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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.
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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
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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
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Name: W. Xxxxxx Xxxxxxx
Title: Vice President
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