Exhibit (c)(5)
LEHIGH TAX CREDIT PARTNERS L.L.C.
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April 23, 1997
Everest Properties
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Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
This letter agreement confirms our mutual agreement to be bound by the
terms of this letter agreement, including the terms and conditions set forth in
Exhibit A annexed hereto and made a part hereof. This agreement is intended to
be legally binding and enforceable upon execution and delivery hereof.
Each of the parties represents and warrants to the other that (1) it has
the right, power and authority to enter into this letter agreement and perform
its obligations hereunder, (2) upon the execution of this letter agreement by
each of the parties hereto, this letter agreement will constitute the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms, and (3) no consent or approval of any third party or
governmental agency or authority is required for such party to execute and
deliver this letter agreement or to perform its obligations hereunder.
Each of the parties hereto agrees that the terms of this letter agreement
are confidential and may not be disclosed by any party hereto, except as may be
required by law and except to the principals and authorized representatives of
the parties hereto and the general partners of Liberty III and the Additional
Partnerships (as defined in Exhibit A), without the written consent of all of
the parties. Except as may be required by law, any public announcement regarding
this letter agreement or the transactions contemplated herein may not be made by
any party without the prior consent of all other parties hereto.
This letter agreement shall be governed by and interpreted in accordance
with the laws of the State of New York, without regard to the conflicts of law
provisions thereof. Nothing herein shall be deemed to grant jurisdiction to the
State of New York over any dispute concerning this letter agreement.
This letter agreement may be executed in separate counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
This letter agreement supersedes any and all prior agreements, written or
oral, by or among any of the parties hereto with respect to the subject matter
hereof and may not be amended or otherwise modified except in writing signed by
all of the parties hereto.
This letter agreement shall be binding upon the parties hereto and their
respective successors, assigns and controlled affiliates.
Any party may execute this letter agreement by transmitting a copy of its
signature by facsimile to the other parties. In such event the signing party
shall deliver an original of the signature page to each of the other parties
within one business day of signing and failure to so deliver such originals
shall result in the facsimile copy of that party's signature being treated as an
original.
Very truly yours,
LEHIGH TAX CREDIT PARTNERS L.L.C.
By: Lehigh Tax Credit Partners, Inc.,
Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
LEHIGH TAX CREDIT PARTNERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
RELATED CAPITAL COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Managing Director
ACCEPTED AND AGREED TO AS
OF THE DATE FIRST ABOVE WRITTEN:
EVEREST PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
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EVEREST PROPERTIES II, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
EVEREST PROPERTIES, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
EVEREST TAX CREDIT INVESTORS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
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EXHIBIT A
OPTION TO PURCHASE SECURITIES
Tender Offer(s)
I. Liberty Tax Credit Plus III L.P.
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Lehigh Tax Credit Partners L.L.C. has commenced a tender
offer (the "Liberty III Offer") to purchase up to 17,500 of the
issued and outstanding Beneficial Assignment Certificates ("BACs")
representing limited partnership interests in Liberty Tax Credit Plus
III L.P. ("Liberty III") at a purchase price of $588.20 per BAC, net
to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated April 10,
1997. The Liberty III Offer expires at 12:00 midnight, New York City
time, on May 8, 1997 or such later date to which the Liberty III
Offer may be extended. Lehigh filed a Tender Offer Statement on
Schedule 14D-1 (the "Liberty III Schedule 14D-1") with the Securities
and Exchange Commission (the "Commission") with respect to the
Liberty III Offer on April 10, 1997. References herein to the Liberty
III Offer shall include (a) any amendments to the Liberty III
Schedule 14D-1 and (b) any subsequent tender offer made by Lehigh for
BACs in Liberty III.
II. Additional Tender Offers Contemplated
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Attached hereto as Schedule I is a list of additional
partnerships (the "Additional Partnerships"), the securities of which
may be subject to a tender offer by Lehigh Tax Credit Partners
L.L.C., Related Capital Company or any direct or indirect affiliate
thereof (collectively, "Lehigh"). Those additional tender offers, the
Liberty III Offer and any other tender offers for Liberty III or the
Additional Partnerships in which Lehigh participates (participation
meaning the activities covered by clauses (ii), (iv) and (vi) set
forth under "Standstill" below) are collectively referred to herein
as the "Tender Offers", and each a "Tender Offer". The BACs tendered
pursuant to the Liberty III Offer and the securities tendered
pursuant to the other Tender Offers are referred to herein as
"Tendered Securities". Lehigh agrees (a) that the tender offers for
securities of any Additional Partnerships shall be for at least 25%
of the outstanding securities of such Additional Partnership and (b)
to commence Tender Offers for the securities of at least two
Additional Partnerships by July 31, 1997.
Option to Purchase Securities; Payment of Securities and Expenses
Subject to the terms and conditions set forth below, Lehigh hereby
grants, or will cause to be granted, to Everest Properties II, LLC and its
affiliates (collectively, "Everest") an option to purchase up to 25% of the
securities tendered in each Tender Offer; provided, however, the maximum amount
of all Tendered Securities purchased by Everest pursuant to this letter
agreement shall not exceed an amount that has an aggregate purchase price of
more than Ten Million ($10,000,000) Dollars; provided further, however, if
Everest has not had the opportunity to exercise its option to purchase Tendered
Securities with an aggregate purchase price of Ten Million ($10,000,000) Dollars
in connection with the first three Tender Offers, the 25% limitation set forth
above shall be increased in connection with any future Tender Offer(s) to a
percentage that will provide Everest with the opportunity to exercise its option
to purchase Tendered Securities with an aggregate purchase price of Ten Million
($10,000,000) Dollars. Upon the expiration of
a Tender Offer, Lehigh shall provide written notice to Everest of the amount of
Tendered Securities accepted by Lehigh pursuant to such Tender Offer. Within two
business days following Lehigh's notice to Everest, Everest shall notify Lehigh
in writing whether or not it elects to exercise its option and to what extent.
If Everest fails to notify Lehigh of the exercise of its option within such two
business day period, Everest shall be deemed not to have exercised its option.
If such option is exercised, Everest shall pay Lehigh, by wire transfer, on the
later of (a) one business day after Everest delivers written notice of its
election to exercise, (b) one business day after Lehigh has given notice to
Everest that Lehigh will pay tendering security holders in accordance with the
terms of the Tender Offer (such notice to be given by Lehigh to Everest not less
than one business day prior to the date of such payment) and (c) the date that
Lehigh makes such payment, an amount equal to (i) the number of Tendered
Securities with respect to which Everest exercised its option (the "Option
Securities") multiplied by the price per Tendered Security paid by Lehigh in the
applicable Tender Offer plus (ii) Everest's share of the "Total Expenses" (as
defined below) for such applicable Tender Offer (see "Allocation of Expenses"
below). Upon receipt of such payment, (1) Lehigh will deliver the Option
Securities to Everest, together with all necessary documentation to transfer to
Everest all of Lehigh's right, title and interest in and to such Option
Securities, (2) Lehigh will assign to Everest its rights under all letters of
transmittal (including related proxies and powers-of-attorney) relating to such
Option Securities, and (3) Everest will agree in writing to be bound by the
terms and conditions of the "Partnership Standstill Agreement" (as defined
below), if any, governing the Tendered Securities. Lehigh will deliver (or will
cause to be delivered), concurrently with the receipt of such payment from
Everest by Lehigh, a confirmation from the subject partnership setting forth the
number of Option Securities that will be transferred to Everest.
Allocation of Expenses
At the time of the purchase of any Option Securities, Everest shall
pay to Lehigh a portion of Total Expenses related to such Tender Offer equal to
the lesser of (a) $25,000 and (b) Total Expenses multiplied by a fraction, the
numerator of which is the number of Tendered Securities purchased by Everest and
the denominator of which is the total number of Tendered Securities purchased
pursuant to the Tender Offer. "Total Expenses" with respect to each Tender Offer
means all third-party out-of-pocket costs and expenses incurred by Lehigh,
Everest or their respective affiliates (including attorneys fees and expenses in
connection with the preparation and filing of any Tender Offer documents, but
excluding litigation expenses) with respect to each Tender Offer, including,
without duplication, Commission filing fees, the out-of-pocket expenses of any
person for acting as the information agent/depositary for the Tender Offer,
printing and mailing expenses, and the out-of-pocket expenses of the general
partners of Liberty III or any Additional Partnership which are paid for by
Lehigh. Total Expenses shall not include the costs of purchasing the Tendered
Securities or any non-third-party costs, including the overhead of Lehigh. Each
party will provide, upon the execution and delivery hereof, an estimate of its
costs and expenses incurred to date in connection with any Tender Offers and
shall provide, upon request, invoices or other appropriate evidence of the
incurrence of costs and expenses constituting Total Expenses hereunder.
Liabilities, costs, obligations and damages incurred by any party in connection
with any litigation or threatened litigation relating to, or arising from, the
Tender Offers ("Tender Offer Litigation") shall be borne by Lehigh and not
Everest. Lehigh agrees to indemnify and defend Everest and its affiliates,
officers, directors, members, employees and agents from and against all
liabilities, costs, obligations and damages in connection with Tender Offer
Litigation (even if the same are covered by an indemnification assumed by
Everest under the Partnership Standstill Agreement).
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Standstill Agreement
Everest covenants and agrees that neither it nor any person who is
its Affiliate (as defined under Rule 405 of the Securities Act of 1933, as
amended) will, directly or indirectly: (i) in any manner including, without
limitation, by tender offer (whether or not pursuant to a filing made with the
Commission), acquire, attempt to acquire or make a proposal to acquire, directly
or indirectly, any securities of Liberty III or any Additional Partnership,
except for (a) the Option Securities and (b) purchases of de minimis amounts of
securities in the secondary market at the prevailing secondary market price (it
being understood that the purchaser of such de minimis amounts of securities
shall be bound by the terms and conditions of this agreement); (ii) seek or
propose to enter into, directly or indirectly, any merger, consolidation,
business combination, sale or acquisition of assets, liquidation, dissolution or
other similar transaction involving Liberty III or any Additional Partnership;
(iii) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" or "consents" (as such terms are used in the proxy
rules of the Commission) to vote, or seek to advise or influence any person with
respect to the voting of, any voting securities of Liberty III or any Additional
Partnership; (iv) form, join or otherwise participate in a "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended)
with respect to any voting securities of Liberty III or any Additional
Partnership; (v) disclose in writing to any third party any intention, plan or
arrangement inconsistent with the terms of this letter agreement; or (vi) loan
money to, advise, assist or encourage any person in connection with any action
inconsistent with the terms of this letter agreement. The foregoing restrictions
shall continue in full force and effect from the date hereof and forever, in
perpetuity, with respect to the securities of Liberty III and any Additional
Partnership, on a partnership by partnership basis if Lehigh has accepted
Tendered Securities of the subject partnership and Everest has either (a)
exercised its option, (b) not exercised its option or (c) such option is deemed
not to have been exercised in accordance with the terms hereof. The foregoing
restrictions shall continue in full force and effect from the date hereof and
forever, in perpetuity, with respect to the securities of Liberty III and all of
the Additional Partnership if Everest has been granted an option by Lehigh to
purchase Option Securities for an aggregate purchase price of Ten Million
($10,000,000) Dollars. If Lehigh fails to commence Tender Offers for the
securities of any Additional Partnership by October 31, 1997 and the aggregate
purchase price for which Everest could have exercised its option to purchase
Tendered Securities prior to such date (but for its failure or deemed failure to
exercise such option) is less than Ten Million ($10,000,000) Dollars or if
Lehigh defaults in any material respect in the performance of its obligations
hereunder, then Everest shall cease to be bound by the foregoing restrictions,
but only with respect to Additional Partnerships for which Lehigh has failed to
commence Tender Offers. If Lehigh defaults in any material respect in the
performance of its obligations under the section titled "Option to Purchase
Securities; Payment of Securities and Expenses" above, then Everest shall cease
to be bound by the foregoing restrictions, but only with respect to the
partnership to which such default relates and any Additional Partnerships for
which Lehigh has failed to commence tender offers prior to the date of such
default.
Partnership Standstill Agreement(s)
Lehigh entered into a letter agreement with Liberty III, dated April
4, 1997 (the "Liberty III Standstill Agreement"), a copy of which has been filed
as an exhibit to the Liberty III Schedule 14D- 1. It is expected that some or
all of the Additional Partnerships may require similar standstill agreements
prior to Lehigh commencing an offer for the securities of such Additional
Partnerships (such agreements, together with the Liberty III Standstill
Agreement, are referred to herein as the "Partnership Standstill Agreements").
Everest covenants and agrees that upon the purchase of any Tendered Securities,
it will, if applicable, agree to be bound by the terms and conditions of any
Partnership Standstill Agreement
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(including without limitation the Liberty III Standstill Agreement) or execute a
replacement standstill agreement reasonably acceptable to the subject
partnership.
Litigation
Reference is made to the following actions pending in Delaware
Chancery Court: (i) Everest Properties, Inc. v. Liberty Tax Credit Plus III
L.P., Related Credit Properties III L.P., Liberty GP III Inc., Lehigh Tax Credit
Partners L.L.C. and Lehigh Tax Credit Partners, Inc. (C.A. No. 15660) (commenced
April 15, 1997); and (ii) Everest Properties, Inc. v. Liberty Tax Credit Plus
III L.P., et al. (C.A. No. 15531) (commenced February 10, 1997). Everest
covenants and agrees that it shall immediately cause these actions to be
dismissed, without prejudice, and without costs to any of Lehigh, its affiliates
or the defendants in such actions. Each of Lehigh and Everest hereby releases
the other, and Everest hereby releases all of the defendants in the foregoing
actions, from any and all claims for events that have occurred prior to the date
of this letter agreement, such releases being expressly conditioned upon the
performance by Lehigh, in the case of Everest's release, Everest, in the case of
Lehigh's release, and the other defendants, in the case of Everest's release, of
their respective obligations, if any, hereunder.
Conduct of Offer(s)
All decisions relating to the conduct of the Tender Offers and the
acquisition and transfer of Tendered Securities pursuant thereto, including
without limitation any change in the terms or waiver of any of the conditions
thereof, shall be made solely by Lehigh. Notwithstanding the foregoing, if
requested by Everest, Lehigh agrees to consult with Everest prior to commencing
a Tender Offer with regard to the purchase price offered therein and prior to
increasing the offered price in any Tender Offer commenced prior to the date
hereof. Lehigh agrees to amend the Liberty III Offer materials to include the
following statement:
In its filed pleadings, Everest stated that the estimated offer price
of $414 per BAC for a possible tender offer by Everest, as disclosed
in the Offer to Purchase, was incorrect and Everest intended to offer
BACs holders a price higher than the then-Purchase Price offered by
the Purchaser.
Cooperation
Everest and Lehigh shall cooperate and provide each other with such
information as may be necessary or desirable to disclose the transaction(s)
contemplated hereby in accordance with applicable securities laws and the rules
and regulations promulgated thereunder. In addition, subject to applicable laws,
Lehigh agrees to provide Everest, promptly upon request (but in no event later
than five days prior to the commencement of a Tender Offer), with copies of all
reports sent to limited partners, filings with the Commission and other public
information reasonably requested by Everest. Additionally, Lehigh agrees to
furnish Everest, promptly upon request, a report of securities tendered in any
pending Tender Offer.
No Other Contracts
Except as expressly set forth herein, there are no contracts,
arrangements, understandings or relationships between Everest and Lehigh with
respect to the BACs or the securities of any Additional Partnership.
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Further Assurances
Each of the parties agrees that it shall take whatever action or
actions as are deemed by counsel to any party hereto to be reasonably necessary,
advisable or convenient from time to time to effectuate the provisions or intent
of this agreement, and to that end, each party agrees that it will execute,
acknowledge and deliver any further instruments or documents as give force and
effect to this letter agreement or any of the provisions hereof, or to carry out
the intent of this letter agreement or any of the provisions hereof. Related
Capital Company agrees that it shall, and shall cause its affiliates to, take
such action as may be necessary to effectuate the provisions or intent of this
letter agreement. Furthermore, Related Capital Company agrees to (i) effect the
transfer to Everest of any Option Securities on the books and records of Liberty
III and any Additional Partnership to Everest contemporaneously with effecting
any such transfer to Lehigh on such books and records and (ii) consistent with
past practice and subject to the advice of legal counsel that the requested
transfer will result in the subject partnership being treated as a
"publicly-traded partnership" for federal income tax purposes, promptly effect
all other transfers to Everest of the securities of Liberty III and any
Additional Partnership permitted by the terms of this letter agreement.
Remedies
It is understood and agreed that monetary damages would be an
inadequate remedy for violation of this agreement, and in the case of an actual
breach by a party of the provisions hereof, any one or more of the other parties
shall be entitled to relief by way of injunction, specific performance or other
equitable relief. The prevailing party in any dispute arising out of this letter
agreement shall, in addition to any monetary damages or equitable relief, be
entitled to recover from the other party, the prevailing party's attorney's fees
and expenses (including the time of personnel employed by Lehigh or Everest)
incurred in connection with such dispute.
Notices
Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, sent by facsimile
transmission or sent by reputable overnight courier, postage or other charges
prepaid. Any such notice shall be deemed given when so delivered personally, or
by facsimile transmission or, if sent by overnight courier, one day after
delivery to the courier, as follows:
If to Lehigh, to:
Lehigh Tax Credit Partners L.L.C.
c/o Related Capital Company
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Everest, to:
Everest Properties
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Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may designate another address or person for receipt of
notices hereunder by notice given in accordance with this section to the other
party.
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