SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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INDEPENDENCE TAX CREDIT PLUS L.P.
(Name of Subject Company)
INDEPENDENCE TAX CREDIT PLUS L.P.
(Name of Person(s) Filing Statement)
BENEFICIAL ASSIGNMENT CERTIFICATES
(Title of Class of Securities)
453780 10 8
(CUSIP Number of Class of Securities)
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J. Michael Fried
Related Independence Associates L.P.
625 Madison Avenue
New York, NY 10022
(212) 421-5333
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
Copy to:
Peter M. Fass, Esq.
Battle Fowler LLP
75 East 55th Street
New York, NY 10022
(212) 856-7000
<PAGE>
Item 1. Security and Subject Company.
The name of the subject company is Independence Tax Credit Plus L.P., a
Delaware limited partnership (the "Partnership"), which has its principal
executive offices at 625 Madison Avenue, New York, New York 10022. The general
partner of the Partnership is Related Independence Associates L.P. (the
"General Partner"), a Delaware corporation, which has its principal executive
offices at 625 Madison Avenue, New York, New York 10022. The title of the class
of equity securities to which this statement relates is the Partnership's
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership.
Item 2. Tender Offer of the Bidder.
This Schedule 14D-9 relates to the offer by Lehigh Tax Credit Partners
L.L.C. (the "Purchaser"), a Delaware limited liability company and an affiliate
of the General Partner, disclosed in a Tender Offer Statement on Schedule 14D-1
dated May 30, 1997 (the "Schedule 14D-1"), to purchase up to 19,197 issued and
outstanding BACs at a purchase price of $730 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 May 30, 1997 and the
related Letter of Transmittal, as each may be supplemented, modified or amended
from time to time (which collectively constitute the "Lehigh Offer" and are
contained within the Schedule 14D-1).
The address of the Purchaser's principal executive offices is 625 Madison
Avenue, New York, New York 10022.
Item 3. Identity and Background.
(a) The name and business address of the Partnership, which is the person
filing this statement, are set forth in Item 1 above.
(b)(1) The Partnership does not have any employees, directors or executive
officers. All decisions with respect to the management of the Partnership and
its affairs are made by the General Partner. Except as described below, there
are no material contracts, agreements, arrangements or understandings or any
actual or potential conflicts of interest between the General Partner or its
affiliates and the Partnership and its affiliates.
The General Partner and its affiliates have received or will receive
certain types of compensation, fees or other distributions in connection with
the operations of the Partnership. The arrangements for payment of compensation
and fees, as set forth in the Partnership's Amended and Restated Agreement of
Limited Partnership, dated as of September 16, 1991 (the "Partnership
Agreement"), the Partnership's prospectus and other publicly filed documents,
were not determined in arm's-length negotiations with the Partnership.
Pursuant to the Partnership Agreement, the General Partner is entitled to
a fee (the "Partnership Management Fee") for its services in connection with
the administration of the affairs of the Partnership (including, without
limitation, coordination of communications between the Partnership and BACs
holders and with the partnerships (the "Local Partnerships") in which the
Partnership has acquired a partnership interest). The Partnership Management
Fee is payable annually and is determined by the General Partner based on its
review of the Partnership's investments, up to a maximum of 0.5% of the
Partnership's Invested Assets (as defined below); provided, however, the
Partnership Management Fee is a minimum of $2,500 per $1 million of Invested
Assets up to Invested Assets of $20 million and $5,000 per $1 million of
Invested Assets above $20 million. "Invested Assets" means the purchase price
paid upon the acquisition by the Partnership of properties and interests in
Local Partnerships, including (i) the total of all fees and commissions paid in
connection with the selection or purchase by the Partnership or Local
Partnerships of properties or interests in Local Partnerships, and (ii) the
amount of all liens and mortgages on properties acquired by the Partnership.
For the nine months ended December 31, 1996 and the three years ended March 31,
1996, 1995 and 1994, the General Partner earned aggregate Partnership
Management Fees of $75,000, $685,165, $880,221 and $878,981, respectively.
According to the Partnership Agreement, the General Partner is also
entitled to receive a disposition fee (the "Disposition Fee") for services
rendered in connection with the sale of a property or the sale of the
Partnership's interest in a Local Partnership. Payment of such fee shall be
subordinated to the return to Limited Partners and BACs holders of their
capital contribution and other items as set forth in the Partnership Agreement.
Each Disposition Fee is equal to the lesser of one-half the competitive real
estate commission or 3% of the sale price in respect of any such sale
(including the principal amount of any mortgage loans and any related seller
financing with respect to a property to which such sale is subject). In no
event, however, shall the Disposition Fee and all
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other fees payable to the General Partner and any of its affiliates and any
unrelated parties arising out of any given sale exceed in the aggregate the
lesser of the competitive rate or 6% of the gross proceeds from such sale. For
the nine months ended December 31, 1996 and the three years ended March 31,
1996, 1995 and 1994, the General Partner did not earn any Disposition Fee.
Independence SLP L.P. ("Independence SLP") is an affiliate of the General
Partner. Independence SLP is entitled to receive up to $2,500 per year as an
annual fee (the "Annual Local Administrative Fee") from each Local Partnership
of which it is a special limited partner; provided, however, the sum of the
aggregate Annual Local Administrative Fee and the Partnership Management Fee
for any year shall not exceed 0.5% of Invested Assets. Independence SLP, as
special limited partner of the Local Partnerships, earned an aggregate Annual
Local Administrative Fee of $54,000, $72,078, $58,893 and $54,400 from the
Local Partnerships for the nine months ended December 31, 1996 and the three
years ended March 31, 1996, 1995 and 1994, respectively.
Affiliates of the Local Partnerships' general partners incurred property
management fees, of which, for the nine months ended December 31, 1996 and the
three years ended March 31, 1996, 1995 and 1994, $38,363, $65,121, $67,467 and
$28,595, respectively, were incurred to an affiliate of the General Partner.
The General Partner and the officers and directors of its general partner
are each entitled to indemnification under certain circumstances from the
Partnership pursuant to provisions of the Partnership Agreement. Generally, the
General Partner is also entitled to reimbursement of expenditures made on
behalf of the Partnership. An affiliate of the General Partner performs asset
monitoring services for the Partnership. These services include site visits and
evaluations of the Local Partnerships' performance. For the nine months ended
December 31, 1996 and the three years ended March 31, 1996, 1995 and 1994, the
Partnership incurred, in the aggregate, $77,581, $84,912, $106,374 and
$136,640, respectively, to the General Partner and its affiliates as
reimbursement of expenditures and asset monitoring services performed by the
General Partner's affiliate on behalf of the Partnership.
In addition, under the terms of the Partnership Agreement, upon the
removal of the General Partner by the limited partners of the Partnership (the
"Limited Partners") or upon the occurrence of a "Removal Event", as defined
below, the General Partner may be entitled to receive a fee, which will be
payable with interest over a five-year period and may be secured by the assets
of the Partnership. The amount of such fee shall be the fair market value of
the removed General Partner's interest, which amount could be substantial. The
Partnership Agreement deems a "Removal Event" to have occurred if the business
of the Partnership is continued after the bankruptcy, death, adjudication of
incompetence or removal of a general partner (subject to certain exceptions
pursuant to the Partnership Agreement). A majority in interest of the Limited
Partners may approve the removal of any general partner without the concurrence
of any general partner at a meeting of the Partnership.
(2) Except as described below, there are no material contracts,
agreements, arrangements or understandings or any actual or potential conflicts
of interest between the General Partner or its affiliates and the Purchaser,
its executive officers, directors or affiliates. The Purchaser is an affiliate
of the General Partner. The executive officers and directors of the Purchaser
also serve as executive officers and directors of the general partner of the
General Partner. Therefore, the Purchaser and the General Partner, subject to
its fiduciary duties, may have a conflict of interest with respect to certain
matters involving the Partnership, its partners and its investors.
The Partnership, the Purchaser and the General Partner entered into a
letter agreement, dated May 28, 1997 (the "Standstill Agreement") (a copy of
which has been filed as Exhibit (c)(1) hereto), pursuant to which the Purchaser
agreed that, prior to May 28, 2007 (the "Standstill Expiration Date"), it will
not and it will cause certain affiliates not to (i) seek to 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 Securities Exchange
Act of 1934, as amended) with respect to any voting securities of the
Partnership, except that those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (iii) disclose in writing to any
third party any intention, plan or arrangement inconsistent with the terms of
the Standstill Agreement, or (iv) loan money to, advise, assist or encourage
any person in connection with any action inconsistent with the terms of the
Standstill Agreement. By the terms of the Standstill Agreement, the Purchaser
has also agreed to vote its BACs in the same manner as a majority of all voting
BACs holders; provided, however, the Purchaser is entitled to vote its BACs as
it determines with regard to any proposal (i) to remove the General Partner or
(ii) concerning the reduction of any fees, profits, distributions
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or allocations for the benefit of the General Partner or its affiliates. The
Purchaser, the General Partner and Related Capital Company also agreed to
indemnify and hold harmless the Partnership, Independence SLP and certain
associated parties against any claims or damages arising from a breach of the
Standstill Agreement or from a tender offer or acquisition of BACs by the
Purchaser or its affiliates. The foregoing discussion of the Standstill
Agreement is subject to and qualified in its entirety by reference to such
agreement, which is incorporated herein by reference.
The Partnership has been informed that the Purchaser expects to borrow all
of the funds to purchase BACs pursuant to the Lehigh Offer 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 First National Bank of Boston and Wells Fargo Bank, National
Association (the "Lenders"). The existing credit agreement is among the Lenders
and RCC Credit Facility, L.L.C., Related Capital Company and The Related
Companies, L.P. All of the BACs tendered pursuant to the Lehigh Offer (other
than BACs purchased by Everest Properties, Inc. or its affiliates ("Everest")
pursuant to the Everest Option (as defined in Item 8 below)) and all of the
membership interests in the Purchaser will be pledged to the Lenders to
collateralize the loan. Additionally, Related Capital Company will guarantee
all amounts borrowed by the Purchaser under the credit facility.
Item 4. The Solicitation or Recommendation.
(a) Following receipt of the terms of the Lehigh Offer, the General
Partner reviewed and considered the Lehigh Offer. The General Partner is
expressing no opinion and is remaining neutral with respect to the Lehigh
Offer.
(b) Although the General Partner is not making a recommendation with
respect to the Lehigh Offer, the General Partner believes that BACs holders
should consider the following factors in making their own decisions of whether
to accept or reject the Lehigh Offer:
o The Lehigh Offer will provide BACs holders with an immediate
opportunity to liquidate their investment in the Partnership.
o As stated by the Purchaser in the Lehigh Offer, there may be a
conflict of interest between the Purchaser's desire to purchase
the BACs at a low price and a BACs holder's desire to sell its
BACs at a high price. Therefore, BACs holders might receive
greater value if they hold their BACs, rather than tender.
Furthermore, BACs holders should be aware that a secondary market
exists for the BACs.
o BACs holders will no longer receive the tax credits and/or tax
losses from the BACs should they tender pursuant to the Lehigh
Offer, nor will tendering BACs holders receive any future
distributions from the Partnership (including distributions from
any refinancing or sale). The Partnership has made no
distributions to BACs holders in the past, and there can be no
assurance as to the timing, amount or occurrence of any future
distributions.
o The Purchase Price exceeds the weighted average secondary market
price for the two months ended March 31, 1997. Additionally,
based on certain assumptions therein, the Purchaser states in the
Lehigh Offer that the present value of the potential aggregate
benefits to a BACs holder who tenders to the Purchaser exceeds
the Purchaser's estimate of the present value of the potential
aggregate benefits if a BACs holder does not tender.
Item 5. Persons Retained, Employed or to Be Compensated.
Neither the Partnership nor any person acting on its behalf has employed,
retained or compensated, or intends to employ, retain or compensate, any person
to make solicitations or recommendations to BACs holders on its behalf
concerning the Lehigh Offer.
Item 6. Recent Transactions and Intent With Respect to Securities.
(a) Neither the Partnership nor the General Partner has effected any
transactions in the BACs during the past 60 days. The General Partner is not
aware of any transactions in the BACs during the past 60 days by any of its
executive officers, directors, affiliates or subsidiaries. The following table
sets forth purchases of 121 BACs made by the Purchaser, an affiliate of the
General Partner, on the dates indicated for the amounts and purchase prices set
forth below:
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Number of
Date of Purchase BACs Purchased Purchase Price per BAC
- ---------------------- ---------------- -----------------------
March 1, 1997 ...... 67 $674.50
March 1, 1997 ...... 10 $674.50
March 1, 1997 ...... 44 $674.50
(b) Neither the General Partner nor, to the knowledge of the General
Partner, any of its executive officers, directors, affiliates or subsidiaries
own any BACs and, therefore, cannot tender BACs to the Purchaser pursuant to
the Lehigh Offer.
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) No negotiation is being undertaken or is underway by the Partnership
in response to the Lehigh Offer which relates to or would result in: (1) an
extraordinary transaction such as a merger or reorganization, involving the
Partnership or any subsidiary of the Partnership; (2) a purchase, sale or
transfer of a material amount of assets by the Partnership or any subsidiary;
(3) except as set forth in Item 8 below, a tender offer for or other
acquisition of securities by or of the Partnership; or (4) any material change
in the present capitalization or dividend policy of the Partnership.
(b) Except as described above or in Item 3(b), there are no transactions,
board resolutions, agreements in principle or signed contracts in response to
the Lehigh Offer which relate to or would result in one or more of the matters
referred to in Item 7(a).
Item 8. Additional Information to Be Furnished.
The General Partner has in the past received from third parties requests
that such parties be provided with a list of the Partnership's BACs holders
(the "List"). Such a List would only be provided by the General Partner to
parties in cases where the General Partner has been satisfied that such List
has been properly requested by a person entitled by the Partnership Agreement
and applicable law to receive such a List, the party requesting the List has
demonstrated that such party has a proper partnership business purpose in
connection with such request and the General Partner has been satisfied that
the Partnership and the BACs holders have obtained appropriate protections from
such party with respect to the use of such List. The General Partner has sought
such protections to ensure, among other things, compliance with federal
securities tender offer rules (i.e., full and adequate disclosure, withdrawal
rights and rights to proration) if the List will be used to conduct a tender
offer and compliance with certain tax provisions to protect against possible
adverse tax consequences to the Partnership.
In March 1997, Credit d'Impots ("Credit"), a BACs holder, requested a copy
of the List. The Partnership's counsel communicated with Credit respecting the
purposes of Credit's request and the terms and conditions under which the
Partnership would make the List available to Credit. The purposes stated by
Credit for its request for the List changed over time and in its last
communication with the Partnership in April 1997, Credit stated that it wanted
to conduct a tender offer for BACs. There can be no assurance, however, that
Credit will commence any offer for BACs or what the terms of any such offer
would be. If Credit commences an offer, the Partnership will duly consider it
and respond in accordance with applicable securities laws and its fiduciary
duties.
Item 9. Material to be Filed as Exhibits.
(a)(1) Letter from Independence Tax Credit Plus L.P. to BACs holders, dated
June 13, 1997.
(b) None.
(c)(1) Letter Agreement, dated May 28, 1997, among Independence Tax Credit
Plus L.P., Lehigh Tax Credit Partners L.L.C. and Related Independence
Associates L.P.
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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: June 13, 1997
INDEPENDENCE TAX CREDIT PLUS L.P.
By: RELATED INDEPENDENCE ASSOCIATES L.P.
By: Related Independence
Associates Inc., its general partner
By: /s/ Alan P. Hirmes
------------------------------------
Name: Alan P. Hirmes
Title: Vice President
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EXHIBIT INDEX
EXHIBIT
NO. TITLE
- ------- -----
(a)(1) Letter from Independence Tax Credit Plus L.P. to BACs holders,
dated June 13, 1997.
(c)(1) Letter Agreement, dated May 28, 1997, among Independence Tax
Credit Plus L.P., Lehigh Tax Credit Partners L.L.C. and
Related Independence Associates L.P.
INDEPENDENCE TAX CREDIT PLUS L.P.
625 Madison Avenue
New York, New York 10022
June 13, 1997
Dear BACs holder:
As you are by now aware, Lehigh Tax Credit Partners L.L.C., a
Delaware limited liability company (the "Purchaser"), has made an offer (the
"Lehigh Offer") to purchase Beneficial Assignment Certificates representing
assignments of limited partnership interests ("BACs") of Independence Tax
Credit Plus L.P. (the "Partnership") for a cash purchase price of $730 per
BAC. THE PURCHASER IS AN AFFILIATE OF RELATED INDEPENDENCE ASSOCIATES L.P.,
THE GENERAL PARTNER OF THE PARTNERSHIP (THE "GENERAL PARTNER").
The General Partner is expressing no opinion and is remaining
neutral with respect to the Lehigh Offer. Although the General Partner is not
making a recommendation with respect to the Lehigh Offer, the General Partner
believes that BACs holders should consider the following factors in making
their own decision of whether to accept or reject the Lehigh Offer:
o The Lehigh Offer will provide BACs holders with an immediate
opportunity to liquidate their investment in the Partnership.
o As stated by the Purchaser in the Lehigh Offer, there may be a
conflict of interest between the Purchaser's desire to purchase the
BACs at a low price and a BACs holder's desire to sell its BACs at a
high price. Therefore, BACs holders might receive greater value if
they hold their BACs, rather than tender. Furthermore, BACs holders
should be aware that a secondary market exists for the BACs.
o BACs holders will no longer receive the tax credits and/or tax
losses from the BACs should they tender pursuant to the Lehigh
Offer, nor will tendering BACs holders receive any future
distributions from the Partnership (including distributions from any
refinancing or sale). The Partnership has made no distributions to
BACs holders in the past, and there can be no assurance as to the
timing, amount or occurrence of any future distributions.
o The Purchase Price exceeds the weighted average secondary market
price for the two months ended March 31, 1997. Additionally, based
on certain assumptions made therein, the Purchaser states in the
Lehigh Offer that the present value of the potential aggregate
benefits to a BACs holder who tenders to the Purchaser exceeds the
Purchaser's estimate of the present value of the potential aggregate
benefits if a BACs holder does not tender.
Enclosed is a copy of the Partnership's Statement on Schedule 14D-9
which has been filed with the Securities and Exchange Commission and sets
forth the Partnership's response to the Offer. BACs holders are advised to
carefully read the Schedule 14D-9 and consult with their advisors about the
financial, tax, legal and other implications of accepting the Lehigh Offer.
Please do not hesitate to call Brenda Abuaf, c/o Related Capital
Company, at (800) 600-6422 (ext. 2090) for assistance in any Partnership matter.
INDEPENDENCE TAX CREDIT PLUS L.P.
INDEPENDENCE TAX CREDIT PLUS L.P.
625 Madison Avenue
New York, NY 10022
May 28, 1997
Personal and Confidential
- -------------------------
Related Independence Associates L.P.
Lehigh Tax Credit Partners L.L.C.
625 Madison Avenue
New York, NY 10022
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 L.P., 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 one hundred and twenty-one (121) 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
<PAGE>
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 RIA 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 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
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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 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, shall be entitled to equitable relief,
including
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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 L.P.
By: Related Independence Associates L.P., its general
partner
By: Related Independence Associates Inc., its general
partner
By: /s/ J. Michael Fried
------------------------------------
Name: J. Michael Fried
Title: 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/ Alan P. Hirmes
--------------------------------
Name: Alan P. Hirmes
Title: Vice President
RELATED INDEPENDENCE ASSOCIATES L.P.
By: Related Independence Associates Inc.,
its general partner
By: /s/ Alan P. Hirmes
--------------------------------
Name: Alan P. Hirmes
Title: Vice President
