Exhibit 12
SECOND AMENDMENT TO
SETTLEMENT AGREEMENT AND RELEASE
This Second Amendment to Settlement Agreement and Release (this
"Amendment") is made and entered into as of the 6th day of January 1997, 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 defined in the Agreement (as hereinafter defined), a
California limited partnership with a principal place of business at 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, the parties entered into a Settlement Agreement and
Release, dated the 27th day of June, 1996, as amended as of October 8, 1996 (as
amended, the "Agreement"), and now desire to the amend the Agreement, to
eliminate a possible ambiguity and to facilitate the contemplated transactions
described below, as hereinafter set forth;
WHEREAS, Krescent Partners L.L.C. (i) retained Liquidity Financial
Advisors, Inc., an affiliate of Liquidity, as its financial advisor, (ii) agreed
to become bound by the terms of the Agreement, and (iii) commenced tender offers
(the "Krescent Tender Offers") for units of Investor Limited Partnership
Interests of the real estate limited partnerships listed on Schedule I attached
hereto (the "Scheduled Partnerships");
WHEREAS, American Holdings I, L.P. ("AHI") desires to participate in
the Krescent Tender Offers and, therefore, has agreed to become bound by the
terms of the Agreement with respect to the Scheduled Partnerships; and
WHEREAS, Xxxxx has consented to the participation of AHI in the
Krescent Tender Offers upon AHI's agreement to be bound by the terms of the
Agreement with respect to the Scheduled Partnerships;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 4(d) of the Agreement is hereby amended and restated in
its entirety as follows:
(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, unless
each member of such group agrees in writing to be bound by the terms of
this
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Agreement; provided, however, that Liquidity and Liquidity Affiliates
shall not be deemed to be acting in a "group" in violation of this Section
4(d) solely by virtue of their voting their interests in compliance with
Section 4(a) of this Agreement;
2. Xxxxx hereby agrees that the agreement between Liquidity and AHI,
attached hereto as Exhibit A, satisfies the requirements of the amended Section
4(d) of the Agreement, as set forth in Section I of this Amendment.
3. Except as expressly set forth above, the Agreement shall remain
in full force and effect without amendment or modification.
4. Liquidity represents that it has not made any statements
inconsistent with the terms of the Krescent Tender Offers and hereby agrees to
comply with the terms of that certain letter dated December 17, 1996 from Xxxxxx
X. Xxxxxxxxxxx to Xxxxx Xxxxx, a copy of which is attached hereto as Exhibit B.
IN WITNESS WHEREOF, the parties have executed this Agreement under
sea] as of the date first above written.
THE XXXXX CORPORATION
By: /s/ Xxxxxxxx Xxxxxx
------------------------------------------
Xxxxxxxx Xxxxxx, President
LIQUIDITY FINANCIAL GROUP, L.P.
By: Liquidity Financial
Corporation, its general partner
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxxx, President
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SCHEDULE I
Xxxxx Realty Fund, Ltd. - III
Xxxxx Realty Limited Partnership - V
Xxxxx Realty Limited Partnership - VII
Xxxxx Cash Plus Limited Partnership
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Exhibit A
ASSUMPTION AGREEMENT (this "Agreement"), dated as of January __,
1997, between Liquidity Financial Group, L.P., a California limited partnership
("LFG"), and American Holdings I, L.P., a Delaware limited partnership ("AHI").
W I T N E S S E T H:
WHEREAS, LFG and The Xxxxx Corporation, a Massachusetts corporation
(the "Corporation"), entered into a Letter Agreement, dated as of June 27, 1996
and amended as of October 8, 1996 and January __, 1997 (the "Letter Agreement"),
pursuant to which LFG and its Affiliates (as defined therein) agreed to certain
restrictions in exchange for current lists (the "Lists") of the names and
addresses of the holders of the units of Investor Limited Partnership Interest
(or depositary certificates representing such units) (the "Units") in various
real estate limited partnerships sponsored and/or managed by The Xxxxx
Corporation, a Massachusetts corporation ("Xxxxx" );
WHEREAS, Krescent Partners L.L.C. (i) retained Liquidity Financial
Advisors, Inc., an affiliate of LFG, as its financial advisor and (ii) used the
Lists of the real estate limited partnerships listed on Schedule I attached
hereto (the "Scheduled Partnerships") to commence tender offers for Units (the
"Krescent Tender Offers");
WHEREAS, AHI desires to participate in the Krescent Tender Offers
and, therefore, has agreed to become bound by the terms of the Letter Agreement
with respect to the Scheduled Partnerships; and
WHEREAS, Xxxxxxxx Corporation ("Xxxxxxxx"), an affiliate of AHI, and
Xxxxx are parties to an agreement, dated November 26, 1996 (the "Xxxxxxxx
Standstill Agreement"), pursuant to which Xxxxxxxx has undertaken (on its own
behalf and on behalf of its affiliates, including AHI) certain obligations with
respect to the Scheduled Partnerships and certain other real estate limited
partnerships sponsored by Xxxxx and, concurrently with the execution and
delivery hereof, Xxxxxxxx and Xxxxx have executed and delivered an amendment to
the Xxxxxxxx Standstill Agreement (the "Amendment") to delete the Scheduled
Partnerships from the schedule of real estate limited partnerships covered by
the Xxxxxxxx Standstill Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, AHI agrees as follows:
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1. With respect to the Scheduled Partnerships, from and after the
date hereof AHI hereby agrees to become bound by the Letter Agreement to the
extent LFG is so bound as if AHI had executed the Letter Agreement on the date
hereof, provided, however, AHI shall only have liability with respect to its
actions or inactions under the Letter Agreement and shall not be liable for any
breach of any representation, warranty or covenant by LFG or any other party to
the Letter Agreement (whether directly or by assumption).
2. AHI shall not be bound by the Letter Agreement to the extent that
any of the obligations and liabilities of LFG under the Letter Agreement are
expanded, broadened, increased or enlarged.
3. Nothing contained herein shall require AHI to pay, perform or
discharge any liabilities or obligations expressly assumed hereunder so long as
AHI shall in good faith contest or cause to be contested the amount or validity
thereof.
4. AHI represents that it has not made any statements inconsistent
with the terms of the Krescent Tender Offers and hereby agrees to comply with
the terms of that certain letter dated December 17, 1996 from Xxxxxx X.
Xxxxxxxxxxx to Xxxxx Xxxxx, a copy of which is attached hereto.
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IN WITNESS WHEREOF, LFG and AHI have caused this Agreement to be
duly executed as of the date first written above.
AMERICAN HOLDINGS I, L.P.
By: American Holdings I-GP, Inc. its general
partner
By:
-----------------------------------
Name:
Title:
LIQUIDITY FINANCIAL GROUP, L.P.
By: Liquidity Financial Corporation, its
general partner
By:
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
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SCHEDULE I
Xxxxx Realty Fund, Ltd. - III
Xxxxx Realty Limited Partnership - V
Xxxxx Realty Limited Partnership - VII
Xxxxx Cash Plus Limited Partnership
Exhibit B
BATTLE XXXXXX LLP LETTERHEAD
December 17, 1996
VIA FACSIMILE
Xxxxx X. Xxxxx, Esq.
Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Re: Xxxxx Realty Fund, Ltd. - III and
XXXXX REALTY LIMITED PARTNERSHIP - V
Dear Xxx:
Pursuant to our discussions, I am writing to you on behalf of my
client, Krescent Partners L.L.C. and its affiliates, including Apollo Advisors
(collectively, the "Purchaser"), in connection with the tender offers (the
"Offers") commenced for units of limited partnership interests in the referenced
partnerships. Capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Tender Offer Documents (as defined below).
This will confirm that the Purchaser has reconfirmed its
instructions to the Xxxxxx Group, Inc., the information agent (the "INFORMATION
AGENT") in connection with the Offers, that they are not to make any
recommendation or any representation in connection with the Offers that is not
consistent with the disclosures made in the Offers to Purchase or in the related
Letters of Transmittal dated November 21, 1996, as such documents may be amended
from time to time (the "Tender Offer Documents"). In particular, the Information
Agent has been instructed that they are not to make any statements (i) regarding
any plan by the Purchaser to remove the general partners of the partnerships, or
(ii) that are inconsistent with the Purchaser's obligations under the Standstill
Agreement, including any statements inconsistent with the Purchaser's agreement
that (a) it will not acquire or attempt to acquire more than a 25% interest in
the referenced partnerships and (b) it will vote its interests in the
Partnerships on an issue only in proportion to the votes of all other interest
holders who vote on such issue. Further, the Information Agent has been
instructed that it will only make statements with respect to the number of units
of limited partnership interest that in fact have been tendered to the
Purchaser. The Information Agent has reconfirmed to the Purchaser that they will
instruct each and
BATTLE XXXXXX LLP PAGE 2
Xxxxx X. Xxxxx, Esq. December 17, 1996
every person who is involved in soliciting tenders that they are to specifically
comply with the instructions provided by the Purchaser, and that they will
monitor such persons for this purpose on a continuing basis during the course of
the Offer.
This will also confirm that the Purchaser and the Information Agent
are currently investigating the allegations that certain unauthorized
representations may have been made to investors in the referenced partnerships
during the past two weeks, including, without limitation, the allegation that an
unauthorized representation was made to an investor in Xxxxx Realty Fund,
Ltd.-III on December 12, 1996. In the event you should have any further concerns
regarding, the manner in which the solicitation is being conducted, I urge you
to contact me immediately.
This will confirm further that the Purchaser understands that the
agreement by the referenced partnerships to consider the request by affiliates
of the Purchaser and American Holding I, L.P. to amend the standstill agreements
to which they are subject is specifically conditioned on the Purchaser's and the
Information Agent's absolute compliance with the statements and instructions set
forth in this letter.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
SLL/kl
cc: Xxxxx X. Xxxxxxxxx, Esq.
