BACs that are Properly Tendered, as promptly as practicable
following the Expiration Date. In all cases, payment for BACs purchased pursuant
to the Offer will be made only after timely receipt by the Purchaser of: (i) a
properly completed and duly executed and acknowledged
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Letter of Transmittal (or facsimile thereof), (ii) any other documents required
in accordance with the Letter of Transmittal, and (iii) written confirmation
from the Partnership of the transfer of the BACs to the Purchaser.
UNDER NO CIRCUMSTANCE WILL INTEREST ON THE PURCHASE PRICE BE PAID,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered BACs are not purchased for any reason (other than
proration adjustments), the original Letter of Transmittal with respect to the
BACs may be destroyed by the Purchaser. If for any reason acceptance for payment
of, or payment for, any BACs tendered pursuant to the Offer is delayed or the
Purchaser is unable to accept for payment, purchase or pay for BACs tendered,
then, without prejudice to the Purchaser's rights under Section 4, the Purchaser
may, nevertheless, retain documents concerning tendered BACs, and those BACs may
not be withdrawn except to the extent that the tendering BAC Holders are
otherwise entitled to withdrawal rights as described in Section 5; subject,
however, to the Purchaser's obligation under Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to pay BAC Holders the
Purchase Price in respect of BACs tendered or return documents, if any,
representing those BACs promptly after termination or withdrawal of the Offer.
3. PROCEDURE TO ACCEPT THE OFFER. A BAC HOLDER MAY TENDER ANY OR ALL OF
THE BACS OWNED BY THAT BAC HOLDER. FOR BACS TO BE VALIDLY TENDERED PURSUANT TO
THE OFFER THE PURCHASER MUST RECEIVE, AT THE ADDRESS LISTED ON THE BACK PAGE OF
THIS OFFER TO PURCHASE ON OR PRIOR TO THE EXPIRATION DATE, A PROPERLY COMPLETED
AND DULY EXECUTED LETTER OF TRANSMITTAL, THE ORIGINAL PARTNERSHIP CERTIFICATE
(IF AVAILABLE), AND ALL DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL.
The method of delivery of the Letter of Transmittal, and all other
required documents is at the option and risk of the tendering BAC Holder, and
delivery will be deemed made only when actually received by the Purchaser. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
assure timely delivery.
BAC HOLDERS WHO WANT TO PARTICIPATE IN THIS OFFER AND HAVE TENDERED IN THE
LOWER OFFER MUST DELIVER A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL TO EVEREST NO LATER THAN MAY 14, 1998 TO ASSURE TIMELY WITHDRAWAL OF
THE PRIOR TENDER. EVEREST WILL SEND THE NOTICE OF SUCH WITHDRAWAL.
A BAC Holder may tender any or all of the BACs owned by that BAC Holder.
By executing and delivering a Letter of Transmittal, a tendering BAC Holder
irrevocably appoints the Purchaser and its officers and any other designee of
the Purchaser, and each of them, the attorneys-in-fact and proxies of the BAC
Holders, in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of the BAC Holder's rights with
respect to the BACs tendered by the BAC Holder and accepted for payment by the
Purchaser (and with respect to any and all distributions, other BACs, rights or
other securities issued or issuable in respect thereof (collectively,
"Distributions")), including without limitation the right to direct any IRA
custodian, trustee or other record owner to execute and deliver the Letter of
Transmittal, the right to cause the original or a copy of the Letter of
Transmittal to be transmitted to Valley Creek Capital, LLC or its agent to
accomplish a withdrawal of any previous tender of the BAC Holder's BACs, and the
right to complete the transfer contemplated thereby. All such proxies will be
considered coupled with an interest in the tendered BACs, are irrevocable and
are granted in consideration of, and are effective upon, the acceptance for
payment of the BACs by the Purchaser in accordance with the terms of the Offer.
Upon acceptance for payment, all prior powers of attorney and proxies given by
the BAC Holder with respect to the BACs and Distributions will, without further
action, be revoked, and no subsequent powers of attorney or proxies may be given
(and, if given, will be without force or effect). The officers and designees of
the Purchaser will, with respect to the BACs for which the appointment is
effective, be empowered to exercise all voting and other rights of the BAC
Holder as they in their sole discretion may deem proper at any meeting of the
Partnership or any adjournment or postponement thereof. In order for BACs to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of the BACs, the Purchaser or its designee must be able to exercise full voting
rights with respect to the BACs, including voting at any meeting of the
Partnership's Limited Partners.
By executing and delivering a Letter of Transmittal, a tendering BAC
Holder irrevocably assigns to the Purchaser and its assigns all of the right,
title and interest of the BAC Holder in and to any and all Distributions or
3
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tax credit allocations made by the Partnership from and after the date of
acceptance with respect to BACs accepted for payment and thereby purchased by
the Purchaser.
4. Determination of Validity; Rejection of BACs; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions about the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of BACs pursuant to the Offer will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of any particular BACs
determined by it not to be in proper form or if the acceptance of or payment for
those BACs may, in the opinion of Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right to waive or amend any of the
conditions of the Offer that it is legally permitted to waive and to waive any
defect in any tender with respect to any particular BACs. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal) will be final and binding. No tender of BACs will be deemed to have
been validly made until all defects have been cured or waived. Neither the
Purchaser nor any other person will be under any duty to give notification of
any defects in the tender of any BACs or will incur any liability for failure to
give any such notification.
A tender of BACs pursuant to the procedure described above and the
acceptance for payment of such BACs will constitute a binding agreement between
the tendering BAC Holder and the Purchaser on the terms set forth in the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment pursuant to this Offer, and thereby purchased, Properly Tendered
BACs if, as and when the Purchaser gives written notice to the Partnership or
its Transfer Agent of the Purchaser's acceptance of those BACs for payment
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for BACs accepted for payment pursuant to the Offer will be made
and transmitted directly to BAC Holders whose BACs have been accepted for
payment.
5. Withdrawal Rights. Tenders of BACs made pursuant to the Offer are
irrevocable, except that BACs tendered pursuant to the Offer may be withdrawn at
any time on or prior to the Expiration Date and, unless already accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after June 21, 1998. If purchase of, or payment for, BACs is delayed for
any reason, including extension by the Purchaser of the Expiration Date, or if
the Purchaser is unable to purchase or pay for BACs for any reason (for example,
because of proration adjustments) then, without prejudice to the Purchaser's
rights under the Offer, tendered BACs may be retained by the Purchaser and may
not be withdrawn, except to the extent that tendering BAC Holders are otherwise
entitled to withdrawal rights as set forth in this Section 5; subject, however,
to the Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act,
to pay BAC Holders the Purchase Price in respect of BACs tendered promptly after
termination or withdrawal of the Offer.
For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Purchaser at its address listed on
the back cover of this Offer to Purchase. Any notice of withdrawal must specify
the name of the person(s) who tendered the BACs to be withdrawn and must be
signed by the person(s) who signed the Letter of Transmittal in the same manner
as the Letter of Transmittal was signed. Any BACs properly withdrawn will be
deemed not validly tendered for purposes of the Offer. Withdrawn BACs may be
re-tendered, however, by following the procedures described in Section 3 at any
time prior to the Expiration Date.
All questions about the validity and form (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. Neither the
Purchaser nor any other person will be under any duty to give notice of any
defects in any notice of withdrawal or incur any liability for failure to give
any such notice.
6. Extension of Tender Period; Termination; Amendment. The Purchaser
expressly reserves the right, in its sole discretion, at any 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 BACs, (ii) to terminate the Offer and
not accept for payment any BACs not already accepted for payment, (iii) upon the
occurrence of any of the conditions specified in Section 7, to delay the
acceptance for payment of, or payment for, any BACs not already accepted for
payment or paid for, and (iv) to amend the Offer in any respect (including,
without limitation, by increasing the consideration offered, increasing or
decreasing the number of BACs being sought, or both). Notice of any such
extension, termination or
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amendment will promptly be disseminated to BAC Holders in a manner reasonably
designed to inform BAC Holders of such change in compliance with Rule 14d-4(c)
under the Exchange Act. In the case of an extension of the Offer, the extension
will be followed by a press release or public announcement which will be issued
no later than 9:00 a.m. New York City time, on the next business day after the
scheduled Expiration Date, in accordance with Rule 14e-1(d) under the Exchange
Act. If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act.
7. Conditions of the Offer. Notwithstanding any other term of the Offer,
the Purchaser will not be required to accept for payment or to pay for any BACs
tendered if all authorizations, consents, orders of, or filings with, or
expirations of waiting periods imposed by, any court, administrative agency or
other governmental authority necessary for the consummation of the transactions
contemplated by the Offer shall not have occurred or been filed, or obtained.
Furthermore, notwithstanding any other term of the Offer and in addition to the
Purchaser's right to withdraw the Offer at any time before the Expiration Date,
the Purchaser will not be required to accept for payment or pay for any BACs, or
may delay the acceptance for payment of the BACs tendered if, at any time on or
after the date of the Offer and before the acceptance of such BACs for payment
or the payment therefor, any of the following conditions exists:
(a) a preliminary or permanent injunction or other order of any federal or
state court, government or governmental agency shall have been issued and shall
remain in effect which: (i) makes illegal, delays or otherwise directly or
indirectly restrains or prohibits the making of the Offer or the acceptance for
payment, purchase of or payment for any BACs by the Purchaser, (ii) imposes or
confirms limitations on the ability of the Purchaser effectively to exercise
full rights of both legal and beneficial ownership of the BACs, (iii) requires
divestiture by the Purchaser of any BACs, (iv) causes any material diminution of
the benefits to be derived by the Purchaser as a result of the transactions
contemplated by the Offer, (v) might materially adversely affect the business,
properties, assets, liabilities, financial condition, operations, results of
operations or prospects of the Purchaser, or the Partnership, or (vi) seeks to
impose any material condition to the Offer unacceptable to the Purchaser;
(b) there shall be any action taken, or any statute, rule, regulation or
order proposed, enacted, enforced, promulgated, issued or deemed applicable to
the Offer by any federal or state court, government or governmental authority or
agency which might, directly or indirectly, result in any of the consequences
referred to in clauses (i) through (vi) of paragraph (a) above;
(c) any change or development shall have occurred or been threatened or
disclosed in the business, properties, assets, liabilities, financial condition,
operations, results of operations or prospects of the Partnership, which is or
may be materially adverse to the Partnership, or there shall be any material
lien not disclosed in the Partnership's financial statements, or the Purchaser
shall have become aware of any fact that does or may have a material adverse
effect on the value of the BACs or the Properties (as defined below);
(d) the General Partner (as defined below) of the Partnership shall have
failed or refused to take all other action that the Purchaser deems necessary,
in the Purchaser's judgment, for the Purchaser to be the registered owner of the
BACs tendered and accepted for payment hereunder simultaneously with the
consummation of the Offer or as soon thereafter as is permitted under the
Partnership Agreement, in accordance with the Partnership Agreement and
applicable law;
(e) there shall have been threatened, instituted or pending any action or
proceeding before any court or governmental agency or other regulatory or
administrative agency or commission or by any other person, challenging the
acquisition of any BACs pursuant to the Offer or otherwise directly or
indirectly relating to the Offer, or otherwise, in the sole judgment of the
Purchaser, adversely affecting the Purchaser, the Partnership or the Properties
or the value of the BACs or the benefits expected to be derived by the Purchaser
as a result of the transactions contemplated by the Offer;
(f) the Partnership shall have (i) issued, or authorized or proposed the
issuance of, any partnership interests of any class, or any securities
convertible into, or rights, warrants or options to acquire, any such interests
or other
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<PAGE> 9
convertible securities, (ii) issued or authorized or proposed the issuance of
any other securities, in respect of, in lieu of, or in substitution for, all or
any of the presently outstanding BACs, (iii) declared or paid any Distribution,
other than in cash, on any of the BACs, or (iv) the Partnership or the General
Partner shall have authorized, proposed or announced its intention to propose
any merger, consolidation or business combination transaction, acquisition of
assets, disposition of assets or material change in its capitalization, or any
comparable event not in the ordinary course of business; or
(g) the General Partner shall have modified, or taken any step or steps to
modify, in any way, the procedures or regulations applicable to the registration
of BACs or transfers of BACs on the books and records of the Partnership or the
admission of transferees of BACs as registered owners and as BAC Holders.
The foregoing conditions are for the sole benefit of the Purchaser and may
be (but need not be) asserted by the Purchaser regardless of the circumstances
giving rise to such conditions or may be waived by the Purchaser in whole or in
part at any time in its sole discretion. Any determination by the Purchaser
concerning the events described above will be final and binding upon all
parties.
8. Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding of 31 percent with respect
to payment of the Purchase Price, a tendering BAC Holder must provide the
Purchaser with the BAC Holder's correct taxpayer identification number in the
space provided in the Letter of Transmittal.
9. FIRPTA Withholding. To prevent the withholding of federal income tax in
an amount equal to ten percent of the amount of the Purchase Price plus
Partnership liabilities allocable to each BAC purchased, the Letter of
Transmittal includes FIRPTA representations certifying the BAC Holder's taxpayer
identification number and address and that the BAC Holder is not a foreign
person.
CERTAIN INFORMATION CONCERNING THE PARTNERSHIP
Information contained in this section is based upon documents and reports
publicly filed by the Partnership, including the Annual Report on Form 10-K for
the fiscal year ended March 31, 1997 (the "Form 10-K") and the Quarterly Report
on Form 10-Q for the fiscal quarter ended December 31, 1997 (the "Form 10-Q").
Although the Purchaser has no information that any statements contained in this
section are untrue, the Purchaser has not independently investigated the
accuracy of statements, and takes no responsibility for the accuracy,
inaccuracy, completeness or incompleteness of any of the information contained
in this section or for the failure by the Partnership to disclose events which
may have occurred and may affect the significance or accuracy of any such
information.
General. The Partnership was formed in 1993 under the laws of the State of
Delaware. Its principal executive offices are located at One Boston Place, Suite
2100, Boston, Massachusetts 02108. The General Partner of the Partnership is
Boston Capital Associates IV L.P., a Delaware limited partnership (the "General
Partner"). The general partner of the General Partner is C & M Associates, d/b/a
Boston Capital Associates, a Massachusetts general partnership whose only two
partners are Herbert F. Collins and John P. Manning.
The Partnership acquires, holds and disposes of interests in other limited
partnerships (the "Operating Partnerships") each of which will acquire, develop,
rehabilitate, operate and own a newly constructed, existing or rehabilitated
Apartment Complex exclusively or partially for low- and moderate-income tenants.
Each Apartment Complex is expected to qualify for the low-income housing tax
credit under Section 42 of the Internal Revenue Code (the "Federal Housing Tax
Credit"), thereby providing tax benefits over a period of ten to twelve years in
the form of tax credits which investors may use to offset income, subject to
certain strict limitations, from other sources. Certain Apartment Complexes may
also qualify for the historic rehabilitation tax credit under Section 48 of the
Code (the "Rehabilitation Tax Credit"). Some of the Apartment Complexes benefit
from one or more other forms of federal or state housing assistance.
The Partnership's profits, losses and cash flow (subject to certain
priority allocations and distributions) and tax credits are allocated 99% to BAC
Holders and 1% to the General Partner. The Partnership's investment objectives
do not include receipt of significant cash flow from the Operating Partnerships
in which it invests.
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<PAGE> 10
Investments in Operating Partnerships are made principally with a view towards
realizing Federal Housing Tax Credits for allocation to the Partnership's
partners and BAC Holders.
Generally, Federal Housing Tax 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 Operating Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agency the authority to recognize Federal Housing Tax Credits to be
claimed during the Credit Period provided that the Operating Partnership
satisfies the rent restriction, minimum set-aside and other requirements for
eligibility for the Federal Housing Tax Credits at all times during the 15-year
period commencing at the beginning of the Credit Period (the "Compliance
Period"). Once an Operating Partnership has become eligible to receive Federal
Housing Tax Credits, it may lose such eligibility and suffer an event of
"recapture" if (i) the Operating Partnership ceases to meet qualification
requirements, (ii) there is a decrease in the qualified basis of 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. The Form 10-K does not indicate that any Operating
Partnership in which the Partnership has invested has suffered an event of
recapture.
The Partnership issues BACs in separate series and invests in Operating
Partnerships on behalf of each series separately. The Partnership commenced
offering BACs in Series 24 on June 9, 1995 and completed the offering on
September 22, 1995, with a total of 2,169,878 BACs issued for $21,697,000. As of
December 31, 1997, the Partnership had invested $15,939,004 of such proceeds and
held investments in 24 Operating Partnerships on behalf of Series 24, and had an
additional $364,888 in capital contributions remaining to be paid to such
Operating Partnerships. The Partnership generated Federal Housing Tax Credits
per BAC of $.503 for 1996 and from $.109 to $.163 for 1995, depending on the BAC
Holder's date of admission.
As of December 31, 1997, of the 24 Apartment Complexes in the series, 22
had completed construction or rehabilitation and initial lease-up, and 2 were in
initial lease-up. Attached to this Offer to Purchase as Part II of Appendix A is
a schedule of the Apartment Complexes held as of December 31, 1996, and further
information.
The Partnership is subject to the information reporting requirements of
the Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial results and other matters. Such
reports and other documents may be examined and copies may be obtained from the
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, or
electronically 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. 20549.
Outstanding BACs. According to the Form 10-K, there were 2,169,878 BACs
issued and outstanding, held by approximately 1,326 BAC Holders, as of March 31,
1997.
Selected Financial and Property Related Data. Attached as Appendix A is a
summary of certain financial and statistical information with respect to the
Partnership and the Properties, all of which has been taken from the Form 10-K
and the Form 10-Q. More comprehensive financial and other information is
included in such reports and other documents filed by the Partnership with the
Commission, and Appendix A is qualified in its entirety by reference to such
reports and other documents and all the financial information and related notes
contained therein.
Prior Acquisitions of BACs and Prior Contacts. Neither the Purchaser nor
any of its affiliates holds any BACs in any series of the Partnership. On April
17, 1998, the Purchaser informed representatives of the Partnership of its
desire to make an offer to purchase BACs at a price higher than the Lower Offer
and requested a list of BAC Holders for such purpose. As of the date of this
Offer, the Purchaser has received no response. Except as set forth above,
neither the Purchaser nor its affiliates are party to any past, present or
proposed material contracts, arrangements, understandings, relationships, or
negotiations with the Partnership or with the General Partner concerning the
Partnership.
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<PAGE> 11
DETERMINATION OF PURCHASE PRICE
In establishing the Purchase Price, the Purchaser reviewed certain
publicly available information including among other things: (i) the Partnership
Agreement, and (ii) the Form 10-K and Form 10-Q. Based on that information, the
Purchaser considered several factors, some of which are discussed below.
Trading History of the BACs. Secondary market sales activity for the BACs,
including privately negotiated sales, has been limited and highly sporadic. The
Form 10-K states that "[t]here is no established public trading market for the
BACs and it is not anticipated that any public market will develop." At present,
privately negotiated sales and sales through intermediaries (such as through the
trading system previously operated by Chicago Partnership Board, Inc., which
used to publish sell offers by holders of BACs) are the only means available to
a BAC Holder to liquidate an investment in BACs (other than this Offer, the
Lower Offer or other occasional offers by other partnership investors, if any)
because the BACs are not listed or traded on any exchange or quoted on any
NASDAQ list or system.
According to Partnership Spectrum, an independent third party publication,
there has been only three sales of the Partnership's Series 24 BACs since
December 1, 1995: one in April-May 1996, for $8.80 per BAC, one in April-May
1997, for $9.25 per BAC, and one in December 1997-January 1998, for $8.75 per
BAC. Sales may be conducted which are not reported in the Partnership Spectrum
and the prices of sales through other channels may differ from those reported by
the Partnership Spectrum. The reported gross sales prices may not reflect the
net sales proceeds received by sellers of BACs, which typically are reduced by
commissions (approximately 5% to 10%) and other secondary market transaction
costs. The Purchaser does not know whether the information provided by the
Partnership Spectrum is accurate or complete.
Remaining Tax Credits. Based on information contained in public filings,
the Purchaser believes that additional tax credits of approximately $11.16 will
be available to BAC Holders who hold their BACs through 2007.
CERTAIN INFORMATION CONCERNING THE PURCHASER
The Purchaser. The Purchaser is a California limited liability company
that was formed in 1997. The principal office of the Purchaser is 199 South Los
Robles Avenue, Suite 440, Pasadena, CA 91101. Everest Tax Credit Investors, LLC
is owned by Everest Properties II, LLC, a California limited liability company
("EPII"), and by Imperial Bank, a California state-chartered bank. Imperial Bank
is the wholly owned operating subsidiary of Imperial Bancorp, a bank holding
company registered under the Bank Holding Company Act of 1956. The Manager of
the Purchaser is EPII, and it is the person that manages Purchaser's affairs.
For certain information concerning the directors and executive officers of EPII,
Imperial Bank and Imperial Bancorp, see Schedule I to the Offer to Purchase.
General. Except as set forth above or elsewhere in this Offer to Purchase:
(i) the Purchaser does not beneficially own or have a right to acquire, and, to
the best knowledge of the Purchaser, no associate or majority-owned subsidiary
of any of the Purchaser or the persons listed in Schedule I hereto, beneficially
owns or has a right to acquire any BACs or any other equity securities of the
Partnership; (ii) the Purchaser has not, and to the best knowledge of the
Purchaser, none of the persons and entities referred to in clause (i) above or
any of their executive officers, directors or subsidiaries has, effected any
transaction in the BACs or any other equity securities of the Partnership during
the past 60 days other than as stated in this Offer; (iii) the Purchaser does
not have and, to the best knowledge of the Purchaser, none of the persons listed
in Schedule I hereto has, any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Partnership, including, but not limited to, 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, consents or
authorizations; (iv) since March 31, 1994, there have been no transactions which
would require reporting under the rules and regulations of the Commission
between the Partnership or any of its affiliates and the Purchaser or any of its
subsidiaries or, to the best knowledge of the Purchaser, any of their executive
officers, directors or affiliates; and (v) since March 31, 1994, except as
otherwise stated in this Offer, there have been no contacts, negotiations or
transactions between the Purchaser or any of its subsidiaries or, to the best
knowledge of the Purchaser, any of the persons listed in Schedule I hereto, on
the one hand, and the Partnership or its affiliates, on the other hand,
concerning a merger, consolidation or
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<PAGE> 12
acquisition, tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets of the
Partnership.
Source of Funds. Based on the Purchase Price of $8.00 per BAC, the
Purchaser estimates that the total amount of funds necessary to purchase all
BACs sought by this Offer and to pay related fees and expenses, will be
approximately $2,624,000. The Purchaser expects to obtain these funds by means
of equity capital contributions from its members at the time the BACs tendered
pursuant to the Offer are accepted for payment. Such members will fund their
capital contributions through existing cash and other financial assets which in
the aggregate are sufficient to provide the funds required in connection with
the Offer without any additional borrowings.
FUTURE PLANS OF THE PURCHASER
The Purchaser is seeking to acquire BACs pursuant to the Offer to obtain a
substantial equity interest in the Partnership, primarily for investment.
Following the completion of the Offer, the Purchaser and persons related to or
affiliated with the Purchaser may acquire additional BACs. Any such acquisition
may be made through private purchases, through one or more future tender or
exchange offers or by any other means deemed advisable by the Purchaser in its
sole discretion. Any such acquisition may be at a price higher or lower than the
price to be paid for the BACs purchased pursuant to the Offer, and may be for
cash or other consideration. The Purchaser also may consider selling some or all
of the BACs it acquires pursuant to the Offer, either directly or by a sale of
one or more interests in the Purchaser itself, depending upon liquidity,
strategic, tax and other considerations.
The Purchaser does not currently intend to change current management or
the operation of the Partnership and does not have current plans for any
extraordinary transaction involving the Partnership. However, these plans could
change at any time in the future. If any transaction is effected by the
Partnership and financial benefits accrue to the BAC Holders, the Purchaser and
its affiliates will participate in those benefits to the extent of their
ownership of the BACs.
The Purchaser has no present plans or proposals that would result in an
extraordinary transaction, such as a merger, reorganization, liquidation,
reallocation of operations or sale or transfer of assets involving the
Partnership or any material changes in the Partnership's structure, business or
composition of its management or personnel.
EFFECTS OF THE OFFER
Future Benefits of BAC Ownership. Tendering BAC Holders shall receive cash
in exchange for their BACs purchased by the Purchaser and will forego all future
distributions and tax credit allocations from the Partnership with respect to
such BACs.
Limitations on Resales. Transfers of 50% or more of the BACs in a
twelve-month period may result in a termination of the Partnership for federal
income tax purposes and would also result in a recapture of tax credits.
Pursuant to the Partnership Agreement, the General Partner may defer transfers
in order to avoid such an event. The Purchaser believes that its Offer (for
approximately 15% of the BACs in Series 24, which would be approximately 1% of
the BACs in Series 20-31 of the Partnership as of December 31, 1997), when
combined with the recent trading activity and any BACs transferred in connection
with the Lower Offer, will not likely result in a tax termination.
Influence on Voting Decisions by the Purchaser. Under the Partnership
Agreement, BAC Holders holding a majority of the BACs are entitled to take
action with respect to a variety of matters, including removal of the General
Partner, dissolution and termination of the Partnership, and approval of most
types of amendments to the Partnership Agreement. If the Purchaser obtains all
or most of the 325,481 BACs sought, the influence of Purchaser and its
affiliates on such actions may be significant.
CERTAIN FEDERAL INCOME TAX MATTERS
The following summary is a general discussion of certain of the federal
income tax consequences of a sale of BACs pursuant to the Offer. The summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable
Treasury regulations thereunder, administrative rulings, and judicial authority,
all as of the date
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<PAGE> 13
of the Offer. All of the foregoing are subject to change, and any such change
could affect the continuing accuracy of this summary. This summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular BAC Holder in light of such BAC Holder's specific circumstances, nor
does it describe any aspect of state, local, foreign or other tax laws. Sales of
BACs pursuant to the Offer will be taxable transactions under applicable state,
local, foreign and other tax laws. BAC HOLDERS SHOULD CONSULT THEIR RESPECTIVE
TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THE BAC HOLDER OF SELLING
BACS PURSUANT TO THE OFFER.
In general, a BAC Holder will recognize gain or loss on a sale of BACs
pursuant to the Offer equal to the difference between (i) the BAC Holder's
"amount realized" on the sale and (ii) the BAC Holder's adjusted tax basis in
the BACs sold. The amount of a BAC Holder's adjusted tax basis in such BACs will
vary depending upon the BAC Holder's particular circumstances. The "amount
realized" with respect to a BAC will be a sum equal to the amount of cash
received by the BAC Holder for the BAC pursuant to the Offer (that is, the
Purchase Price), plus the amount of the Partnership's liabilities allocable to
the BAC (as determined under Code Section 752).
The gain or loss recognized by a BAC Holder on a sale of a BAC pursuant to
the Offer generally will be treated as a capital gain or loss if the BAC was
held by the BAC Holder as a capital asset. Recent changes to the tax laws made
by the Taxpayer Relief Act of 1997 (the "Act") modified applicable capital gain
rates and holding periods. Gain with respect to BACs held for more than 18
months will be taxed at a long-term capital gain rate of 20 percent. Gain with
respect to BACs held more than one year but less than 18 months will be taxed at
a mid-term capital gain rate of 28 percent. Gain with respect to BACs held one
year or less will be taxed at ordinary income rates. It should also be noted
that the Act imposed depreciation recapture of previously deducted straight line
depreciation with respect to real property at a rate of 25 percent (assuming
eligibility for long-term capital gain treatment). A portion of the gain
realized by a BAC Holder with respect to a disposition of the BACs may be
subjected to this 25 percent rate to the extent that the gain is attributable to
depreciation recapture inherent in the properties of the Partnership.
Capital losses are deductible only to the extent of capital gains, except
that individual taxpayers may deduct up to $3,000 per year of capital losses in
excess of the amount of their capital gains against ordinary income. Excess
capital losses generally can be carried forward to succeeding years (a
corporation's carry-forward period is five years and an individual taxpayer can
carry forward such losses indefinitely).
A tendering BAC Holder will be allocated a pro rata share of the
Partnership's tax credits and taxable income or loss for the year of the sale
with respect to the BACs sold in accordance with the provisions of the
Partnership Agreement concerning transfers of BACs. Such allocation and any cash
distributed by the Partnership to the BAC Holder for that year will affect the
BAC Holder's adjusted tax basis in BACs and, therefore, the amount of such BAC
Holder's taxable gain or loss upon a sale of BACs pursuant to the Offer.
Under Code Section 469, individuals and certain types of corporations
generally are able to deduct "passive activity losses" in any year only to the
extent of the person's passive activity income for that year. Substantially all
post-1986 losses of BAC Holders from the Partnership are passive activity
losses. BAC Holders may have "suspended" passive activity losses from the
Partnership (i.e., post-1986 net taxable losses in excess of statutorily
permitted "phase-in" amounts and which have not been used to offset income from
other passive activities).
If a BAC Holder sells less than all of its BACs pursuant to the Offer, a
loss recognized by that BAC Holder can be currently deducted (subject to the
other applicable limitations) to the extent of the BAC Holder's passive income
from the Partnership for that year plus any other passive activity income for
that year, and a gain recognized by a BAC Holder upon the sale of BACs can be
offset by the BAC Holders' current or "suspended" passive activity losses (if
any) from the Partnership and other sources. If, on the other hand, a BAC Holder
sells 100 percent of its BACs pursuant to the Offer, any "suspended" losses and
any losses recognized upon the sale of the BACs will be offset first against any
other net passive gain to the BAC Holder from the sale of the BACs and any other
net passive activity income from other passive activity investments, and the
balance of any "suspended" net losses from the BACs will no longer be subject to
the passive activity loss limitation and, therefore, will be deductible by such
BAC Holder from its other "ordinary" income (subject to any other applicable
limitations). If more than 325,481 BACs are tendered, some tendering BAC Holders
may not be able to sell 100 percent of their BACs pursuant to the Offer because
of proration of the number of BACs to be purchased by the Purchaser.
10
<PAGE> 14
BAC Holders (other than tax-exempt persons, corporations and certain
foreign individuals) who tender BACs may be subject to 31 percent backup
withholding unless those BAC Holders provide a taxpayer identification number
("TIN") and are certain that the TIN is correct or properly certify that they
are awaiting a TIN. A BAC Holder may avoid backup withholding by properly
completing and signing the Letter of Transmittal. If a BAC Holder who is subject
to backup withholding does not include its TIN, the Purchaser will withhold 31
percent from payments to such BAC Holder.
A BAC Holder who tenders BACs must file an information statement with his
federal income tax return for the year of the sale which provides the
information specified in Treasury Regulation Section 1.751-1(a)(3). The selling
BAC Holder must also notify the Partnership of the date of the transfer and the
names, addresses and tax identification numbers of the transferors and
transferee within 30 days of the date of the transfer (or, if earlier, January
15 of the following calendar year) (See IRS Form 8308).
CERTAIN LEGAL MATTERS
General. Except as set forth in this Section, the Purchaser is not aware
of any filings, approvals or other actions by any domestic or foreign
governmental or administrative agency that would be required prior to the
acquisition of BACs by the Purchaser pursuant to the Offer. The Purchaser's
obligation to purchase and pay for BACs is subject to certain conditions,
including conditions related to the legal matters discussed in this Section.
State Takeover Statutes. The Partnership was formed under the laws of the
State of Delaware, which currently does not have any takeover statute applicable
to limited partnerships. However, it is a condition to the Offer that no state
or federal statute impose a material limitation on the Purchaser's right to vote
the BACs purchased pursuant to the Offer. If this condition is not met,
Purchaser may terminate or amend the Offer.
If any person seeks to apply any state takeover statute, the Purchaser
will take such action as then appears desirable, which action may include
challenging the validity or applicability of any such statute in appropriate
court proceedings. If there is a claim that one or more takeover statutes apply
to the Offer, and it is not determined by an appropriate court that such
statutes do not apply or are invalid as applied to the Offer, the Purchaser
might be required to file certain information with, or receive approvals from,
the relevant state authorities. This could prevent the Purchaser from purchasing
or paying for BACs tendered pursuant to the Offer, or cause delay in continuing
or consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or pay for BACs tendered.
Fees and Expenses. Purchaser will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of BACs pursuant to the
Offer. The Purchaser will pay all costs and expenses of printing and mailing the
Offer and its legal fees and expenses. The Purchaser will reduce the purchase
price of BACs by any transfer fees imposed by the Partnership.
Miscellaneous. The Offer is not made to (nor will tenders be accepted on
behalf of) BAC Holders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities
or other laws of such jurisdiction. However, the Purchaser may, in its
discretion, take such action as it deems necessary to make the Offer in any
jurisdiction and extend the Offer to BAC Holders in such jurisdiction.
In any jurisdiction where the securities or other laws require the Offer
to be made by a licensed broker or dealer, the Offer will be deemed to be made
on behalf of the Purchaser by one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. The Schedule 14D-1 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 under the caption "CERTAIN INFORMATION CONCERNING THE
PARTNERSHIP -- GENERAL".
11
<PAGE> 15
No person has been authorized to give any information or to 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.
EVEREST TAX CREDIT INVESTORS, LLC
April 20, 1998
12
<PAGE> 16
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
The business address of each executive officer and director of Everest
Properties II, LLC is 199 South Los Robles Avenue, Suite 440, Pasadena,
California 91101. Each executive officer and director is a United States
citizen. The name and principal occupation or employment of each executive
officer and director of Everest Properties II, LLC, are set forth below.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME POSITION AND FIVE-YEAR EMPLOYMENT HISTORY
W. Robert Kohorst President of Everest Properties II, LLC from 1996 -
present. President and Director of Everest
Properties, Inc. from 1994 - present. President and
Director of KH Financial, Inc. from 1991 - present
David I. Lesser Executive Vice President and Secretary of Everest
Properties II, LLC from 1996 - present. Executive
Vice President of Everest Properties, Inc. from 1995
- present. Principal and member of Feder, Goodman &
Schwartz, Inc. from 1992 - 1996.
The business address of each executive officer and director of Imperial
Bank and Imperial Bancorp is 9920 South La Cienega Boulevard, Inglewood,
California 90301. Each executive officer and director is a United States
citizen. The name and principal occupation or employment of each executive
officer and director of Imperial Bank and Imperial Bancorp are set forth below.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME POSITION AND FIVE-YEAR EMPLOYMENT HISTORY
George L. Graziadio, Jr. Chairman of the Board, President and Chief Executive
Officer of Imperial Bancorp for the past five years.
Chairman of the Board and Co-Founder of Imperial
Bank. Chairman of the Board of Imperial Financial
Group, Inc. Mr. Graziadio is also engaged as an
owner or partner in many other business activities
primarily in the real estate industry. Director of
Coastcost Corp.
J. Richard Barkley Executive Vice President and Director, Human
Resources for the past five years.
Richard J. Casey Executive Vice President of Imperial Bank for the
past five years.
Harry W. Chenoweth Executive Vice President of Imperial Bank commencing
in 1997. Previously served as a Senior Vice
President with Union Bank for five years.
Norman P. Creighton Vice Chairman and Chief Executive Officer and
Director of Imperial Bank for the past five years.
Director of Imperial Bancorp.
Richard K. Eamer Director of Imperial Bank and Imperial Bancorp.
Chairman Emeritus of Tenet Healthcare Corporation.
Chairman of National Medical Enterprises.
Robert M. Franko President and Director of Imperial Finance Group,
Inc. commencing in 1997. Executive Vice President
and Chief Financial of Imperial Bank from 1995-1997.
Previously served as President and Chief Executive
Officer of Springfield Bank and Trust Ltd.
G. Louis Graziadio, III Director of Imperial Bancorp. President of Ginarra
Holdings, Inc. Co-Chairman of the Board of Imperial
Financial Group, Inc.
Bernard G. LeBeau Director of Imperial Bancorp and Imperial Bank.
Chairman of the Board of Imperial Bank from 1982 -
1995.
Eldon K. Lloyd Executive Vice President, Chief Credit Officer of
Imperial Bank for the past five years.
13
<PAGE> 17
William L. MacDonald Director of Imperial Bank. President and Chief
Executive Officer of Compensation Resource Group.
Daniel R. Mathis Director, President and Chief Operating Officer of
Imperial Bank.
Christine McCarthy Executive Vice President and Chief Financial Officer
of Imperial Bank commencing in 1997. Executive Vice
President and Chief Financial Officer of First
Interstate Bank for the five years prior to 1997.
Lee E. Mikles Director of Imperial Bank from 1994 to present.
Investment Advisor, Mikles/Miller Management, Inc.
Director of Coastcast Corp.
Paul A. Novelly Director of Imperial Bank. President of Apex Oil Co.
Director of Imperial Financial Group, Inc. Director
of Coastcast Corp., Vista 2000, Inc., and Intrawest
Corp.
Robert S. Muehlenbeck Executive Vice President of Imperial Bank since
1993. President of Seaborg, Inc. for five years
prior thereto.
Charles T. Owen Director of Imperial Bank. President and Publisher
of the San Diego Business Journal.
John A. Andreini Director of Imperial Bank. Chairman of Andreini &
Co.
James R. Daly Executive Vice President of Imperial Bank since
1996. Previously served as President of Sunrise Bank
Richard Baker Senior Vice President, General Counsel and Secretary
of Imperial Bancorp and Imperial Bank since 1983.
Previously served as Senior Vice President and
General Counsel for American City Bank.
14
<PAGE> 18
APPENDIX A
Set forth below is a summary of certain financial data for the Partnership
which has been excerpted or developed from the Partnership's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997 (the "Form 10-K"), and
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1997
(the "Form 10-Q"), filed with the Securities and Exchange Commission. Such
reports and other documents filed by the Partnership with the Commission contain
more comprehensive financial and other information, including the notes
accompanying the financial statements, 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.
PART I
SELECTED FINANCIAL DATA
STATEMENTS OF OPERATIONS - SERIES 24
<TABLE>
<CAPTION>
Period from
June 29,
1995 (date
Nine months ended of inception)
December 31, Year ended through
------------------------------- March 31, March 31,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Income
Interest income ....................................... $ 12,343 $ 179,679 $ 193,065 $ 139,594
Miscellaneous income .................................. -- -- -- --
------------- ------------- ------------- -------------
12,343 179,679 193,065 139,594
------------- ------------- ------------- -------------
Share of losses from Operating Partnerships .............. (601,246) (109,960) (797,796)* (149,023)
------------- ------------- ------------- -------------
Expenses
Fund management fee ................................... 149,640 133,855 212,130 62,532
Amortization .......................................... 9,735 9,735 12,980 5,769
General and administrative expenses ................... 25,705 65,550 73,370 63,731
Professional fees ..................................... 29,096 24,746 25,402 2,396
------------- ------------- ------------- -------------
214,176 233,886 323,882 134,428
------------- ------------- ------------- -------------
NET INCOME (LOSS) ........................................ $ (803,079) $ (164,167) $ (928,613) $ (143,857)
============= ============= ============= =============
Net income (loss) allocated to
general partner ....................................... $ (8,031) $ (1,642) $ (9,286) $ (1,439)
============= ============= ============= =============
Net income (loss) allocated to
limited partners ...................................... $ (795,048) $ (162,525) $ (919,327) $ (142,418)
============= ============= ============= =============
Net income (loss) per BAC ................................ $ (.37) $ (.07) $ (0.42) $ (0.08)
============= ============= ============= =============
OTHER INFORMATION:
Tax Credits per BAC for the Investors
Tax Year, the Twelve Months Ended
December 31, 1996 and 1995 ............................ $ .109 to
$ .503 $ .163 **
============= =============
</TABLE>
* Net of gain on disposition of investment of $23,253.
** Depends on the investors' date of admission.
A-1
<PAGE> 19
BALANCE SHEETS - SERIES 24
<TABLE>
<CAPTION>
Dec. 31, 1997 March 31, 1997
-------------- --------------
<S> <C> <C>
ASSETS
INVESTMENTS IN OPERATING PARTNERSHIPS ..................... $ 16,184,618 $ 15,915,977
OTHER ASSETS
Cash and cash equivalents ................................. 364,888 644,685
Investments ............................................... 517 303,949
Notes receivable .......................................... 756,782 1,654,702
Deferred acquisition costs ................................ 276,283 313,911
Prepaid expenses .......................................... -- --
Organization costs, net of accumulated amortization ....... 35,695 45,429
Other assets .............................................. 1,326,950 1,438,557
-------------- --------------
$ 18,945,733 $ 20,317,210
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts payable and accrued expenses ..................... $ -- $ --
Syndication costs payable ................................. -- --
Accounts payable affiliates ............................... 240,704 79,964
Capital contributions payable ............................. 2,050,311 2,779,449
-------------- --------------
2,291,015 2,859,413
-------------- --------------
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership interest; $10 stated value
per BAC; 40,000,000 authorized BACs; 2,169,878 issued
and outstanding as of December 31, 1997 ............... 16,672,957 17,468,005
General Partner ........................................... (18,756) (10,725)
Unrealized gain (loss) on securities for sale, net ........ 517 517
-------------- --------------
16,654,718 17,457,797
-------------- --------------
$ 18,945,733 $ 20,317,210
============== ==============
</TABLE>
DIVIDEND HISTORY
The Partnership has made no distributions of net cash flow to BAC Holders
from its inception, October 5, 1993, through March 31, 1997.
LIQUIDITY
The Partnership's primary source of funds is the proceeds of its public
offering of BACs. Other sources of liquidity will include (i) interest earned on
capital contributions held pending investment and on working capital and (ii)
cash distributions from operations of the Operating Partnerships in which the
Partnership has and will invest. The Partnership does not anticipate significant
cash distributions from operations of the Operating Partnerships.
The Partnership invests in short-term tax-exempt municipal bonds to
decrease the amount of taxable interest income that flows through to it's
investors. The Partnership anticipates that the investments it purchases will be
held to maturity, but periodically the Partnership must sell investments to meet
certain obligations. Many of the investments sold during the years ended March
31, 1995 and 1996 were yielding coupon rates higher than market
A-2
<PAGE> 20
rates. A premature sale of these investments may have resulted in realized
losses, but when combined with the higher coupon yields the resulting actual
yields were consistent with market rates. In selecting investments to purchase
and sell the general partner and it's advisors stringently monitor the ratings
of the investments and safety of principal.
As of December 31, 1997, the Partnership was accruing the fund management
fee for Series 20, Series 21, Series 22, Series 23, Series 24 and Series 27.
Pursuant to the partnership agreement, such liabilities will be deferred until
the Partnership receives sales or refinancing proceeds from Operating
Partnerships which will be used to satisfy such liabilities. As of December 31,
1997, the Partnership's working capital and sources of liquidity coupled with
affiliated party liability accruals allowed sufficient levels of liquidity to
meet the third party obligations of the Partnership. As of December 31, 1997,
the Partnership was unaware if any trends which would create insufficient
liquidity to meet future third party obligations.
CAPITAL RESOURCES
The Partnership offers BACs in a public offering originally declared
effective by the Commission on December 16, 1993. As of February 19, 1998, the
Partnership was continuing to offer BACs in Series 32.
Series 24. The Partnership commenced offering BACs in Series 24 on June 9,
1995. The Partnership received and accepted subscriptions for $21,697,000
representing 2,169,878 BACs from investors admitted as BAC Holders in Series 24.
Offers and sales of BACs in Series 24 were completed and the last of the BACs in
Series 24 were issued by the Partnership on September 22, 1995.
As of December 31, 1997, the Partnership had committed Series 24 net
offering proceeds to pay initial and additional installments of capital
contributions to 24 Operating Partnerships in the amount of $15,939,004, with
the amount of $364,888 remaining to be used by the Partnership to pay remaining
capital contributions to the Operating Partnerships that Series 24 had invested
in as of December 31, 1997.
RESULTS OF OPERATIONS
The Partnership incurs a fund management fee to the General Partner and/or
its affiliates in an amount equal to 0.5% of the aggregate cost of the Apartment
Complexes owned by the Operating Partnerships, less the amount of certain asset
management and reporting fees paid by the Operating Partnership.
The Partnership's investment objectives do not include receipt of
significant cash flow distributions from the Operating Partnerships in which it
has invested or intends to invest. The Partnership's investments in Operating
Partnerships have been and will be made principally with a view towards
realization of Federal Housing Tax Credits for allocation to its partners and
BAC Holders.
Series 24. As of March 31, 1997 and 1996, the average Qualified Occupancy
for the series was 91.3% and 100%, respectively. The series had a total of 23
properties at March 31, 1997. Out of the total, 19 were at 100% qualified
occupancy and 3 were in initial lease-up. The series also had 1 property with
multiple buildings some of which were under construction and some of which were
in initial lease-up at March 31, 1997.
As of December 31, 1997 and 1996, the average Qualified Occupancy for the
series was 98.8% and 94.7%, respectively. The series had a total of 24
properties at December 31, 1997. Out of the total 22 were at 100% qualified
occupancy and 2 were in active lease-up.
For the tax years ended December 31, 1996 and 1995, the series, in total,
generated $1,048,795 and $224,386, respectively, in passive income tax losses
that were passed through to investors. The series also provided tax credits per
BAC to the investors of $.503 for 1996 and from $.109 to $.163 for 1995
depending on the investors' date of admission.
As of March 31, 1997 and 1996, the Investments in Operating Partnerships
for Series 24 was $15,915,977 and $10,012,941, respectively. The increase was a
result of the Partnership acquiring 8 interests in Operating Partnerships and
costs capitalized to the investment account which were incurred by the
Partnership in acquiring the
A-3
<PAGE> 21
Operating Partnerships. Investments in Operating Partnerships was also affected
by the way the Partnership accounts for such investments, the equity method. By
using the equity method the Partnership adjusts its investment cost for its
share of each Operating Partnership's results of operations and for any
distributions received or accrued.
For the year ended March 31, 1997 and for the period ended March 31, 1996
the net loss of the Series was $928,613 and $143,857, respectively. The major
components of these amounts were the Partnership's share of losses from
Operating Partnerships, the fund management fee and interest income earned on
Offering proceeds to be used for acquisitions and working capital reserves that
were yet to be expended. As of March 31, 1997, it was anticipated that the net
loss would fluctuate in future years until the series finishes acquiring
Operating Partnerships, construction is completed on the Operating Partnerships,
and they become fully leased-up and stabilize operations.
For the nine months ended December 31, 1997, Series 24 reflected a net
loss from Operating Partnerships of $607,318. When adjusted for depreciation,
which is a non-cash item, the Operating Partnerships reflected positive
operations of $225,467. This is an interim period estimate; it is not indicative
of the final year end results.
A-4
<PAGE> 22
PART II
BOOK VALUE AND ACCUMULATED DEPRECIATION OF APARTMENT COMPLEXES
HELD BY OPERATING PARTNERSHIPS IN SERIES 24, AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Accum.
Encum- Buildings and Depre- Acq. Date
Property Description Units brances Land improvements ciation(1) Date Built(1)
- -------------------- --------- ----------- ----------- ------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Autumn Ridge Apts. ....... 34 $ 1,123,201 $ 125,347 $ 0 $ 0 7/96 1/97*
Shenandoah, VA
Brooks Summit Apts. ...... 36 1,123,519 44,000 1,454,399 8,614 12/95 11/96
Blue Ridge, GA
Brownsville Apts. ........ 36 1,209,681 58,945 1,208,428 51,499 9/95 9/95
Brownsville, TN
Cooper's Crossing ........ 93 3,682,888 522,890 6,954,516 113,288 6/96 12/95
Irving, TX
Century East Apts. IV .... 24 635,683 90,000 984,989 40,552 8/95 8/95
Bismark, ND
Century East V Apts. ..... 24 635,683 90,000 982,504 38,367 11/95 9/95
Bismark, ND
Edenfield Apts. .......... 48 1,247,826 10,280 1,709,535 53,173 1/96 12/96
Millen, GA
Elm Street Apts. ......... 35 2,420,999 183,547 3,715,562 81,639 1/96 1/96
Yonkers, NY
Heritage Glen Apts. ...... 28 1,142,884 40,000 1,363,991 25,966 4/96 4/96
Coolidge, AZ
Hillridge Apts. .......... 38 1,225,000 150,000 2,280,094 41,939 8/96 6/96
Los Lunas, NM
Lake Apts. I ............. 24 620,233 85,000 1,013,895 43,871 8/95 7/95
Fargo, ND
Lakeway Apts. ............ 32 880,109 10,000 1,119,097 50,938 11/95 4/96
Zwolle, LA
Laurelwood Park Apts. .... 100 2,330,000 230,000 5,379,607 62,543 2/96 10/96
High Point, NC
Madison Park IV Apts. .... 143 7,812,244 541,624 11,606,586 288,888 5/96 3/97*
Boston, MA
New Hilltop Apts. ........ 72 1,733,471 52,591 2,147,997 107,250 11/95 11/95
Laurens, SC
North Hampton Pl ......... 36 888,616 207,550 2,230,062 88,913 11/95 3/96
Columbia, MO
Northfield Housing, L.P. . 5 200,000 70,000 446,355 17,478 12/96 9/96
Jackson, MS
Pahrump Valley Apts. ..... 32 1,405,051 63,000 1,757,158 32,701 7/96 7/96
Pahrump, NV
Park Meadow Apts. ........ 80 1,638,979 242,000 1,579,251 22,052 9/95 U/C*
Gaylord, MI
Shadowcreek Apts. ........ 24 1,235,329 130,000 1,529,213 9,305 6/96 9/96
Overton, NV
Stanton Village Apts. .... 40 1,219,234 85,971 1,252,848 47,276 9/95 9/95
Stanton, TN
Woodlands Apts. .......... 24 1,143,044 108,900 1,496,732 43,728 11/95 9/95
Elko, NV
Wyandotte Apts. .......... 32 3,765,817 950,000 0 0 4/96 2/97*
Los Angeles, CA
</TABLE>
(1) The properties are being depreciated over 27.5, 28, 40 or 50 years.
* Property was in lease-up phase as of March 31, 1997.
U/C=Property was under construction as of March 31, 1997.
A-5
<PAGE> 23
BAC Holders who want to participate in this Offer and have tendered in the
Lower Offer must deliver a properly completed and duly executed Letter of
Transmittal to Everest no later than May 14, 1998 to assure timely withdrawal of
the prior tender. Everest will send the notice of such withdrawal.
The Letter of Transmittal, and any other required documents should be sent
or delivered by each BAC Holder or his broker, dealer, commercial bank, trust
company or other nominee to the Purchaser at its address set forth below:
EVEREST PROPERTIES II, LLC
(MANAGER)
199 SOUTH LOS ROBLES AVENUE
SUITE 440
PASADENA, CALIFORNIA 91101
Questions and requests for assistance may be directed to the Purchaser at
its address and telephone number listed below. Additional copies of this Offer
to Purchase, the Letter of Transmittal, and other tender offer materials may be
obtained from the Purchaser as set forth below, and will be furnished promptly
at the Purchaser's expense. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
For information regarding the Offer contact:
EVEREST PROPERTIES II, LLC
(MANAGER)
199 SOUTH LOS ROBLES AVENUE
SUITE 440
PASADENA, CALIFORNIA 91101
(800) 611-4613 OR (626) 585-5920
FACSIMILE: (626) 585-5929
<PAGE> 1
AGREEMENT OF TRANSFER AND LETTER OF TRANSMITTAL
FOR BENEFICIAL ASSIGNEE CERTIFICATES ("BACS")
OF
BOSTON CAPITAL TAX CREDIT FUND IV L. P. - SERIES 24
FOR $8.00 PER BAC
Subject to and effective upon acceptance for payment, the undersigned (the
"Seller") hereby sells, assigns, transfers, conveys and delivers and irrevocably
directs any custodian or trustee to sell, assign, transfer, convey and deliver
("Transfer") to Everest Tax Credit Investors, LLC, a California limited
liability company (the "Purchaser"), all of the Seller's right, title and
interest in beneficial assignee certificates ("BACs") in Series 24 of Boston
Capital Tax Credit Fund IV L. P., a Delaware limited partnership (the
"Partnership"), for $8.00 per BAC, less the amount of Distributions (as defined
in the Offer to Purchase) per BAC, if any, made to Seller by the Partnership
after March 1, 1998 and before the date on which the Purchaser purchases the
BACs tendered pursuant to the Offer (the "Purchase Date") and less any tax
credits allocated to Seller after May 31, 1998, in accordance with and pursuant
to the Offer to Purchase, dated April 20, 1998, as it may be supplemented or
amended from time to time (the "Offer to Purchase") and this Agreement of
Transfer and Letter of Transmittal, as it may be supplemented or amended from
time to time (the "Letter of Transmittal," which together with the Offer to
Purchase, constitutes the "Offer").
Such Transfer shall include, without limitation, all rights in, and claims
to, any Partnership profits and losses, tax credit allocations, cash
distributions, voting rights and other benefits of any nature whatsoever
distributable or allocable to such BACs under the Partnership's Agreement of
Limited Partnership, as amended (the "Partnership Agreement"), and all
certificates evidencing the same, and Seller agrees immediately to endorse and
deliver to Purchaser all distribution checks received from the Partnership after
the Purchase Date. The Seller hereby irrevocably constitutes and appoints the
Purchaser as the true and lawful agent and attorney-in-fact of the Seller with
respect to such BACs, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to vote,
inspect Partnership books and records or act in such manner as any such
attorney-in-fact shall, in its sole discretion, deem proper with respect to such
BACs, to deliver such BACs and transfer ownership of such BACs on the
Partnership's books maintained by the General Partner of the Partnership,
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Purchaser, to immediately revoke and withdraw all prior
tenders of BACs hereof, to direct any custodian or trustee holding record title
to the BACs to do any of the foregoing, including the execution and delivery of
a copy of this Letter of Transmittal, and upon payment by the Purchaser of the
purchase price, to receive all benefits and cash distributions, endorse
Partnership checks payable to Seller and otherwise exercise all rights of
beneficial ownership of such BACs. The Purchaser shall not be required to post
bond of any nature in connection with this power of attorney.
The Seller hereby represents and warrants to the Purchaser that the Seller
owns such BACs and has full power and authority to validly sell, assign,
transfer, convey and deliver such BACs to the Purchaser, and that when any such
BACs are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all options, liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such BACs will not be
subject to any adverse claim. If the undersigned is signing on behalf of an
entity, the undersigned declares that he has authority to sign this document on
behalf of the entity. The Seller further represents and warrants that the Seller
is a "United States person", as defined in Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended, or if the Seller is not a United States
person, that the Seller does not own beneficially or of record more than 5% of
the outstanding BACs.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase (including proration), the Purchaser may not be required
to accept for payment any or all of the BACs tendered hereby. In such event, the
undersigned understands that this Letter of Transmittal will be effective to
Transfer only those BACs accepted for purchase by the Purchaser and any Letter
of Transmittal for BACs not accepted for payment may be destroyed by the
Purchaser (in accordance with its customary practice).
<PAGE> 2
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity or liquidation of the Seller and any obligations of the
Seller shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
Upon request, the Seller will execute and deliver, and irrevocably directs
any custodian to execute and deliver, any additional documents deemed by the
Purchaser to be necessary or desirable to complete the assignment, transfer and
purchase of such BACs.
The Seller hereby certifies, under penalties of perjury, that (1) the
number shown below on this form as the Seller's Taxpayer Identification Number
is correct and (2) Seller is not subject to backup withholding either because
Seller has not been notified by the Internal Revenue Service (the "IRS") that
Seller is subject to backup withholding as a result of a failure to report all
interest or dividends, or the IRS has notified Seller that Seller is no longer
subject to backup withholding. The Seller hereby also certifies, under penalties
of perjury, that the Seller, if an individual, is not a nonresident alien for
purposes of U.S. income taxation, and if not an individual, is not a foreign
corporation, foreign partnership, foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code and Income Tax Regulations). The
Seller 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.
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 the determinations will be final and binding. The Purchaser's
interpretation of the terms and conditions of the Offer (including this Letter
of Transmittal) will be final and binding. The Purchaser will have the right to
waive any defects or conditions as to the manner of tendering. Any defects in
connection with tenders, unless waived, must be cured within such time as the
Purchaser will determine. This Letter of Transmittal will not be valid until all
defects have been cured or waived.
Date: April 20, 1998
NOTICE OF WITHDRAWAL OF PRIOR TENDER
Execution and delivery of this Letter of Transmittal shall constitute
notice that the undersigned owner(s) irrevocably elect(s) to withdraw all prior
tenders of any BACs covered hereby made by such owner(s), including any tenders
made to Valley Creek Capital, LLC under its offer dated April 14, 1998, as it
may be amended.
<TABLE>
<S> <C>
ALL
- -------------------------------------------------- ------------------------------------------------------
[Specify Number of BACs Tendered [Signature of Owner]
if less than "ALL"]
- -------------------------------------------------- ------------------------------------------------------
[Your Telephone Number] [Print Name]
- -------------------------------------------------- ------------------------------------------------------
[Your Social Security or Taxpayer ID Number] [Signature of Co-Owner]
- -------------------------------------------------- ------------------------------------------------------
[Print Name]
- --------------------------------------------------
[Your Address]
------------------------------------------------------
The completed Letter of Transmittal and original
Partnership Certificate(s) (if available) should be
forwarded to:
EVEREST PROPERTIES II, LLC
199 S. Los Robles Ave., Suite 440
Pasadena, CA 91101
Attn: Securities Processing Department
(626) 585-5920
RE: BOSTON CAPITAL TAX CREDIT FUND IV L. P. -
SERIES 24
------------------------------------------------------
</TABLE>
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell BACs. The Offer is being made solely by the Offer to Purchase
dated April 20, 1998 and the related Agreement of Transfer and Letter of
Transmittal and is not being made to, nor will tenders be accepted from or on
behalf of BAC Holders that reside in any jurisdiction in which making or
accepting the Offer would violate that jurisdiction's laws. In those
jurisdictions where the laws require the Offer to be made by a licensed broker
or dealer, the Offer shall be deemed to be made on behalf of the Purchaser, if
at all, only by one or more registered brokers or dealers licensed under the
laws of the applicable jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
UP TO 325,481 BENEFICIAL ASSIGNEE CERTIFICATES ("BACS")
OF
BOSTON CAPITAL TAX CREDIT FUND IV L.P. - SERIES 24
FOR
$8.00 PER BAC
BY
EVEREST TAX CREDIT INVESTORS, LLC
Everest Tax Credit Investors, LLC, a California limited liability company
(the "Purchaser"), is offering to purchase up to 325,481 beneficial assignee
certificates ("BACs") in Series 24 of Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership (the "Partnership"), at a net cash price of $8.00
per BAC (the "Purchase Price"), without interest, less the amount of the
Distributions (as defined in the Offer to Purchase) per BAC, if any, made to the
holders of BACs ("BAC Holders") by the Partnership after March 1, 1998 and less
any tax credits allocated to selling BAC Holders after May 31, 1998 (allocable
at approximately $0.1125 per month per BAC), and less any transfer fees imposed
by the Partnership for each transfer. This Offer (as defined below) is upon the
terms set forth in the Offer to Purchase dated April 20, 1998 (the "Offer to
Purchase") and in the related Agreement of Transfer and Letter of Transmittal
(the "Letter of Transmittal"), as each may be supplemented or amended from time
to time. The Offer to Purchase and the Letter of Transmittal constitute the
"Offer." The Offer is not conditioned upon financing.
- -------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRO-RATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME ON FRIDAY, MAY 22, 1998 UNLESS THE OFFER IS
EXTENDED.
- -------------------------------------------------------------------------------
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment pursuant to the Offer, and thereby purchased, validly tendered BACs
if, as and when the Purchaser gives oral or written notice to the Partnership
of the Purchaser's acceptance of those BACs for payment pursuant to the Offer.
A tendering beneficial owner of BACs whose BACs are owned of record by an
Individual Retirement Account, a Keogh or other employee benefit plan will not
receive direct payment of the Purchase Price, rather, payment will be made to
the custodian of the account or plan. Upon the terms and subject to the
conditions of the Offer, payment for BACs accepted for payment pursuant to the
Offer will be made and transmitted directly to BAC Holders whose BACs have been
accepted for payment.
The Purchaser is making the Offer in order to acquire a substantial equity
interest in the Partnership primarily for investment and does not currently
intend to change current management or the operation of the Partnership and does
not have current plans for any extraordinary transaction involving the
Partnership.
In all cases, payment for BACs purchased pursuant to the Offer will be made
only after timely receipt by the Purchaser of: (i) a properly completed and duly
executed and acknowledged Letter of Transmittal, (ii) any other documents
required by the Letter of Transmittal, and (iii) written confirmation from the
Partnership of the transfer of the BACs to Purchaser. If more than 325,481 BACs
are validly tendered and not withdrawn on or prior to the Expiration Date, the
Purchaser will, upon the terms and subject to the conditions of the Offer,
accept and pay for an aggregate of 325,481 BACs (or, if less, the maximum number
of BACs that can be purchased without imposing limitations on future resales),
pro rata, with appropriate adjustments to avoid purchases of
<PAGE> 2
fractional BACs. Under no circumstance will interest on the Purchase Price for
BACs be paid, regardless of any extension of the Offer or delay in making the
payment to BAC Holders.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, May 22, 1998 unless the Purchaser in its sole discretion extends the
period of time during which the Offer is open, in which event the term
"Expiration Date" will mean the latest time and date to which the Offer is
extended by the Purchaser. Subject to the applicable regulation of the
Securities and Exchange Commission, the Purchaser expressly reserves the right,
in its sole discretion, at any time, to extend the period of time during which
the Offer is open for any reason, including the occurrence of any of the events
specified in the Offer to Purchase. Any extension will be followed by a press
release or public announcement made no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date.
Tenders of BACs made pursuant to the Offer are irrevocable, except that
BACs tendered pursuant to the Offer may be withdrawn at any time or prior to
the Expiration Date and, unless already accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after June 21, 1998.
For withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Purchaser at its address set forth on
the back cover of the Offer to Purchaser. Any notice of withdrawal must specify
the name of the person(s) who tendered the BACs to be withdrawn and must be
signed by the person(s) who signed the Letter of Transmittal in the same manner
as the Letter of Transmittal was signed. Any BACs properly withdrawn will be
deemed not validly tendered for purposes of the Offer. Withdrawn BACs may be
re-tendered, however, at any time prior to the Expiration Date.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities and Exchange Act of 1934, as
amended (the "Act"), is contained in the Offer to Purchase and is incorporated
herein by reference.
A request is being made under Rule 14d-5 under the Act, for the use of the
list of the BAC Holders for the purpose of disseminating the Offer to BAC
Holders. Upon compliance by the Partnership with the request, the Offer to
Purchase and the Letter of Transmittal and, if required, other relevant
materials will be mailed to registered owners of BACs and will be furnished to
brokers, banks and similar persons whose names, or whose nominees, appear on the
list of BAC Holders, or if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of BACs.
Questions and requests for assistance may be directed to the Purchaser at
its address and telephone number set forth below. Copies of the Offer to
Purchase and the related Letter of Transmittal may be obtained from the
Purchaser, and will be furnished promptly at the Purchaser's expense. The
Purchaser will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of BACs pursuant to the Offer.
Information About the Offer is Available From:
EVEREST TAX CREDIT INVESTORS, LLC
199 S. LOS ROBLES AVE., SUITE 440
PASADENA, CALIFORNIA 91101
TELEPHONE: (800) 611-4613
April 20, 1998 FACSIMILE: (626) 585-5929
