INDEPENDENCE TAX CREDIT PLUS X.X. XX
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
November 7, 1997
Personal and Confidential
-------------------------
Related Independence Associates L.P.
Lehigh Tax Credit Partners L.L.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
As you requested, the purpose of this letter is to set forth our
understanding with regard to any proposed acquisition of beneficial assignment
certificates ("BACs") of Independence Tax Credit Plus X.X. XX, a Delaware
limited partnership (the "Partnership"), from holders of BACs (each a "BACs
holder" and collectively, "BACs holders") by Related Independence Associates
L.P. ("RIA"), Lehigh Tax Credit Partners L.L.C. ("Lehigh") or any person who is
their Affiliate (as defined below) (collectively, "you").
In response to your proposal to commence a tender offer for BACs and in
consideration of the agreements set forth in this letter agreement, the
Partnership agrees to mail your tender offer materials, at your expense, subject
to the terms set forth below and whether or not such tender offer is subject to
the provisions of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Nothing in this letter agreement shall be construed as requiring the
Partnership to provide you with a current list of the names and addresses of the
BACs holders. The Partnership will not be obligated to mail your tender offer
materials until it has received from you an amount of cash equal to $10,000,
representing the estimated cost of such mailing together with the Partnership's
other expenses, including, without limitation, reasonable attorney fees.
You represent and warrant that on the date hereof you beneficially own
not more than eighty five (85) BACs. You also agree that prior to the tenth
anniversary of the date of this letter agreement, neither you nor any person who
is your Affiliate (as defined under Rule 405 of the Securities Act of 1933, as
amended) will, without the prior written consent of the Partnership, which may
be withheld for any reason, directly or indirectly, (i) 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 the Partnership, (ii) form, join or otherwise
participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) with respect to any voting securities of the Partnership, except that those
Affiliates bound by this letter agreement will not be deemed to have violated
this letter agreement and formed a "group" solely by acting in accordance with
this letter agreement, (iii) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of this letter
agreement or (iv) loan money to, advise, assist or encourage any person in
connection with any action inconsistent with the terms of this letter agreement.
Notwithstanding the foregoing restrictions, nothing in this letter agreement
shall apply to, govern, restrict or limit any sales, purchases, transfers or
assignments of interests in Lehigh.
You hereby represent, warrant and covenant to the Partnership that any
tender offer to purchase BACs commenced by you will be conducted in compliance
with Section 14(e) (misleading statements), Rule 14d-7 (additional withdrawal
rights), Rule 14d-8 (pro rata requirements), Rule 14e-1 (unlawful tender offer
practices) and Rule 14e-3 (non-public information) of the Exchange Act,
notwithstanding that such tender offer may be for less than 5.0% of the
outstanding BACs.
You understand that the general partner of the Partnership may consider
from time to time selling all or substantially all of the assets of the
Partnership or entering into any other transaction determined by the general
partner to be in the best interests of the BACs holders and the Partnership. The
result of any such transaction, if approved by a majority vote of the BACs
holders, might be the dissolution and liquidation of the Partnership in
accordance with the partnership agreement. Accordingly, in order to avoid
disrupting any possible sale of all or substantially all of the Partnership's
assets or any other transaction determined by the general partner to be in the
best interests of the BACs holders and the Partnership and any required vote of
BACs holders, you agree that, prior to the ten-year anniversary of the date of
this letter agreement, all BACs obtained by you pursuant to any means will be
voted by you on all issues in the same manner as by the majority of all other
BACs holders who vote on such proposal. Notwithstanding the foregoing, you may
vote all BACs in the manner you determine, in your sole and absolute discretion,
on proposals (i) concerning the removal of XXX as general partner of the
Partnership or (ii) seeking to reduce any fees, profits, distributions or
allocations attributable to RIA or its Affiliates.
If at any time during such ten year period you (excluding your
affiliate which serves as the general partner of the Partnership while acting in
its capacity as general partner) are contacted in writing by any third party
concerning participation
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in any transaction involving the assets, businesses or securities of the
Partnership or involving any action inconsistent with the terms of this letter
agreement, you will promptly forward a copy of such writing to the Partnership
and you may inform such third party that this letter agreement requires you to
so notify the Partnership, provided, however, this paragraph shall not apply to
any transaction or proposed transaction involving all or substantially all of
the assets, businesses or securities of Related Capital Company and/or its
Affiliates (other than the Partnership and RIA).
Nothing in this letter agreement shall apply to, govern, restrict or
limit any sales, purchases, transfers or assignments of interests in Lehigh.
Notwithstanding the immediately preceding sentence, Lehigh shall remain bound by
this letter agreement notwithstanding that any interests in Lehigh have been
sold, purchased, transferred or assigned.
Lehigh, RIA and Related Capital Company agree to indemnify and hold
harmless, to the fullest extent permitted by law, the Partnership, Independence
SLP L.P., and each of their partners, directors, officers, employees,
representatives and agents (the "Indemnified Parties") against any losses,
claims, damages, liabilities, costs, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Indemnified Party to the fullest extent
permitted by law), judgments, fines and amounts (collectively, "Damages") paid
in connection with any threatened or actual claim, action, suit, proceeding or
investigation which arises out of or is the result of a breach of this letter
agreement, any tender offer commenced by you (regardless of whether such tender
offer is subject to the provisions of the Exchange Act) or the actual or
proposed acquisition of BACs by you by any other means; provided, however, that
if such claim, action, suit, proceeding or investigation is threatened but not
actual, your obligation to indemnify the Indemnified Parties shall apply only if
such threat is in writing and only with respect to any legal fees incurred in
connection with such threat. If such threat becomes an actual claim, action,
suit, proceeding or investigation, you shall then be responsible for the full
indemnification provided for in this paragraph. If an Indemnified Party intends
to seek indemnification pursuant to this paragraph, it shall promptly notify you
of such claim, in writing, describing such claim in reasonable detail; provided,
that the failure to provide such notice shall not affect your obligations herein
unless you are materially prejudiced by the failure to provide such notice.
Counsel for the Indemnified Party shall be chosen at your discretion and shall
be directed by you. We both agree that you will be materially prejudiced if, due
to the failure of an Indemnified Party to provide the notice required above, you
were not given the opportunity to obtain the counsel of your choice or
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direct such counsel. You may participate at your own expense in the defense of
any such action; provided, that counsel for the Indemnified Party shall not
(except with the consent of the Indemnified Party) also serve as your counsel.
You shall not, without first obtaining a general release from liability for the
Indemnified Parties in a form satisfactory to such Indemnified Parties, settle
or compromise or consent to the entry of any judgment with respect to any
threatened or actual claim, action, suit, proceeding or investigation involving
an Indemnified Party which seeks indemnity under this paragraph. If the
indemnification provided in this paragraph is for any reason unavailable to or
insufficient to hold harmless an Indemnified Party in respect of any Damages
referred to above, then you and each party seeking indemnification shall
contribute to the aggregate amount of such Damages incurred by such Indemnified
Party in such proportion as is appropriate to reflect the relative benefits
received by each party from the act which gives rise to the indemnification
claim. You agree that the amount of such economic benefit received by each
Indemnified Party shall be $1 and the amount of such economic benefit received
by you shall be computed by multiplying your per BAC offer price by the total
number of BACs which were sought in your tender offer. Both you and the
Indemnified Parties each hereby agree to cooperate fully in all aspects of any
investigation, defense, pre-trial activities, trial, compromise, settlement or
discharge of any claim in respect of which indemnity is sought pursuant to this
paragraph, including, but not limited to, by providing the other party
reasonable access upon reasonable notice to employees and officers and other
information during reasonable business hours. Nothing in this paragraph is
intended to limit your ability to obtain indemnification from the Partnership if
such indemnification is available to you pursuant to the Partnership's
partnership agreement and applicable law, provided, however, that your
obligations herein shall not be affected by your ability or inability to obtain
such indemnification. We each hereby agree that the provisions of this paragraph
shall have no effect on any other partnership which you or any of our respective
Affiliates may be a partner.
Notwithstanding the immediately preceding paragraph, we acknowledge
that you may engage a third party lender(s) to finance your proposed acquisition
of BACs. We hereby acknowledge and agree for the benefit of such third party
lender(s) that the indemnification provisions in the immediately preceding
paragraph are not intended to apply to or obligate, and in no event shall be
binding upon, such third party lender(s) or any of its assigns or successors in
interest to any of the BACs acquired by you.
We each hereby acknowledge that we are aware, and that we will advise
our respective Affiliates, of our respective responsibilities under the
securities laws. We each agree that the other of us or our respective
Affiliates, as the case may be,
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shall be entitled to equitable relief, including injunctive relief and specific
performance, in the event of any breach of the provisions of this letter
agreement, in addition to all other remedies available at law or in equity.
In case any provision in or obligation under this letter agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
This letter agreement shall be governed by the laws of the State of New
York without giving effect to principles of conflicts of law thereof. This
letter agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which together constitute one and the same instrument.
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If you agree with the foregoing, please sign and return two copies of
this letter agreement, which will constitute our agreement with respect to the
subject matter of this letter agreement.
Very truly yours,
INDEPENDENCE TAX CREDIT PLUS X.X. XX
By: Related Independence Associates
L.P., its general partner
By: Related Independence Associates
Inc., its general partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Confirmed and agreed to as of
the date first above written
LEHIGH TAX CREDIT PARTNERS L.L.C.
By: Lehigh Tax Credit Partners, Inc.,
its managing member
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RELATED INDEPENDENCE ASSOCIATES L.P.
By: Related Independence Associates Inc.,
its general partner
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
