BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP
101 Arch Street
Boston, MA 02110
August 18, 1997
Dear Limited Partner:
As you are by now aware, two unrelated bidders have made offers to
purchase units representing units of limited partnership interests ("Units")
of Boston Financial Tax Credit Fund VIII, A Limited Partnership (the
"Partnership"):
(i) Oldham Institutional Tax Credits LLC, a Massachusetts limited
liability company ("Oldham"), has made an offer (the "Oldham
Offer") to purchase Units for an increased cash purchase price
of $880 per Unit. The Purchaser is an affiliate of Arch Street
VIII Limited Partnership , the general partner of the
Partnership (the "General Partner"), and
(ii) Everest Tax Credit Investors, LLC, a California limited
liability company, and Everest Tax Credit Investors II, LLC, a
California limited liability company (together, "Everest"), has
made an offer (the "Everest Offer") to purchase Units for a
cash purchase price of $840 per Unit.
Because the General Partner is affiliated with Oldham, the General
Partner is expressing no opinion and are remaining neutral with respect to
the Oldham Offer and the Everest Offer . Although the General Partner is not
making a recommendation with respect to either offer, the General Partner
believes that Limited Partners should carefully consider the following
factors in making their own decision of whether to accept or reject the
Oldham Offer or the Everest Offer:
- - Oldham is an affiliate of the General Partner. The executive officers
and directors of the managing member of Oldham also serve as the
executive officers and directors of the General Partner. Therefore, the
General Partner, subject to its fiduciary duties, may have a conflict of
interest with respect to certain matters involving the Partnership and
its Limited Partners:
- There may be a conflict of interest in responding to the Oldham
Offer.
- If Oldham is successful in acquiring a significant number of Units
pursuant to the Oldham Offer, Oldham could be in a position to
significantly influence all Partnership decisions on which Limited
Partners may vote.
This voting ability could prevent nontendering Limited Partners
from taking action that they desired but Oldham and the General
Partner opposed and enable Oldham and the General Partner to take
action desired by the Partnership but opposed by the nontendering
Limited Partners.
- There may also be a conflict of interest if Oldham's acquisition
of Units has the effect of making any future change in the
Partnership's current management by the General Partner more
difficult.
- - The Everest Offer is for $840 per Unit. The Oldham Offer exceeds the
Everest Offer by $40 per Unit.
- - The Everest Offer is NOT net of transfer fees, which means that a Limited
Partner who tenders to Everest will be required to pay a transfer fee of
$10 per Unit transferred ($100 minimum).
- - The Everest Offer is for a maximum of 1,825 Units, which is less than
Oldham's maximum of 9,125 Units. It is a more likely possibility that
Everest may not be able to accept all the Units tendered to it because
proration, or rejection, of some tendered Units may occur at the lower
maximum level established by Everest.
- - Both offers will provide Limited Partners with an immediate opportunity
to liquidate their investment in the Partnership. Limited Partners who
have a present or future need for the tax credits and/or tax losses from
the Units may, however, prefer to retain their Units and not tender them
pursuant to either offer.
- - As stated by Oldham in the Oldham Offer, there may be a conflict of
interest between Oldham's desire to purchase the Units at a low price and
a Limited Partner's desire to sell its Units at a high price. Therefore,
Limited Partners might receive greater value if they hold their Units,
rather than tender. Furthermore, Limited Partners should be aware that a
secondary market exists for the Units.
- - The Partnership Agreement of the Partnership provides that no sale or
transfer of Units may be made if such sale, when aggregated with all
other transfers during the same year would result in both (i) the
transfer of Units (excluding certain transfers permitted under the
Partnership Agreement ("Permitted Transfers")) representing more than a
5% interest in Partnership capital or profits and (ii) the transfer of
Units (excluding Permitted Transfers and transfers made through a
"Matching Service" (as such term is used in Internal Revenue Service
Notice 88-75)) representing more than a 2% interest in Partnership
capital or profits (the "Safe Harbor Percentages"), unless the General
Partner shall have received an opinion of counsel that such sale or
transfer may be made without material adverse tax consequence to any
partner of the Partnership. Since the Partnership has permitted
transfers during taxable year 1997, Oldham has stated in its Offer that
it will obtain an opinion of counsel that consummation of the Oldham
Offer
2
will not result in material adverse tax consequences to the Partnership's
partners. Everest does not make a similar statement in its offer.
However, in order to comply with the Partnership Agreement, if the Units
acquired by Everest pursuant to the Everest Offer, when aggregated with
all other transfers during 1997, would result in the Partnership
exceeding the Safe Harbor Percentages, the General Partner will require
that Everest obtain an opinion of counsel that consummation of the
Everest offer will not result in adverse tax consequences to the partners.
- - LIMITED PARTNERS WILL NO LONGER RECEIVE THE TAX CREDITS AND/OR TAX LOSSES
FROM THE UNITS SHOULD THEY TENDER PURSUANT TO THE EITHER OFFER.
- - Limited Partners who tender their Units will lose the right to receive
any future distributions from the Partnership, including distributions
from any refinancing or sale of the Partnership's properties. The
Partnership has made no distributions to Limited Partners in the past,
and there can be no assurance as to the timing, amount or occurrence of
any future distributions.
- - Limited Partners should consult with their respective advisors about the
financial, tax, legal and other consequences of both offers.
Enclosed is a copy of the Partnership's amended Statement on Schedule
14D-9 which has been filed with the Securities and Exchange Commission and
sets forth the Partnership's response to the offers. Limited Partners are
advised to carefully read the amended Schedule 14D-9.
Please do not hesitate to call the Partnership at (800) 829-9213
(ext. 10) for assistance in any Partnership matter.
BOSTON FINANCIAL TAX CREDIT FUND
VIII, A LIMITED PARTNERSHIP
3