Dakotah Hills Offices Limited Partnership, An Arizona Limited Partnership, William M. and Dianne B. Stephens, Tax Matters Partners, et al. - Page 6

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             1985.  In this opinion, we refer to these promissory notes               
             as investor notes or as capital contribution notes.                      
                  As security for the payment of the investor notes,                  
             each investor was required to execute a security agreement               
             which gave the partnership a security interest in his or                 
             her partnership interest.  The partnership’s security                    
             interest in each unit of limited partnership interest was                
             recorded by the filing of a Uniform Commercial Code                      
             financing statement that was also executed by the investor.              
                  The sale of units of limited partnership interest                   
             in Dakotah Hills was preceded by the circulation of a                    
             confidential private offering memorandum dated August 17,                
             1984 (private offering memorandum).  The private offering                
             memorandum states that the partnership intended to use the               
             investor notes as collateral for a loan, the proceeds of                 
             which would be used to acquire partnership property.                     
             The private offering memorandum describes the intended use               
             of the investors’ notes, in part, as follows:                            

                  Leveraging.  Immediately after the formation                        
                  of the partnership, the partnership intends                         
                  to obtain a loan from a bank, savings and loan                      
                  association and/or other institutional lender                       
                  in order to obtain the necessary funds with                         
                  which to purchase the partnership property.                         
                  The General Partners, based upon their past                         
                  financing experiences, believe that they will                       
                  be in a position to use the partnership property                    
                  and the promissory notes, to be executed by all                     
                  the Limited Partners, as collateral for a loan.                     
                  Also in accordance with their prior financing                       




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