SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
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LIBERTY TAX CREDIT PLUS III L.P.
(Name of Subject Company)
LEHIGH TAX CREDIT PARTNERS L.L.C.
(Bidder)
BENEFICIAL ASSIGNMENT CERTIFICATES
(Title of Class
of Securities)
531280 30 3
(CUSIP Number of Class
of Securities)
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J. Michael Fried
c/o Related Capital Company
625 Madison Avenue
New York, NY 10022
Copies to:
Peter M. Fass
Battle Fowler LLP
75 East 55th Street
New York, NY 10022
(212) 856-7000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
Calculation of Filing Fee
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Transaction Amount of
Valuation* Filing Fee
- ------------------------------ ----------------------------
$10,325,000 $2,065
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*For purposes of calculating the filing fee only. This amount
assumes the purchase of 17,500 Beneficial Assignment Certificates (representing
assignments of limited partnership interests) ("BACs") of the subject company
for $590 per BAC in cash.
{ x } 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 date of its filing.
Amount previously paid: $2,058.70
Form or registration no.: Schedule 14D-1
Filing party: Lehigh Tax Credit Partners L.L.C.
Date filed: April 10, 1997
(Continued on following pages)
(Page 1 of 7 pages)
<PAGE>
Cusip No.: 531280 30 3 14D-1 Page 2 of 7
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
LEHIGH TAX CREDIT PARTNERS L.L.C.
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2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) { }
(b) {X}
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF; BK
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5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(e) or 2(f)
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--
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
95 Beneficial Assignment Certificates (representing assignments
of limited partnership interests)
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8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
| |
--
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9. Percent of Class Represented by Amount in Row (7)
Less than 1%
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10. Type of Reporting Person (See Instructions)
OO
<PAGE>
Cusip No.: 531280 30 3 14D-1 Page 3 of 7
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
LEHIGH TAX CREDIT PARTNERS, INC.
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2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) { }
(b) {X}
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF; BK
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5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(e) or 2(f)
| |
--
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
95 Beneficial Assignment Certificates (representing assignments
of limited partnership interests)
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8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
| |
--
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9. Percent of Class Represented by Amount in Row (7)
Less than 1%
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10. Type of Reporting Person (See Instructions)
CO
<PAGE>
AMENDMENT NO. 1 TO SCHEDULE 14D-1
This Amendment No. 1 amends the Tender Offer Statement on Schedule
14D-1 filed with the Securities and Exchange Commission on April 10, 1997 by
Lehigh Tax Credit Partners L.L.C., a Delaware limited liability company ("the
Purchaser"), relating to the tender offer by the Purchaser to purchase up to
17,500 issued and outstanding Beneficial Assignment Certificates ("BACs")
representing assignments of limited partnership interests ("Limited Partnership
Interests") in Liberty Tax Credit Plus III L.P., a Delaware limited partnership
(the "Partnership"), to include the information set forth below. Terms not
otherwise defined herein shall have the meaning ascribed to them in the Schedule
14D-1 and the Offer to Purchase.
Item 1. Security and Subject Company.
Item 1(b) is hereby supplemented and amended as follows:
The information set forth in the Introduction to the Supplement to
the Offer to Purchase, a copy of which is attached hereto as Exhibit (a)(4) (the
"Supplement"), is incorporated herein in its entirety by reference.
Item 3. Past Contacts, Transactions or Negotiations With the Subject
Company.
Item 3(b) is hereby supplemented and amended as follows:
The information set forth in Section 11 ("Background of the Offer")
of the Supplement is incorporated herein in its entirety by reference.
Item 4. Source and Amount of Funds or Other Consideration.
Item 4(a) is hereby amended as follows:
The information set forth in Section 12 ("Source of Funds") of the
Supplement is incorporated herein in its entirety by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
Item 7 is hereby amended as follows:
The information set forth in Section 11 ("Background of the Offer")
of the Supplement is incorporated herein in its entirety by reference.
Item 10. Additional Information.
Items 10(e) and (f) are hereby supplemented and amended as follows:
The information set forth in the Supplement, a copy of which is
attached hereto as Exhibit (a)(4), is incorporated herein in its entirety by
reference.
4
<PAGE>
Item 11. Material to be Filed as Exhibits.
(a)(4) Supplement to Offer to Purchase dated April 24,
1997.
(a)(5) Letter of Transmittal.
(c)(5) Letter Agreement dated April 23, 1997 among Lehigh
Tax Credit Partners L.L.C. and Everest Properties
(the "Everest Settlement Agreement").
5
<PAGE>
SIGNATURES
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 24, 1997
LEHIGH TAX CREDIT PARTNERS L.L.C.
By: Lehigh Tax Credit Partners,
Inc., its managing member
By: /s/ Alan P. Hirmes
----------------------------
Name: Alan P. Hirmes
Title: Vice President
LEHIGH TAX CREDIT PARTNERS, INC.
By: /s/ Alan P. Hirmes
---------------------------------
Name: Alan P. Hirmes
Title: Vice President
6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. TITLE
- ------- -----
(a)(4) Supplement to Offer to Purchase dated April 24, 1997.
(a)(5) Letter of Transmittal
(c)(5) Letter Agreement dated April 23, 1997 among Lehigh
Tax Credit Partners L.L.C. and Everest Properties (the
"Everest Settlement Agreement").
7
SUPPLEMENT TO THE
OFFER TO PURCHASE FOR CASH
UP TO 17,500
BENEFICIAL ASSIGNMENT CERTIFICATES
in
LIBERTY TAX CREDIT PLUS III L.P.
for
$590 NET PER BAC IN CASH
by
LEHIGH TAX CREDIT PARTNERS L.L.C.
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MAY 8, 1997, UNLESS EXTENDED.
The Purchaser hereby supplements and amends its offer to purchase up to
17,500 of the issued and outstanding Beneficial Assignment Certificates ("BACs")
in Liberty Tax Credit Plus III L.P., upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 10, 1997, this
Supplement and the related Letter of Transmittal, as each may be amended from
time to time. Capitalized terms used but not otherwise defined in this
Supplement shall have the meanings ascribed to them in the Offer to Purchase.
INTRODUCTION
The "Introduction" to the Offer to Purchase is hereby supplemented and
amended as follows:
The Purchaser hereby amends the Offer to increase the Purchase Price to
$590 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 and the
related Letter of Transmittal, and this Supplement, as each may be supplemented
and amended from time to time. The Purchase Price will be automatically reduced
by $10 per BAC for each month (or part of a month) between May 31, 1997 and the
date of transfer for BACs transferred after May 31, 1997.
-------------------------
THE PURCHASE PRICE HAS BEEN INCREASED TO $590. BACs HOLDERS WHO HAVE ALREADY
TENDERED THEIR BACS TO THE PURCHASER WILL AUTOMATICALLY RECEIVE THE INCREASED
PURCHASE PRICE WITHOUT TAKING ANY FURTHER ACTION.
-------------------------
THE TENDER OFFER
Section 11. Background of the Offer.
Section 11 of the Offer to Purchase is hereby supplemented and amended as
follows:
The Purchaser commenced the Offer on April 10, 1997. By letter dated April
15, 1997, counsel for Everest contacted counsel for the Partnership and
disclosed Everest's intention to commence an offer to purchase BACs at a price
higher than $588.20 per BAC. Additionally, on April 15, 1997, Everest commenced
an action (captioned Everest Properties, Inc. v. Liberty Tax Credit Plus III
L.P., Related Credit Properties III L.P., Lehigh Tax Credit Partners L.L.C. et
al. (C.A. No. 15660)) seeking a temporary restraining order (the "TRO Action")
enjoining the Offer until the earlier of (i) Everest obtaining the list of BACs
holders (the "List") in order to commence its competing offer and (ii)
completion of the pending litigation in Delaware Chancery Court to obtain the
List (captioned Everest Properties, Inc. v. Liberty Tax Credit Plus III L.P., et
al. (C.A. No. 15531)). 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.
On April 16, 1997, counsel for the Partnership wrote to counsel for Everest
and reiterated the Partnership's willingness to make the List available to
Everest provided that Everest complied with the same terms and conditions
<PAGE>
as agreed to by the Purchaser and previously requested of Everest by the
Partnership. On or about such date, the Purchaser and Everest commenced
negotiations to settle the pending List litigation and the TRO Action. On April
18, 1997, Everest's motion in the TRO Action for a temporary restraining order
enjoining the Purchaser's Offer was denied by the Delaware court and the court
scheduled a hearing on a preliminary injunction for May 8, 1997.
Prior to filing this Supplement with the Commission, Everest and the
Purchaser entered into a settlement agreement (the "Everest Settlement
Agreement", a copy of which has been filed as Exhibit (c)(4) to Amendment No. 1
of the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the
Commission on April 24, 1997) pursuant to which, among other things, Everest was
granted an option to purchase up to 25% of the BACs tendered in the Offer on the
same terms and conditions as the Purchaser's purchase of BACs (the "Everest
Option") and Everest dismissed the litigation to obtain the List and the TRO
Action, without prejudice, and released the defendants in such actions
(including the Purchaser and the Partnership), subject to compliance by such
defendants with the terms of the Everest Settlement Agreement. Additionally,
Everest agreed that neither it nor any of its affiliates 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 the Partnership, except for (a) the BACs it acquires pursuant to the Everest
Option and (b) purchases of de minimis amounts of BACs in the secondary market
at the prevailing secondary market price (it being understood that the purchaser
of such de minimis amounts of BACs shall be bound by the terms and conditions of
the Everest Settlement 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 the 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 the
Partnership; (iv) 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; (v) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of the Everest
Settlement Agreement; or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the Everest
Settlement Agreement. The foregoing restrictions shall continue in full force
and effect forever, in perpetuity, with respect to the securities of the
Partnership if the Purchaser acquires BACs pursuant to the Offer and Everest (a)
exercises the Everest Option, (b) does not exercise the Everest Option or (c) is
deemed not to have exercised the Everest Option in accordance with the terms of
the Everest Settlement Agreement. The foregoing discussion of the Everest
Settlement Agreement is subject to and qualified in its entirety by reference to
such agreement, which agreement is incorporated herein by reference.
On April 24, 1997, the Purchaser amended the Offer to (a) disclose the
settlement with Everest, (b) describe the Everest Option and (c) in light of
Everest's disclosed intention of offering a price per BAC higher than previously
offered by the Purchaser, increase the Purchase Price to $590.
Section 12. Source of Funds.
Section 12 of the Offer to Purchase is hereby amended as follows:
The Purchaser expects that approximately $10,325,000 (exclusive of fees and
expenses) would be required to purchase all of the BACs sought pursuant to the
Offer, if tendered. Other than BACs purchased by Everest pursuant to the Everest
Option, if any, the Purchaser presently contemplates that it will borrow all of
such funds from one of its members, on substantially the same terms and
conditions that such member borrows such funds under an existing credit facility
it has available to it with the Lenders.
If Everest exercises the Everest Option for 25% of all of the BACs sought
pursuant to the Offer and 17,500 BACs are tendered and accepted for payment, the
Purchaser expects that approximately $2,581,250 (exclusive of fees and expenses)
of the aggregate purchase price would be paid by Everest. Everest has informed
the Purchaser that Everest will obtain all such funds from investment funds
Everest has raised from investors.
* * * *
For your convenience, we have included herewith another copy of the Letter
of Transmittal. For BACs to be validly tendered pursuant to the Offer, a Letter
of Transmittal, properly completed and duly executed, together with any other
documents required by the Letter of Transmittal, must be received by the
Information Agent/Depositary at its address on the back cover page of the Offer
to Purchase on or prior to the Expiration Date.
Lehigh Tax Credit Partners L.L.C.
April 24, 1997
LETTER OF TRANSMITTAL
TO
TENDER BENEFICIAL ASSIGNMENT CERTIFICATES
IN LIBERTY TAX CREDIT PLUS III L.P.
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 10, 1997, AS AMENDED,
BY LEHIGH TAX CREDIT PARTNERS L.L.C.
Number of Number of(1) Purchase Price(2)
BACs Owned BACs Tendered Per BACs
---------- ------------- -----------------
- -------------------------------- $590.00
- --------------------------------
- --------------------------------
- -------------------------------- (1) If no indication is marked in the
Number of BACs Tendered column, all
BACs issued to you will be deemed to
Please print your name and address have been tendered.
above, as they appear on the mailing
label pursuant to which you received (2) The Purchase Price will be
the Offer to Purchase and this Letter automatically reduced by $10 per BAC
of Transmittal. for each month (or part of a month)
between May 31, 1997 and the date of
transfer for BACs transferred after
May 31, 1997.
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, MAY 8, 1997 (THE "EXPIRATION DATE") UNLESS SUCH
OFFER IS EXTENDED.
The undersigned hereby tender(s) to Lehigh Tax Credit Partners L.L.C., a
Delaware limited liability company (the "Purchaser"), the number of Beneficial
Assignment Certificates ("BACs") representing assignments of limited partnership
interests in Liberty Tax Credit Plus III L.P., a Delaware limited partnership
(the "Partnership"), specified above, pursuant to the Purchaser's offer to
purchase up to 17,500 of the issued and outstanding BACs at a purchase price of
$590.00 per BAC, net to the seller in cash (the "Purchase Price"), without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 10, 1997 and the Supplement dated April 24, 1997
(the "Offer to Purchase") and this Letter of Transmittal (the "Letter of
Transmittal", which, together with the Offer to Purchase and any supplements,
modifications or amendments thereto, constitute the "Offer"), all as more fully
described in the Offer to Purchase. The Purchase Price will be automatically
reduced by $10 per BAC for each month (or part of a month) between May 31, 1997
and the date of transfer for BACs transferred after May 31, 1997. BACs HOLDERS
WHO TENDER THEIR BACS WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS OR
PARTNERSHIP TRANSFER FEES, WHICH COMMISSIONS AND FEES WILL BE BORNE BY THE
PURCHASER. Receipt of the Offer to Purchase is hereby acknowledged. Capitalized
terms used but not defined herein have the respective meanings ascribed to them
in the Offer to Purchase.
By executing and delivering this Letter of Transmittal, a tendering BACs
holder irrevocably appoints the Purchaser and the designees of the Purchaser and
each of them as such BACs holder's proxies, each with full power of
substitution, to the full extent of such BACs holder's rights with respect to
the BACs tendered by such BACs holder and accepted for payment by the Purchaser
(and with respect to any and all other BACs or other securities issued or
issuable in respect of such BACs on or after the date hereof). All such proxies
shall be considered irrevocable and coupled with an interest in the tendered
BACs. Such appointment will be effective when, and only to the extent that, the
Purchaser accepts such BACs for payment. Upon such acceptance for payment, all
prior proxies given by such BACs holder with respect to such BACs (and such
other BACs and securities) will be revoked without further action, and no
subsequent proxies may be given nor any subsequent written consents executed
(and, if given or executed, will not be deemed effective). The Purchaser and its
designees will, with respect to the BACs (and such other BACs and securities)
for which such appointment is effective, be empowered to exercise all voting and
other rights of such BACs holder as it in its sole discretion may deem proper
pursuant to the Partnership Agreement or otherwise. The Purchaser may assign
such proxy to any person with or without assigning the related BACs with respect
to which such proxy and/or power of attorney was granted. The Purchaser reserves
the right to require that, in order for BACs to be deemed validly tendered,
immediately upon the Purchaser's payment for such BACs, the Purchaser must be
able to exercise full voting rights with respect to such BACs and other
securities, including voting at any meeting of BACs holders.
By executing and delivering this Letter of Transmittal, a tendering BACs
holder also irrevocably constitutes and appoints the Purchaser and its designees
as the BACs holder's attorneys-in-fact, each with full power of substitution to
the extent of the BACs holder's rights with respect to the BACs tendered by the
BACs holder and accepted for payment by the Purchaser. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts the tendered
BACs for payment. Upon such acceptance for payment, all prior powers of attorney
granted by the BACs holder with respect to such BAC will, without further
action, be revoked, and no subsequent powers of attorney may be granted (and if
granted will not be effective). Pursuant to such appointment as
attorneys-in-fact, the Purchaser and its designees each will have the power,
among other things, (i) to seek to transfer ownership of such BACs on the books
and records of the Partnership maintained by the Assignor Limited Partner (and
execute and deliver any accompanying evidences of transfer and authenticity any
of them may deem necessary or appropriate in connection therewith, including,
without limitation, any documents or instruments required to be executed under
the Partnership Agreement or a "Transferor's (Seller's) Application for
Transfer" created by the NASD, if required), (ii) upon receipt by the
Information Agent/Depositary (as the tendering BACs holder's agent) of the
Purchase Price, to be allocated all Tax Credits and tax losses and to receive
any and all distributions made by the Partnership after the Expiration Date, and
to receive all benefits and otherwise exercise all rights of beneficial
ownership of such BACs in accordance with the terms of the Offer, (iii) to
execute and deliver to the Partnership, the General Partners and/or the Assignor
Limited Partner (as the case may be) a change of address form instructing the
Partnership to send any and all future distributions to which the Purchaser is
entitled pursuant to the terms of the Offer in respect of tendered BACs to the
address specified in such form, and (iv) to endorse any check payable to or upon
the order of such BACs holder representing a distribution, if any, to which the
Purchaser is entitled pursuant to the terms of the Offer, in each case on behalf
of the tendering BACs holder. If legal title to the BACs is held through an IRA
or KEOGH or similar account, the BACs holder understands that this Letter of
Transmittal must be signed by the custodian of such IRA or KEOGH account and the
BACs holder hereby authorizes and directs the custodian of such IRA or KEOGH to
confirm this Letter of Transmittal. This power of attorney shall not be affected
by the subsequent mental disability of the BACs holder, and the Purchaser shall
not be required to post bond in any nature in connection with this power of
attorney. The Purchaser may assign such power of attorney to any person with or
without assigning the related BACs with respect to which such power of attorney
was granted.
By executing and delivering this Letter of Transmittal, a tendering BACs
holder irrevocably assigns to the Purchaser and its assigns all of the, direct
and indirect, right, title and interest of such BACs holder in the Partnership
with respect to the BACs tendered and purchased pursuant to the Offer,
including, without limitation, such BACs holder's right, title and interest in
and to any and all Tax Credits and tax losses and any and all distributions made
by the Partnership after the Expiration Date in respect of the BACs tendered by
such BACs 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 the
Expiration Date. The Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to any third party, the right to purchase
BACs tendered pursuant to the Offer, together with its rights under the Letter
of Transmittal, but any such transfer or assignment will not relieve the
assigning party of its obligations under the Offer or prejudice the rights of
tendering BACs holders to receive payment for BACs validly tendered and accepted
for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (a) the undersigned is not a plan subject to Title I 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. [sec]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.
The undersigned recognizes that, if proration is required pursuant to the
terms of the Offer, the Purchaser will accept for payment from among those BACs
validly tendered on or prior to the Expiration Date and not properly withdrawn,
the maximum number of BACs permitted pursuant to the Offer on a pro rata basis,
with adjustments to avoid purchases which would violate the terms of the Offer,
based upon the number of BACs validly tendered prior to the Expiration Date and
not properly withdrawn.
The undersigned understands that a tender of BACs to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in Section 2 ("Proration; Acceptance
for Payment and Payment for BACs") and Section 14 ("Conditions of the Offer") of
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the BACs tendered hereby. In such event, the undersigned understands that
any Letter of Transmittal for BACs not accepted for payment will be destroyed by
the Purchaser. Except as stated in Section 4 ("Withdrawal Rights") of the Offer
to Purchase, this tender is irrevocable, provided BACs tendered pursuant to the
Offer may be withdrawn at any time prior to the Expiration Date. The undersigned
acknowledges that (i) upon acceptance of, and payment for, tendered BACs, the
undersigned shall no longer be entitled to any benefits as a BACs holder and
(ii) notwithstanding that the undersigned may retain a Beneficial Assignment
Certificate, such certificate shall not entitle the undersigned or any purported
transferees (other than the Purchaser) to any benefits as a BACs holder.
<PAGE>
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SIGNATURE BOX
- --------------------------------------------------------------------------------
Please sign exactly as you printed your X------------------------------------
name above. For joint owners, each joint (Signature of Owner) (Date)
owner must sign. All signatures must be
medallion guaranteed by an Eligible X------------------------------------
Institu tion. (See Instruction 2.) The Tax Identification Number of Owner
signatory hereto hereby certifies under
penalties of per jury the Taxpayer X------------------------------------
Identification Number (i.e., the (Signature of Co-Owner) (Date)
signatory's social security number)
furnished in the blank provided in this -------------------------------------
Signature Box and the statements in Box (Title)
A, Box B and, if applicable, Box C. The
undersigned hereby represents and Telephone (Day) ( )------------------
warrants for the benefit of the
Partnership and the Purchaser that the Telephone (Eve) ( )------------------
undersigned owns (or beneficially owns)
the BACs tendered hereby and has full Guarantee of Signature
power and authority to validly tender, (See Instruction 2):
sell, assign, transfer, convey and
deliver the BACs tendered hereby and Name of Eligible Institution:--------
that when the same are accepted for
payment by the Purchaser, the Purchaser Authorized Signature:----------------
will acquire good, marketable and
unencumbered title thereto, free and
clear of all liens, restrictions,
charges, encumbrances, conditional sales
agreements or other obligations relating
to the sale or transfer thereof, such
BACs will not be subject to any adverse
claims, the transfer and assignment
contemplated herein are in compliance
with all applicable laws and
regulations, and that upon such transfer
and assignment the undersigned will not
own less than 5 BACs. All authority
herein conferred or agreed to be
conferred shall survive the death or
incapacity of the undersigned and any
obligations of the undersigned shall be
binding upon the heirs, personal
representatives, successors and assigns
of the undersigned. Except as stated in
Section 4 ("Withdrawal Rights") of the
Offer to Purchase, this tender is irrevocable.
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TAX CERTIFICATES
- --------------------------------------------------------------------------------
BOX A
SUBSTITUTE FORM W-9
(See Instruction 3)
The person signing this Letter of Transmittal hereby certifies the following to
the Purchaser under penalties of perjury:
(i) The Taxpayer Identification Number ("TIN") furnished in the space provided
for that purpose in the Signature Box of this Letter of Transmittal is the
correct TIN of the BACs holder. If no TIN is provided above and this box - is
checked, the BACs holder has applied for a TIN. If the BACs holder has applied
for a TIN, a TIN has not been issued to the BACs holder, and either (a) the BACs
holder has mailed or delivered an application to receive a TIN to the
appropriate Internal Revenue Service ("IRS") Center or Social Security
Administration Office, or (b) the BACs holder intends to mail or deliver an
application in the near future, it is hereby understood that if the BACs holder
does not provide a TIN to the Purchaser within sixty (60) days, 31% of all
reportable payments made to the BACs holder thereafter will be withheld until a
TIN is provided to the Purchaser; and
(ii) Unless this box [_] is checked, the BACs holder is not subject to backup
withholding either because the BACs holder (a) is exempt from backup
withholding, (b) has not been notified by the IRS that the BACs holder is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) has been notified by the IRS that such BACs holder is no
longer subject to backup withholding.
Note: Place an "X" in the box in (ii) above, if you are unable to certify that
the BACs holder is not subject to backup withholding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX B
FIRPTA AFFIDAVIT
(See Instruction 3)
Under Section 1445(c)(5) of the Code and Treas. Reg. 1.1445-IIT(d), a transferee
must withhold tax equal to 10% of the amount realized with respect to certain
transfers of an interest in a partnership if 50% or more of the value of its
gross assets consists of U.S. real property interests and 90% or more of the
value of its gross assets consists of U.S. real property interests plus cash or
cash equivalents, and the holder of the partnership interest is a foreign
person. To inform the Purchaser that no withholding is required with respect to
the BACs holder's interest in the Partnership, the person signing this Letter of
Transmittal hereby certifies the following under penalties of perjury:
(i) Unless this box [_] is checked, the BACs holder, if an individual, is a U.S.
citizen or a resident alien for purposes of U.S. income taxation, and if other
than an individual, is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Code and Income Tax
Regulations);
(ii) the BACs holder's U.S. social security number (for individuals) or employer
identification number (for non-individuals) is correct as furnished in the blank
provided for that purpose on the back of this Letter of Transmittal; and
(iii) the BACs holder's home address (for individuals), or office address (for
non-individuals), is correctly printed (or corrected) on the back of this Letter
of Transmittal. If a corporation, the jurisdiction of incorporation is ________.
The person signing this Letter of Transmittal 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX C
SUBSTITUTE FORM W-9
(See Instruction 3)
By checking this box [_], the person signing this Letter of Transmittal hereby
certifies under penalties of perjury that the BACs holder is an "exempt foreign
person" for purposes of the backup withholding rules under U.S. federal income
tax laws, because the BACs holder:
(i) Is a nonresident alien or a foreign corporation, partnership, estate or
trust;
(ii) If an individual, has not been and plans not to be present in the U.S. for
a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business that has
effectively connected gains from transactions with a broker or barter exchange.
- --------------------------------------------------------------------------------
For BACs to be accepted for purchase, BACs holders should complete and sign this
Letter of Transmittal in the Signature Box and return it in the self-addressed,
postage-paid envelope enclosed, or by hand or overnight courier to: Denise
Bernstein, c/o Related Capital Company, 625 Madison Avenue, New York, NY 10022,
or by Facsimile to: (212) 593-5794. Delivery of this Letter of Transmittal or
any other required documents to an address other than the one set forth above or
transmission via facsimile other than as set forth above does not constitute
valid delivery.
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL AND BOXES A, B AND C ABOVE.
<PAGE>
INSTRUCTIONS FOR COMPLETING LETTER OF TRANSMITTAL
Forming Part of the Terms and Conditions of the Offer
- --------------------------------------------------------------------------------
FOR ASSISTANCE IN COMPLETING THE LETTER OF TRANSMITTAL, CALL:
DENISE BERNSTEIN, c/o RELATED CAPITAL COMPANY, AT (800) 600-6422 (ext. 2030)
- --------------------------------------------------------------------------------
1. Delivery of Letter of Transmittal. For convenience in responding to the
Offer, a self-addressed, postage-paid envelope had been enclosed with the
Offer to Purchase. However, to ensure receipt of the Letter of Transmittal,
it is suggested that you use an overnight courier or, if the Letter of
Transmittal is to be delivered by United States mail, that you use
certified or registered mail, return receipt requested.
To be effective, a duly completed and original of the signed Letter of
Transmittal must be received by the Information Agent/Depositary at the
address (or facsimile number) set forth below before the Expiration Date,
12:00 Midnight, New York City Time on Thursday, May 8, 1997, unless
extended. Letters of Transmittal which have been duly executed, but where
no indication is marked in the "Number of BACs Tendered" column, shall be
deemed to have tendered all BACs pursuant to the Offer. Tenders of less
than all BACs owned by a BACs holder that would result in such BACs holder
holding less than 5 BACs will not be accepted.
By Mail/Hand or Overnight Delivery: RELATED CAPITAL COMPANY
625 Madison Avenue
New York, New York 10022
Attention: Denise Bernstein
By Facsimile (see note below): (212) 593-5794
For Additional Information Call: (800) 600-6422 (ext. 2030)
THE METHOD OF DELIVERY OF THE LETTER OF THE TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING BACS HOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION
AGENT/DEPOSITARY. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
TIMELY DELIVERY. IF TENDERING BY FACSIMILE, PLEASE TRANSMIT BOTH THE FRONT AND
BACK OF THE LETTER OF TRANSMITTAL AND THE TAX CERTIFICATION PAGE AND MAIL THE
ORIGINAL COPIES OF SUCH PAGES TO THE INFORMATION AGENT/DEPOSITARY AT THE ADDRESS
LISTED ABOVE PRIOR TO THE EXPIRATION OF THE OFFER. ONLY ORIGINAL LETTERS OF
TRANSMITTAL WILL BE ACCEPTED FOR PURCHASE.
All tendering holders of BACs, by execution of this Letter of Transmittal or
facsimile hereof, waive any right to receive any notice of the acceptance of
their BACs for payment.
2. Signatures. All BACs holders must sign in the Signature Box on the back of
the Letter of Transmittal. If the BACs are held in the names of two or
more persons, all such persons must sign the Letter of Transmittal. When
signing as a general partner, corporate officer, attorney-in-fact,
executor, custodian, administrator or guardian, please give full title and
send proper evidence of authority satisfactory to the Purchaser with this
Letter of Transmittal. With respect to most trusts, the Partnership will
generally require only the named trustee to sign the Letter of
Transmittal. For BACs held in a custodial account for minors, only the
signature of the custodian will be required.
For IRA custodial accounts, the beneficial owner should return the
executed Letter of Transmittal to the Information Agent/Depositary as
specified in Instruction 1 herein. Such Letter of Transmittal will then be
forwarded by the Information Agent/Depositary to the custodian for
additional execution. Such Letter of Transmittal will not be considered
duly completed until after it has been executed by the custodian.
If any tendered BACs are registered in different names, it will be
necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certificates.
All signatures on the Letter of Transmittal 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. (each, an "Eligible Institution").
3. Documentation Requirements. In addition to information required to be
completed on the Letter of Transmittal, additional documentation may be
required by the Purchaser under certain circumstances including, but not
limited to those listed below. Questions on documentation should be
directed to Denise Bernstein, c/o Related Capital Company, at (800)
600-6422 (ext. 2030). ONLY ORIGINAL LETTERS OF TRANSMITTAL WILL BE
ACCEPTED. If tendering by fax, original copies should be sent so as to be
received on or before the Expiration Date.
Deceased Owner (Joint Tenant) Certified Copy of Death Certificate.
Deceased Owner (Others) Certified Copy of Death Certificate
(See also
Executor/Administrator/Guardian below).
Executor/Administrator/Guardian (i) Certified Copies of court
Appointment Documents for Executor
or Administrator dated within 60
days of the date of execution of
the Letter of Transmittal; OR
(ii) a copy of applicable provisions of
the Will (Title Page, Executor(s)'
powers, asset distribution); OR
(iii) Certified copy of Estate
distribution documents.
Attorney-in-Fact Current Power of Attorney.
Corporations/Partnerships Certified copy of Corporate
Resolution(s) (with raised corporate
seal), or other evidence of authority
to act. Partnerships should furnish
copy of Partnership Agreement.
Trust/Pension Plans Copy of cover page of the Trust or
Pension Plan, along with copy of the
section(s) setting forth names and
powers of Trustee(s) and any amendments
to such sections or appointment of
Successor Trustee(s).
All signatures must be medallion guaranteed.
(Continued on Back)
<PAGE>
4. U.S. Persons. A BACs holder who or which is a United States citizen OR a
resident alien individual, a domestic corporation, a domestic partnership,
a domestic trust or a domestic estate (collectively, "United States
Persons") as those terms are defined in the Code and Income Tax
Regulations, should follow the instructions below with respect to
certifying Boxes A and B (on the reverse side of the Letter of
Transmittal).
Taxpayer Identification Number. To avoid 31% federal income tax backup
withholding, the BACs holder must furnish his, her or its TIN in the blank
provided for that purpose in the Signature Box on the back of the Letter of
Transmittal and certify under penalties of perjury Box A, B and, if
applicable, Box C. In the case of an individual person, such person's
social security number is his or her TIN.
WHEN DETERMINING THE TIN TO BE FURNISHED, PLEASE REFER TO THE FOLLOWING
NOTE AS A GUIDELINE:
NOTE: Individual Accounts should reflect their own TIN. Joint Accounts
should reflect the TIN of the person whose name appears first. Trust
Accounts should reflect the TIN assigned to the Trust. Custodial
accounts for the benefit of minors should reflect the TIN of the
minor. Corporations or other business entities should reflect the TIN
assigned to that entity. If you need additional information, please
see the enclosed copy of the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
Substitute Form W-9--Box A.
(i) In order to avoid 31% federal income tax backup withholding, the BACs
holder must provide to the Purchaser in the blank provided for that purpose
in the Signature Box on the back of the Letter of Transmittal the BACs
holder's correct TIN and certify, under penalties of perjury, that such
BACs holder is not subject to such backup withholding. The TIN being
provided on the Substitute Form W-9 is that of the registered BACs holder
as indicated in the Signature Box on the back of the Letter of Transmittal.
If a correct TIN is not provided, penalties may be imposed by the IRS, in
addition to the BACs holder being subject to backup withholding. Certain
BACs holders (including, among others, all corporations) are not subject to
backup withholding. Backup withholding is not an additional tax. If
withholding results in an overpayment of taxes, a refund may be obtained
from the IRS.
(ii) DO NOT CHECK THE BOX IN BOX A, PART (ii), UNLESS YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
FIRPTA Affidavit-Box B. To avoid withholding of tax pursuant to Section
1445 of the Code, each BACs holder who or which is a United States Person
(as defined in Instruction 3 above) must certify, under penalties of
perjury, the BACs holder's TIN and address, and that the BACs holder is not
a foreign person. Tax withheld under Section 1445 of the Internal Revenue
Code is not an additional tax. If withholding results in an overpayment of
tax, a refund may be obtained from the IRS. CHECK THE BOX IN BOX B, PART
(ii) ONLY IF YOU ARE NOT A U.S. PERSON, AS DESCRIBED THEREIN.
5. Foreign Persons-Box C. In order for a BACs holder who is a foreign person
(i.e., not a United States Person as defined in Instruction 3 above) to
qualify as exempt from 31% backup withholding, such foreign BACs holder
must certify, under penalties of perjury, the statement in Box C of this
Letter of Transmittal attesting to that foreign person's status by checking
the box in such statement. UNLESS SUCH BOX IS CHECKED, SUCH FOREIGN PERSON
WILL BE SUBJECT TO 31% WITHHOLDING OF TAX UNDER SECTION 1445 OF THE CODE.
6. Conditional Tenders. No alternative, conditional or contingent tenders will
be accepted.
7. Validity of Letter of Transmittal. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of a Letter of
Transmittal will be determined by the Purchaser and such determination will
be final and binding. The Purchaser's interpretation of the terms and
conditions of the Offer (including these instructions for the Letter of
Transmittal) also will be final and binding. The Purchaser will have the
right to waive any irregularities or conditions as to the manner of
tendering. Any irregularities in connection with tenders must be cured
within such time as the Purchaser shall determine unless waived by them.
The Letter of Transmittal will not be valid unless and until any
irregularities have been cured or waived. Neither the Purchaser nor the
Information Agent/ Depositary is under any duty to give notification of
defects in a Letter of Transmittal and will incur no liability for failure
to give such notification.
8. Assignee Status. Assignees must provide documentation to the Information
Agent/Depositary which demonstrates, to the satisfaction of the Purchaser,
such person's status as an assignee.
9. Inadequate Space. If the space provided herein is inadequate, the numbers
of BACs and any other information should be listed on a separate schedule
attached hereto and separately signed on each page thereof in the same
manner as this Letter of Transmittal is signed.
Questions and requests for assistance may be directed to the Information
Agent/Depositary at its address and telephone number listed below. Additional
copies of the Offer to Purchase, the Letter of Transmittal and other tender
offer materials may be obtained from the Information Agent as set forth below,
and will be furnished promptly at the Purchaser's expense. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent/Depositary for the Offer is:
RELATED CAPITAL COMPANY
625 Madison Avenue
New York, New York 10022
Attention: Denise Bernstein
or
Call Toll-Free (800) 600-6422 (ext. 2030)
Exhibit (c)(5)
LEHIGH TAX CREDIT PARTNERS L.L.C.
625 MADISON AVENUE
NEW YORK, NEW YORK 10022
April 23, 1997
Everest Properties
3280 E. Foothill Boulevard
Suite 320
Pasadena, California 91107
Attention: W. Robert Kohorst
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.
<PAGE>
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/ Alan P. Hirmes
------------------------------------
Alan P. Hirmes, Vice President
LEHIGH TAX CREDIT PARTNERS, INC.
By: /s/ Alan P. Hirmes
------------------------------------
Alan P. Hirmes, Vice President
RELATED CAPITAL COMPANY
By: /s/ Alan P. Hirmes
-------------------------------------
Name: Alan P. Hirmes
Title: Senior Managing Director
ACCEPTED AND AGREED TO AS
OF THE DATE FIRST ABOVE WRITTEN:
EVEREST PROPERTIES, INC.
By: /s/ David I. Lesser
----------------------------
Name: David I. Lesser
Title: Executive Vice President
-2-
<PAGE>
EVEREST PROPERTIES II, LLC
By: /s/ David I. Lesser
----------------------------
Name: David I. Lesser
Title: Executive Vice President
EVEREST PROPERTIES, LLC
By: /s/ David I. Lesser
----------------------------
Name: David I. Lesser
Title: Executive Vice President
EVEREST TAX CREDIT INVESTORS, LLC
By: /s/ David I. Lesser
----------------------------
Name: David I. Lesser
Title: Executive Vice President
-3-
<PAGE>
EXHIBIT A
OPTION TO PURCHASE SECURITIES
Tender Offer(s)
I. Liberty Tax Credit Plus III L.P.
--------------------------------
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
-------------------------------------
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
<PAGE>
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).
-2-
<PAGE>
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
-3-
<PAGE>
(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
625 Madison Avenue
New York, New York 10022
Attention: Alan P. Hirmes
Telephone: (212) 421-5333
Telecopier: (212) 593-5794
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If to Everest, to:
Everest Properties
3280 E. Foothill Boulevard
Suite 320
Pasadena, California 91107
Attention: W. Robert Kohorst
Telephone: (818) 585-5920
Telecopier: (818) 585-5929
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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