Exhibit 4
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (this "Agreement") is made and
entered into as of the 27th day of June, 1996, by and between The Xxxxx
Corporation ("Xxxxx"), a Massachusetts corporation with a principal place of
business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Liquidity
Financial Group, L.P. ("Liquidity") individually and on behalf of certain
Affiliates as hereinafter defined, a California limited partnership with a
principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, Liquidity is engaged in the business of sponsoring and
managing funds which invest in, among other things, real estate limited
partnerships;
WHEREAS, Xxxxx and certain affiliates sponsored and are engaged in
the business of managing, among other things, real estate limited partnerships;
WHEREAS, Liquidity sponsored and manages Liquidity Fund #33 LP as
well as other investment funds, and may in the future sponsor and manage and or
provide investment advice to additional investment funds (collectively, the
"Liquidity Funds"), and Xxxxx sponsored and manages Xxxxx Realty Fund, Ltd.-III
("Realty III") and Xxxxx Realty Limited Partnership-V ("Realty-V") as well as
other investment funds, and may in the future sponsor or manage additional
investment funds (individually a "Xxxxx Fund" and collectively, the "Xxxxx
Funds");
WHEREAS, Liquidity has, on behalf of certain of the Liquidity Funds,
sought to obtain from Xxxxx lists of the investors in certain of the Xxxxx Funds
for the stated purpose of contacting such investors in order to attempt to
acquire their units in the Xxxxx Funds;
WHEREAS, Xxxxx has refused to provide lists of the investors to
Liquidity, alleging that they are not entitled to obtain such lists and
Liquidity has stated that, absent a satisfactory resolution, its present
intention is to litigate the issue;
WHEREAS, the parties have conferred through their respective counsel
and are desirous of resolving and settling Liquidity's claims, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Delivery of Lists: Within ten business days of the date of this
Agreement, Xxxxx will deliver to Liquidity lists of investors (containing the
names, addresses and capital contributions of such investors) in Realty III and
Realty V. The lists will be sorted alphabetically and delivered in both paper
format and on 3.5" IBM Compatible computer diskette in ASCII format. Any
additional lists delivered pursuant to paragraph 3 below will also be delivered
in both paper format on 3.5" IBM Compatible computer diskette in ASCII format.
2. Payment for Lists: Within ten business days of the date of this
Agreement, Liquidity will deliver to Xxxxx payment for the estimated cost of
reproducing and delivering such lists in the total amount of $600.00.
3. Provision of Additional Lists: From time to time during the twelve
month period commencing on the date hereof and expiring on the first anniversary
date of this Agreement, Xxxxx will, upon written request from Liquidity, deliver
to Liquidity within 15 business days of receipt of such written request, updated
lists of investors in Realty III and Realty V, or, to the extent a Liquidity
Fund is a Limited Partner or Shareholder (as the case may be) in any other Xxxxx
Fund, current lists of investors in such other Xxxxx Fund, provided such request
includes an undertaking by Liquidity to pay the cost of reproducing and
delivering such lists within 10 business days after receipt of such lists.
4. Restrictions on Activities: For a period commencing on the date
hereof and continuing for 30 months from the last date an investor list in a
Xxxxx Fund is delivered to Liquidity in response to Liquidity's request,
Liquidity and any person or entity controlling, controlled, managed or advised
by Liquidity or its subsidiaries (including the Liquidity Funds) or under common
control with Liquidity ("Liquidity Affiliates") shall not, without the prior
written consent of Xxxxx, which may be granted or withheld in Xxxxx'x sole and
exclusive discretion and for any reason, or no reason:
(a) vote its interests in any Xxxxx Fund on any issue other than in
proportion to the votes of all other interest holders who vote on such issue;
(b) in any manner acquire, attempt to acquire, or make a proposal to
acquire, directly or indirectly, more than a 25% interest in any Xxxxx Fund;
(c) propose, or propose to enter into, directly or indirectly, any
merger, consolidation, business combination, sale or acquisition of assets,
liquidation or other similar transaction involving any Xxxxx Fund;
(d) form, join or otherwise participate in a "group" within the meaning
of Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended, with
respect to any voting securities of a Xxxxx Fund;
(e) make or participate in any way, directly or indirectly, in any
solicitation of "proxies" or "consents" (as such terms are used in the proxy
rules of the Securities and Exchange Commission) to vote, or seek to advise or
influence any person with respect to the voting of any voting securities of any
Xxxxx Fund;
(f) sell, transfer or assign any interests in any Xxxxx Fund to any
person or entity not bound by the terms and conditions of this Agreement;
(g) disclose any intention, plan or arrangement inconsistent with the
terms of this Agreement; and
(h) loan money to, advise, assist or encourage any person in connection
with any of the actions restricted or prohibited by this Agreement.
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5. Use of Lists, Prohibition on Furnishing to Others: Any investor
list obtained by Liquidity or Liquidity Affiliates relative to any Xxxxx Fund
will be utilized only for the purpose of contacting investors to inquire as to
whether they wish to sell their units in such Xxxxx Fund to a Liquidity Fund,
and for no other purpose. The lists will not be furnished by Liquidity or
Liquidity Affiliates to any other person or entity.
6. Third Parties: If at any time Liquidity or Liquidity Affiliates is
approached or contacted by any third party concerning participation in a
transaction involving the assets, businesses or securities of any Xxxxx Fund or
involving any of the actions proscribed by Section 4 hereof or otherwise by this
Agreement, Liquidity or Liquidity Affiliates, as the case may be, will
immediately notify such party of its inability to participate in such a
transaction and, its obligation to notify Xxxxx and will thereafter promptly
(and in any event, within 5 business days) notify Xxxxx of the nature of such
contact and the parties thereto. Xxxxx will indemnify, defend and hold harmless
Liquidity and the Liquidity Affiliates from and against any and all claims,
demands or liabilities that may arise as a result of Liquidity's or any
Liquidity Affiliates' strict compliance with the terms of this paragraph.
7. Compliance with Securities and Other Laws: Liquidity and Liquidity
Affiliates acknowledge their obligations under the Securities Laws and Rules of
the Securities and Exchange Commission.
8. Provision of Copies of All Communications: Liquidity and Liquidity
Affiliates covenant and agree that they shall deliver to Xxxxx at least 5
business days before mailing or otherwise distributing to investors in any Xxxxx
Fund any communication to be given to one or more investors in any Xxxxx Fund.
9. Fiduciary Duties of Xxxxx; Safe Harbor Provision, Protection of
Partnership Status: Liquidity acknowledges that:
(a) Xxxxx and its affiliates have significant fiduciary obligations
to the investors in the Xxxxx Funds, and has stated that it is entering into
this Agreement to, among other things, fulfill those fiduciary obligations;
(b) Xxxxx may need to take certain further action to meet its
fiduciary obligations, including, without limitation, suspending the acceptance
of transfer paperwork in one or more Xxxxx Funds to avoid the termination of
such Xxxxx Fund's status as a partnership under the Internal Revenue Code of
1986 (the "Code"), as amended; avoid the treatment of such Xxxxx Fund as a
Publicly Traded Partnership under the Code; or cause the Xxxxx Fund to fall
outside any so-called "Safe Harbor" provision relating to taxation or tax
status, including provisions relating to Publicly Traded Partnerships; and
(c) That the suspension of the acceptance of transfer paperwork by
Xxxxx would mean that, notwithstanding the presentment of valid transfer
paperwork and the terms of this Agreement, transfers requested by Liquidity or a
Liquidity Affiliate would not be processed nor reflected on the books and
records of the Xxxxx Fund.
Nothing herein shall be construed, however, as an acknowledgement or
agreement by Liquidity that Xxxxx has the right under any particular
circumstances to suspend the acceptance of transfer paperwork, or as a waiver of
any future claims of Liquidity arising out of any such suspension or other
similar action.
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10. Release: For and in consideration of the agreements herein made,
Liquidity, individually and on behalf of the Liquidity Affiliates, does hereby
remise, release and acquit Xxxxx and all of its partners, officers, directors,
affiliates, predecessors, successors and assigns and each of their partners,
officers, directors, affiliates, predecessors, successors and assigns from and
against any and all claims, damages, costs, expenses, actions and causes of
action which Liquidity and the Liquidity Affiliates (including their partners,
officers, directors, affiliates, successors and assigns and all of their
partners, officers, directors, affiliates, predecessors, successors and assigns)
had in the past, now has, or may in the future acquire arising from or related
to the failure or refusal of Xxxxx to provide an investor list of any Xxxxx
Fund, except for such a failure or refusal in violation of the provisions of
this Agreement.
11. Notices: Any and all notices required or permitted hereunder shall
be in writing and shall be deemed given or served, as the case may be, upon
actual delivery to the parties at the following addresses:
If to Liquidity: Liquidity Financial Group, L.P.
0000 Xxxxxx Xxxxxx-Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
with a copy to: Xxxxx X. Xxxx, Esq.
Xxxxxx & Xxxxx
Embarcadero Center West Tower
000 Xxxxxxx Xxxxxx-00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
If to Xxxxx: The Xxxxx Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
with a copy to: Xxxxx X. Xxxxxxxxx, Esq.
Vice President and General Counsel
The Berkshire Group
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
12. No Admissions, Confidentiality: The parties agree that this
Agreement is being entered into solely to settle disputed claims, and nothing
herein shall be deemed to constitute an admission of liability on the part of
Xxxxx, all such liability being expressly contested. The parties agree that
their discussions prior to entering into this Agreement, the nature, existence
and terms of this Agreement, and all matters relating to the dispute and
settlement shall be strictly confidential and not disclosed by either party to
any individual or entity, nor be admissible in court for any purpose.
Notwithstanding the foregoing, should either party believe that it must produce
this Agreement in response to subpoena or other lawful process, it shall first
notify the other party and provide the other party with at least 15 business
days in which to seek to quash or limit any such subpoena or process, before
producing this Agreement. To the extent the second party does not have standing
to seek to quash or limit the subpoena, the first party shall cooperate in such
efforts, provided such cooperation does not result in the incurring of any costs
on the part of said first party.
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13. Enforcement: The parties agree that each shall be entitled to
equitable relief, including injunctive relief and specific performance, in the
event of any breach of the provisions of this Agreement, in addition to all
other remedies available at law or in equity. In the event either party must
refer this agreement to an attorney for enforcement, the prevailing party shall
be entitled to all costs of enforcement, including attorney's fees.
14. Governing Law; Venue and Jurisdiction: This Agreement shall be
governed by the laws of the Commonwealth of Massachusetts without regard to
principles of conflict of law thereof. The parties agree that the Federal and
state courts located within the Commonwealth of Massachusetts shall have
exclusive jurisdiction over disputes arising hereunder, and the parties hereby
consent to such venue and submit to the jurisdiction of such courts.
15. Captions: Captions and section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
16. Amendments: This Agreement may be amended, changed, modified,
altered or terminated only by written instrument or written instruments signed
by all of the parties hereto.
17. Severability: In the event any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first above written.
LIQUIDITY FINANCIAL GROUP, L.P.
By: Liquidity Financial Corporation,
its general partner
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
President
THE XXXXX CORPORATION
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
President
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