-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A0jOVCzODbrOQ9jj45Rjma2l+qRhDmOnor7RJ6dL0//iWIN9zQm/P9SAdj8SERF/ GWYkWISwTp1kxv0K5dFWqA== 0001047469-98-013625.txt : 19980406 0001047469-98-013625.hdr.sgml : 19980406 ACCESSION NUMBER: 0001047469-98-013625 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980403 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON CAPITAL TAX CREDIT FUND III L P CENTRAL INDEX KEY: 0000879555 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 521749505 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-53853 FILM NUMBER: 98586776 BUSINESS ADDRESS: STREET 1: 313 CONGRESS ST STREET 2: C/O BOSTON CAPITAL PARTNERS INC CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 6174390072 MAIL ADDRESS: STREET 1: ONE BOSTON PLACE STREET 2: STE 2100 CITY: BOSTON STATE: MA ZIP: 02108-4406 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VALLEY CREEK CAPITAL LLC CENTRAL INDEX KEY: 0001058981 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 601 CARLSON PARKWAY SUITE 200 CITY: MINNETONKA STATE: MN ZIP: 55305 BUSINESS PHONE: 6124767200 SC 14D1 1 SCHEDULE 14D1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ BOSTON CAPITAL TAX CREDIT FUND III L.P. (NAME OF SUBJECT COMPANY) VALLEY CREEK CAPITAL, LLC A DELAWARE LIMITED LIABILITY COMPANY GLOBAL CAPITAL MANAGEMENT, INC., A DELAWARE CORPORATION (BIDDER) SERIES 15 BENEFICIAL ASSIGNEE CERTIFICATES (TITLE OF CLASS OF SECURITIES) 100567 40 3 (CUSIP Number of Class of Securities) Thomas A. Schmidt 601 Carlson Parkway - Suite 200 Minnetonka, Minnesota 55305 (612) 476-7200 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) WITH A COPY TO: Peter R. Pancione, Esq. Gipson Hoffman & Pancione, P.C. 1901 Avenue of the Stars - Suite 1100 Los Angeles, California 90067 (310) 556-4660 ------------------------ CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE $1,915,000 $383
- -------------------------------------------------------------------------------- * FOR PURPOSES OF CALCULATING THE FILING FEE ONLY. THIS CALCULATION ASSUMES THE PURCHASE OF 383,000 BACS AT $5.00 PER BAC NET IN CASH. THE AMOUNT OF THE FILING FEE, CALCULATED IN ACCORDANCE WITH REGULATION 0-11 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EQUALS 1/50 OF ONE PERCENT OF THE VALUE OF BACS ASSUMED TO BE PURCHASED. / / 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 OF REGISTRATION NO.: NOT APPLICABLE DATE FILED: NOT APPLICABLE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PAGE 1 OF 7 CUSIP NO. 100567 40 3 Page 2 of 7 Pages
1. Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Valley Creek Capital, LLC 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / / (b) / / 3. SEC Use Only 4. Sources of Funds (See Instructions) WC 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) / / 6. Citizenship or Place of Organization State of Delaware 7. Aggregate Amount Beneficially Owned By Each Reporting Person None 8. Check if the Aggregate in Row (7) Excludes Certain BACs (See Instructions) / / 9. Percent of Class Represented by Amount in Row (7) None 10. Type of Reporting Persons (See Instructions) OO
PAGE 2 OF 7 CUSIP NO. Page 3 of 7 Pages 100567 40 3
1. Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Global Capital Management, Inc. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / / (b) / / 3. SEC Use Only 4. Sources of Funds (See Instructions) WC 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) / / 6. Citizenship or Place of Organization State of Delaware 7. Aggregate Amount Beneficially Owned By Each Reporting Person None 8. Check if the Aggregate in Row (7) Excludes Certain BACs (See Instructions) / / 9. Percent of Class Represented by Amount in Row (7) None 10. Type of Reporting Persons (See Instructions) CO
PAGE 3 OF 7 ITEM 1. SECURITY AND SUBJECT COMPANY a. The name of the subject company is Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership, and the address of its executive offices is One Boston Place, Suite 2100, Boston, Massachusetts 02108-4466. b. The information set forth in the "Introduction" of the Offer to Purchase is incorporated herein by reference. This Schedule 14D-1 relates to a tender offer by Valley Creek Capital, LLC, a Delaware limited liability company ("Purchaser"), to purchase 383,000 beneficial assignment certificates ("BACs") evidencing the beneficial interest of an assignee in the series 15 limited partnership interests of Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership"), at $5.00 per BAC, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated April 3, 1998, and the related Agreement of Transfer and Sale (which together constitute the "Offer"), which are attached to and filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively, and incorporated herein by reference. (i) The information set forth in the "Introduction" and Section 7 ("Purpose and Effect of the Offer") of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND (a)-(d) and (g) The information set forth in the "Introduction," Section 11 ("Certain Information Concerning the Purchaser"), Section 12 ("Source and Amount of Funds") and Schedule 1 of the Offer to Purchase is incorporated herein by reference. (e)-(f) During the last five years, neither the Purchaser, nor to the best of their knowledge, any of their respective executive officers and directors listed in Schedule 1 of the Offer to Purchase (I) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) 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) The information set forth in Schedule 1 to the Offer to Purchase is incorporated herein by this reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY (i) Not applicable. (ii) The information set forth in Section 9 ("Past Contacts and Negotiations with General Partners") of the Offer to Purchase is incorporated herein by this reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION (i) The information set forth in Section 12 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (ii) Not applicable. (iii) Not applicable. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER (a)-(g) The information set forth in the "Introduction," Section 7 ("Purpose and Effects of the Offer") and Section 8 ("Future Plans") of the Offer to Purchase are incorporated herein by reference. PAGE 4 OF 7 ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY (a)-(b) The information set forth in the "Introduction" and Section 11 ("Certain Information Concerning the Purchaser") of the Offer to Purchase are incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES Not applicable. ITEM 8. PERSONS RELATED, EMPLOYED OR TO BE COMPENSATED The information set forth in the "Introduction" and Section 15 ("Fees and Expenses") of the Offer to Purchase are incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS Not applicable. ITEM 10. ADDITIONAL INFORMATION (i) Not applicable. (b)-(c) The information set forth in the "Introduction," Section 7 ("Purpose and Effects of the Offer") and Section 14 ("Certain Legal Matters and Regulatory Approvals") of the Offer to Purchase are incorporated herein by reference. (d) Not applicable. (e) Not applicable. (f) Reference hereby is made to the Offer to Purchase and the related Agreement of Sale, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, which are incorporated in their entirety herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS (a)(1) -- Offer to Purchase, dated April 3, 1998. (a)(2) -- Agreement of Transfer and Sale. (a)(3) -- Cover Letter, dated April 3, 1998, from Purchaser to Limited Partners. (a)(4) -- Summary Publication. (b) -- Not applicable. (c) -- Not applicable. (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable. PAGE 5 OF 7 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 3, 1998 VALLEY CREEK CAPITAL, LLC By: Global Capital Management, Inc., a Delaware corporation, its Manager By: /s/ Michael J. Frey_______________ Michael J. Frey, Vice President GLOBAL CAPITAL MANAGEMENT, INC., a Delaware corporation By: /s/ Michael J. Frey_______________ Michael J. Frey, Vice President PAGE 6 OF 7 EXHIBIT INDEX
SEQUENTIAL PAGE EXHIBIT NO. DESCRIPTION NUMBER - ----------- --------------------------------------------------------------------------------------- ----------------- (a)(1) -- Offer to Purchase, dated April 3, 1998. (a)(2) -- Agreement of Transfer and Sale. (a)(3) -- Cover Letter, dated April 3, 1998 from Purchaser to Shareholders (a)(4) -- Summary Publication. (b) -- Not applicable. (c) -- Not applicable. (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable.
PAGE 7 OF 7 EX-99.(A)(1) 2 EXHIBIT 99(A)(1) OFFER TO PURCHASE FOR CASH SERIES 15 BENEFICIAL ASSIGNEE CERTIFICATES OF BOSTON CAPITAL TAX CREDIT FUND III L.P. AT $5.00 NET PER BAC BY VALLEY CREEK CAPITAL, LLC THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN DAYLIGHT TIME, ON MAY 5, 1998, UNLESS THE OFFER IS EXTENDED. Valley Creek Capital, LLC, a Delaware limited liability company (the "Purchaser"), hereby offers to purchase up to 383,000 of the beneficial assignee certificates ("BACs") evidencing the beneficial interest of an assignee in the series 15 limited partnership interests of Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership"), at a purchase price of $5.00 per BAC, net to the seller in cash, without interest, less the amount of any cash distributions declared or paid, including any return of capital made in cash with respect to the BACs between March 1, 1998 and the Expiration Date (as hereinafter defined) (the "Purchase Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in the related Agreement of Transfer and Sale, as each may be supplemented or amended from time to time (which together constitute the "Offer"). The Purchase Price will be automatically reduced by $0.12 per BAC for each month (or part of a month) between May 31, 1998 and the date of transfer of the BACs after May 31, 1998 in recognition of the reduction of allocable tax credits to the Purchaser after May 31, 1998. The 383,000 BACs sought to be purchased pursuant to the Offer represent, to the best knowledge of the Purchaser, approximately 9.9% of the BACs outstanding as of the date of the Offer. THE OFFER TO PURCHASE IS NOT CONDITIONED UPON THE VALID TENDER OF ANY MINIMUM NUMBER OF BACS. IF MORE THAN 383,000 BACS ARE VALIDLY TENDERED AND NOT WITHDRAWN, THE PURCHASER WILL ACCEPT FOR PURCHASE UP TO 383,000 OF THE TENDERED BACS, ON A PRO RATA BASIS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN, SEE "TENDER OFFER--SECTION 13. CERTAIN CONDITIONS OF THE OFFER." A HOLDER OF BACS ("BAC HOLDER") MAY TENDER ANY OR ALL BACS OWNED BY SUCH BAC HOLDER. FOR MORE INFORMATION OR FOR FURTHER ASSISTANCE PLEASE CALL: Valley Creek Capital, LLC 1-888-292-4264 April 3, 1998 IMPORTANT Any BAC Holder desiring to tender any or all of his/her BACs should complete and sign the Agreement of Transfer and Sale in accordance with the instructions in the Agreement of Transfer and Sale and mail or deliver a fully executed original of the Agreement of Transfer and Sale along with any other required documents to the Purchaser at the address set forth on the back cover of this Offer to Purchase, or request his/her broker, dealer, commercial bank, credit union, trust company or other nominee to effect the transaction on their behalf. QUESTIONS OR REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THIS OFFER TO PURCHASE OR THE AGREEMENT OF TRANSFER AND SALE MAY BE DIRECTED TO MAVRICC MANAGEMENT SYSTEMS, INC. (THE "DEPOSITARY") BY CALLING THE TOLL-FREE INFORMATION LINE: 1-888-292-4264. ------------------------ NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER THAN AS CONTAINED HEREIN OR IN THE AGREEMENT OF TRANSFER AND SALE. NO SUCH RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED. [INTENTIONALLY LEFT BLANK] i TABLE OF CONTENTS
INTRODUCTION.............................................................. 1 OFFER TO PURCHASE......................................................... 4 Section 1. Terms of the Offer........................................... 4 Section 2. Proration; Acceptance for Payment and Payment for BACs....... 4 Section 3. Procedures for Tendering BACs................................ 5 Valid Tender.......................................................... 5 Backup Federal Income Tax Withholding................................. 5 Tenders by Beneficial Holders......................................... 6 Signature Guarantees.................................................. 6 ERISA................................................................. 6 Appraisal Rights...................................................... 6 Other Requirements.................................................... 6 Determination of Validity; Rejection of BACs; Waiver of Defects; No Obligation to Give Notice of Defects................................. 7 Section 4. Withdrawal Rights............................................ 7 Section 5. Extension of Tender Period; Termination; Amendment........... 8 Section 6. Certain Tax Consequences..................................... 8 Section 7. Purpose and Effects of the Offer............................. 8 Purpose of the Offer.................................................. 8 Certain Restrictions on Transfer of BACs.............................. 9 Effect on Trading Market and Price Range of the BACs.................. 9 Section 8. Future Plans................................................. 10 Section 9. Past Contacts and Negotiations With General Partner.......... 10 Section 10. Certain Information Concerning the Business of the Partnership and Related Matters....................................... 10 Section 11. Certain Information Concerning the Purchaser................ 16 Section 12. Source of Funds............................................. 16 Section 13. Certain Conditions of the Offer............................. 16 Section 14. Certain Legal Matters and Required Regulatory Approvals..... 18 General............................................................... 18 Antitrust............................................................. 18 State Takeover Laws................................................... 18 Section 15. Fees and Expenses........................................... 19 Section 16. Miscellaneous............................................... 19 SCHEDULE 1................................................................ S-1
ii To the Holders of Series 15 Beneficial Assignee Certificates of Boston Capital Tax Credit Fund III L.P. INTRODUCTION Valley Creek Capital, LLC, a Delaware limited liability company (the "Purchaser"), hereby offers to purchase up to 383,000 Series 15 Beneficial Assignee Certificates ("BACs") evidencing the beneficial interest of an assignee in the series 15 limited partnership interests of Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership" or the "Fund"), at a purchase price of $5.00 per BAC, net to the seller in cash, without interest, less the amount of any cash distributions declared or paid, including any cash return of capital, if any, (collectively hereinafter referred to as "Distributions") made or declared with respect to the BACs between March 1, 1998 and the Expiration Date (as hereinafter defined) (the "Purchase Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Agreement of Transfer and Sale (which together constitute the "Offer"). The Purchase Price will be automatically reduced by $0.12 per BAC for each month (or part of a month) between May 31, 1998 and the date of transfer of the BACs after May 31, 1998 in recognition of the reduction of allocable tax credits to the Purchaser after May 31, 1998. Holders of BACs ("BAC Holders") who tender their BACs will NOT be obligated to pay any Partnership transfer fees or commissions. The 383,000 BACs sought to be purchased pursuant to the Offer represent, to the best knowledge of the Purchaser, approximately 9.9% of the BACs outstanding as of the date of the Offer. We encourage you to consider the following factors: BAC Holders who have a present or future need for tax credits and/or tax losses from the BACs may prefer to retain their BACs and not tender them pursuant to the Offer, or any other tender offer. BAC Holders who tender their BACs will be giving up the opportunity to participate in any future potential benefits represented by ownership of BACs, including, for example, the right to participate in any future distribution of cash or property, whether from operations, the proceeds of a sale of the Partnership's assets or in connection with any future liquidation of the Partnership. However, there is no guarantee of future results of the Partnership and investment in the Partnership. Although the Purchaser cannot predict the future value of the Partnership's assets on a per BAC basis, the Purchase Price could differ significantly from the net proceeds that would be recognized on a per BAC basis from the sale of the Partnership's assets or that may be realized upon a future liquidation of the Partnership The tax consequences of the Offer to a particular BAC Holder may be different from those of other BAC Holders and we urge you to consult your own tax advisors in connection with the Offer. BAC Holders should note that the most recent reported trading activity in the BACs occurred in January 1998. The selling price for BACs reported in the limited and sporadic secondary market during the two-month period ended January 31, 1998 was $7.63 encompassing four trades and 8,000 BACs (as reported in the Partnership Spectrum, an industry publication). Such secondary market selling prices, however, do not take into account commissions charged by secondary market makers effectuating such sales which the Purchaser believes, based on a typical 1,000 BAC sales transaction, range from 5% to 8% of the sales proceeds (which would result in a reduction of the net proceeds to the seller of approximately $.38 to approximately $.61 per BAC). Additionally, because a BAC is less valuable with the passage of time since fewer Tax Credits remain, the Purchaser believes the price per BAC should be reduced by approximately $.12 for each passing month, or a total of approximately $.48 per BAC from January 31, 1998 to May 31, 1998. The Purchaser is making the Offer with a view towards making a profit. Accordingly, there may be a conflict between the desire of the Purchaser to acquire the BACs at a low price and the desire of the BAC Holders to sell the BACs at a high price. No independent person has been retained to 1 evaluate or render any opinion with respect to the fairness of the $5.00 Purchase Price and no representation is made as to such fairness. Other measures of value may be relevant to a BAC Holder and all BAC Holders are urged to carefully consider all of the information contained in the Offer to Purchase and Agreement of Transfer and Sale and to consult with their own advisors (tax, financial or otherwise) in evaluating the terms of the Offer before deciding whether to tender their BACs. BAC Holders may no longer wish to continue with their investment in the Partnership and might consider accepting the Offer for one or more of the following reasons: "There is no established trading market for the BACs and it is not anticipated that any public market will develop." (See the Partnership's Form 10-K for the fiscal year ended March 31, 1997). BAC Holders who desire resale liquidity may wish to consider the Offer. The Offer affords a significant number of BAC Holders with an opportunity to dispose of their BACs for cash, which otherwise might not be available to them. The Purchase Price is not intended to represent either the fair market value of a BAC or the fair market value of the tax credits and tax losses attributable to each BAC and the Partnership's assets on a per BAC basis. Although there are some limited resale mechanisms available to the BAC Holders wishing to sell their BACs, there is no formal or organized trading market for the BACs. Acceptance of the Offer will eliminate any future risk to the selling BAC Holder from recapture of tax credits received, since such risk will be borne by the Purchaser. The Offer may be attractive to certain BAC Holders who wish in the future to avoid the continued additional expense, delay and complication in filing income tax returns which result from the ownership of BACs. Generally, individuals may not be able to fully use passive tax losses since current tax laws restrict the use of such losses by individuals. For some BAC Holders, selling their BACs may permit the use of suspended passive losses against other forms of taxable income, providing additional tax benefits in the year of sale. We urge all BAC Holders to consult their tax advisors in connection with the Offer. The Offer provides BAC Holders with the opportunity to liquidate their BACs and to reinvest the proceeds in other investments should they desire to do so. The Offer will provide BAC Holders with an immediate opportunity to liquidate their investment in the Partnership without the usual transaction costs associated with secondary market sales or Partnership transfer fees. To date the Partnership has not made any distributions of cash to BAC Holders. The Offer may be attractive for BAC Holders whose circumstances have changed such that anticipated future allocation tax credits and tax losses may no longer be beneficial to them. General disenchantment with real estate investments and with long-term investments in limited partnerships because of, among other things, their illiquidity. If you wish to sell some or all of your BACs now, please read carefully the enclosed Offer to Purchase and the Agreement of Transfer and Sale. All you need to do is complete the Agreement of Transfer and Sale in accordance with the instructions provided therein, sign where indicated, have your signature Medallion Guaranteed and return it to the Purchaser, in the pre-addressed return envelope. If you desire to accept this Offer, please carefully follow the instructions on the Agreement of Transfer and Sale. Errors will delay and possibly prevent acceptance of your tender of the BACs. If, prior to the Expiration Date, the Purchaser increases the consideration offered to BAC Holders pursuant to the Offer, such increased consideration will be paid with respect to all BACs that are purchased pursuant to the Offer, whether or not such BACs were tendered prior to such increase in consideration. 2 The Offer is being made by the Purchaser as a speculative investment based upon the belief that the BACs represent an attractive investment at the price offered based upon, in part, the expected remaining Low-Income Housing Tax Credits and tax losses. The purpose of the Offer is to allow the Purchaser to benefit from any one combination of the following: (i) any and all Low-Income Housing Tax Credits and tax losses attributable to such BACs; (ii) any cash distributions from Partnership operations in the ordinary course of business; (iii) distributions, if any, of net proceeds from the liquidation of any properties after the Partnership has satisfied its liabilities; (iv) any cash from any redemption of the BACs by the Partnership; and (v) sale of the BACs. The Offer is not conditioned upon the valid tender of any minimum number of the BACs. If more than 383,000 BACs, are validly tendered and not withdrawn, the Purchaser will accept up to 383,000 of the tendered BACs for purchase on a pro rata basis, subject to the terms and conditions herein. See "Tender Offer--Section 13. Certain Conditions of the Offer." The Purchaser expressly reserves the right to terminate the Offer at anytime and to waive any or all of the conditions of the Offer, although the Purchaser does not presently intend to waive any such conditions. The Partnership is subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and in accordance therewith is required to file reports and other information with the Securities and Exchange Commission ("Commission") relating to its business, financial condition and other matters. Such reports and other information may be inspected at the public reference facilities maintained by the Commission at room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and is available for inspection and copying at the regional offices of the Commission located in Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can also be obtained from the Public Reference Room of the Commission in Washington, D.C. at prescribed rates or from the Commission's Website at http://www.sec.gov. The Purchaser has filed with the Commission a Tender Offer Statement on Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, which provides certain additional information with respect to the Offer. Such Statements and any amendments thereto, including exhibits, may be inspected and copies may be obtained from the Commission in the manner specified above. According to publicly available information, there were 3,870,500 BACs issued and outstanding at March 31, 1997, held by approximately 2,610 BAC Holders. The Purchaser does not own any BACs. Information contained in this Offer to Purchase which relates to, or represents statements made by the Partnership or the General Partner, has been derived from information provided in reports and other information filed with the Commission by the Partnership and General Partner. BAC Holders are urged to read this Offer to Purchase and the accompanying Agreement of Transfer and Sale carefully before deciding whether to tender their BACs. 3 OFFER TO PURCHASE SECTION 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment and pay for up to 383,000 BACs that are validly tendered on or prior to the Expiration Date and not withdrawn in accordance with Section 4 of this Offer to Purchase. The term "Expiration Date" shall mean 12:00 midnight, Eastern Time, on May 5, 1998, unless and until the Purchaser shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest date on which the Offer, as so extended by the Purchaser shall expire. Subject to any approval rights of the General Partner under the terms of the Partnership Agreement, the Purchaser reserves the right to transfer or assign, (in whole or in part from time to time), to one or more of the Purchaser's affiliates, the right to purchase all or any portion of the BACs tendered pursuant to the Offer. Any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer or prejudice the rights of tendering BAC Holders to receive payment for BACs validly tendered and accepted for payment pursuant to the Offer. The Offer is conditioned on satisfaction of certain conditions. See "Tender Offer--Section 13. Certain Conditions of the Offer," which sets forth in full the conditions of the Offer. The Purchaser reserves the right (but shall not be obligated), for any reason, or for no reason, to waive any or all of such conditions or to terminate the offer at any time. If any or all of such conditions have not been satisfied or waived by the Expiration Date, the Purchaser reserves the right (but shall not be obligated) to (i) decline to purchase any of the BACs tendered, (ii) terminate the Offer and return all tendered BACs to tendering BAC Holders, (iii) waive all the unsatisfied conditions and, subject to complying with applicable rules and regulations of the Commission, purchase all BACs validly tendered, (iv) extend the Offer and, subject to the right of BAC Holders to withdraw BACs until the Expiration Date, retain the BACs that have been tendered during the period or periods for which the Offer is extended or (v) to otherwise amend the Offer. The Offer to Purchase and the related Agreement of Transfer and Sale are being mailed at the Purchaser's expense to BAC Holders or beneficial owners of BACs (in case of Individual Retirement Accounts (IRA) and qualified plans). SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR BACS. If not more than 383,000 BACs are validly tendered and not properly withdrawn prior to the Expiration Date the Purchaser, upon the terms and subject to the conditions of the Offer, will accept for payment all such BACs so tendered. If more than 383,000 BACs are validly tendered and not properly withdrawn on or prior to the Expiration Date, the Purchaser, upon the terms and subject to the conditions of the Offer, will accept for payment 383,000 BACs so tendered, on a pro rata basis with appropriate adjustments to avoid tenders of fractional BACs and purchases that would violate transfer restrictions contained in the Partnership's Agreement of Limited Partnership. In the event that proration is required, because of the difficulty of immediately determining the precise number of BACs to be accepted, the Purchaser will announce the final results of proration as soon as practicable, but in no event later than five to ten business days following the Expiration Date. Subject to the Purchaser's obligations under Rule 14e-1(c) under the Exchange Act to pay BAC Holders the Purchase Price in respect of BACs tendered or to return those BACs promptly after termination or withdrawal of the Offer, the Purchaser will not pay for any BACs tendered until after the final proration results have been determined. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment, and will pay for, BACs validly tendered and not withdrawn in accordance with Section 4 below, as promptly as practicable following the Expiration Date. The Partnership has orally advised the Purchaser (See "Section 9. Past Contacts and Negotiations with the General Partner") that it will approve for transfer 4 any BACs purchased by the Purchaser within five to ten business days after receipt of properly completed transfer documents by the Partnership. Upon written notification by the Partnership that the BACs purchased by the Purchaser have been approved for transfer to it, the Purchaser will pay for the BACs. In all cases, payment for BACs purchased pursuant to the Offer will be made only after the Expiration Date and timely receipt by the Purchaser of a properly completed and duly executed Agreement of Transfer and Sale and any other documents required by the Agreement of Transfer and Sale. For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment (and thereby purchased) tendered BACs when, as and if the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such BACs pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for BACs purchased pursuant to the Offer will in all cases be made by the deposit of the Purchase Price with the Depositary who will act as agent for the purpose of receiving payment from the Purchaser and transmitting payment to the tendering BAC Holders. The Purchase Price will be automatically reduced by $0.12 per BAC for each month (or part of a month) between May 31, 1998 and the date of transfer of the BACs after May 31, 1998 in recognition of the reduction of allocable tax credits to the Purchaser after May 31, 1998. Under no circumstances will interest be paid on the Purchase Price for any BAC by reason of any delay in making such payment. If any tendered BACs are not purchased for any reason, the Agreement of Transfer and Sale with respect to such BACs not purchased will be of no force or effect. If, for any reason whatsoever, acceptance for payment of, or payment for, any BACs tendered pursuant to the Offer is delayed, then, without prejudice to the Purchaser's rights under Section 13 (but subject to compliance with Rule 14e-1(c) under the Exchange Act), the Purchaser may retain tendered BACs, subject to any limitations of applicable law, and such BACs may not be withdrawn except to the extent that the tendering BAC Holders are entitled to withdrawal rights as described in Section 4. If, prior to the Expiration Date, the Purchaser shall increase the consideration offered to BAC Holders pursuant to the Offer, such increased consideration shall be paid for all BACs accepted for payment pursuant to the Offer, whether or not such BACs were tendered prior to such increase. The Purchaser reserves the right to transfer or assign, at any time and from time to time, in whole or in part, to one or more affiliates or direct or indirect subsidiaries of the Purchaser, the right to purchase BACs tendered pursuant to the Offer, but no such transfer or assignment will relieve the Purchaser of its obligations under the Offer or prejudice the rights of tendering BAC Holders to receive payment for BACs validly tendered and accepted for payment pursuant to the Offer. SECTION 3. PROCEDURES FOR TENDERING BACS. VALID TENDER. For BACs to be validly tendered pursuant to the Offer, a properly completed and duly executed Agreement of Transfer and Sale must be received by the Purchaser at its address set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date. A BAC Holder may tender any or all BACs owned by such BAC Holder. In order for a tendering BAC Holder to participate in the Offer, BACs must be validly tendered and not withdrawn prior to the Expiration Date, which is 12:00 midnight, Eastern Time, on May 5, 1998. Although the Purchaser has included a pre-addressed envelope with this Offer for the convenience of BAC Holders, the method of delivery of the Agreement of Transfer and Sale is at the option and sole risk of the tendering BAC Holder, and the delivery will be deemed made only when actually received by the Purchaser. If delivery is by mail, registered mail with return receipt requested is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible application of backup federal income tax withholding with respect to payment of the Purchase Price for BACs purchased pursuant to the Offer, a tendering BAC Holder must verify such BAC Holder's correct taxpayer identification number or 5 social security number, as applicable, and make certain certifications that the BAC Holder is not subject to backup federal income tax withholding. The BAC Holder is required to certify in the Agreement of Transfer and Sale, under penalties of perjury, that (i) the tax identification number shown on the Agreement of Transfer and Sale is the BAC Holder's correct Taxpayer Identification Number; and (ii) the BAC Holder is not subject to backup withholding either because the BAC Holder has not been notified by the Internal Revenue Service (the "IRS") that the BAC Holder is subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has notified the BAC Holder that the BAC Holder is no longer subject to backup withholding. The BAC Holder is also required to certify in the Agreement of Transfer and Sale, under penalties of perjury, that the BAC Holder, 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 BAC Holder 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. TENDERS BY BENEFICIAL HOLDERS. Tenders of BACs made by beneficial holders of BACs will be deemed an instruction to brokers, dealers, commercial banks, trust companies, custodian and similar persons or entities whose names, or the names of whose nominees, appear as the registered owner of such BACs, to tender such BACs on behalf of such beneficial holder. A tender of BACs can only be made by the registered owner of such BACs. SIGNATURE GUARANTEES. The signature(s) on the Agreement of Transfer and Sale must be Medallion guaranteed by a commercial bank, savings bank, credit union, savings and loan association or trust company having an office, branch or agency in the United States, a brokerage firm that is a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., as provided in the Agreement of Transfer and Sale. ERISA. By executing the Agreement of Transfer and Sale, a tendering Shareholder represents that either (a) the tendering BAC Holder is not a plan subject to Title 1 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510-3-101 of any such plan; or (b) the tender and acceptance of BACs pursuant to the Offer will not result in a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code. APPRAISAL RIGHTS. BAC Holders will not have any appraisal or dissenter's rights with respect to or in connection with the Offer. OTHER REQUIREMENTS. By executing and delivering the Agreement of Transfer and Sale, a tendering BAC Holder irrevocably appoints the Purchaser and/or designees of the Purchaser and each of them as such BAC Holder's proxies, with full power of substitution, in the manner set forth in this Agreement of Transfer and Sale. By executing and delivering the Agreement of Transfer and Sale, a tendering BAC Holder also irrevocably assigns to the Purchaser and its assigns all of the right, title and interest, free and clear of all liens and encumbrances of any kind, of such BAC Holder in the Partnership with respect to the BACs tendered and purchased pursuant to the Offer, including, without limitation, such BAC Holder's right, title and interest in and to any and all Distributions made by the Partnership between March 1, 1998 and the Expiration Date in respect of the BACs tendered by such BAC Holder and accepted for payment by the Purchaser, regardless of the fact that the record date for any such Distribution may be a date prior to March 1, 1998. The Purchaser will seek to be admitted to the Partnership as an Assignee and/or a substitute limited partner upon consummation of the purchase of BAC Holder's BACs pursuant to the 6 Offer and it is the intention of the BAC Holder that upon consummation of the purchase of BAC Holder's BACs pursuant to the Offer that the Purchaser succeed to the BAC Holder's interest as an assignee and/or a substitute limited partner of the Partnership in such BAC Holder's place. By executing an Agreement of Transfer and Sale as set forth above, a tendering BAC Holder also agrees that notwithstanding any provisions of the Partnership's Partnership Agreement which provide that any transfer is not effective until a date subsequent to the date of any transfer of BACs under the Offer, the Purchase Price shall be reduced by any Distributions with respect to the BACs between March 1, 1998, and the Expiration Date. DETERMINATION OF VALIDITY; REJECTION OF BACS; WAIVER OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the form of documents and validity, eligibility (including time of receipt) and acceptance for payment of any tender of BACs will be determined by the Purchaser, in its sole discretion, which determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance of or payment for which may, in the opinion of the Purchaser or Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender of BACs of any particular BAC Holder whether or not similar defects or irregularities are waived in the case of other BAC Holders. The Purchaser's interpretation of the terms and conditions of the Offer (including the Agreement of Transfer and Sale and the instructions thereto) will be final and binding. No tender of BACs will be deemed to have been validly made until all defects and irregularities with respect to such tender have been cured or waived. Neither the Purchaser nor any of its affiliates or assigns, if any, or any other person will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's acceptance for payment of BACs tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering BAC Holder and the Purchaser upon the terms and subject to the conditions of the Offer. SECTION 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, tenders of BACs made pursuant to the Offer are irrevocable. BACs tendered pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date and, unless previously accepted for payment as provided herein, may also be withdrawn at any time after June 3, 1998 (or such later date as may apply in case the Offer is extended). If, for any reason whatsoever, acceptance for payment of any BACs tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept for payment or pay for BACs tendered pursuant to the Offer, then, without prejudice to the Purchaser's rights set forth herein, the Purchaser may retain tendered BACs and such BACs may not be withdrawn, except to the extent that the tendering BAC Holder is entitled to and duly exercises withdrawal rights as described in this Section 4. Any such delay will be by an extension of the Offer to the extent required by law. In order for a withdrawal to be effective, a written notice of withdrawal must be timely received by the Depositary at its address set forth on the last page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the BACs to be withdrawn, with the signature of such person Medallion guaranteed in the same manner as the signature in the Agreement of Transfer and Sale, the number of BACs to be withdrawn, and (if the Agreement of Transfer and Sale has been delivered) the name of the BAC Holder as set forth in the Agreement of Transfer and Sale. Withdrawals of BACs may not be rescinded. Any BACs properly withdrawn will be deemed not validly tendered for purposes of the Offer, but may be retendered at any subsequent time prior to the Expiration Date by following any of the procedures described in Section 3. 7 All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. Neither the Purchaser nor any of its affiliates or assigns, if any, or any other person will be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, (i) to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and the payment for, any BACs by giving oral or written notice of such extension, (ii) to terminate the Offer at any time from any or no reason and not accept for payment any BACs not theretofore accepted for payment or paid for, by giving oral or written notice of such termination. (iii) upon the failure to satisfy any of the conditions specified in Section 13, to delay the acceptance for payment of, or payment for, any BACs not heretofore accepted for payment or paid for, by giving oral or written notice of such termination or delay, and (iv) to amend the Offer in any respect (including, without limitation, by increasing or decreasing the consideration offered or the number of BACs being sought in the Offer or both) by giving oral or written notice of such amendment. Any extension, termination or amendment will be followed as promptly as practicable by public announcement, the announcement in the case of an extension to be issued no later than 9:00 a.m., Eastern Time, on the next business day after the previously scheduled Expiration Date, in accordance with the public announcement requirement of 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 to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during which an offer must remain open following a material change in the terms of the offer or of information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the change in the terms or information. With respect to a change in price or a change in percentage of securities sought (other than an increase of not more than 2% of the securities sought), however, a minimum ten business day period is generally required to allow for adequate dissemination to security holders and for investor response. As used in this Offer, "business day" means any day other than a Saturday, Sunday or a federal holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Time. SECTION 6. CERTAIN TAX CONSEQUENCES. BAC HOLDERS SHOULD CONSULT THEIR RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH BAC HOLDER OF SELLING BACS PURSUANT TO THE OFFER. SECTION 7. PURPOSE AND EFFECTS OF THE OFFER. PURPOSE OF THE OFFER. The Purchaser is making the Offer for investment purposes only (See Section 8--"Future Plans") with a view towards making a profit. The Purchaser's intent is to acquire the BACs at a discount to the value that the Purchaser might ultimately realize from owning the BACs. No independent person has been retained to evaluate or render any opinion with respect to the fairness of the $5.00 Purchase Price and no representation is made as to such fairness. The Offer is being made by the Purchaser as a speculative investment based upon the belief that the BACs represent an attractive investment at the price offered based upon, in part, the expected remaining Low-Income Housing Tax Credits and tax losses. The purpose of the Offer is to allow the Purchaser to benefit from any one combination of the following: (i) any and all Low-Income Housing Tax Credits and tax losses attributable to such BACs; (ii) any cash distributions from Partnership operations in the ordinary course of business; (iii) distributions, if any, of net proceeds from the liquidation of any properties after the Partnership has satisfied its liabilities; (iv) any cash from any redemption of the BACs by the Partnership; and (v) sale of the BACs. 8 The Purchaser established the Purchase Price based on its independent analysis of the Partnership, its assets, i.e., the Partnership's interest in the local partnerships which owns real estate and the value of the real estate, the tax benefits of owning the BACs and the financial condition of the Partnership. The Purchaser derived the Purchase Price from its analysis of financial and other information contained in publicly-available information in the Partnership's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the Commission, which describe the Partnership's business and assets. Other measures of value may be relevant to a BAC Holder and all BAC Holders are urged to carefully consider all of the information contained in the Offer to Purchase and Agreement of Transfer and Sale and to consult with their own advisors (tax, financial or otherwise) in evaluating the terms of the Offer before deciding whether to tender BACs. The Offer is being made as a speculative investment by the Purchaser based on its belief that there is inherent underlying value in the assets of the local partnership in which the Partnership has an interest. CERTAIN RESTRICTIONS ON TRANSFER OF BACS. The Partnership Agreement restricts transfers of BACs if a transfer, when considered with all other transfers during the same applicable twelve month period, would cause a termination of the Partnership for federal or applicable state income tax purposes (which termination may occur when 50% or more of the BACs are transferred in a twelve month period) or to prevent a termination of the Partnership for federal income tax purposes, which is deemed harmful to the BAC Holders. These provisions may limit sales of BACs on the secondary market and in private transactions for the twelve-month period following completion of the Offer. The Partnership may not process any requests for recognition of substitution of BAC Holders upon a transfer of BACs during such twelve-month period which the General Partner believes may cause a tax termination in contravention of the Partnership's Agreement of Limited Partnership. In determining the number of BACs for which the Offer is made (representing approximately 9.9% of the outstanding BACs), the Purchaser took these restrictions into account and has conditioned the Offer on not violating such restriction. See "Tender Offer--Section 13. Certain Conditions of the Offer." The Purchaser has been orally advised by the Partnership that the Partnership will approve for transfer any BACs the Purchaser purchased as a result of the Offer within five to ten business days after receipt of properly executed transfer documents (see "Section 9. Past Contacts and Negotiations with General Partner"). The foregoing are hereafter referred to as the "Transfer Restrictions." EFFECT ON TRADING MARKET AND PRICE RANGE OF THE BACS. If a substantial number of BACs are purchased pursuant to the Offer, the result will be a reduction in the number of BAC Holders. In the case of certain kinds of equity securities, a reduction in the number of security-holders might be expected to result in a reduction in the liquidity and volume of activity in the trading market for the security. In this case, however, there is a limited trading market for the BACs and, therefore, the Purchaser does not believe a reduction in the number of BAC Holders will materially further restrict the BAC Holders' ability to find purchasers for their BACs. The Partnership disclosed in the its Annual Report on Form 10-K for the year ended March 31, 1997, "There is no established trading market for the BACs and it is not anticipated that any public market will develop." Partnership Spectrum, a national industry publication covering real estate limited partnerships and real estate investment trusts reported that during the period March 1997 through February 1998 16 trades at an average trading price of $7.72 per BAC, encompassing 31,400 BACs took place. Such secondary market selling prices, however, do not take into account commissions charged by secondary market makers effectuating such sales which the Purchaser believes, based on a typical 1,000 BAC sales transaction, range from 5% to 8% of the sales proceeds. Additionally, because a BAC is less valuable with the passage of time since fewer Tax Credits remain, the Purchaser believes the price per BAC should be reduced by approximately $.12 for each passing month. 9 The BACs are registered under Section 12(g) of the Exchange Act, which means, among other things, that the Partnership is required to file periodic reports with the Commission and to comply with the Commission's proxy rules. The Purchaser does not expect or intend that consummation of the Offer will cause the BACs to cease to be registered under Section 12(g) of the Exchange Act. Currently, there are approximately 2,610 BAC Holders. If the BACs were to be held by fewer than 300 persons, the Partnership could apply to de-register the BACs under the Exchange Act. Because the BACs are widely held, however, the Purchaser expects that even if it purchases the maximum number of BACs in the Offer, after that purchase the BACs will be held of record by substantially more than 300 persons. SECTION 8. FUTURE PLANS. The Purchaser is acquiring the BACs pursuant to the Offer for investment purposes only, does not intend to make any effort to change current management or operations of the Partnership and has no current plans for any extraordinary transactions involving the Partnership. However, the Purchaser and its affiliates may acquire additional BACs through private purchases, one or more future tender offers or by any other means deemed advisable. Such future purchases will also be for investment purposes only, may be at prices higher or lower than the Purchase Price. SECTION 9. PAST CONTACTS AND NEGOTIATIONS WITH GENERAL PARTNER. On March 30, 1998, a representative of the Purchaser contacted by telephone a representative of the Partnership's General Partner and notified the Partnership that the Purchaser would commence a tender offer during the week of March 30, 1998. No discussion was held between the representatives as to the amount of BACs to be tendered for or the Purchase Price of the BACs. A discussion took place regarding the mechanics of the Offer, i.e., printing, mailing and the transfer of purchased BACs to Purchaser. On March 31, 1998, the same representative of Purchaser and the Partnership had an additional telephone conversation wherein the mechanics of the Offer were further discussed. In that discussion the Partnership stated to the Purchaser that the Partnership would approve the transfer of the purchased BACs to the Purchaser five to ten business days after receipt of properly executed transfer documents. Additionally, in the March 31, 1998 discussion, Purchaser requested three specific business records, pro forma K-1s for 1996 and 1997, a schedule of remaining tax credits available and a list of "watch properties," i.e., properties with potential problems and also requested that the transfer fee of $150 per BAC Holder be waived. On April 1, 1998, the Partnership responded to the Purchaser's requests by declining to waive the transfer fee, by referring the Purchaser to the Partnership's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q for the information regarding "watch properties" and by referring the Purchaser to the Partnership's original prospectus for the information regarding tax credits. The Partnership will forward the pro-forma K-1s to the Purchaser. SECTION 10. CERTAIN INFORMATION CONCERNING THE BUSINESS OF THE PARTNERSHIP AND RELATED MATTERS. The following information was extracted from the Partnership's Annual Report on Form 10-K for the year ended March 31, 1997 and the Quarterly Reports on Form 10-Q for the nine-month periods ended December 31, 1997 and December 31, 1996 (collectively the "Reports"), which Reports were filed with the Commission. The Purchaser did not prepare any of the information contained in such Reports and extracted in this Offer and the Purchaser makes no representation as to the accuracy or completeness of such information. The Fund was formed on September 19, 1991 to invest as a limited partner in other limited partnerships (the "Operating Partnerships") each of which will own or lease and will operate apartment complexes exclusively or partially for low- and moderate-income tenants. Each Operating Partnership in which the Fund will invest will own apartment complexes which are completed, newly-constructed, under construction or rehabilitation, or to be constructed or rehabilitated and which are expected to receive Government Assistance. Each apartment complex is expected to qualify for the low-income housing tax 10 credit under Section 42 of the Internal Revenue Code (the "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"). Section 236(f)(ii) of the National Housing Act, as amended, in Section 101 of the Housing and Urban Development Act of 1965, as amended, each provide for the making by HUD of rent supplement payments to low income tenants in properties which receive other forms of federal assistance such as Tax Credits. The payments for each tenant, which are made directly to the owner of their property, generally are in such amounts as to enable the tenant to pay rent equal to 30% the adjusted family income. Some of the apartment complexes in which the Partnership has invested are receiving such rent supplements from HUD. HUD has been in the process of converting rent supplement assistance to assistance paid not to the owner of the apartment complex, but directly to the individuals. At this time, the Partnership is unable to predict whether Congress will continue rent supplement programs payable directly to owners of the apartment complex. The BACs were issued as five series: series 15, series 16, series 17, series 18 and series 19. The business objective of the Fund is to: (1) provide current tax benefits to investors in the form of Federal Housing Tax Credits and in limited instances, a small amount of Rehabilitation Tax Credits, which an Investor may apply, subject to certain strict limitations, against the investor's federal income tax liability from active portfolio and passive income; (2) provide tax benefits in the form of passive losses which an Investor may apply to offset his/ her passive income (if any); and (3) preserve and protect the Fund's capital and provide capital appreciation and cash distributions through increases in value of the Fund's investment and to the extent applicable, equity building through periodic payments on the mortgage indebtedness with respect to the Apartment Complexes. Series 15 of the Fund has acquired a Limited Partnership interest in 68 Operating Partnerships, identified in the table set forth below. In each instance the apartment complex owned by the applicable Operating Partnership is eligible for Federal Housing Tax Credits. Occupancy of a unit in each apartment complex which initially complied with the Minimum Net Aside Test (i.e., occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the Rent Restriction Test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to hereinafter as "Qualified Occupancy." 11 PROPERTY PROFILE AS OF MARCH 31, 1997
MORTGAGE QUALIFIED CAP CON BALANCE AS ACQ. CONST. OCCUPANCY PAID THRU PROPERTY NAME LOCATION UNITS OF 12/31/96 DATE COMP. 3/31/97 3/31/97 - ---------------- --------------- ----- ------------ --------- --------- -------------- ------------ April Gardens Los Piedras 32 $ 1,473,645 9/92 5/93 100% $ 279,823 Apts. III PA Autumnwood Keysville 40 1,355,355 8/92 1/93 100% 256,700 Heights VA Barton Village Arlington 18 512,441 10/92 3/93 100% 101,154 Apartments GA Bergen Bergan 24 1,024,570 7/92 7/92 100% 199,420 Meadows NY Bridlewood Horse Cave 24 794,924 1/94 1/95 100% 167,679 Terrace KY Brunswick Larenceville 24 829,994 3/92 9/92 100% 152,282 Commons VA Buena Vista Union Apartments, SC 44 1,459,496 3/92 1/92 100% 281,000 Phase II Calexico Calexico 38 1,929,914 9/92 9/92 100% 366,220 Senior Apts. CA Chestnut Altoona 24 746,277 9/92 9/92 100% 146,500 Hills Estates AL Columbia Camden 32 1,300,766 10/92 9/93 100% 247,599 Heights Apts. AR Coral Ridge Coralville 102 2,628,498 3/92 11/92 100% 2,257,827 Apartments IA Country Sioux Falls, Meadows SD 55 1,371,889 5/92 9/92 100% 1,220,825 II, III, IV Curwensville Curwensville 28 1,221,138 9/92 7/93 100% 262,000 House Apts. PA Deerfield Crawe 39 1,234,613 4/92 6/92 100% 242,430 Commons VA East Park Dilworth 24 506,285 6/94 1/94 100% 385,824 Apts I MN Edgewood Munfordville 24 790,831 6/92 8/92 100% 156,605 Apts KY Golden Age Oak Grove 17 406,090 4/92 11/91 100% 84,410 Apts. MO Graham Graham 50 1,340,848 10/94 6/95 100% 794,669 Village Apts NC Greentree Utica 24 688,129 4/94 10/75 100% 64,069 Apts. OH Greenwood Fort Gaines 24 678,621 8/92 5/93 100% 131,268 Village GA
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MORTGAGE QUALIFIED CAP CON BALANCE AS ACQ. CONST. OCCUPANCY PAID THRU PROPERTY NAME LOCATION UNITS OF 12/31/96 DATE COMP. 3/31/97 3/31/97 - ---------------- --------------- ----- ------------ --------- --------- -------------- ------------ Hadley's East Machiex Lake ME 18 1,044,316 9/92 1/93 100% 291,400 Apts Hammond Westernport 35 1,495,201 7/92 2/93 100% 327,944 Heights Apts. MD Harrisonville Harrisonville 24 610,418 3/92 11/91 100% 144,004 Properties II MO Harvest Point Madison 30 1,204,968 3/95 12/94 100% 268,760 Madison Apts SD Portage 60 1,965,350 4/92 11/92 100% 1,153,620 MI Hearthside II Heron's Lake Placid 37 1,210,640 10/92 10/92 100% 255,339 Landing I FL Hidden W. Pittsburg 88 2,922,342 2/94 8/88 100% 200,000 Cove CA Higginsville Higginsville 24 629,932 3/92 3/91 100% 146,111 Estates MO Kearney Kearney 24 637,035 5/92 1/92 100% 138,103 Estates MO Lakeside Lake Village 32 1,227,232 8/94 8/95 100% 282,004 Apts. AR Lake View Lake View 24 891,378 3/92 7/92 100% 183,603 Green Apts. SC Laurelwood Winnsboro Apartments SC 32 1,072,959 3/92 2/92 100% 229,986 Phase II Lebanon Lebanon Properties MO 24 634,958 3/92 2/92 100% 152,171 III Lebanon Spring Grove 24 929,928 8/92 2/93 100% 169,000 Village II VA Leitchfield 24 732,250 6/92 7/92 100% 148,015 KY Lilac Apts Livingston Livingston 24 680,192 12/92 11/93 100% 176,534 Plaza TX Manning Manning 42 1,478,336 8/92 3/93 100% 296,436 Lane Apts. SC Marshall Marshallville 18 556,113 8/92 12/92 100% 114,200 Lane Apts. GA Maryville Maryville 24 721,333 5/92 3/92 100% 156,636 Properties MO Meadow Gransville 36 1,493,335 5/92 2/93 100% 291,322 View Apts. MD Millbrook Sanford 16 925,247 6/92 11/92 100% 227,100 Commons ME
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MORTGAGE QUALIFIED CAP CON BALANCE AS ACQ. CONST. OCCUPANCY PAID THRU PROPERTY NAME LOCATION UNITS OF 12/31/96 DATE COMP. 3/31/97 3/31/97 - ---------------- --------------- ----- ------------ --------- --------- -------------- ------------ Monark Van Buren & 10 331,775 6/94 3/94 100 239,800 Homes Barling AR North Prairie Plainwell 28 885,589 9/92 5/93 100% 206,820 Manor Apts. MI North Trail Arkansas City 24 831,930 9/94 12/95 100% 194,118 Apts. KS Oakwood Century 39 112,767 5/92 5/92 100% 249,374 Village FL Osceola Osceola 24 678,684 5/92 5/92 100% 161,325 Estates Apts IA Payson Payson Senior AZ 39 1,492,979 8/92 8/92 100% 365,755 Center Apts. Rainier Mt. Ranier 104 2,712,816 4/92 1/93 100% 1,095,382 Manor Apts. MD Ridgeview Brainerd 24 865,020 3/92 1/92 100% 165,434 Apartments MN Rio Mimbres Deming 24 776,727 4/92 4/92 100% 149,811 II Apartments NM River Chase Wauchula 47 1,482,965 8/92 10/92 100% 322,944 Apts. FL Rolling Algonac Brook MI 26 830,505 6/92 11/92 100% 185,632 III Apts. School St. Marshall 24 774,226 4/92 5/92 100% 666,025 Apts. Phase I WI Shenandoah Shenandoah 34 1,479,154 8/92 2/93 100% 317,136 Village PA Showboat Cheasaning 26 799,316 7/92 2/93 100% 178,084 Manor Apts. MI Spring Creek Derby 50 1,277,530 4/92 6/92 100% 1,060,282 II Apts. KS Summit Ridge Palmdale 304 9,004,859 10/92 12/93 100% 5,639,000 Apartments CA Sunset Sq. Scottsboro 24 743,697 9/92 8/92 100% 143,900 Apts. AL 1,424r Mill Hodgenville 24 771,275 4/92 5/92 100% 173,606 Apartments KY Timmons Lynchburg 18 624,810 5/92 7/92 100% 122,450 Village Apts. SC University Detroit 53 1,896,828 6/92 12/92 100% 1,676,750 Meadow MI Valatie Valatie 32 1,390,380 6/92 4/92 100% 277,600 Woods NY
14
MORTGAGE QUALIFIED CAP CON BALANCE AS ACQ. CONST. OCCUPANCY PAID THRU PROPERTY NAME LOCATION UNITS OF 12/31/96 DATE COMP. 3/31/97 3/31/97 - ---------------- --------------- ----- ------------ --------- --------- -------------- ------------ Village Healdton 24 707,444 8/94 12/94 100% 173,616 Woods OK Urb. Corrales 32 1,470,358 8/92 8/92 100% 307,200 de Hatillo PR Villas Del Mar Virgen de Sabana Grande Pozo Garden PR 70 3,345,226 8/92 7/93 100% 772,550 Apts. Weedpatch Weedpatch 36 1,982,359 1/94 9/94 100% 461,197 Country Apts. CA Whitewater Ideal 18 528,920 8/92 11/92 100% 108,000 Village Apts. GA Wood Park Arcadia 36 1,173,664 6/92 5/92 100% 243,672 Pointe FL
The following financial information was extracted from the Reports.
FISCAL YEAR ENDED MARCH 31 ---------------------------- 1997 1996 ------------- ------------- Operations Interest and Other Income.................................... $ 173,892 $ 192,705 Share of Losses From Operating Limited Partnerships.......... $ (3,039,112) $ (3,201,668) Net Loss..................................................... $ (3,438,687) $ (3,602,402) Net Loss Per BAC............................................. $ (0.89) $ (0.93) Balance Sheet Total Assets................................................. $ 19,800,536 $ 22,818,036 Total Liabilities............................................ $ 1,992,517 $ 1,536,247 Partners Equity.............................................. $ 17,808,019 $ 22,281,799 Other Data Tax Credit per BAC for Tax Years Ended December 31, 1996 and 1995, Respectively......................................... $ 1.47 $ 1.43
NINE MONTHS ENDED DECEMBER 31 ---------------------------- 1997 1996 ------------- ------------- (UNAUDITED) Operations Interest and Other Income.................................... $ 170,256 $ 172,187 Share of Losses of Operating Partnership..................... $ (2,098,823) $ (2,219,355) Net Loss..................................................... $ (2,393,783) $ (2,535,058) Net Loss Per BAC............................................. $ (0.61) $ (0.65) Balance Sheet Total Assets................................................. $ 17,673,641 $ 20,612,512 Total Liabilities............................................ $ 2,259,405 $ 1,866,130 Partners Equity.............................................. $ 15,414,236 $ 18,746,382
15 DISTRIBUTIONS: The Partnership has not made any distributions to the BAC Holders since its formation. SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER. The Purchaser is a Delaware limited liability company which was organized for the purpose of making passive investments and acquiring the BACs pursuant to the Offer. The Manager of the Purchaser is Global Capital Management, Inc., a Delaware corporation ("GCM"), which is controlled by its three officers and directors, Richard J. Emmerich, John D. Brandenborg and Michael J. Frey. GCM is also the general partner of and exercises sole control over the limited partnership which is a member of the Purchaser and which owns all of the interests of the Purchaser. GCM is engaged in business to make innovative non-traditional investments in financial instruments. The Purchaser's and GCM's principal executive offices are at 601 Carlson Parkway, Suite 200, Minnetonka, Minnesota 55305. For certain information concerning the executive officers and directors of GCM, see Schedule 1 to this Offer to Purchase. Except as otherwise set forth herein, (i) neither the Purchaser nor, to the best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of the Purchaser beneficially owns or has a right to acquire any BACs, (ii) neither the Purchaser nor, to the best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of the Purchaser or any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the BACs, (iii) neither the Purchaser nor, to the best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of the Purchaser has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Partnership, including but not limited to, contracts, arrangements, understandings or relationships concerning the transfer or voting thereof, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations, (iv) there have been no transactions or business relationships which would be required to be disclosed under the rules and regulations of the Commission between the Purchaser, or, to the best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of the Purchaser, on the one hand, and the Partnership or affiliates, on the other hand, and (v) there have been no contracts, negotiations or transactions between the Purchaser or to the best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of the Purchaser, on the one hand, and the Partnership or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election or removal of any general partner or a sale or other transfer of a material amount of assets. SECTION 12. SOURCE OF FUNDS. The Purchaser expects that approximately $1,915,000 (exclusive of fees and expenses) will be required to purchase 383,000 BACs (approximately 9.9% of the 3,870,500 BACs outstanding), if tendered. The Purchaser will obtain all of those funds from its working capital. However, the Purchaser may seek to obtain financing to facilitate the purchase of the BACs. If the Purchaser determines to obtain financing for the purchase of the BACs, Purchaser will amend this Offer to disclose such financing to the BAC Holders. SECTION 13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions of the Offer, the Purchaser will not be required to accept for payment or, subject to any applicable rules or regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered BACs promptly after the expiration or termination of the Offer), to pay for any BACs tendered, and may postpone the acceptance for payment or, subject to the restriction referred to above, payment for any BACs tendered, and may amend or terminate the Offer if (i) the Purchaser shall not have confirmed to its reasonable satisfaction that, upon purchase of the BACs pursuant to the Offer, the Purchaser will have full rights to ownership as to all such BACs, the Purchaser will become a registered owner on the books and records of the Partnership, (ii) the Purchaser shall not have confirmed to its 16 reasonable satisfaction that, upon the purchase of the BACs pursuant to the Offer, the Transfer Restrictions will have been satisfied, or (iii) all authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, necessary for the consummation of the purchase contemplated by the Offer shall not have been filed, occurred or been obtained. Furthermore, notwithstanding any other term of the Offer, the Purchaser will not be required to accept for payment or pay for any BACs not theretofore accepted for payment or paid for and may terminate or amend the Offer as to such BACs if, at any time on or after the date of the Offer and before the Expiration Date any of the following conditions exist: (a) the acceptance by the Purchaser of BACs tendered and not withdrawn pursuant to the Offer or the transfer of such BACs to the Purchaser violates restrictions in the Partnership Agreement which prohibit any transfer of BACs which would cause a termination of the Partnership or would cause the Partnership to be taxed as a "publicly traded partnership" under the Internal Revenue Code; (b) 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 judgment of the Purchaser, adversely affecting the Purchaser or the Partnership; (c) any statute, rule or regulation shall have been proposed, enacted, promulgated or deemed applicable to the Offer, or any action or order shall have been proposed, entered into or taken, by any government, governmental agency, or other regulatory or administrative agency or authority, which, in the judgment of the Purchaser, might (i) result in a delay in the ability of the Purchaser or render the Purchaser unable, to purchase or pay for some or all of the tendered BACs, (ii) make such purchase or payment illegal, or (iii) otherwise adversely affect the Purchaser or the Partnership; (d) any change shall have occurred or be threatened in the business, financial condition, results of operations, tax status or prospects of the Partnership which, in the judgment of the Purchaser, is or may be adverse to the Partnership, or the Purchaser shall have become aware of any facts which, in the judgment of the Purchaser, have or may have adverse significance with respect to the value of the BACs; (e) there shall have occurred (i) any general suspension of, or limitation on prices for or trading in, securities in the over-the-counter market or on the New York Stock Exchange, Inc., (ii) a declaration of a banking moratorium or any suspension of payment in respect of banks in the United States or any limitation by federal or state authorities on the extension of credit by lending institutions or (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States; or, in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (f) a tender or exchange offer for some or all of the BACs is made, or publicly proposed to be made or amended, by another person; (g) 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 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 its partnership interests, (iv) 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 (v) proposed or effected any amendment to the Partnership's Agreement of Limited Partnership; 17 (h) the failure to occur of any necessary approval or authorization by any Federal or state authorities necessary to consummation of the Purchaser of all or any part of the BACs to be acquired hereby, which in the sole judgment of the Purchaser in any such case, and regardless of the circumstances (including any action of the Purchaser) giving rise thereto, makes it inadvisable to proceed with such purchase or payment; or (i) the Purchaser or any of its affiliates and the Partnership shall have agreed that the Purchaser shall amend or terminate the Offer or postpone the payment for the BACs pursuant thereto. The foregoing conditions are for the sole benefit of the Purchaser and its affiliates and may be asserted by the Purchaser regardless of the circumstances (including, without limitation, any action or inaction by the Purchaser or any of its affiliates) giving rise to such condition, or may be waived by the Purchaser, in whole or in part, from time to time in its sole discretion. The failure by the Purchaser at any time to exercise the foregoing rights will not be deemed a waiver of such rights, which rights will be deemed to be ongoing and may be asserted at any time and from time to time. Any determination by the Purchaser concerning the events described in this Section 13 will be final and binding upon all parties. SECTION 14. CERTAIN LEGAL MATTERS AND REQUIRED REGULATORY APPROVALS. GENERAL. Except as set forth in this Offer to Purchase, based on its review of publicly available filings by the Partnership with the Commission and other publicly available information regarding the Partnership, the Purchaser is not aware of any licenses or regulatory permits that would be material to the business of the Partnership, taken as a whole, and that might be adversely affected by the Purchaser's acquisition of BACs as contemplated herein, or any filings, approvals or other actions by or with any domestic, foreign or governmental authority or administrative or regulatory agency that would be required prior to the acquisition of BACs by the Purchaser pursuant to the Offer as contemplated herein. Should any such approval or other action be required, there can be no assurance that any such additional approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Partnership's business, or that certain parts of the Partnership's or the Purchaser's business might not have to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval. The Purchaser's obligation to purchase and pay for BACs is subject to certain conditions. See "Offer to Purchase--Section 13. Certain Conditions of the Offer." ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated until certain information and documentary material has been furnished for review by the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The Purchaser does not currently believe any filing is required under the HSR Act with respect to its acquisition of BACs contemplated by the offer. Based upon an examination of publicly available information relating to the business in which the Partnership is engaged, the Purchaser believes that the acquisition of BACs pursuant to the Offer would not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or, if such challenge is made, what the result will be. STATE TAKEOVER LAWS. The Purchaser has not attempted to comply with any state takeover statutes in connection with the Offer. The Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer and nothing in the Offer, nor any action taken in connection herewith, is intended as a waiver of that right. In the event that any state takeover statute is found applicable to the Offer, the Purchaser might be unable to accept for payment or purchase BACs tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, the Purchaser may not be obligated to accept for purchase, or pay for, any BACs tendered. 18 SECTION 15. FEES AND EXPENSES. The Purchaser will pay all expenses of the Offer, including the fees and expenses of MAVRICC Management Systems, Inc., the Depositary. The Purchaser will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of BACs pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees, if any, will, upon request and prior approval of the Purchaser, be reimbursed by the Purchaser for customary clerical and mailing expenses incurred by them in forwarding materials to their customers. SECTION 16. MISCELLANEOUS. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) BAC HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD BE ILLEGAL. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Purchaser will engage one or more registered brokers or dealers that are licensed under the laws of such jurisdiction to make the Offer. The Purchaser has filed with the Commission the Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain information with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits, may be examined and copies may be obtained from the Commission as set forth above in "Introduction." No person has been authorized to give any information or to make any representation on behalf of the Purchaser not contained in this Offer to Purchase or in the Agreement of Transfer and Sale and, if given or made, any such information or representation must not be relied upon as having been authorized. Neither the delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall, under any circumstances, create any implication that there has been no change in the affairs of the Purchaser or the Partnership since the date as of which information is furnished or the date of this Offer to Purchase. Valley Creek Capital, LLC April 3, 1998 19 SCHEDULE 1 INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICES OF GLOBAL CAPITAL MANAGEMENT, INC. Set forth in the table below are the names of the directors and executive officers of Global Capital Management, Inc. and their present principal occupations and five (5) year employment histories. Each individual is a citizen of the United States and the business address of each person is 601 Carlson Parkway, Suite 200, Minnetonka, Minnesota 55305.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT NAME AND FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------------------ --------------------------------------------------------------------- Richard J. Emmerich....................... Richard J. Emmerich has been the President and a Director of Global Capital Management Inc. ("GCM") from August 1988 to present. From 1976 to 1988, Mr. Emmerich was employed by Cargill, Inc. in acquisitions research and international trading and processing activities. Mr. Emmerich served as President of Cargill Financial Services Corporation at his departure in 1988. Mr. Emmerich has a Masters of Business Administration Degree from Stanford University and a Bachelor of Arts Degree from Northwestern University. John D. Brandenborg....................... John D. Brandenborg has been a Vice President, Treasurer and a Director of GCM from August 1988 to present. Mr. Brandenborg was employed by Cargill, Inc. from 1978 to 1988 and was involved in trading of domestic and foreign equity and fixed income instruments. Mr. Brandenborg served as a Vice President of Cargill Financial Services Corporation at his departure in 1988. Mr. Brandenborg has a Bachelor of Science Degree in Accounting from the University of Denver. Michael J. Frey........................... Michael J. Frey has been Secretary, Vice President and a Director of GCM from 1988 to present. From 1979 to 1988, Mr. Frey was employed by Cargill, Inc. and traded and supervised trading of domestic and foreign equity and fixed income instruments. At his departure in 1988, Mr. Frey served as Assistant Vice President of Cargill Financial Services Corporation. Mr. Frey has a Bachelor of Science Degree in Business Administration from the University of Minnesota. GCM is the general partner of EBF & Associates Limited Partnership which is engaged in business to make innovative non-traditional investments in financial instruments.
S-1 Any questions or requests for assistance or for delivery of additional copies of this Offer to Purchase or the Agreement of Transfer and Sale may be directed to the Depositary at the telephone number and address set forth below. Mavricc Management Systems, Inc. Post Office Box 7090 Troy, Michigan 48007-7090 Tele: 1-888-292-4264 EX-99.(A)(2) 3 EXHIBIT 99(A)(2) AGREEMENT OF TRANSFER AND SALE The undersigned (or the nominee of the undersigned) is an owner of the number of beneficial assignee certificates ("BACs") evidencing the beneficial interest of an assignee in the series 15 limited partnership interests of Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership"), set forth below on this Agreement of Transfer and Sale ("Agreement"), and agrees to sell and transfer all of the undersigned's right, title and interest in the BACs to Valley Creek Capital, LLC, free and clear of all liens and encumbrances of any kind, on the terms and conditions set forth in Valley Creek Capital, LLC's Offer to Purchase dated April 3, 1998, and as set forth below. Unless otherwise indicated below, the undersigned agrees to sell all (100%) of the BACs the undersigned owns. 1. Notwithstanding any provision to the contrary, the undersigned agrees that in the event any distribution of cash with respect to the BACs or a cash redemption of the BACs is made or declared (collectively, a "Distribution") by the Partnership to the undersigned on or after March 1, 1998 with respect to the BACs being sold and transferred to it pursuant to this Agreement, that the cash price of $5.00 per BAC to be paid to the undersigned shall be reduced by the amount of the Distribution per BAC to the undersigned. To the extent any Distribution is made or declared by the Partnership with respect to the BACs for any period on or after March 1, 1998 that is received by the undersigned, the undersigned understands that the amount of said Distribution will be deducted from the cash price of $5.00 per BAC to be paid to the undersigned by Valley Creek Capital, LLC, pursuant to the timing set forth in the Offer. The undersigned also agrees that the Purchase Price will be automatically reduced by $0.12 per BAC for each month (or part of a month) between May 31, 1998 and the date of transfer of the BACs after May 31, 1998 in recognition of the reduction of allowable tax credits to the purchaser after May 31, 1998. To this end, the undersigned hereby instructs the Partnership to change the address of its account to : Valley Creek Capital, LLC, c/o Global Capital Management, 601 Carlson Parkway, Suite 200, Minnetonka, Minnesota 55305, or such entity as Valley Creek Capital LLC may designate in its sole discretion. 2. The undersigned (or the nominee for the undersigned) by executing this Agreement hereby irrevocably constitutes and appoints Valley Creek Capital, LLC, a Delaware limited liability company, and its Manager, Global Capital Management, Inc., a Delaware corporation, as its true and lawful agent and attorney-in-fact with respect to the BACs with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) of the undersigned to (a) execute, swear to, acknowledge, and file any document providing for or relating to the transfer of the ownership of the BACs on the books of the Partnership; (b) deliver the BACs and transfer ownership of the BACs on the books of the Partnership; (c) endorse in favor of Valley Creek Capital, LLC or any other payee Valley Creek Capital, LLC otherwise designates on the undersigned's behalf, any and all payments payable to the undersigned and received by Valley Creek Capital, LLC from the Partnership for any period of time on or after March 1, 1998; (d) execute on behalf of the undersigned any applications for transfer and distribution allocation agreements required by the National Association of Securities Dealers, Inc.'s Notice to Members 96-14 to give effect to the transaction contemplated by this Agreement; (e) execute on behalf of the undersigned any affidavit or other document necessary to indemnify the Partnership if the certificate evidencing the ownership of the undesigned's BACs has been lost, stolen or destroyed; and (f) receive all benefits and distributions and cause the Partnership to amend the books and records of the Partnership, including my record account and address, to direct Distributions to Valley Creek Capital, LLC and otherwise exercise all rights of beneficial owner of the BACs. Neither Valley Creek Capital, LLC, nor Global Capital Management, Inc. shall be required to post bond of any nature in connection with this power of attorney. 3. The undersigned hereby represents and warrants that the BACs are being transferred and sold to Valley Creek Capital, LLC, free and clear of all liens and encumbrances of any kind and that it has the authority to execute this Agreement and that the Partnership may rely on this Agreement and any documents executed by Valley Creek Capital, LLC or Global Capital Management, Inc., as the attorney-in-fact for the undersigned, which is necessary or convenient to carrying out all matters contemplated by this Agreement. 4. The undersigned (or the nominee of the undersigned) hereby certifies, under penalty of perjury, that the undersigned's tax identification number or social security number set forth below is true and correct. 5. The undersigned (or the nominee of the undersigned) hereby certifies under penalty of perjury that it is not subject to backup withholding either because the undersigned has not been notified by the Internal Revenue Service (the "IRS") that the undersigned is subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has notified the undersigned that the undersigned is no longer subject to backup withholding. 6. The undersigned (or the nominee of the undersigned) hereby certifies, under penalty of perjury, that the undersigned, 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 undersigned 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. 7. The undersigned hereby represents and warrants that either (a) the undersigned is not a plan subject to Title 1 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510-3-101 of any such plan; or (b) the tender and acceptance of BACs pursuant to the Offer will not result in a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code. 8. / / Yes / / No I have possession of the certificates evidencing ownership of the BACs and am sending them to Valley Creek Capital, LLC with this Agreement. - ----------------------------------- ----------------------------------- ----------------------------------- IRA/Pension/Custodial Account # or Printed Name of BAC Holder Signature of BAC Holder Tax Identification # - ----------------------------------- ----------------------------------- ----------------------------------- Social Security or Tax ID # Printed Name of Joint BAC Holder Signature of Joint BAC Holder, if (or IRA/Pension/Custodian Name) any (or IRA/Pension/Custodia n Signature) - ----------------------------------- ----------------------------------- Telephone Number Today's Date - ----------------------------------- No. of BACs Sold and Transferred MEDALLION GUARANTEE FOR BAC HOLDER MEDALLION GUARANTEE FOR CUSTODIAN / / Less than 100% of BACs sold and transferred (check box if applicable) - ----------------------------------- MEDALLION GUARANTEE FOR BAC HOLDER Date
Agreed to and Accepted Valley Creek Capital, LLC By: Its Manager Global Capital Management, Inc. By: - ------------------------ INSTRUCTIONS TO COMPLETE AGREEMENT OF TRANSFER AND SALE PLEASE CAREFULLY PROVIDE THE FOLLOWING INFORMATION: 1. Sign and Date Agreement; 2. Have all signatures MEDALLION GUARANTEED. A medallion guarantee can be obtained through your broker or local financial institution. You may want to call ahead to confirm that the particular location has the medallion guarantee. Please remember, a medallion guarantee is not a notary; 3. Provide your social security or tax identification number; 4. INDICATE THE NUMBER OF BACS YOU WANT TO SELL AND TRANSFER; 5. Date the Agreement; 6. Provide a telephone number where you can be reached; and 7. RETURN THE AGREEMENT AND YOUR BAC CERTIFICATES BY PLACING THEM IN THE ENVELOPE PROVIDED AND SENDING THEM CERTIFIED MAIL, RETURN RECEIPT REQUESTED. IF YOU DO NOT HAVE POSSESSION OF YOUR BAC CERTIFICATES, PLEASE ENCLOSE A SIGNED LETTER INDICATING YOU NO LONGER HAVE THEM. IN ADDITION TO THE INFORMATION REQUESTED IN ITEMS 1 TO 7 ABOVE: IF YOU OWN THE BACS JOINTLY WITH ANOTHER INDIVIDUAL: Please have both owners sign the Agreement; both signatures must be Medallion Guaranteed. If spouse is deceased, please enclose a certified copy of the Death Certificate along with a Letter Testament ary or Will showing your beneficial ownership or executor capacity. IF YOU OWN THE BACS IN YOUR IRA: Please provide the name of your custodian and your IRA account number. This information will be used solely by your custodian (the financial institution with custody of your account) to make certain that the purchase proceeds are properly deposited in your account. If your BACs are held in an IRA account, in addition to your signature, the custodian's signature is required on the Agreement of Transfer and Sale. We will obtain this required signature for you. IF THE BACS ARE OWNED IN A TRUST, PROFIT SHARING OR PENSION PLAN: Attach the first and last pages, as well as the section of the Trust Agreement showing that the signer has authority to sign the Agreement on behalf of the Trust or Plan. IF THE BACS ARE OWNED IN A CORPORATION: Attach an original corporate resolution showing that the signer has the authority to sign the Agreement on behalf of the corporation. MAIL TO: Valley Creek Capital, LLC c/o MAVRICC Management Systems, Inc. Post Office Box 7090 Troy, Michigan 48007-7090 1-888-292-4264 EX-99.(A)(3) 4 EXHIBIT 99(A)(3) VALLEY CREEK CAPITAL, LLC C/O MAVRICC MANAGEMENT SYSTEMS POST OFFICE BOX 7090 TROY, MICHIGAN 48007-7090 APRIL 3, 1998 To Holders of Series 15 Beneficial Assignee Certificates of Boston Capital Tax Credit Fund III L.P. Dear BAC Holder: We are pleased to enclose with this letter the offer (the "Offer") by Valley Creek Capital, LLC (the "Purchaser") to pay $5.00 for each series 15 beneficial assignee certificate ("BAC") evidencing the beneficial interest of an assignee in the series 15 limited partnership interests of Boston Capital Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership"), less the amount per BAC of cash distributions declared or paid, including any cash returns of capital made or declared with respect to each BAC between March 1, 1998 and the close of business, Eastern Time on May 5, 1998 (the "Purchase Price"). The Purchase Price will be automatically reduced by $0.12 per BAC for each month (or part of a month) between May 31, 1998 and the date of transfer of the BACs after May 31, 1998 in recognition of the reduction of allocable tax credits to the Purchaser after May 31, 1998. The Offer is for up to 383,000 BACs, representing approximately 9.9% of the BACs outstanding on the date of the Offer. If more than 383,000 BACs are tendered, BACs will be accepted on a pro rata basis. THE PURCHASER IS NOT AN AFFILIATE OF THE GENERAL PARTNER OF THE PARTNERSHIP The Purchaser is making this Offer because it believes that the BACs represent an attractive investment at the price offered based upon, in part, the expected remaining tax credits and tax losses. There can be no assurance, however, that the Purchaser's judgment is correct, and, as a result, ownership of a BAC (either by the Purchaser or BAC Holders who retain their BACs) will remain a speculative investment. The Purchaser is acquiring the BACs for investment purposes and does not intend to make any effort to change current management or the operations of the Partnership. The Purchaser has no current plans for any extraordinary transaction involving the Partnership. We encourage you to consider the following factors: - BAC Holders who have a present or future need for tax credits and/or tax losses from the BACs may prefer to retain their BACs and not tender them pursuant to the Offer, or any other tender offer. BAC Holders who tender their BACs will be giving up the opportunity to participate in any future potential benefits represented by ownership of BACs, including, for example, the right to participate in any future distribution of cash or property, whether from operations, the proceeds of a sale of the Partnership's assets or in connection with any future liquidation of the Partnership. However, there is no guarantee of future results of the Partnership and investment in the Partnership. - Although the Purchaser cannot predict the future value of the Partnership's assets on a per BAC basis, the Purchase Price could differ significantly from the net proceeds that would be recognized on a per BAC basis from the sale of the Partnership's assets or that may be realized upon a future liquidation of the Partnership - The tax consequences of the Offer to a particular BAC Holder may be different from those of other BAC Holders and we urge you to consult your own tax advisors in connection with the Offer. - BAC Holders should note that the most recent reported trading activity in the BACs occurred in January 1998. The selling price for BACs reported in the limited and sporadic secondary market during the two-month period ended January 31, 1998 was $7.63 encompassing four trades and 8,000 BACs (as reported in the Partnership Spectrum, an industry publication). Such secondary market selling prices, however, do not take into account commissions charged by secondary market makers effectuating such sales which the Purchaser believes, based on a typical 1,000 BAC sales transaction, range from 5% to 8% of the sales proceeds (which would result in a reduction of the net proceeds to the seller of approximately $.38 to approximately $.61 per BAC). Additionally, because a BAC is less valuable with the passage of time since fewer Tax Credits remain, the Purchaser believes the price per BAC should be reduced by approximately $.12 for each passing month, or a total of approximately $.48 per BAC from January 31, 1998 to May 31, 1998. - The Purchaser is making the Offer with a view towards making a profit. Accordingly, there may be a conflict between the desire of the Purchaser to acquire the BACs at a low price and the desire of the BAC Holders to sell the BACs at a high price. No independent person has been retained to evaluate or render any opinion with respect to the fairness of the $5.00 Purchase Price and no representation is made as to such fairness. Other measures of value may be relevant to a BAC Holder and all BAC Holders are urged to carefully consider all of the information contained in the Offer to Purchase and Agreement of Transfer and Sale and to consult with their own advisors (tax, financial or otherwise) in evaluating the terms of the Offer before deciding whether to tender their BACs. - BAC Holders may no longer wish to continue with their investment in the Partnership and might consider accepting the Offer for one or more of the following reasons: "There is no established trading market for the BACs and it is not anticipated that any public market will develop." (See the Partnership's Annual Report on Form 10-K for the fiscal year ended March 31, 1997). BAC Holders who desire resale liquidity may wish to consider the Offer. The Offer affords a significant number of BAC Holders with an opportunity to dispose of their BACs for cash, which otherwise might not be available to them. The Purchase Price is not intended to represent either the fair market value of a BAC or the fair market value of the tax credits and tax losses attributable to each BAC and the Partnership's assets on a per BAC basis. Although there are some limited resale mechanisms available to the BAC Holders wishing to sell their BACs, there is no formal or organized trading market for the BACs. - Acceptance of the Offer will eliminate any future risk to the selling BAC Holder from recapture of tax credits received, since such risk will be borne by the Purchaser. - The Offer may be attractive to certain BAC Holders who wish in the future to avoid the continued additional expense, delay and complication in filing income tax returns which result from the ownership of BACs. - Generally, individuals may not be able to fully use passive tax losses since current tax laws restrict the use of such losses by individuals. For some BAC Holders, selling their BACs may permit the use of suspended passive losses against other forms of taxable income, providing additional tax benefits in the year of sale. We urge all BAC Holders to consult their tax advisors in connection with the Offer. - The Offer provides BAC Holders with the opportunity to liquidate their BACs and to reinvest the proceeds in other investments should they desire to do so. - The Offer will provide BAC Holders with an immediate opportunity to liquidate their investment in the Partnership without the usual transaction costs associated with secondary market sales or Partnership transfer fees. - To date the Partnership has not made any distributions of cash to BAC Holders. - The Offer may be attractive for BAC Holders whose circumstances have changed such that anticipated future allocation tax credits and tax losses may no longer be beneficial to them. 2 - General disenchantment with real estate investments and with long-term investments in limited partnerships because of, among other things, their illiquidity. If you wish to sell some or all of your BACs now, please read carefully the enclosed Offer to Purchase and the Agreement of Transfer and Sale. All you need to do is complete the Agreement of Transfer and Sale in accordance with the instructions provided therein, sign where indicated, have your signature Medallion Guaranteed and return it to the Purchaser, in the pre-addressed return envelope. If you desire to accept this Offer, please carefully follow the instructions on the Agreement of Transfer and Sale. Errors will delay and possibly prevent acceptance of your tender of the BACs. Except as indicated above, no other action on your part is required. This Offer will expire at 12:00 midnight, Eastern Time, on May 5, 1998, unless extended. If you have any questions or need assistance in completing the Agreement of Transfer and Sale, please call the Depositary at 1-888-292-4264. Very truly yours, Valley Creek Capital, LLC 3 EX-99.(A)(4) 5 EXHIBIT 99(A)(4) THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE, NOR A SOLICITATION OF AN OFFER TO SELL THE SECURITIES. THE OFFER IS MADE ONLY BY THE OFFER TO PURCHASE AND THE RELATED AGREEMENT OF TRANSFER AND SALE AND IS NOT BEING MADE (NOR WILL TENDERS BE ACCEPTED FROM) HOLDERS OF BACS IN ANY JURISDICTION WHICH THE OFFER OR THE ACCEPTANCE THEREOF WILL NOT BE IN COMPLIANCE WITH THE SECURITIES LAWS OF SUCH JURISDICTION; IN THOSE JURISDICTIONS WHERE SECURITIES 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 ONLY BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION. NOTICE OF OFFER TO PURCHASE FOR CASH UP TO 383,000 SERIES 15 BENEFICIAL ASSIGNEE CERTIFICATES (THE "BACS") OF BOSTON CAPITAL TAX CREDIT FUND III L.P. (THE "PARTNERSHIP") BY VALLEY CREEK CAPITAL, LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE "PURCHASER") The Purchaser is offering to purchase for cash up to 383,000 BACs held by the BAC Holders of the Partnership (the "BAC Holders") at $5.00 per BAC upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase and in the related Agreement of Transfer and Sale (which together constitute the "Offer" and the "Tender Offer Documents"). THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON TUESDAY, MAY 5, 1998, UNLESS THE OFFER IS EXTENDED. Funding for the purchase of the BACs will be provided through the Purchaser's existing working capital. The Offer will expire at 12:00 midnight, Eastern Time on May 5, 1998, and unless and until the Purchaser, in its sole discretion, shall have extended the period of time for which the Offer is open (such date and time, as extended the "Expiration Date"). If the Purchaser makes a material change in the terms of the Offer, or if they waive a material condition to 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"). The minimum period during which an offer must remain open following any material change in the terms of the Offer, other than a change in price or a change in percentage of securities sought will depend upon the facts and circumstances including the materiality of the change with respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought. A minimum of ten business days from the date of such change is generally required to allow for adequate dissemination to BAC Holders. Accordingly, if prior to the Expiration Date, the Purchaser increases (other than increases of not more than two percent of the outstanding BACs) or decreases the number of BACs being sought, or increases or decreases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from the date that notice of such increase or decrease is first published, sent or given to BAC Holders, the Offer will be extended at least until the expiration of such tenth business days. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Time. In all cases payment for the BACs purchased pursuant to the Offer will be made only after timely receipt of the Agreement of Transfer and Sale, properly completed and duly executed, with any required signature guarantees, and any other documents required by such Agreement of Transfer and Sale. Tenders of BACs made pursuant to the Offer are irrevocable, except that BAC Holders who tender their BACs in response to the Offer will have the right to withdraw their tendered BACs at any time prior to the Expiration Date by sending a written notice of withdrawal to the Purchaser specifying the name of the person who tendered the BACs to be withdrawn. In addition, tendered BACs may be withdrawn at any time after June 3, unless the tender has theretofore been accepted for payment as provided above. If tendering BAC Holders tender more than the number of BACs that the Purchaser seeks to purchase pursuant to the Offer, the Purchaser will take into account the number of BACs so tendered and take up and pay for as nearly as may be pro rata, disregarding fractions, according to the number of BACs tendered by each tendering BAC Holder during the period during which the Offer remains open. The terms of the Offer are more fully set forth in the formal Tender Offer Documents which are available from the Purchaser. The Offer contains terms and conditions and the information required by Rule 14d-6(e)(l)(vii) under the Exchange Act which are incorporated herein by reference. THE TENDER OFFER DOCUMENTS CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. The Tender Offer Documents may be obtained by written request as set forth below. The Tender Offer Documents and, if required, other relevant materials will be mailed to record holders of BACs or persons who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of BACs. FOR COPIES OF THE TENDER OFFER DOCUMENTS CALL THE DEPOSITARY TOLL FREE AT 1-888-292-4264 OR MAKE A WRITTEN REQUEST ADDRESSED TO VALLEY CREEK CAPITAL, LLC, C/O MAVRICC MANAGEMENT SYSTEMS, INC., POST OFFICE BOX 7090, TROY, MICHIGAN 48007-7090. April 3, 1998 -----END PRIVACY-ENHANCED MESSAGE-----