Exhibit 1
OPTION AGREEMENT
AGREEMENT, dated as of November 21, 1996 (this "Agreement"), by and
between Liquidity Financial Group, L.P., a California limited partnership (the
"Optionee"), and Apollo Real Estate Investment Fund II, L.P., a Delaware limited
partnership (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund owns 29.23% of the outstanding limited liability
company interests (the "Krescent Interests") of Krescent LFG L.L.C., a Delaware
limited liability company ("Krescent LFG");
WHEREAS, Krescent LFG owns 17.1% of the outstanding limited liability
company interests (the "Bidder Interests") of Krescent Partners L.L.C., a
Delaware limited liability company (the "Bidder");
WHEREAS, the Bidder has commenced or will commence tender offers (the
"Tender Offers") to acquire units of Investor Limited Partnership Interest (or
assignee interests therein or depositary certificates representing such units)
(the "Units") of various real estate limited partnerships sponsored and/or
managed by The Xxxxx Corporation, a Massachusetts corporation (the "Targets");
and
WHEREAS, the Fund desires to grant to the Optionee an option to
acquire up to 100% of the Fund's Krescent Interests (the "Option Interests"),
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Optionee and the
Fund hereby agree as follows:
1. Grant of the Options. The Fund hereby grants to the Optionee the
right to purchase (the "Option") all or any part of the Option Interests from
the Fund exercisable from the date Bidder accepts for payment Units tendered
pursuant to the Tender Offer until that date which is six months after the date
the Option becomes exercisable (the "Option Period"), at a purchase price (the
"Purchase Price") equal to five percent (5%) of the aggregate consideration paid
and expenses incurred by the Bidder for the Units in the Tender Offer together
with interest at a rate of 20% per annum based on a year of 366 days (calculated
from and after the date of the closing of the Tender Offer through and including
the date of the closing of the Option). If Optionee does not exercise the entire
Option, the Purchase Price shall be reduced pro rata in accordance with the
percentage of the entire Option exercised by the Optionee.
2. Exercise of the Option. The Option to purchase the Option
Interests shall be exercisable in whole or in part on the terms and subject to
the conditions hereinafter set forth:
(a) In the event that the Optionee is entitled to and wishes to
exercise the Option, the Optionee shall, during the Option Period, send a
written notice (the "Exercise Notice") to the Fund identifying the date and
place for the closing (the "Closing") of the Option Interests to be purchased.
Delivery of the Exercise Notice prior to the expiration of the Option Period
shall be sufficient to entitle the Optionee to purchase the Option Interests
notwithstanding that the Closing may occur after the expiration of the Option
Period; provided, however, that the Closing shall not be more than fifteen (15)
business days from the date that the Exercise Notice is received by the Fund
unless another date is agreed upon in writing by the Fund and the Optionee.
(b) Payment of the Purchase Price for the Option Interests to be
acquired pursuant to the exercise of the Option will be made by the Optionee at
the Closing by delivering to the Fund, by wire transfer or by certified check
payable to the order of the Fund, an amount equal to the Purchase Price.
3. Transferability of the Option. The Option may not be assigned,
transferred, or otherwise disposed of, or pledged or hypothecated or in any way
be subject to execution, attachment or other process. Any assignment, transfer,
pledge, hypothecation or other disposition of the Option attempted contrary to
the provisions of this Agreement or any levy, execution, attachment or other
process attempted upon the Option will be null and void and without effect.
4. Sale of Option Interests. Except as provided in this Agreement,
the Fund shall not, without the express written consent of the Optionee, during
the Option Period, (i) sell or otherwise dispose of any or all of the Option
Interests, or (ii) convert such Option Interests into cash, capital stock or
other securities.
5. Adjustment Upon Changes in Capitalization. In the event of any
change in the Krescent Interests by reason of dividends, split-ups,
recapitalizations, combinations, exchanges of interests or the like, the type
and number of interests of Krescent Interests subject to the Option and the
Purchase Price shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional Krescent Interests become
outstanding as a result of any such change after the date of this Agreement, the
Option shall be adjusted so that, after such change and together with the
Krescent Interests previously outstanding pursuant to the exercise of the Option
(as adjusted on account of any of the foregoing change in Krescent Interests),
it equals 29.23% of the number of Krescent Interests then outstanding.
6. Investment. The Optionee acknowledges that the Option Interests
are not being offered pursuant to a registration statement under the Securities
Act of 1933, as amended (the "Act"), or any other securities laws. The Optionee
acknowledges that the Option Interests are being acquired for the Optionee's own
account for investment purposes only and not with a view to, or for sale in
connection with, any public distribution thereof and will not sell, or offer to
sell or otherwise dispose of, any interest in the Option Interests acquired by
the Optionee in violation of the Act. The Optionee has had substantial
experience in business and financial matters and in making investments of the
type contemplated by this Agreement, is capable of evaluating the merits and
risks of the purchase of the Option Interests and is able to bear the economic
risks of such investment.
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7. Representations and Warranties of the Fund. The Fund hereby
represents and warrants to the Optionee as follows:
(a) Organization. The Fund is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite power and authority to execute and deliver this Agreement and
perform its obligations hereunder. The execution and delivery by the Fund of
this Agreement and the performance by the Fund of its obligations hereunder have
been duly and validly authorized by the general partner of the Fund and no other
partnership actions on the part of the Fund are necessary to authorize the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
(b) Authorization. This Agreement has been duly and validly executed
and delivered by the Fund and constitutes a valid and binding agreement
enforceable against the Fund in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) Title to Option Interests. As of the date hereof, the Fund is the
legal, beneficial and record owner of the Option Interests. The Fund has good
and marketable title to all of the Option Interests, free and clear of any
liens, encumbrances, equities, restrictions and claims of every kind and nature.
No person other than the Fund has any interest in or right to acquire any
interest in any of the Option Interests. There are no rights, options,
convertible or exchangeable, instruments or interests or commitments,
agreements, arrangements or undertakings of any kind to which the Fund is a
party or by which the Fund is bound obligating the Fund to deliver, sell, or
cause to be sold or delivered, the Option Interests.
(d) No Conflicts. Except for authorizations, consents and approvals as
may be required hereunder, (i) no filing with, and permit, authorization,
consent or approval of any state or federal public body or authority is
necessary for the execution of this Agreement by the Fund and the consummation
by the Fund of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by the Fund and the consummation by the
Fund of the transactions contemplated hereby will (A) conflict with any or
result in any breach of any provision of the organizational documents of the
Fund, (B) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any indenture, license, contract, agreement or other instrument or
obligation to which the Fund is a party or by which it may be bound, or (C)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Fund.
8. Representations and Warranties of the Optionee. The Optionee hereby
represents and warrants to the Fund as follows:
(a) Organization. The Optionee is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of California,
has all requisite power and authority to execute and deliver this Agreement and
perform its obligations hereunder. The execution and delivery by the Optionee of
this Agreement and the performance by the Optionee of its
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obligations hereunder have been duly and validly authorized by the general
partner of the Optionee and no other partnership actions on the part of the
Optionee are necessary to authorize the execution, delivery or performance of
this Agreement or the consummation of the transactions contemplated hereby.
(b) Authorization. This Agreement has been duly and validly executed
and delivered by the Optionee and constitutes a valid and binding agreement
enforceable against the Optionee in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) No Conflicts. Except for authorizations, consents and approvals as
may be required hereunder, (i) no filing with, and permit, authorization,
consent or approval of any state or federal public body or authority is
necessary for the execution of this Agreement by the Optionee and the
consummation by the Optionee of the transactions contemplated hereby and (ii)
none of the execution and delivery of this Agreement by the Optionee and the
consummation by the Optionee of the transactions contemplated hereby will (A)
conflict with any or result in any breach of any provision of the organizational
documents of the Optionee, (B) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any indenture, license, contract, agreement or other
instrument or obligation to which the Optionee is a party or by which it may be
bound, or (C) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Optionee.
9. Termination. Except as otherwise provided herein, the covenants and
agreements contained herein with respect to the Option Interests shall terminate
upon the expiration of the Option Period.
10. Notices. Notices relating to this Agreement shall be in writing and
delivered in person or by hand delivery or certified mail, return receipt
requested, postage prepaid, as follows:
If to the Optionee:
Liquidity Financial Group, L.P.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx
0000 X Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx, Esq.
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If to the Fund:
c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxxxx
Xxxxxxx Xxxx
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxxxxxx, Esq.
or to such other address as either party may designate by written notice to the
other in accordance with this provision, and is hereby deemed to have been given
or made: if delivered in person, immediately upon delivery; if by telex,
telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day after
sending; and if by certified mail, return receipt requested, three (3) days
after mailing.
11. Benefits of Agreement. This Agreement shall inure to the benefit
and shall be binding upon the successors, heirs, legal representatives and
permitted assigns of the parties hereto.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles thereof respecting conflicts of laws.
13. Holidays. Whenever any payment to be made hereunder shall be stated
to be due on a Saturday, Sunday or any national holiday, such payment may be
made on the next succeeding business day.
14. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. Entire Understanding and Release. (a) This Agreement contains the
entire agreement between the Fund and the Optionee and supersedes any and all
prior agreements, understandings and undertakings, whether written or oral,
between the Fund and its officers, directors, employees or agents on the one
hand, and the Optionee on the other hand. No representations, warranties,
covenants or agreements, except those expressly set forth in this Agreement will
be deemed to have been made by either the Fund and its officers, directors,
employees or agents on the one hand, and the Optionee on the other hand.
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(b) The Optionee hereby releases, acquits and forever discharges the
Fund and its partners, employees and agents, as well as each of their respective
heirs, personal representatives, successors and assigns, from any and all
losses, damages, claims, demands, debts, actions, causes of action, suits,
contracts, agreements, obligations, accounts, defenses and liabilities of any
kind or character whatsoever, known or unknown, suspected or unsuspected, in
contract or in tort, at law or in equity, which the Optionee ever had, now has,
or might hereafter have against the Fund and its partners, employees and agents
for or by reason of any matter, cause or thing whatsoever which relates in any
manner, in whole or in part, directly or indirectly, to any agreement,
understanding, or undertaking of the Fund and its partners, employees, and
agents in connection with the transactions contemplated by this Agreement.
16. Severability. If any of the provisions of this Agreement shall be
held by a court of competent jurisdiction to be void or unenforceable, the
balance of the provisions of this Agreement shall remain in effect and be
enforced so as to give effect as nearly as possible to the intentions of the
Fund and the Optionee.
17. Execution. This Agreement may be executed in one or more
counterparts, each of which shall be deemed as original, but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
LIQUIDITY FINANCIAL GROUP
By: Liquidity Financial Corporation, its general
partner
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: President
APOLLO REAL ESTATE INVESTMENT FUND II,
L.P.
By: Apollo Real Estate Advisors II, L.P., its
general partner
By: Apollo Real Estate Capital Advisors II, Inc.,
its general partner
By: /s/ W. Xxxxxx Xxxxxxx
Name: W. Xxxxxx Xxxxxxx
Title: Vice President
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