Exhibit 8
KRESCENT PARTNERS L.L.C
0000 XXXXXX XX XXX XXXXXXXX, 00XX XXXXX
XXX XXXX, XXX XXXX 00000
February 12, 1997
American Holdings I, L.P.
000 Xxxxx Xxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Re: XXXXX CASH PLUS-II LIMITED PARTNERSHIP
Ladies and Gentlemen:
The parties hereto confirm their agreement to the terms of Exhibit A
annexed hereto, which terms are incorporated herein by reference, which
agreement is intended to be legally binding and enforceable upon execution and
delivery hereof and which, unless modified or terminated by a writing signed by
all of the parties hereto, constitutes the definitive agreement among the
parties relating to the subject matter hereof and thereof.
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, (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 principals and authorized
representatives of the parties hereto, 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.
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 shall supersede 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. 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,
KRESCENT PARTNERS L.L.C.
By: AP-GP Prom Partners Inc.,
Managing Member
By: /s/ Xxxxxxx Xxxx
-----------------
Xxxxxxx Xxxx, Vice President
AP-GP PROM PARTNERS INC.
By: /s/ Xxxxxxx Xxxx
-----------------
Xxxxxxx Xxxx, Vice President
APOLLO REAL ESTATE INVESTMENT
FUND II, L.P.
By: Apollo Real Estate Advisors II, L.P.,
General Partner
By: Apollo Real Estate Capital Advisors II,
Inc., General Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------
Xxxxxxx X. Xxxx, President
KRESCENT LFG L.L.C.
By: AP-GP Prom Partners Inc.,
Managing Member
By: /s/ Xxxxxxx Xxxx
----------------
Xxxxxxx Xxxx, Vice President
ACCEPTED AND AGREED TO AS
OF THE DATE FIRST ABOVE WRITTEN:
AMERICAN HOLDINGS I, L.P.
By: American Holdings I-GP, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx, Vice President
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AMERICAN HOLDINGS I-GP, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx, Vice President
AMERICAN REAL ESTATE HOLDINGS
LIMITED PARTNERSHIP
By: American Property Investors, Inc.,
General Partner
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------
Xxxx X. Xxxxxxxxxx, Vice President
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EXHIBIT A
KRESCENT PARTNERS L.L.C./
AMERICAN HOLDINGS I, L.P.
PURCHASE OF UNITS OF INVESTOR LIMITED PARTNERSHIP INTEREST OF
XXXXX CASH PLUS - II LIMITED PARTNERSHIP
Tender Offer
Krescent Partners L.L.C. ("Krescent") and American Holdings I, L.P. ("AHI" and,
together with Krescent, the "Purchasers") propose making an offer (the "Offer")
to purchase up to 20.1% of investor limited partnership interests (the "Units")
of Xxxxx Cash Plus - II Limited Partnership (the "Partnership") at a purchase
price and upon other terms and conditions to be jointly determined by Krescent
and AHI and set forth in an Offer to Purchase (the "Offer to Purchase") and a
related Letter of Transmittal (the "Letter of Transmittal" and, together with
the Offer to Purchase, the "Offer"). The purchase price will be reduced by the
aggregate amount of distributions per Unit, if any, made or declared by the
Partnership after the date on which the Offer commences and prior to 12:00
midnight on the expiration date of the Offer (the "Expiration Date"). In
addition, if a distribution is made or declared after the Expiration Date but
prior to the date on which the Purchasers pay the purchase price for the
tendered Units, the Purchasers will offset the amount of such distribution from
the amount otherwise due a holder of Units pursuant to the Offer. The parties
propose to file a Tender Offer Statement of Schedule 14D-1 (the "Schedule
14D-1") relating to the Offer with the Securities and Exchange Commission (the
"Commission") as promptly as practicable following the execution and delivery
hereof.
Purchase of Units
The Units tendered to and accepted for payment by the Purchasers pursuant to the
Offer will be allocated between and purchased by the Purchasers as follows: (1)
first, an aggregate of 242,970 Units will be allocated to and purchased by AHI;
and (2) then, of the Units remaining after giving effect to clause (1) (the
"Remaining Units"), 41.8% of such Remaining Units will be allocated to and
purchased by AHI and 58.2% of such Remaining Units will be allocated to and
purchased by Krescent. In the event that 242,970 or fewer Units are tendered to
and accepted for payment pursuant to the Offer or the Offer is terminated
without any Units being purchased, AHI shall purchase Units from Krescent, at a
price of $7.45 per Unit, in an amount such that Krescent will own 58.2% of the
Acquired Units (as hereinafter defined) and AHI will own 41.8% of the Acquired
Units. Notwithstanding the foregoing, if the direct and indirect percentage
interest of Apollo Real Estate Investment Fund II, L.P. and its affiliates
(collectively, the "Apollo Group") in Krescent immediately following the
expiration and/or exercise of all outstanding options or other rights to acquire
an interest in Krescent, whether directly or indirectly, exceeds 83.6%, then AHI
will be entitled to purchase additional Units from Krescent, at the same
purchase price per Unit paid by the Purchasers pursuant to the Offer, so that,
after giving effect to such purchase, the total percentage of the Acquired Units
purchased by AHI equals 50% of such percentage interest of the Apollo Group in
Krescent. For purposes hereof, all Units purchased by AHI or Krescent pursuant
to the Offer or by Krescent pursuant to the Krescent Offer (as hereinafter
defined) are hereinafter collectively referred to as the "Acquired Units." The
Acquired Units purchased by AHI (including Units purchased by AHI from Krescent
as contemplated above) are hereinafter referred to as the "AHI Units" and the
Acquired Units purchased by Krescent (net of Units sold by Krescent to AHI as
contemplated above) are hereinafter referred to as the "Krescent Units." Each of
Krescent and AHI will pay the purchase price for the Units to be purchased by
them directly from Unitholders pursuant to the Offer by wire transfer to Xxxxxx
Group (as hereinafter defined).
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Allocation of Expenses
AHI and Krescent shall share Total Expenses (as hereinafter defined) in the same
ratio as the number of AHI Units and the number of Krescent Units, respectively,
bear to the aggregate number of Acquired Units. Concurrently with the payment
for Units by AHI and Krescent and, if necessary, from time to time thereafter,
one party shall pay the other such amounts as may be necessary so that Total
Expenses are shared in such ratio. "Total Expenses" means all out-of-pocket
costs and expenses incurred by Krescent, AHI or their respective affiliates
(including attorneys fees and expenses) with respect to: (1) the Offer,
including, without duplication, the fees and expenses of The Xxxxxx Group, Inc.,
the information agent/depositary for the Offer ("Xxxxxx Group"), printing and
mailing expenses and Partnership transfer fees, but excluding any fees payable
to LFG (as hereinafter defined) or its affiliates; (2) the negotiation,
execution and delivery of this letter agreement; and (3) the Krescent Offer.
Total Expenses shall not include the costs of purchasing the Units. Each party
will provide, at the execution and delivery hereof, an estimate of its costs and
expenses incurred to date and shall provide, upon request, invoices or other
appropriate evidence of the incurrence of costs and expenses constituting Total
Expenses hereunder. As used herein, the "Krescent Offer" shall mean Krescent's
offer to purchase up to 4.9% of the Units made pursuant to a letter to
Unitholders dated November 29, 1996. Krescent purchased 338,048.3247 Units
pursuant to the Krescent Offer.
Standstill Agreement
In order to obtain a list of Unitholders, Liquidity Financial Group, L.P.
("LFG"), an affiliate of Krescent's financial advisor, Liquidity Financial
Advisors, Inc., entered into a settlement agreement and release, dated June 27,
1996, as amended as of October 8, 1996 and as of January 6, 1997 (the
"Standstill Agreement"), with the Partnership. Krescent assumed the obligations
of LFG under the Standstill Agreement pursuant to an assumption agreement, dated
as of November 21, 1996 (the "Krescent Assumption Agreement"). An affiliate of
AHI entered into a Standstill Agreement with the Partnership on November 26,
1996 as amended as of January 8, 1997 and February 3, 1997 (the "AHI Standstill
Agreement"). The parties have taken all such action necessary or desirable for
AHI to assume the obligations of LFG under the Standstill Agreement with respect
to the Partnership to the same extent that Krescent is bound thereby and to
amend the Standstill Agreement and the AHI Standstill Agreement to permit the
parties to engage in the transactions contemplated hereby. The parties will
cooperate in taking all other necessary action under the Standstill Agreement in
connection with the Offer and in seeking the agreement of the general partner of
the Partnership to admit Krescent and AHI as limited partners of the Partnership
or recognize Krescent and AHI as registered owners of Units to the same extent
as it agreed to so admit or recognize Krescent in connection with the Krescent
Offer.
Conduct of Offer
All decisions relating to the conduct of the Offer and the acquisition and
transfer of Units pursuant thereto, including without limitation any change in
the terms or waiver of any of the conditions thereof, shall be made jointly by
Krescent and AHI. Notwithstanding the foregoing, in the event that either
Krescent or AHI proposes to increase the purchase price for Units and the other
opposes such an increase, such purchase price shall, subject to the provisions
set forth below, nonetheless be increased as proposed, and the parties shall
take all necessary action to amend the Offer accordingly. The party proposing to
increase the purchase price shall so notify the other party in writing. Not
later than 5:00 p.m., New York City time, on the second business day following
receipt of such notice, the party receiving the notice shall notify the
proposing party whether it agrees to or opposes such increase. If AHI so
notifies Krescent of its opposition to an increase in the purchase price
proposed by Krescent, AHI shall have no further obligation to purchase the Units
pursuant to the Offer and Krescent shall thereafter control all decisions
regarding the conduct of the Offer and the acquisition and transfer of Units
pursuant thereto. In addition, in such event, Krescent shall retain all Units
purchased pursuant to the Krescent Offer and AHI shall not be entitled to
purchase any of such Units. If Krescent so notifies AHI of its opposition to an
increase in
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the purchase price proposed by AHI, Krescent shall have no further obligation to
purchase the Units pursuant to the Offer and AHI shall thereafter control all
decisions regarding the conduct of the Offer and the acquisition and transfer of
Units pursuant thereto. In such event, AHI shall be entitled to purchase 41.8%
of the Units purchased by Krescent in the Krescent Offer. In either such event,
the parties shall execute and deliver such instruments and documents and
cooperate in taking any other action as may be necessary or desirable to amend
the Offer in accordance with the applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder. If a party opposes a proposed purchase
price increase, AHI shall be responsible for 41.8%, and Krescent shall be
responsible for 58.2%, of Total Expenses incurred through the date on which the
opposing party notifies the proposing party of its opposition (except that
expenses relating to the Krescent Offer shall be the sole responsibility of
Krescent if Krescent proposes a purchase price increase that is opposed by AHI),
and the proposing party shall be responsible for 100% of Total Expenses incurred
subsequent to such date.
Notwithstanding the foregoing, if the proposing party shall at any time lower
the purchase price for Units or shall breach its obligation to acquire Units
pursuant to the Offer (assuming all conditions thereto have been satisfied or
waived), the opposing party shall have the right (exercisable in its sole
discretion) to purchase Units (including the Krescent Units, if applicable) upon
the terms and conditions set forth herein, and, if the opposing party exercises
such right, the parties shall share Total Expenses as provided under "Allocation
of Expenses" above.
Cooperation
AHI and Krescent shall cooperate and provide each other with and disclose such
information as may be necessary or desirable to comply with the applicable
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder. Neither party shall use the name of the other in any public
disclosure regarding the transactions contemplated hereby without obtaining the
prior written consent of such other party, which shall not be unreasonably
withheld or delayed.
AHI and Krescent shall also cooperate in connection with the transfer of Units
to AHI and Krescent, respectively, and, to the extent within their reasonable
control, in ensuring that AHI and Krescent are each accorded the benefits of
ownership of their respective Units from and after the date of the Closing,
notwithstanding any delays in the recognition or effectiveness of the transfer
of such Units to AHI or Krescent on the books of the Partnership. The parties
shall execute and deliver such further instruments and documents as may be
necessary or desirable in connection with the foregoing.
Krescent shall instruct Xxxxxx Group to provide AHI, upon request, with
information regarding the Offer and tenders made pursuant thereto and to provide
AHI with reports regarding such status and tenders as such reports are made to
Krescent.
Indemnification
Krescent and its members, jointly and severally, shall indemnify AHI and hold it
harmless against any loss, claim, damage or liability (or any action in respect
thereof) to which AHI may become subject, insofar as such loss, claim, damage or
liability arises out of or is based upon any violation of the Xxxxxxxx Act or
any untrue statement of a material fact included in the offer materials of
Krescent relating to the Krescent Offer or the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Krescent and its members, jointly and severally, on the one hand, and AHI and
its partners, jointly and severally, on the other, shall indemnify and hold
harmless the other against any loss, claim, damage or liability (or any action
in respect thereof) to which any of them may become subject, insofar as such
loss, claim, damage or liability arises out of or is based upon any violation of
the Xxxxxxxx Act or any untrue
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statement of a material fact included in the Schedule 14D-1 or the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that any such
loss, claim, damage or action is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with information furnished by Krescent or its affiliates, on the one
hand, or AHI or its affiliates, on the other, for inclusion in such Schedule
14D-1.
Buy/Sell
Either AHI or Krescent may institute buy/sell procedures at any time commencing
on the first anniversary of the purchase of the Units by Krescent and AHI
pursuant to the Offer, as long as both parties (together with their respective
affiliates and members of their immediate families) continue to own at least 2%
of the issued and outstanding Units. These buy/sell provisions shall cover all
Units owned by AHI and by its affiliates and members of their immediate families
and all Units owned by Krescent and by its affiliates and members of their
immediate families, in each case, whether such Units were acquired prior to the
Offer, pursuant to the Offer or subsequent to the Offer. For purposes of these
buy/sell provisions, LFG shall not be deemed an affiliate of Krescent.
Accordingly, these buy/sell provisions shall not cover (1) that percentage of
the Krescent Units equal to the percentage interest in Krescent, if any, whether
direct or indirect, of LFG, its affiliates and members of their immediate
families or (2) any Units owned directly by any of them. These buy/sell
provisions shall not apply to the extent that any buy/sell transaction would
impose any liability under Section 16(b) of the Exchange Act.
Either party may initiate the buy/sell by delivering to the other a written
offer stating the purchase price on a per Unit basis and other material terms
and conditions on which the initiating party is willing to purchase all, but not
less than all, Units then owned by the non-initiating party.
The non-initiating party shall then be obligated to elect to sell Units to the
initiating party at the per Unit price and upon the other terms and conditions
set forth in the buy/sell offer, or to purchase all of the initiating party's
Units upon such terms and conditions. The non-initiating party shall have thirty
days to decide whether to buy or sell. Failure to notify the initiating party of
such decision on a timely basis shall be deemed a decision to sell.
The closing of any purchase and sale of Units pursuant to these buy-sell
provisions shall occur no later than 15 days following the delivery of the
notice of election set forth above or such earlier date as shall be specified in
writing by the purchasing party. At any such closing, the selling party shall
sell, transfer and assign to the purchasing party all right, title and interest
in and to the selling party's Units, free and clear of all liens, claims and
encumbrances; the purchasing party shall pay for such Units in cash or
immediately available Federal funds; and, at the request of the purchasing
party, the selling party shall execute all other documents and take such other
actions as may be reasonably necessary or desirable to effectuate the transfer
of the Units and to carry out the purposes of this letter agreement.
Purchase of Additional Units
Prior to the Standstill Expiration Date, the parties subject to the Standstill
Agreement (whether directly or by assumption of the obligations of LFG
thereunder) (such parties being collectively referred to as the "Standstill
Parties") are permitted to purchase up to 25% of the issued and outstanding
Units. In the event that less than such amount is tendered pursuant to the Offer
(and/or already owned by the Standstill Parties on the Expiration Date), then,
prior to the Standstill Expiration Date, AHI and its affiliates will be entitled
to purchase up to 41.8% (or, if AHI purchases additional Units from Krescent
under the circumstances described under "Purchase of Units" above, then the
total percentage of the Units purchased by AHI whether pursuant to the Offer or
from Krescent subsequent to the Offer) of any Available Units (as hereinafter
defined) and the other Standstill Parties and their respective affiliates,
collectively, will be entitled to purchase the balance of any Available Units,
in each case, without obtaining the consent of or
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notifying any other party. "Available Units" means the difference between 25% of
the outstanding Units and the number of Units purchased pursuant to the Offer
and/or owned by the Standstill Parties as of the Expiration Date.
No Other Contracts
Except as expressly set forth herein, there are no contracts, arrangements,
understandings or relationships between AHI and Krescent with respect to the
Units.
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.
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.
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