-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JKrT6mczlizjkN09mVPxSiKpfQMtnOZgqjdmrn/dtxSIpTnqWReWhldUvZKCLQ/A A4egpse/5oAxIpP424dnOA== 0000847557-02-000091.txt : 20020814 0000847557-02-000091.hdr.sgml : 20020814 20020814155107 ACCESSION NUMBER: 0000847557-02-000091 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN INCOME PARTNERS V D LTD PARTNERSHIP CENTRAL INDEX KEY: 0000847560 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 043090151 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19135 FILM NUMBER: 02736267 BUSINESS ADDRESS: STREET 1: 98 NORTH WASHINGTON ST. CITY: BOSTON STATE: MA ZIP: 02114 BUSINESS PHONE: 6175421200 MAIL ADDRESS: STREET 1: 98 N WASHINGTON STREET CITY: BOSTON STATE: MA ZIP: 02114 10-Q 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-19135 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP ------------------------------------------------ (Exact name of registrant as specified in its charter) Massachusetts 04-3090151 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1050 Waltham Street, Suite 310, Lexington, MA 02421 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (781) 676-0009 ------------------- 88 Broad Street, Boston, MA 02110 - ---------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No____ ----- AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION: Page ---- Item 1. Financial Statements Statement of Financial Position at June 30, 2002 and December 31, 2001 3 Statement of Operations for the three and six months ended June 30, 2002 and 2001 4 Statement of Cash Flows for the six months ended June 30, 2002 and 2001 5 Notes to the Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures about Market Risk 13 PART II. OTHER INFORMATION: Item 1 - 6 14
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF FINANCIAL POSITION JUNE 30, 2002 AND DECEMBER 31, 2001 (UNAUDITED)
June 30, December 31, 2002 2001 ------------ -------------- ASSETS Cash and cash equivalents $1,428,735 $ 1,164,045 Rents receivable - 2,333 Accounts receivable - affiliate 1,635 8,246 Other assets 7,258 938 Interest receivable - loan, net of allowance of $19,996 and $443,080 at June 30, 2002 and December 31, 2001, respectively - - Loan receivable, net of allowance of $238,875 at June 30, 2002 and December 31, 2001 2,491,125 2,491,125 Equipment at cost, net of accumulated depreciation of $496,326 at December 31, 2001 - - ----------- -------------- Total assets $3,928,753 $ 3,666,687 =========== ============== LIABILITIES AND PARTNERS' CAPITAL Accrued liabilities $ 187,516 $ 240,995 Accrued liabilities - affiliate - 25,478 ----------- -------------- Total liabilities 187,516 266,473 ----------- -------------- Partners' capital (deficit): General Partner (344,992) (362,043) Limited Partnership interests (480,227 Units; initial purchase price of $25 each) 4,086,229 3,762,257 ----------- -------------- Total partners' capital 3,741,237 3,400,214 ----------- -------------- Total liabilities and partners' capital $3,928,753 $ 3,666,687 =========== ==============
The accompanying notes are an integral part of these financial statements. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
For the three months ended For the six months ended June 30, June 30, 2002 2001 2002 2001 --------- ---------- ---------- ---------- INCOME Lease revenue $ 13,288 $ 33,156 $ 20,685 $ 68,019 Interest income 4,895 13,478 9,863 25,741 Interest income - loan - - - 108,515 Gain on sale of equipment 28,370 7,500 28,370 7,500 --------- ---------- ---------- ---------- Total income 46,553 54,134 58,918 209,775 EXPENSES Depreciation - 14,569 - 29,138 Equipment management fees - affiliate 239 1,083 609 2,251 Operating expenses - affiliate 88,075 108,623 140,370 186,887 Recovery of bad debt expense (423,084) - (423,084) - Write-down of impaired loan and interest receivable - 681,955 - 681,955 --------- ---------- ---------- ---------- Total expenses (334,770) 806,230 (282,105) 900,231 Net income (loss) $ 381,323 $(752,096) $ 341,023 $(690,456) ========= ========== ========== ========== Net income (loss) per limited partnership unit $ 0.75 $ (1.49) $ 0.67 $ (1.37) ========= ========== ========== ========== Cash distributions declared per limited partnership unit $ - $ - $ - $ - ========= ========== ========== ==========
The accompanying notes are an integral part of these financial statements. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
2002 2001 .. ------------ ------------ CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES Net income (loss) $ 341,023 $ (690,456) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation - 29,138 Gain on sale of equipment (28,370) (7,500) Write-down of impaired loan and interest receivable - 681,955 Recovery of bad debt expense (423,084) - Changes in assets and liabilities: Rents receivable 2,333 10,731 Accounts receivable - affiliate 6,611 (5,757) Other assets (6,320) (6,563) Interest receivable - loan 423,084 (108,515) Accrued liabilities (53,479) (12,022) Accrued liabilities - affiliate (25,478) 16,181 -------------- -------------- Net cash provided by (used in) operating activities 236,320 (92,808) -------------- -------------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES Proceeds from equipment sales 28,370 7,500 -------------- -------------- Net cash provided by investing activities 28,370 7,500 -------------- -------------- Net increase (decrease) in cash and cash equivalents 264,690 (85,308) Cash and cash equivalents at beginning of period 1,164,045 1,226,359 -------------- -------------- Cash and cash equivalents at end of period $ 1,428,735 $ 1,141,051 ============== ==============
The accompanying notes are an integral part of these financial statements. ------ AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002 (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION - ----------------------------------- The financial statements presented herein are prepared in conformity with generally accepted accounting principles and the instructions for preparing Form 10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange Commission and are unaudited. As such, these financial statements do not include all information and footnote disclosures required under generally accepted accounting principles for complete financial statements and, accordingly, the accompanying financial statements should be read in conjunction with the financial statements and related footnotes presented in the 2001 Annual Report (Form 10-K) of American Income Partners V-D Limited Partnership (the "Partnership"). Except as disclosed herein, there has been no material change to the information presented in the footnotes to the 2001 Annual Report included in Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary to present fairly the financial position at June 30, 2002 and December 31, 2001 and results of operations for the three and six month periods ended June 30, 2002 and 2001 have been made and are reflected. NOTE 2 - REVENUE RECOGNITION - -------------------------------- Rents are payable to the Partnership monthly or quarterly and no significant amounts are calculated on factors other than the passage of time. The leases are accounted for as operating leases. As of June 30, 2002, the Partnership has no future rents due under noncancellable lease agreements. NOTE 3 - EQUIPMENT - --------------------- During the quarter ended June 30, 2002, the Partnership sold all of its remaining and fully depreciated equipment resulting in a net gain of $28,370. NOTE 4 - LOAN RECEIVABLE - ---------------------------- On March 8, 2000, the Partnership and 10 affiliated partnerships (the ''Partnerships'') collectively loaned $32 million to Echelon Residential Holdings LLC ("Echelon Residential Holdings"), a newly formed real estate company. Echelon Residential Holdings is owned by several investors, including James A. Coyne, Executive Vice President of EFG. In addition, certain affiliates of the General Partner made loans to Echelon Residential Holdings in their individual capacities. The Partnership's original loan was $2,730,000. Echelon Residential Holdings, through a wholly-owned subsidiary (Echelon Residential LLC), used the loan proceeds to acquire various real estate assets from Echelon International Corporation, an unrelated Florida-based real estate company. The loan has a term of 30 months, maturing on September 8, 2002, and an annual interest rate of 14% for the first 24 months and 18% for the final 6 months. Interest accrues and compounds monthly and is payable at maturity. In connection with the transaction, Echelon Residential Holdings has pledged a security interest in all of its right, title and interest in and to its membership interests in Echelon Residential LLC to the Partnerships as collateral. Echelon Residential Holdings has no material business interests other than those connected with the real estate properties owned by Echelon Residential LLC. During the second quarter of 2001, the General Partner determined that recoverability of the loan receivable had been impaired and at June 30, 2001 recorded an impairment of $238,875, reflecting the General Partner's current assessment of the amount of loss that is likely to be incurred by the Partnership. In addition to the write-down recorded at June 30, 2001, the Partnership reserved all accrued interest of $443,080 recorded on the loan receivable from inception through March 31, 2001 and ceased accruing interest on its loan receivable from Echelon Residential Holdings, effective April 1, 2001. During the second quarter of 2002, the Partnership received $423,084 from Echelon Residential Holdings for interest due on the loan. As a result, the Partnership reversed $423,084 of the allowance recorded against the accrued interest receivable balance, which is reflected as "Recovery of bad debt expense" in the Statement of Operations. At June 30, 2002, the General Partner believes that the net carrying value of the loan receivable is appropriate. The summarized unaudited financial information for Echelon Residential Holdings as of and for the six month periods ended June 30, 2002 and 2001 is as follows:
2002 2001 ------------- ------------ Total assets $ 94,423,115 $79,159,776 Total liabilities $107,902,966 $85,455,528 Minority interest $ 1,108,573 $ 1,782,982 Total deficit $(14,588,424) $(8,078,734) Total revenues $ 1,430,874 $ 1,705,679 Total expenses, minority interest and equity in loss of unconsolidated joint venture $ 4,061,173 $ 5,924,774 Net loss $ (2,630,299) $(4,219,095)
NOTE 5 - RELATED PARTY TRANSACTIONS - ---------------------------------------- All operating expenses incurred by the Partnership are paid by EFG on behalf of the Partnership and EFG is reimbursed at its actual cost for such expenditures. Fees and other costs incurred during the six month periods ended June 30, 2002 and 2001, which were paid or accrued by the Partnership to EFG or its Affiliates, are as follows:
2002 2001 -------- -------- Equipment management fees $ 609 $ 2,251 Administrative charges 78,983 38,430 Reimbursable operating expenses due to third parties 61,387 148,457 -------- -------- Total $140,979 $189,138 ======== ========
All rents and proceeds from the sale of equipment are paid directly to EFG. EFG temporarily deposits collected funds in a separate interest-bearing escrow account prior to remittance to the Partnership. At June 30, 2002, the Partnership was owed $1,635 by EFG for such funds and the interest thereon. These funds were remitted to the Partnership in July 2002. The discussion of the loan to Echelon Residential Holdings in Note 4 above is incorporated herein by reference. NOTE 6 - LEGAL PROCEEDINGS - ------------------------------ Action involving Rosenblum, et al. - -------------------------------------- As described more fully in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2001, the Partnership is a Nominal Defendant along with ten affiliated partnerships (collectively, the "Partnerships") in a Class Action Lawsuit, Leonard Rosenblum, et al. v. Equis Financial Group Limited Partnership, ----------------------------------------------------------------------- et al. - ------- The Defendant's and Plaintiff's Counsel reached agreement on a Revised Stipulation of Settlement (the "Revised Settlement"). As part of the Revised Settlement, EFG has agreed to buy the loans made by the Partnerships to Echelon Residential Holdings for an aggregate of $32 million plus interest at 7.5% per annum, if they are not repaid prior to or at their scheduled maturity date of September 8, 2002. The Revised Settlement also provides for the liquidation of the Partnerships' assets, a cash distribution and the dissolution of the Partnerships including the liquidation and dissolution of this Partnership. On March 1, 2002, after a hearing on the parties' joint motion for preliminary approval of the Revised Settlement, the Court issued an order preliminarily approving the Revised Settlement and providing for the mailing of notice to the Partnership's Sub-Class of a hearing on June 7, 2002 on whether the settlement should be finally approved. After the hearing the Court issued its Order and Final Judgment, dated June 12, 2002 and recorded on the Court docket on June 18, 2002, approving the settlement on the terms and conditions set forth in the Revised Settlement and finding that the settlement is fair, reasonable and adequate and directing implementation of its terms and provisions with respect to the Partnerships and the Partnerships' Sub-class. The 30 day appeal period expired on July 18, 2002. The Partnership has commenced implementing the terms of the Revised Settlement. See further discussion of the Revised Settlement in Note 7 - Subsequent Events. NOTE 7 - SUBSEQUENT EVENTS - ------------------------------ As of August 9, 2002, the Partnership has sold all of its equipment and transferred its remaining cash and non-cash assets to the American Income Partners V-D Limited Partnership Liquidating Trust ("Liquidating Trust"), of which Wilmington Trust Company is Trustee. The Partnership will be dissolved. The Liquidating Trust is in the process of distributing the Partnership's cash, net of reserves for known and contingent liabilities, in accordance with the terms of the Revised Settlement. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations. - --------------- Certain statements in this quarterly report of American Income Partners V-D Limited Partnership (the "Partnership") that are not historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to a variety of risks and uncertainties. There are a number of factors that could cause actual results to differ materially from those expressed in any forward-looking statements made herein. These factors include, but are not limited to, the performance and liquidation of the Partnership's remaining non-equipment assets. The Defendant's and Plaintiff's Counsel reached agreement on a Revised Stipulation of Settlement (the "Revised Settlement"). As part of the Revised Settlement, Equis Financial Group Limited Partnership ("EFG") has agreed to buy the loans made by the Partnerships to Echelon Residential Holdings LLC ("Echelon Residential Holdings") for an aggregate of $32 million plus interest at 7.5% per annum, if they are not repaid prior to or at their scheduled maturity date of September 8, 2002. The Revised Settlement also provides for the liquidation of the Partnerships' assets, a cash distribution and the dissolution of the Partnerships including the liquidation and dissolution of this Partnership. On March 1, 2002, after a hearing on the parties' joint motion for preliminary approval of the Revised Settlement, the Court issued an order preliminarily approving the Revised Settlement and providing for the mailing of notice to the Partnership's Sub-Class of a hearing on June 7, 2002 on whether the settlement should be finally approved. After the hearing the Court issued its Order and Final Judgment, dated June 12, 2002 and recorded on the Court docket on June 18, 2002, approving the settlement on the terms and conditions set forth in the Revised Settlement and finding that the settlement is fair, reasonable and adequate and directing implementation of its terms and provisions with respect to the Partnerships and the Partnerships' Sub-class. The 30 day appeal period expired on July 18, 2002. The Partnership has commenced implementing the terms of the Revised Settlement. As of August 9, 2002, the Partnership has sold all of its equipment and transferred its remaining cash and non-cash assets to the American Income Partners V-D Limited Partnership Liquidating Trust ("Liquidating Trust"), of which Wilmington Trust Company is Trustee. The Partnership will be dissolved. The Liquidating Trust is in the process of distributing the Partnership's cash, net of reserves for known and contingent liabilities, in accordance with the terms of the Revised Settlement. The Investment Company Act of 1940 (the "1940 Act") places restrictions on the capital structure and business activities of companies registered thereunder. The Partnership has active business operations in the financial services industry, including equipment leasing and the loan to Echelon Residential Holdings. The Partnership does not intend to engage in investment activities in a manner or to an extent that would require the Partnership to register as an investment company under the 1940 Act. However, it is possible that the Partnership unintentionally may have engaged in an activity or activities that may be construed to fall within the scope of the 1940 Act. The General Partner has been engaged in discussions with the staff of the Securities and Exchange Commission ("SEC") regarding whether or not the Partnership may be an inadvertent investment company as a consequence of the above-referenced loan. In a letter dated May 10, 2001, the staff of the SEC informed the general partner that the staff believes that the Partnership and seven of its affiliated partnerships are unregistered investment companies as defined in Section 3(a)(1)(C) of the 1940 Act. The 1940 Act, among other things, prohibits an unregistered investment company from offering securities for sale or engaging in any business in interstate commerce and, consequently, leases and contracts entered into by partnerships that are unregistered investment companies may be voidable. The General Partner has consulted counsel and believes that the Partnership is not an investment company. Critical Accounting Policies and Estimates - ---------------------------------------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the General Partner to make estimates and assumptions that affect the amounts reported in the financial statements. On a regular basis, the General Partner reviews these estimates and assumptions including those related to revenue recognition, asset lives and depreciation, allowance for doubtful accounts, allowance for loan loss, impairment of long-lived assets and contingencies. These estimates are based on the General Partner's historical experience and on various other assumptions believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The General Partner believes, however, that the estimates, including those for the above-listed items, are reasonable. The General Partner believes the following critical accounting policies, among others, are subject to significant judgments and estimates used in the preparation of these financial statements: Revenue Recognition: Rents are payable to the Partnership monthly or quarterly - --------------------- and no significant amounts are calculated on factors other than the passage of time. The Partnership's leases are accounted for as operating leases and are noncancellable. Rents received prior to their due dates are deferred. Asset lives and depreciation method: The Partnership's primary business involved - ------------------------------------ the purchase and subsequent lease of long-lived equipment. The Partnership's depreciation policy is intended to allocate the cost of equipment over the period during which it produces economic benefit. The principal period of economic benefit is considered to correspond to each asset's primary lease term, which generally represents the period of greatest revenue potential for each asset. Accordingly, to the extent that an asset is held on primary lease term, the Partnership depreciates the difference between (i) the cost of the asset and (ii) the estimated residual value of the asset on a straight-line basis over such term. For purposes of this policy, estimated residual values represent estimates of equipment values at the date of the primary lease expiration. To the extent that an asset is held beyond its primary lease term, the Partnership continues to depreciate the remaining net book value of the asset on a straight-line basis over the asset's remaining economic life. Allowance for loan losses: The Partnership periodically evaluates the - ---------------------------- collectibility of its loan's contractual principal and interest and the - ---- existence of loan impairment indicators, including contemporaneous economic - ---- conditions, situations which could affect the borrower's ability to repay its - ---- obligation, the estimated value of the underlying collateral, and other relevant - -- factors. Real estate values are discounted using a present value methodology over the period between the financial reporting date and the estimated disposition date of each property. A loan is considered to be impaired when, based on current information and events, it is probable that the Partnership will be unable to collect all amounts due according to the contractual terms of the loan agreement, which includes both principal and interest. A provision for loan losses is charged to earnings based on the judgment of the General Partner of the amount necessary to maintain the allowance for loan losses at a level adequate to absorb probable losses. Impairment of long-lived assets: On a regular basis, the General Partner - ----------------------------------- reviews the net carrying value of equipment to determine whether it can be - ------ recovered from undiscounted future cash flows. Adjustments to reduce the net - ----- carrying value of equipment are recorded in those instances where estimated net - -- realizable value is considered to be less than net carrying value. Inherent in the Partnership's estimate of net realizable values are assumptions regarding estimated future cash flows. If these assumptions or estimates change in the future, the Partnership could be required to record impairment charges for these assets. Contingencies and litigation: The Partnership is subject to legal proceedings - ------------------------------- involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are made after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Partnership may be required to adjust amounts recorded in its financial statements. Results of Operations - ----------------------- For the three and six month periods ended June 30, 2002, the Partnership recognized lease revenue of $13,288 and $20,685, respectively, compared to $33,156 and $68,019, respectively, for the same periods in 2001. The decrease in lease revenue from 2001 to 2002 resulted primarily from lease term expirations and sales of equipment. During the second quarter of 2002, the Partnership sold all of its remaining equipment. Interest income for the three and six month periods ended June 30, 2002 was $4,895 and $9,863, respectively, compared to $13,478 and $134,256, respectively, for the same periods in 2001. Interest income is generated principally from temporary investment of rental receipts and equipment sale proceeds in short-term instruments and interest earned on the loan receivable from Echelon Residential Holdings. Interest income included $108,515 during the six months ended June 30, 2001, earned on the loan receivable from Echelon Residential Holdings. The Partnership ceased accruing interest on this loan, effective April 1, 2001. See further discussion below. During the three and six months ended June 30, 2002 and 2001, the Partnership sold fully depreciated equipment to existing lessees and third parties resulting in net gains of $28,370 and $7,500, respectively. As of June 30, 2002, the Partnership owned no equipment. The total economic value realized upon final disposition of each asset is comprised of all primary lease term revenue generated from that asset, together with its residual value. The latter consists of cash proceeds realized upon the asset's sale in addition to all other cash receipts obtained from renting the asset on a re-lease, renewal or month-to-month basis. The Partnership classifies such residual rental payments as lease revenue. Consequently, the amount of any gain or loss reported in the financial statements may not necessarily be indicative of the total residual value the Partnership achieved from leasing the equipment. Depreciation expense for the three and six month periods ended June 30, 2001 was $14,569 and $29,138, respectively. The Partnership's equipment became fully depreciated during 2001. Management fees were $239 and $609, respectively, for the three and six months ended June 30, 2002 compared to $1,083 and $2,251, respectively, for the same periods in 2001. Management fees are based on 5% of gross lease revenue generated by operating leases and 2% of gross lease revenue generated by full payout leases. Operating expenses were $88,075 and $140,370, respectively, for the three and six month periods ended June 30, 2002, compared to $108,623 and $186,887, respectively, for the same periods in 2001. In 2001, operating expenses included approximately $59,000 related to the Class Action Lawsuit. Operating expenses consist principally of administrative charges, professional service costs, such as audit and other legal fees, as well as printing, distribution and remarketing expenses. In certain cases, equipment storage or repairs and maintenance costs may have been incurred in connection with equipment being remarketed. During the second quarter of 2001, the General Partner determined that recoverability of the loan receivable had been impaired and at June 30, 2001 recorded an impairment of $238,875, reflecting the General Partner's current assessment of the amount of loss that is likely to be incurred by the Partnership. In addition to the write-down recorded at June 30, 2001, the Partnership reserved all accrued interest of $443,080 recorded on the loan receivable from inception through March 31, 2001 and ceased accruing interest on its loan receivable from Echelon Residential Holdings, effective April 1, 2001. During the second quarter of 2002, the Partnership received $423,084 from Echelon Residential Holdings for interest due on the loan. As a result, the Partnership reversed $423,084 of the allowance recorded against the accrued interest receivable balance, which is reflected as "Recovery of bad debt expense" in the Statement of Operations. Liquidity and Capital Resources and Discussion of Cash Flows - -------------------------------------------------------------------- The Partnership by its nature is a limited life entity. The Partnership's principal operating activities derive from asset rental transactions. Accordingly, the Partnership's principal source of cash from operations is generally provided by the collection of periodic rents. These cash inflows are used to pay management fees and operating costs. Operating activities generated a net cash inflow of $236,320 for the six months ended June 30, 2002 and a net cash outflow of $92,808 for the six months ended June 30, 2001. The cash inflow in 2002 is primarily the result of the receipt of approximately $423,000 of interest earned on the loan receivable from Echelon Residential Holdings. Cash realized from asset disposal transactions is reported under investing activities on the accompanying Statement of Cash Flows. During the six months ended June 30, 2002 and 2001, the Partnership realized equipment sale proceeds of $28,370 and $7,500, respectively. At June 30, 2002, no future minimum lease payments were due and all remaining equipment was sold. The loan made by the Partnership to Echelon Residential Holdings is, and will continue to be, subject to various risks, including the risk of default by Echelon Residential Holdings, which could require the Partnership to foreclose under the pledge agreement on its interests in Echelon Residential LLC. The ability of Echelon Residential Holdings to make loan payments and the amount the Partnership may realize after a default would be dependent upon the risks generally associated with the real estate lending business including, without limitation, the existence of senior financing or other liens on the properties, general or local economic conditions, property values, the sale of properties, interest rates, real estate taxes, other operating expenses, the supply and demand for properties involved, zoning and environmental laws and regulations, rent control laws and other governmental rules. The Partnership periodically evaluates the collectibility of the loan's contractual principal and interest and the existence of loan impairment indicators. During the second quarter of 2001, the General Partner determined that recoverability of the loan receivable had been impaired and at June 30, 2001 recorded an impairment of $238,875, reflecting the General Partner's current assessment of the amount of loss that is likely to be incurred by the Partnership. In addition to the write-down recorded at June 30, 2001, the Partnership reserved all accrued interest of $443,080 recorded on the loan receivable through March 31, 2001 and ceased accruing interest on its loan receivable from Echelon Residential Holdings, effective April 1, 2001. During the quarter ended June 30, 2002, the Partnership received a partial payment of the interest due on this loan as discussed above. The Restated Agreement, as amended, prohibits the Partnership from making loans to the General Partner or its affiliates. Since the acquisition of the several parcels of real estate from the owner had to occur prior to the admission of certain independent third parties as equity owners, Echelon Residential Holdings and its wholly owned subsidiary, Echelon Residential LLC, were formed in anticipation of their admission. The General Partner agreed to an officer of the Manager serving as the initial equity holder of Echelon Residential Holdings and as an unpaid manager of Echelon Residential Holdings. The officer made a $185,465 equity investment in Echelon Residential Holdings. His return on his equity investment is restricted to the same rate of return as the partnerships realize on their loans. There is a risk that structuring the loan this way may be in violation of the prohibition against loans to affiliates in the Partnership Agreements. There are no formal restrictions under the Restated Agreement, as amended, that materially limit the Partnership's ability to pay cash distributions, except that the General Partner may suspend or limit cash distributions to ensure that the Partnership maintains sufficient working capital reserves to cover, among other things, operating costs and potential expenditures, such as refurbishment costs to remarket equipment upon lease expiration. In addition, the Partnership has retained funds in connection with the Class Action Lawsuit. Cash distributions to the General Partner and Recognized Owners had been declared and generally paid within fifteen days following the end of each calendar quarter. No cash distributions have been declared since 1999. In any given year, it is possible that Recognized Owners will be allocated taxable income in excess of distributed cash. This discrepancy between tax obligations and cash distributions may or may not continue in the future, and cash may or may not be available for distribution to the Recognized Owners adequate to cover any tax obligation. Cash distributions when paid to the Recognized Owners generally consist of both a return of and a return on capital. Cash distributions do not represent and are not indicative of yield on investment. Actual yield on investment cannot be determined with any certainty until conclusion of the Partnership and will be primarily dependent upon the proceeds realized from the liquidation of the Partnership's remaining assets offset by the associated costs of such liquidation and dissolution of the Partnership. The Partnership's capital account balances for federal income tax and for financial reporting purposes are different primarily due to differing treatments of income and expense items for income tax purposes in comparison to financial reporting purposes (generally referred to as permanent or timing differences). For instance, selling commissions and organization and offering costs pertaining to syndication of the Partnership's limited partnership units are not deductible for federal income tax purposes, but are recorded as a reduction of partners' capital for financial reporting purposes. Therefore, such differences are permanent differences between capital accounts for financial reporting and federal income tax purposes. Other differences between the bases of capital accounts for federal income tax and financial reporting purposes occur due to timing differences. Such items consist of the cumulative difference between income or loss for tax purposes and financial statement income or loss. For financial reporting purposes, the General Partner has accumulated a capital deficit at June 30, 2002. This is the result of aggregate cash distributions to the General Partner being in excess of its capital contribution of $1,000 and its allocation of financial statement net income or loss. Ultimately, the existence of a capital deficit for the General Partner for financial reporting purposes is not indicative of any further capital obligations to the Partnership by the General Partner. The Agreement, as amended, requires that upon the dissolution of the Partnership, the General Partner will be required to contribute to the Partnership an amount equal to any negative balance which may exist in the General Partner's tax capital account. At December 31, 2001, the General Partner had a positive tax capital account balance. As of August 9, 2002, the Partnership has sold all of its equipment and transferred its remaining cash and non-cash assets to the American Income Partners V-D Limited Partnership Liquidating Trust ("Liquidating Trust"), of which Wilmington Trust Company is Trustee. The Partnership will be dissolved. The Liquidating Trust is in the process of distributing the Partnership's cash, net of reserves for known and contingent liabilities, in accordance with the terms of the Revised Settlement. Item 3. Quantitative and Qualitative Disclosures about Market Risk - -------------------------------------------------------------------------- The Partnership's financial statements include financial instruments that are exposed to interest rate risks. The Partnership's loan to Echelon Residential Holdings matures on September 8, 2002 and currently has a stated fixed annual rate of 18% with interest due at maturity (see discussion above). Investments earning a fixed rate of interest may have their fair market value adversely impacted due to a rise in interest rates. The effect of interest rate fluctuations on the Partnership for the six months ended June 30, 2002 was not material. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART II. OTHER INFORMATION
Item 1. Legal Proceedings . Response: . Refer to Note 6 to the financial statements herein. Item 2. Changes in Securities . Response: None Item 3. Defaults upon Senior Securities . Response: None Item 4. Submission of Matters to a Vote of Security Holders . Response: None Item 5. Other Information . Response: None Item 6(a). Exhibits Response: Exhibit 2.13 Amendment to Subsection 2.2 (f) of the Revised Stipulation of Settlement dated January 29, 2002 Exhibit 2.14 Plan of Liquidation and Dissolution dated July 18, 2002 Exhibit 2.15 Account Agency Agreement between Equis Financial Group Limited Partnership and Wilmington Trust Company, dated Apr Exhibit 2.16 Liquidating Trust Agreement between the Partnership and Wilmington Trust Company dated July 18, 2002 Exhibit 99.1 Certification Pursuant to 18 U.S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of Exhibit 99.2 Certification Pursuant to 18 U.S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of Item 6(b). Reports on Form 8-K . Form 8-K dated July 18, 2002 to include the Court approved settlement of the Class Action Lawsuit.
SIGNATURE PAGE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, a Massachusetts corporation and the General Partner of the Registrant. By: /s/ Michael J. Butterfield ----------------------------- Michael J. Butterfield Treasurer of AFG Leasing IV Incorporated (Duly Authorized Officer and Principal Financial and Accounting Officer) Date: August 14, 2002 ----------------- EX-2 3 doc2.txt EXHIBIT 2.13 ------------ Conformed --------- IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS, BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES, BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of themselves and all others similarly situated and derivatively on behalf of the Nominal Defendants, Plaintiffs, v. Case No. 98-8030 EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, EQUIS CORPORATION, a Massachusetts Corporation, GDE ACQUISITION LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AFG LEASING INCORPORATED, a Massachusetts Corporation, AFG LEASING IV INCORPORATED, a Massachusetts Corporation, AFG LEASING VI INCORPORATED, a Massachusetts Corporation, AFG AIRCRAFT MANAGEMENT CORPORATION, a Massachusetts Corporation, AFG ASIT CORPORATION, a Massachusetts Corporation, AF/AIP PROGRAMS LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, GARY D. ENGLE and GEOFFREY A. MACDONALD, Defendants, AIRFUND I INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 4 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 5 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 6 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 7 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 8 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-B, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-C, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-D, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-E, a Massachusetts Limited Partnership, AFG INVESTMENT TRUST A, a Delaware business trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST C, a Delaware business trust, and AFG INVESTMENT TRUST D, a Delaware business trust, Nominal Defendants. AMENDMENT TO SUBSECTION 2.2(F) OF THE REVISED STIPULATION OF SETTLEMENT DATED ----------------------------------------------------------------------------- JANUARY 29, 2002 ---------------- Pursuant to the Court's instruction at the June 7, 2002 fairness hearing in the above-captioned action, the Parties hereby agree to, and submit, the following amendment to be substituted in Subsection 2.2.(f) of the Revised Stipulation of Settlement dated January 29, 2002: (f) Sale of the Echelon Notes. In accordance with the Court's ----------------------------- Preliminary Approval Order dated March 22, 1999 requiring that the Defendants use their best efforts to sell any New Investments in an orderly and timely fashion if the Exchange has not occurred, Equis and the General Partners shall purchase the Echelon Notes not later than the last day of the first fiscal quarter after the Effective Date - the Operating Partnership Sub-Class (the "Note Payment Date"). Equis and the General Partners shall purchase the Echelon Notes for a price equal to their aggregate outstanding principal amount plus an annualized return of 7.5% simple interest (calculated on the basis of the $32 million original aggregate principal amount of the Echelon Notes less any payments during the original aggregate principal amount of the Echelon Notes less any payments during the term of such notes) from the origination date of March 8, 2000 until the date on which the Echelon Notes are purchased (the "Echelon Note Purchase Price"). The Defendants shall cause Echelon Residential Holdings LLC not to make any distributions in respect of its common equity interests while any outstanding principal and accrued interest of the Echelon Notes is payable to the Operating Partnerships or the Liquidating Trust, as the case may be. For the purpose of calculating the Echelon Note Purchase Price, any payments made in respect to the Echelon Notes prior to the purchase of the notes by Equis and the General Partners shall be applied as a reduction in principal amount pro rata of the Echelon Notes and the 7.5% rate of return will cease to accrue on such payments after receipt of such payments. IT IS THE CLEAR INTENT AND AGREEMENT OF THE PARTIES THAT IN NO EVENT SHALL EQUIS AND THE GENERAL PARTNERS PAY LESS FOR THE ECHELON NOTES THAN THE ECHELON NOTE PURCHASE PRICE (I.E., $32 MILLION PLUS 7.5% SIMPLE INTEREST ACCRUED ON THAT AMOUNT FROM ---- THE ORIGINATION DATE OF MARCH 8, 2000 UNTIL THE DATE ON WHICH THE ECHELON NOTES ARE PURCHASED). HOWEVER, IN ORDER TO ENSURE THAT THE DEFENDANTS ARE NOT RECEIVING A WINDFALL IN CONNECTION WITH THE PURCHASE OF THE ECHELON NOTES, THE DEFENDANTS SHALL HAVE AN APPRAISAL OF THE PROPERTIES UNDERLYING THE ECHELON NOTES CONDUCTED PRIOR TO THE NOTE PAYMENT DATE BY AN INDEPENDENT, NATIONALLY RECOGNIZED, ACCREDITED APPRAISER. IN THE EVENT THAT THE FAIR MARKET VALUE OF THE PROPERTIES UNDERLYING THE ECHELON NOTES BASED ON THE APPRAISAL EXCEEDS THE ------- ECHELON NOTE PURCHASE PRICE (I.E., IS MORE THAN $32 MILLION PLUS 7.5% SIMPLE ---- INTEREST CALCULATED AS DESCRIBED ABOVE), THE LIQUIDATING TRUSTEE WILL HAVE THE OPTION TO FORECLOSE AND COLLECT ON THE ECHELON NOTES RATHER THAN ALLOW EQUIS AND THE GENERAL PARTNERS TO PURCHASE THE ECHELON NOTES FOR THE ECHELON NOTE PURCHASE PRICE. Upon receipt of the Echelon Note Purchase Price, the Operating Partnerships will assign and deliver their respective Echelon Notes to Equis and the General Partners along with a full release of the Payor's obligations to the Operating Partnerships under the Echelon Notes. Equis and the General Partners agree that upon receipt of the Echelon Notes and said release they shall forebear from foreclosing on the Echelon Notes. In the event the Echelon Note Purchase Price has not been paid for the Echelon Notes by Equis and the General Partners by the Maturity Date of September 8, 2002, the Operating Partnerships shall forebear from foreclosing on the Echelon Notes until the earlier of the purchase of the Echelon Notes by Equis and the General Partners on the Note Payment Date or the rejection, termination or cancellation of this Revised Stipulation. Respectfully submitted, this 11th day of June 2002, ATTORNEYS FOR PLAINTIFFS: s/Allan Lerner by ADF - --------------------------------- LERNER & PEARCE, P.A. Allan M. Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 (305) 563-8111 and s/Andrew D. Friedman - ------------------------------ WECHSLER HARWOOD HALEBIAN & FEFFER LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 (212) 935-7400 LAW OFFICES OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Ste. 1445 Atlanta, GA 30328 (770) 552-5270 GILMAN AND PASTOR Peter A. Lagorio One Boston Place Boston, MA 02108-4400 (617) 589-3750 BENJAMIN S. SCHWARTZ, CHARTERED Benjamin S. Schwartz 4600 Olympic Way Evergreen, CO 80439 (303) 670-5941 GLANCY & BINKOW Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Ste. 2700 New York, NY 10110 (212) 921-4100 THOMAS A. HOADLEY, PA 310 Australian Avenue Palm Beach, FL 33480 (561) 792-9006 GOODKIND, LABATAN, RUDOFF & SUCHAROW, LLP Lynda J. Grant Robert N. Cappucci 100 Park Avenue New York, NY 10017 (212) 907-0700 LASKY & RIFKIND, LTD. Leigh Lasky 30 North LaSalle Street, Ste. 2140 Chicago, IL 60602 (312) 759-7670 HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld 260 Madison Avenue New York, NY 10116 (212) 696-1212 ATTORNEYS FOR DEFENDANTS: s/Gerald F. Richman - ---------------------------- RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, P.A. Gerald F. Richman, Esq. 250 Australian Ave. South - Suite 1504 West Palm Beach, Florida 33401 Tel. (561) 803-3500 and s/Gregory P. Deschenes - ------------------------------- NIXON PEABODY LLP Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 Te. (617) 345-1000 EXHIBIT A --------- EXHIBIT 2.13 EXHIBIT A ---------------------- Conformed --------- IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS, BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES, BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of themselves and all others similarly situated and derivatively on behalf of the Nominal Defendants, Plaintiffs, v. Case No. 98-8030 EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, EQUIS CORPORATION, a Massachusetts Corporation, GDE ACQUISITION LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AFG LEASING INCORPORATED, a Massachusetts Corporation, AFG LEASING IV INCORPORATED, a Massachusetts Corporation, AFG LEASING VI INCORPORATED, a Massachusetts Corporation, AFG AIRCRAFT MANAGEMENT CORPORATION, a Massachusetts Corporation, AFG ASIT CORPORATION, a Massachusetts Corporation, AF/AIP PROGRAMS LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, GARY D. ENGLE and GEOFFREY A. MACDONALD, Defendants, AIRFUND I INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 4 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 5 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 6 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 7 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 8 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-B, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-C, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-D, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-E, a Massachusetts Limited Partnership, AFG INVESTMENT TRUST A, a Delaware business trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST C, a Delaware business trust, and AFG INVESTMENT TRUST D, a Delaware business trust, Nominal Defendants. REVISED STIPULATION OF SETTLEMENT --------------------------------- This Revised Stipulation of Settlement (the "Revised Stipulation" or "Settlement") dated as of January 29, 2002 is made and entered into by and among the Plaintiffs, individually and on behalf of all others similarly situated, as further described below, and derivatively on behalf of the Nominal Defendants (defined below), on the one hand, and the Defendants (defined below), on the other hand, by and through their undersigned attorneys in the Action (defined below), and is subject to the approval of the Court (defined below). RECITALS -------- Capitalized terms not otherwise defined shall have the meanings set forth in Article I of this Revised Stipulation. WHEREAS A. This Action was brought by the Plaintiffs, owners of limited partner units ("Units") or beneficial interests ("Interests") in investment programs sponsored by defendant Equis Financial Group Limited Partnership, as successor-in-interest to American Finance Group ("Equis"), as a class and derivative action on behalf of the twenty-eight investment programs named as Nominal Defendants in the Action -- twenty-four (24) limited partnerships (the "Partnerships") and four (4) Trusts organized under Delaware law (the "Trusts") (the Partnerships and the Trusts are referred to collectively as the "Nominal Defendants") -- and a putative class of current and certain former owners of Units or Interests of the Nominal Defendants (the "putative Class" or "Class" or "Class Members"). B. Named as defendants are Equis, certain of its affiliates, including five wholly-owned subsidiaries of Equis which are the general partners or managing trustees of one or more of the Nominal Defendants (the "Managing Defendants"), and certain other entities and individuals alleged to own and/or control one or more of the Managing Defendants and Nominal Defendants (the "Controlling Defendants"). C. Plaintiffs have asserted claims arising out of the acts, errors, omissions, practices, and course of conduct allegedly engaged in by the Defendants in connection with the operation and management of the Nominal Defendants, including, but not limited to, common law fraud, breach of contract, breach of fiduciary duties, and violations of the Partnership and/or Trust Agreements that govern each of the Nominal Defendants, and seek various legal and equitable remedies, including compensatory and punitive damages and various forms of injunctive relief. D. Plaintiffs allege that the Defendants have engaged in a common plan and scheme in which they have, among other things, (1) violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and regulations promulgated by the SEC thereunder, by intentionally or recklessly issuing, disseminating to certain Class Members, and/or filing with the SEC, documents which contained false and misleading statements and/or omissions of material facts; and (2) breached their fiduciary duties of loyalty, good faith and due diligence by, among other things, (a) misappropriating assets of the Nominal Defendants by causing them to, inter alia, sell or exchange assets for inadequate consideration, enter into unnecessary and wasteful transactions, and to pay fees and reimbursements of expenses to the Defendants and their affiliates in amounts that greatly exceeded the value of the services provided and/or the amounts permitted by the respective Governing Agreements of the Nominal Defendants, (b) failing to explore and/or pursue transactions designed to maximize the value of the Units and Interests, and (c) usurping business opportunities that belonged to the Nominal Defendants and the profits derived therefrom. E. Defendants categorically deny the allegations in the Class and Derivative Action Complaint, deny any fault, wrongdoing, or liability relating in any way to, inter alia, the offering and sale of Units or Interests; any statements or demands concerning the Partnerships; and the operation and management of any of the Partnerships and Trusts. The Defendants further deny that they acted improperly in any way, and deny any liability of any kind to the Named Plaintiffs, the Nominal Defendants, or any member of the Settlement Class. The Defendants are entering into this Revised Stipulation solely because the proposed settlement would eliminate the burden, inconvenience and expense of further litigation and to achieve total and final release, repose and protection. F. In the absence of this Revised Stipulation, Defendants would vigorously assert and pursue several defenses as a complete bar to recovery in this Action. G. The parties agree that the Court should grant a joint motion for conditional certification of the Settlement Class and that the Court should designate the Named Plaintiffs as class representatives and designate Class Counsel as class counsel, solely for the purposes of this Revised Stipulation and the Settlement of the Action as set forth herein. H. The parties consider it desirable that the Action be settled on the terms and conditions set forth in this Revised Stipulation. I. Based on their investigation of the facts and of the applicable law, the Named Plaintiffs and Class Counsel have concluded that the proposed settlement of the Action on the terms and conditions of this Revised Stipulation is fair, reasonable, and adequate and is in the best interests of the Settlement Class and the Nominal Defendants, having taken into account the risks and difficulties involved in attempting to establish a right of recovery on behalf of the Settlement Class and/or the Nominal Defendants against the Defendants, the expense and length of time necessary to continue the litigation through trial and the appeals that might follow, and the uncertainty inherent in any complex litigation and the substantial benefits of the Settlement for the Class and Nominal Defendants. J. The proposed settlement of the Action contemplated by this Revised Stipulation is the product of extensive, good faith, and arm's-length negotiation between Class Counsel and counsel for the Defendants. NOW, THEREFORE, in consideration of the foregoing Recitals and the agreements, covenants, representations and warranties set forth herein, IT IS HEREBY STIPULATED AND AGREED by and among the Parties, by and through their attorneys or counsel of record, that, subject to the approval of the Court, the Action and all claims that have been or could have been asserted therein shall be finally and fully compromised and settled as to all Defendants and the Released Parties, and this Action shall be dismissed on the merits and with prejudice as to all Defendants and the Released Parties upon the following terms and conditions: ARTICLE I DEFINITIONS ----------- As used in this Revised Stipulation, the following capitalized terms shall have the meanings respectively assigned to them below. Section 1.1. "Action" shall mean the case entitled Leonard Rosenblum, et al. v. ------ ---------------------------- Equis Financial Group, Inc. et al., Case No. 98-8030, filed in the United States - ---------------------------------- District Court for the Southern District of Florida by the Plaintiffs, individually and on behalf of all persons similarly situated and derivatively on behalf of the Nominal Defendants, against the Defendants. Section 1.2. "Class" or "Settlement Class" or "Class Members" shall mean the ----- ---------------- ------------- class comprised of all Members of the three sub-classes defined herein -- the RSL Sub-Class, Operating Partnership Sub-Class and Trust Sub-Class -- excluding only those RSL Sub-Class and Trust Sub-Class Members who submit a valid and timely request for exclusion from the Settlement Class pursuant to the provisions of the Class Certification and Notice Order. Section 1.3. "Class Counsel" shall mean Law Offices of Lionel Z. Glancy, -------------- Wechsler Harwood Halebian & Feffer LLP, Gilman and Pastor, LLP, The Law Office of Vincent T. Gresham, Benjamin S. Schwartz, Chartered, Law Offices of Allen M. Lerner, Law Offices of James V. Bashian, Thomas A. Hoadley, P.A., Goodkind, Labatan, Rudoff & Sucharow, LLP, Lasky & Rifkind, Ltd., and Harold B. Obstfeld, P.C. Section 1.4. "Complaint" or "Class and Derivative Action Complaint" shall --------- ------------------------------------- mean the class and derivative action complaint filed on or about January 15, 1998. Section 1.5. "Counsel for the Defendants" shall mean Nixon Peabody LLP. ----------------------------- Section 1.6. "Court" shall mean the United States District Court for the ----- Southern District of Florida. Section 1.7. "Defendant/Defendants" shall mean Equis Financial Group Limited -------------------- Partnership, Equis Corporation, GDE Acquisition Limited Partnership, AFG Leasing Incorporated, AFG Leasing IV Incorporated, AFG Leasing VI Incorporated, AFG Aircraft Management Corporation, AFG ASIT Corporation, AF/AIP Programs Limited Partnership, Gary D. Engle and Geoffrey A. MacDonald, either singularly or collectively. Section 1.8. "Echelon Notes" shall mean the $32 million aggregate -------------- principal amount of promissory notes issued by Echelon Residential Holdings LLC to the Operating Partnerships to finance the acquisition of the Properties pursuant to the Court's March 22, 1999 Order permitting the Operating Partnerships to make New Investments. Section 1.9. "Echelon Note Purchase Price" shall mean the price ------------------------------ required to be paid to the Operating Partnerships for the Echelon Notes which shall be an amount equal to the aggregate outstanding principal amount of $32 million plus a return of 7.5% simple interest per annum on the outstanding principal amounts of the Echelon Notes calculated from the origination date of March 8, 2000 through the Note Payment Date. Section 1.10. "Effective Date - RSL and Trust Sub-Classes" shall mean the -------------------------------------------- first date on which the Final Judgment and Order with respect to the RSL and Trust Sub-Classes entered by the Court, as described in Section 4.4 hereof, becomes final, binding and non-appealable which shall be deemed to occur upon the last of the following: (a) if no appeal or review of the Final Judgment - RSL and Trust Sub-Classes is sought, the thirtieth (30th) day after entry of the Final Judgment - RSL and Trust Sub-Classes (or, if the date for taking an appeal shall be extended, the date of expiration of the extension); or (b) if an appeal or review of the Final Judgment and Order - RSL and Trust Sub-Classes is sought, the day after such Final Judgment and Order - RSL and Trust Sub-Classes is affirmed or the appeal or review is dismissed or denied and such Final Judgment and Order - RSL and Trust Sub-Classes is no longer subject to further review. Section 1.11. "Effective Date - Operating Partnership Sub-Class" shall mean ------------------------------------------------ the first date on which the Final Judgment and Order with respect to the Operating Partnership Sub-Class entered by the Court, as described in Section 4.4 hereof, becomes final, binding and non-appealable which shall be deemed to occur upon the last of the following: (a) if no appeal or review of the Final Judgment - Operating Partnership Sub-Class is sought, the thirtieth (30th) day after the entry of the Final Judgment - Operating Partnership Sub-Class (or , if the date for taking an appeal shall be extended, the date of expiration of the extension); or (b) if an appeal or review of the Final Judgment and Order - Operating Partnership Sub-Class is sought, the date after such Final Judgment and Order - Operating Partnership Sub-Class is no longer subject to further review. Section 1.12. "Equipment" shall mean the existing equipment assets directly --------- and indirectly owned by the Partnerships and Trusts. Section 1.13. "Expense Fund" shall mean an amount not to exceed $2.5 million ------------ to be used for the payment of attorneys' fees and reimbursable expenses of Class Counsel that are approved by the Court. Section 1.14. "Final Judgment and Order - RSL and Trust Sub-Classes" shall ----------------------------------------------------- mean the final judgment entered by the Court as provided in Section 4.4 hereof. Section 1.15. "Final Judgment and Order - Operating Partnership Sub-Class" ----------------------------------------------------------- shall mean the final judgment entered by the Court as provided in Section 4.4 hereof, substantially in the form of Exhibit C hereto, finally approving the Settlement contemplated by this Revised Stipulation with respect to the Operating Partnership Sub-Class. Section 1.16. "General Partner" or "General Partners" shall mean any of the --------------- ---------------- General Partners of the Partnerships, including AFG Leasing Associates, a Massachusetts general partnership, AFG Leasing Incorporated, a Massachusetts corporation, AFG Leasing Associates II, a Massachusetts general partnership, AFG Leasing IV Incorporated, a Massachusetts corporation, AFG Leasing VI Incorporated, a Massachusetts corporation, AFG Aircraft Management Corporation, a Massachusetts corporation, and AFG ASIT Corporation, a Massachusetts corporation. Section 1.17. "General Partner Interest" shall mean the percentage ownership ------------------------ of the General Partners in the Partnerships as set forth in the Partnership Agreements. Section 1.18. "Governing Agreements" means the Partnership and Trust --------------------- Agreements that govern each of the Nominal Defendants. Section 1.19. "Lead Plaintiffs' Counsel" shall mean Andrew D. Friedman, Esq. ------------------------ of Wechsler Harwood Halebian & Feffer LLP. Section 1.20. "Limited Partner" shall mean a Person who owns Units of any ---------------- of the Partnerships. Section 1.21. "Liquidating Trust" shall mean a liquidating trust established ----------------- upon the dissolution of the Operating Partnerships, one of the trustees of which shall be an independent, nationally-recognized financial institution. The trustee(s) may engage a manager to manage and administer the Liquidating Trust assets and liabilities. Section 1.22. "Liquidating Trustee" shall mean the Trustee(s) of the -------------------- Liquidating Trust. Section 1.23. "Manager" shall mean the manager as set forth in each ------- Partnership Agreement. Section 1.24. "Maturity Date" means the maturity date of the Echelon Notes, ------------- September 8, 2002. Section 1.25. "Named Plaintiffs" shall mean Leonard Rosenblum, J/B ----------------- Investment Partners, Small and Rebecca Barmack, Partners, Barbara Hall, Henry R. Graham, Anne R. Graham, Margo Cortell, Patrick M. Rhodes, Bernice M. Huels, Garrett N. Voight, Claire E. Fulcher, Marcella Levy, Richard Hodgson, City Partnerships, Helman Parsons and Cleva Parsons. Section 1.26. "Net Proceeds" shall mean the gross amount of each Cash Fund ------------- established pursuant to Sections 2.1(a), 2.2(b) and 2.3(a) and (b) of the Stipulation less the respective amount allocated to each Cash Fund for the portion of the Expense Fund that is to be contributed by the Class and Nominal Defendants (i.e., 60% of the Expense Fund). ---- Section 1.27. "Nominal Defendants" shall mean the twenty-four (24) ------------------- Partnerships organized under Massachusetts law and four (4) Trusts organized under Delaware law which collectively comprised all of the investment programs sponsored by Equis. Section 1.28. "Note Payment Date" shall mean the last day of the first ------------------- fiscal quarter after the Effective Date-Operating Partnership Sub-Class. Section 1.29. "Notice - RSL and Trust Sub-Classes" or "Class Notice - RSL ------------------------------------ ------------------ and Trust Sub-Classes" shall mean the Notice of Class Action Determination, --------------------- Proposed Settlement and Fairness Hearing to be approved by the Court as set -- forth in Section 4.1 hereof. -- Section 1.30. "Notice - Operating Sub-Class" or "Class Notice - Operating ------------------------------ ------------------------ Sub-Class" shall mean the Notice of Class Action Determination, Proposed ------- Settlement and Fairness Hearing to be approved by the Court as set forth in ----- Section 4.1 hereof, substantially in the form attached as Exhibit B hereto. -- Section 1.31. "Operating Partnerships" shall mean the following eleven (11) ---------------------- Partnerships named as Nominal Defendants that are still in existence and currently operating: (a) American Income Partners V-A Limited Partnership, (b) American Income Partners V-B Limited Partnership, (c) American Income Partners V-C Limited Partnership, (d) American Income Partners V-D Limited Partnership, (e) American Income Fund I-A, a Massachusetts Limited Partnership, (f) American Income Fund I-B, a Massachusetts Limited Partnership, (g) American Income Fund I-C, a Massachusetts Limited Partnership, (h) American Income Fund I-D, a Massachusetts Limited Partnership, (i) American Income Fund I-E, a Massachusetts Limited Partnership, (j) AIRFUND International Limited Partnership, and (k) AIRFUND II International Limited Partnership. Section 1.32. "Operating Partnership Sub-Class" shall mean all Persons ------------------------------- who own Units of any of the Operating Partnerships as of the date of the Court's preliminary approval of the Settlement. Members of this Sub-Class shall not have the right to request exclusion from the Settlement Class. Section 1.33. "Parties" shall mean, collectively, the Plaintiffs, the Class, ------- the Nominal Defendants and the Defendants. Section 1.34. "Partnership Agreements" shall mean, collectively, the amended ---------------------- agreements of limited partnership of the Partnerships, the provisions of which govern the rights and obligations of their respective partners. Section 1.35. "Payor" shall mean Echelon Residential Holdings LLC, the ----- obligor under the Echelon Notes. Section 1.36. "Person" shall mean an individual, corporation, partnership, ------ limited partnership, limited liability company, association, joint stock company, estate, legal representative, trust, unincorporated organization and any other type of legal entity, and their heirs, predecessors, successors, representatives and assigns. Section 1.37. "Preliminary Approval Order" shall mean the order of the Court -------------------------- as described in Section 4.1 hereof, substantially in the form attached as Exhibit A hereto. Section 1.38. "Properties" shall mean seven parcels of land either ---------- under construction or development as multifamily housing and interests in two joint ventures holding parcels of land under development as multifamily housing, originally owned by Echelon Residential LLC, a wholly-owned subsidiary of Echelon Residential Holdings LLC, the issuer of the Echelon Notes, or the proceeds of such parcels of land and joint ventures in the event of a sale or refinancing. Section 1.39. "Released Parties" means (i) the Defendants or the ----------------- General Partners; (ii) past or present beneficiaries, subsidiaries, parents, affiliates, associates, successors or assigns including, without limitation, James A. Coyne, of any of the Defendants; (iii) past or present officers, directors, shareholders, partners, members, employees, and attorneys of any of the foregoing; (iv) agents, advisors, investment bankers, accountants, financial advisors or other advisors, including the issuer of the fairness opinion, appraisers, independent contractors, representatives, trustees, heirs, executors, and administrators of the Defendants and Nominal Defendants; and (v) Echelon Residential Holdings LLC, Echelon Residential LLC and any past or present beneficiaries, subsidiaries, parents, successors or assigns, officers, directors, members, employees, attorneys, agents, advisors, investment bankers, accountants, contractors, financial advisors, representatives, trustees, heirs, executors, administrators or other affiliates, associates and advisors of any of the foregoing. Section 1.40. "Releasing Parties" shall have the meaning ascribed to such ------------------ term in Section 3.1 and Section 3.2 hereof. Section 1.41. "Revised Stipulation" shall mean this Revised Stipulation of -------------------- Settlement, together with all exhibits hereto. Section 1.42. "RSL Sub-Class" shall mean all persons who owned Units as of -------------- September 30, 1996 of any of the thirteen (13) Partnerships that sold all of their remaining assets to RSL Finance II Limited Partnership ("RSL") and were subsequently liquidated (the "Liquidated Partnerships") and/or the two (2) Operating Partnerships that sold certain assets to RSL in connection with the transaction closed on or about September 30, 1996 (the "RSL Transaction"), but shall exclude those Members who submit a valid and timely request for exclusion from the RSL Sub-Class pursuant to the provisions of the Class Certification and Notice Order. Section 1.43. "SEC" shall mean the United States Securities and Exchange --- Commission. Section 1.44. "Semele Notes" shall mean purchase money notes in the ------------- aggregate principal amount of $3,957,146 bearing an interest rate of 10% issued by Semele Group, Inc. indirectly to five of the Operating Partnerships as part of the consideration in the purchase of vessels formerly owned indirectly by the Partnerships and certain affiliated investment programs. Section 1.45. "Semele Group Stock" shall mean 177,730 shares of common ------------------ stock of Semele Group, Inc. indirectly issued to five of the Operating Partnerships as part of the consideration in the purchase of vessels formerly owned indirectly by those Partnerships and certain affiliated investment programs. Section 1.46. "Settlement" shall mean the settlement of the Action ---------- pursuant to the terms of this Revised Stipulation. Section 1.47. "Settled Claims" shall have the meaning ascribed to the term --------------- in Sections 3.1 and 3.2 hereof. Section 1.48. "Settlement Hearing" or "Settlement Hearings" shall mean the ------------------- ------------------- fairness hearing or hearings held at the time and place designated by the Court to consider final approval of the Settlement, as provided in Section 4.3 hereof. Section 1.49. "Stipulation" or "Original Stipulation" shall mean the ----------- --------------------- original Stipulation of Settlement, together with all exhibits hereto. Section 1.50. "Trust Sub-Class Members" shall mean all Persons who owned ------------------------- Interests of the Trusts (now characterized as Class A Interests) as of September 1, 1997, and/or their successors and assigns, but shall exclude the Trusts and those Members who submit a valid and timely request for exclusion from the Trust Sub-Class pursuant to the provisions of the Class Certification and Notice Order. Section 1.51. "Trusts" shall mean AFG Investment Trust A, a Delaware ------ Business Trust; AFG Investment Trust B, a Delaware Business Trust; AFG Investment Trust C, a Delaware Business Trust; and AFG Investment Trust D, a Delaware Business Trust. Section 1.52. "Unit" shall mean a unit of limited partnership interest in ---- any of the Partnerships. Section 1.53. "Unknown Claims" shall have the meaning ascribed to such term -------------- in Sections 3.1 and 3.2 hereof. ARTICLE II CONSIDERATION TO THE SETTLEMENT CLASS FOR SETTLEMENT ---------------------------------------------------- Subject to Court approval and the conditions specified herein, in full and final disposition, settlement, discharge, release and satisfaction of any and all Settled Claims, the Defendants agree to provide the following consideration to the Settlement Class Members and Nominal Defendants: Section 2.1. Cash Distribution to RSL Sub-Class Members. ----------------------------------------------- (a) $600,000 Cash Fund. Within fifteen (15) days of the Effective Date ------------------ - - RSL and Trust Sub-Classes, the Defendants shall establish a Cash Fund by paying the sum of $600,000 for the benefit of the RSL Sub-Class Members, the Net Proceeds of which will be distributed on a pro rata per Unit-owned basis to the RSL Sub-Class Members who are not Defendants and/or affiliates of the Defendants. (b) Cash Distributions From Release of $2 Million From Reserve Accounts. ----------------------------------------------------------------------- Within fifteen (15) days of the Effective Date - RSL and Trust Sub-Classes, the Defendants shall cause an aggregate sum of $2 million to be distributed, from the remaining funds contained in certain reserve escrow accounts previously established by the Liquidated Partnerships, to the General and Limited Partners of the Liquidated Partnerships on that date, on a pro rata basis and as determined by the amounts contributed by each Liquidated Partnership to the reserve escrow accounts, after considering the amounts of any contingent or existing liabilities that are reasonably estimated for each such Liquidated Partnership. Section 2.2. Cash Distributions and Orderly Liquidation of Assets of --------------------------------------------------------- the Operating Partnerships. -------------------------- The Defendants agree to conduct the orderly liquidation of the Operating Partnerships as more fully set forth below: (a) Liquidation of Assets and Dissolution of the Operating ------------------------------------------------------------- Partnerships. Defendants have agreed to dissolve each of the Operating Partnerships and liquidate their remaining assets on or before thirty (30) days following the Effective Date - Operating Partnership Sub-Class and, upon dissolution, the General Partners (or their successors) shall (i) cause the cancellation of each Operating Partnership's Certificate of Limited Partnership, (ii) apply and distribute all cash and proceeds in accordance with the provisions set forth in their respective Limited Partnership Agreements and as described in subsection 2.2(b) below after reserving cash amounts for any contingent or existing sales, use and property tax or other types of liabilities that are reasonably estimated for each such Operating Partnership, which cash reserves shall be maintained in a separate account managed and administered on behalf of the Operating Partnerships (and the successor Liquidating Trust) by their respective General Partners or their successors or assigns, and (iii) liquidate the Partnership's assets. All cash other than the cash reserves referred to in (ii) above and any assets that could not be sold for cash prior to dissolution shall be placed in a Liquidating Trust for the benefit of the Members of the Operating Partnership Sub-Class to be established upon the dissolution of the Operating Partnerships with an independent, nationally-recognized financial institution as its trustee. All of the net cash proceeds from the sale of assets of the Liquidating Trust and cash, less reserves for any contingent liabilities, shall be distributed to the beneficiaries of the Liquidating Trust no later than December 31, 2003. (b) Cash Distribution to Partners of the Operating Partnerships. On or ---------------------------------------------------------------- before thirty (30) days following the Effective Date - Operating Partnership Sub-Class, the Operating Partnerships or Liquidating Trustee, as the case may be, shall collectively distribute on a pro rata basis a minimum aggregate amount of $15 million (less any cash distributions made prior to that date and an amount up to $700,000 for the Operating Partnerships' shares of the amount approved for payment of attorneys' fees and reimbursement of expenses) representing all of the cash that is then held by each of the Operating Partnerships or the Liquidating Trust to the Operating Partnership Sub-Class Members and the General Partners of the Operating Partnerships, after reserving amounts for any contingent or existing liabilities that are reasonably estimated for each such Operating Partnership, as is set forth in Chart #1 below: CHART #1 SCHEDULE OF MINIMUM $15 MILLION CASH DISTRIBUTION Operating Partnership MinimumDistribution $15,000,000 --------------------- ------------ American Income Partners V-A Limited Partnership $ 158,000 American Income Partners V-B Limited Partnership 2,216,000 American Income Partners V-C Limited Partnership 821,000 American Income Partners V-D Limited Partnership 692,000 American Income Fund 1-A, a Massachusetts Limited Partnership 304,000 American Income Fund 1-B, a Massachusetts Limited Partnership 282,000 American Income Fund 1-C, a Massachusetts Limited Partnership 1,601,000 American Income Fund 1-D, a Massachusetts Limited Partnership 1,661,000 American Income Fund 1-E, a Massachusetts Limited Partnership 1,819,000 AIRFUND International Limited Partnership 1,996,000 AIRFUND II International Limited Partnership 3,450,000 Total $15,000,000(1) (1) Reduced by any cash distributions made on or before thirty (30) days following the Effective Date - Operating Partnership Sub-Class and an amount up to $700,000 for the Operating Partnerships' shares of the amount approved for payment of attorneys' fees and expenses. (c) Sale of Equipment Assets. The Defendants agree to market --------------------------- immediately the Equipment of the Operating Partnerships, and will endeavor to sell all such Equipment on or before the Effective Date-Operating Partnership Sub-Class. The Equipment held by American Income Partners V-A through V-D and American Income Funds I-A through I-E consists of portfolios of capital equipment including, but not limited to, aircraft, communications equipment, construction equipment, containers and chassis, energy equipment, materials handling equipment, office equipment, over-the-road tractors, trailers and trucks, production machinery and machine tools, research and experimentation equipment and railroad rolling stock. Not all of the Operating Partnerships hold Equipment in all of these categories. AIRFUND and AIRFUND II hold only aircraft equipment. A schedule of the Equipment and its value as carried on the books of the Operating Partnerships is set forth in the Class Notice. Any Equipment not sold by the Effective Date-Operating Partnership Sub-Class shall be placed in the Liquidating Trust, and the proceeds from the sale of such Equipment will be distributed to the former General Partners and Limited Partners of the Operating Partnerships by the Liquidating Trustee. (d) Sale of the Semele Notes and Guaranteed Payment of 30% of Aggregate ------------------------------------------------------------------------ Principal Plus Accrued Interest. The Semele Notes in the aggregate principal ------------------------------ amount of $3,957,146 held indirectly by the Operating Partnerships will be liquidated in the ordinary course and (a) will be repaid or sold at face value plus accrued interest on or before the Effective Date-Operating Partnership Sub-Class, or (b) if not repaid or sold by such date, the Semele Notes shall be placed in the Liquidating Trust and the proceeds from the sale of the Semele Notes will be distributed to the former General Partners and Limited Partners of the Operating Partnerships by the Liquidating Trustee. If by the last day of the first fiscal quarter after the Effective Date - Operating Partnership Sub-Class at least 30% of the aggregate principal amount of the Semele Notes and the related accrued interest has not yet been paid on the Semele Notes, the Defendants shall cause Semele Group, Inc. or a related party to purchase such aggregate principal amount of the Semele Notes at face value plus related accrued interest as is necessary to reduce the aggregate initial principal amount of the Semele Notes by 30%. The Operating Partnership Sub-Class, the General Partners, Equis, Semele Group, Inc. or a related party may purchase any outstanding Semele Notes at face value plus accrued interest. (e) Sale of the Semele Group Stock and Guaranteed Receipt of at Least ------------------------------------------------------------------- $5.00 Per Share. The Semele Group Stock held indirectly by five of the ---------------- Operating Partnerships in the aggregate amount of 177,730 shares of common stock ------- shall be placed in the Liquidating Trust, and such stock shall be sold by the Liquidating Trustee on or after June 30, 2003 in an orderly fashion over the next sixty (60) days with the objective of maximizing the sale price of such shares. If the average sale price for the Semele Group Stock is less than $5.00 per share, Equis shall pay to the Liquidating Trust the difference between $5.00 per share and the average sale price realized from the sale of the Semele Group Stock. The proceeds will thereafter be distributed on a pro rata basis to the former General Partners and Limited Partners of the Operating Partnerships. (f) Sale of the Echelon Notes. In accordance with the Court's ----------------------------- Preliminary Approval Order dated March 22, 1999 requiring that the Defendants use their best efforts to sell any New Investments in an orderly and timely fashion if the Exchange has not occurred, Equis and the General Partners shall purchase the Echelon Notes not later than the last day of the first fiscal quarter after the Effective Date - the Operating Partnership Sub-Class (the "Note Payment Date"). Equis and the General Partners shall purchase the Echelon Notes for a price equal to their aggregate outstanding principal amount plus an annualized return of 7.5% simple interest (calculated on the basis of the $32 million original aggregate principal amount of the Echelon Notes less any payments during the term of such notes) from the origination date of March 8, 2000 until the date on which the Echelon Notes are purchased (the "Echelon Note Purchase Price"). The Defendants shall cause Echelon Residential Holdings LLC not to make any distributions in respect of its common equity interests while any outstanding principal and accrued interest of the Echelon Notes is payable to the Operating Partnerships or the Liquidating Trust, as the case may be. For the purpose of calculating the Echelon Note Purchase Price, any payments made in respect to the Echelon Notes prior to the purchase of the notes by Equis and the General Partners shall be applied as a reduction in principal amount pro rata of the Echelon Notes and the 7.5% rate of return will cease to accrue on such payments after receipt of such payments. The Echelon Note Purchase Price will not be less than the fair value of the Properties based upon an appraisal conducted prior to the Note Payment Date by an independent, nationally recognized, accredited appraiser, nor more than $32 million plus interest calculated at a 7.5% annual rate of return on the outstanding principal amounts during the term of the Echelon Notes. Upon receipt of the Echelon Note Purchase Price, the Operating Partnerships will assign and deliver their respective Echelon Notes to Equis and the General Partners along with a full release of the Payor's obligations to the Operating Partnerships under the Echelon Notes. Equis and the General Partners agree that upon receipt of the Echelon Notes and said release they shall forebear from foreclosing on the Echelon Notes. In the event the Echelon Note Purchase Price has not been paid for the Echelon Notes by Equis and the General Partners by the Maturity Date of September 8, 2002, the Operating Partnerships shall forebear from foreclosing on the Echelon Notes until the earlier of the purchase of the Echelon Notes by Equis and the General Partners on the Note Payment Date or the rejection, termination or cancellation of this Revised Stipulation. (g) Establishment of Minimum of $8 Million Cash Account as Collateral ------------------------------------------------------------------- for the Echelon Note Purchase Price. In order to assure timely payment of the ------------------------------------ Echelon Note Purchase Price on or before the Note Payment Date, (i) the Defendants, prior to the date that Notice - Operating Partnership Sub-Class is mailed to the Members of the Operating Partnership Sub-Class, will deposit an aggregate amount of $8 million cash in a Cash Collateral Account with an independent, nationally-recognized financial institution as Account Agent (who may also serve as the Liquidating Trustee of the Liquidating Trust); and (ii) Equis, upon receipt from the General Partners of cash distributions from the Operating Partnerships, shall promptly deposit 50% of such distributions in the Cash Collateral Account with the Account Agent. (In accordance with the governing provisions of the respective Partnership Agreements, the General Partners generally receive 5% of distributions, except in the case of AIRFUND II where the General Partner receives 1% of distributions, which are then dividended to Equis. The aggregate distributions to the General Partners are expected to exceed $3 million cash.) The Account Agent shall invest the funds deposited in the Cash Collateral Account in securities issued or guaranteed by the United States government or any agency or instrumentality thereof, certificates of deposit of United States banks having a net worth of at least $50,000,000, bankers' acceptances, bank repurchase agreements covering securities issued or guaranteed by the United States government or any agency or instrumentality thereof, money market funds having a net worth of at least $100,000,000 or similar highly liquid investments (other than tax-exempt securities or obligations). On the Note Payment Date, to the extent that any Echelon Notes remain outstanding, the Account Agent shall pay the Echelon Notes out of the funds on deposit in the Cash Collateral Account plus any interest earned on them net of the Account Agent's reasonable fees and expenses pro rata to the Operating Partnerships as payments reducing, first, the principal amount due on the Echelon Notes and, second, any interest accrued at 7.5%. Upon the payment of all of the outstanding aggregate principal amount and interest accrued at 7.5% on the Echelon Notes, the Account Agent shall promptly release any remaining funds in the Cash Collateral Account to the Defendants and terminate the Cash Collateral Account. (h) Equis and General Partners' Obligations to Maintain Minimum Net ------------------------------------------------------------------- Worth to Assure Ability to Timely Purchase the Echelon Notes. Equis covenants ----------------------------------------------------------- to maintain a net worth of not less than $12 million (exclusive of the $8 million cash deposited by the Defendants in the Cash Collateral Account) from the date of the Class Notice - Operating Sub-Classes (the "Notice Date") until the Note Payment Date as evidenced by the delivery to Lead Plaintiffs' Counsel of a certificate of the chief financial officer of Equis dated as of the close of the last fiscal quarter prior to the date of said Class Notice. From the Notice Date until the Note Payment Date, Equis shall not make any distributions or pay any dividends, in cash or in kind, to its partners (other than an aggregate not to exceed $59,000 per month to officers in lieu of salaries). If, at the close of business on the Note Payment Date, Equis and the General Partners have not purchased the Echelon Notes and the total payments on the Echelon Notes from Equis, the General Partners and Echelon Residential Holdings LLC combined with the funds deposited in the Cash Collateral Account to that date are less than the outstanding aggregate principal amount and interest accrued at 7.5% due on the Echelon Notes, the Liquidating Trustee shall take such action as it in its discretion deems appropriate to protect the interests of the beneficiaries of the Liquidating Trust, including, but not limited to, foreclosing on the Echelon Notes and bringing suit against Echelon Residential Holdings LLC to recover all unpaid and overdue principal and accrued interest on the Echelon Notes. In the event that the Liquidating Trustee's suit against Echelon Residential Holdings LLC yields a recovery of less than the remainder of the Echelon Note Purchase Price, Equis and the General Partners shall be liable to suit by the Liquidating Trustee for the difference between the actual damages recovered by the Liquidating Trustee from Echelon Residential Holdings LLC in its suit on the Echelon Notes and the remainder of the Echelon Note Purchase Price. All reasonable expenses and fees incurred by the Operating Partnerships, the Liquidating Trust and its Liquidating Trustee, or their successors or assigns, incurred in taking such actions, including reasonable counsel fees and expenses, shall be borne by Echelon Residential Holdings LLC, Equis and the General Partners. (i) Payment of up to $466,667 for Attorneys' Fees and Reimbursement of ------------------------------------------------------------------- Expenses Incurred in the Pursuit of the Action on Behalf of the Operating - -------------------------------------------------------------------------------- Partnerships and Operating Partnership Sub-Class. Defendants shall pay an - ---------------------------------------------------- amount up to $466,667 for the payment of 40% of the aggregate amount awarded by - ----- the Court to Class Counsel for payment of attorneys' fees and reimbursement of expenses in connection with the settlement of the claims asserted on behalf of the Operating Partnerships and Operating Partnership Sub-Class. Section 2.3. Cash Distributions, Right To Rescind Sales of Interests --------------------------------------------------------- And Therapeutic Benefits To Trust Sub-Class Members, and Cash Distributions and ------------------------------------------------------------------------------ Reduction in Fees Charged to the Trusts. - --------------------------------------------- (a) $4 Million Distribution to Trust Sub-Class Members from Remaining ------------------------------------------------------------------- Proceeds Raised from Sale of Class B Interests to the Defendants. Within ---------------------------------------------------------------------- fifteen (15) days of the Effective Date - RSL and Trust Sub-Classes, the ----- Defendants shall establish a Cash Fund by causing the sum of $4 million to be ----- paid for the benefit of all Trust Sub-Class Members, the Net Proceeds of which - will be distributed to all Trust Sub-Class Members on a pro rata per Class A Interest-owned basis. The sum of $4 million shall be paid from the aggregate remaining proceeds that were raised from the sale of Class B Subordinated Interests of each of the Trusts (the "Class B Interests") and only from that ---- portion of such remaining proceeds which would otherwise be distributed, or be available to be distributed, to the Defendants and/or affiliates of the Defendants and/or Managing Trustee as a Class B Capital Distribution, as that term is defined in the Trust Agreements, as set forth below in Chart #2. The rights and interests of all Trust Sub-Class Members who purchased Class B Interests other than the Defendants, Managing Trustee and/or their affiliates (the "Class B Beneficiaries") will not be affected by this distribution of $4 million from the remaining proceeds raised from the sale of the Class B Interests, and the portion of such proceeds which would otherwise be distributed, or be available to be distributed, to Class B Beneficiaries as a Class B Capital Distribution will be distributed, or will remain available to be distributed, and will not be affected by this Settlement. CHART #2 ALLOCATION OF PROCEEDS PAID TO $4 MILLION CASH FUND Trust Portion of Remaining Proceeds To Be Contributed to $4 Million Cash - ----- ------------------------------ Fund - ---- AFG Investment Trust A $ 413,247 AFG Investment Trust B 500,709 AFG Investment Trust C 1,513,639 AFG Investment Trust D 1,572,405 ---------- TOTAL $4,000,000 ---------- (b) Right to Rescind Prior Sales of Class A Interests and Receipt of ------------------------------------------------------------------- Pro Rata Share of Net Proceeds of $4 Million Cash Fund. The Defendants shall ------------------------------------------------------- permit all Trust Sub-Class Members who sold Class A Interests to any of the Trusts in connection with the self-tender offers completed in September 1997, to rescind their tenders and sales of Class A Interests upon repayment of the purchase price that was tendered to them by the Trusts in exchange for their Class A Interests. In any event, all Trust Sub-Class Members, including those who sold Class A Interests in September 1997, will be entitled to receive a pro --- rata portion of the distribution to Trust Sub-Class Members described in Section - ---- 2.3(a). Those Trust Sub-Class Members who sold Class A Interests in September 1997 will receive the pro rata portion of the cash distribution that is --- ---- attributable to the Class A Interests that were sold to the Trusts. (c) $9 Million Distribution To The Trusts to be Used for Investment or ------------------------------------------------------------------------ General Trust Purposes. Within fifteen (15) days of the Effective Date - RSL ------------------- and Trust Sub-Classes, the Defendants shall establish a Cash Fund for the benefit of the Trusts and Trust Sub-Class Members by causing the sum of $9 million to be paid from the portions of the aggregate remaining proceeds raised from the sale of Class B Interests which would otherwise be distributed, or be available to be distributed, to the Defendants and/or affiliates of the Defendants and/or Managing Trustee as a Class B Capital Distribution, as set forth in Chart #3 below, the Net Proceeds of which will be transferred to the Trusts to be used for investment or general trust purposes. The rights and interests of Class B Beneficiaries will not be affected by this transfer of such $9 million from the remaining proceeds raised from the sale of Class B Interests, and that portion of such remaining proceeds that would otherwise be distributed or be available to be distributed to Class B Beneficiaries will be distributed, or will remain available to be distributed, to such Class B Beneficiaries as a Class B Capital Distribution. CHART #3 CONTRIBUTION TO $9 MILLION CASH FUND Trust Portion of Remaining Proceeds To Be Contributed to $9 Million Cash - ----- ------------------------------ Fund - ---- AFG Investment Trust A $ 929,806 AFG Investment Trust B 1,126,596 AFG Investment Trust C 3,405,688 AFG Investment Trust D 3,537,910 ---------- TOTAL $9,000,000 ---------- (d) Agreement To Reduce Fees Charged To Trusts and Permitted under ------------------------------------------------------------------- Trust Agreements in the Event of the Approval of Certain Amendments to Trust ---------------------------------------------------------------------------- Agreements. The Defendants agree to cause and have caused the Managing Trustee ------- to amend the Trust Agreements to ensure that the fees permitted to be paid to the Managing Trustee or its affiliates under the Trust Agreements would be reduced as follows: for all Equipment acquired after the expiration of the original reinvestment date set forth in the Trust Agreements, the Acquisition Fee (as defined in the Trust Agreements) payable by the Trust to the Managing Trustee and/or its affiliates on such Equipment shall be reduced from a maximum of 3% to 1%, and the Management Fee (as defined in the Trust Agreements) payable by the Trust to the Managing Trustee and/or its affiliates on such Equipment shall be reduced from a maximum of 5% to 2%. (e) Restrictions Upon Defendants' Exercise of Voting Rights. Upon the ------------------------------------------------------------- Effective Date - RSL and Trust Sub-Classes, the Defendants will cause the Managing Trustee to amend the Trust Agreements so as to require the Managing Trustee and/or its Affiliates to vote any Class B Interests owned by such Persons in accordance with the vote of the majority of Class A Interests voted on such matters, where beneficiary consent is necessary, with respect to all Interested Transactions, i.e., transactions concerning the compensation of the ---- Managing Trustee, the extension of the lives of the Trusts, or regarding any transaction between the Trust and the Managing Trustee or any of its affiliates with the express exception of any votes concerning either the withdrawal or removal of the Managing Trustee or the entrance into such transactions that are expressly permitted by the current Trust Agreements. (f) Preparation of Schedules of All Expenses Incurred by Trusts. Following ------------------------------------------------------------- the Effective Date - RSL and Trust Sub-Classes, the Defendants shall prepare a schedule of all expenses incurred by the Trusts showing expenses paid to third parties ("external expenses") separately from reimbursable expenses paid to the Managing Trustee and its affiliates ("internal expenses"), with both external and internal expenses broken down by specific categories to be agreed upon by the Parties to the Action (the "Expense Schedule"). The Expense Schedule will thereafter be included with the Trusts' annual financial statements and sent to all owners of Interests in the Trusts. The Expense Schedule will be audited by the Trusts' independent accountants. Such independent accountants shall include in their public annual report on the financial statements of each Trust which are sent to investors a specific statement (in words or substance) that all expenses have been classified as such on the books and records of the Trust in accordance with generally accepted accounting principles, and in a manner consistent with the prior year. (g) Preparation of Annual Reports Concerning Material Investments and ------------------------------------------------------------------------ Material Changes. Following the Effective Date - RSL and Trust Sub-Classes, the ---------- Defendants shall provide to all owners of Interests in the Trusts with the following reports on an annual basis within ninety (90) days after the end of each year of operations of the applicable Trust or fifteen (15) days after annual filings with the SEC, whichever is later: (i) a description of all material investments owned by the applicable Trust during the previous year; and (ii) a description of all material changes known to the Trust affecting such assets which occurred during such previous year, including, without limiting the generality of the foregoing, any material delinquencies with respect to any payments due under any leases, notes or other obligations held by such Trust, any material default under any contracts to which such Trust is a party, any material damage to or destruction of assets owned by such Trust, any material decline in the value of collateral securing any indebtedness held by such Trust and any other materially significant events, whether similar to or dissimilar from those enumerated above. Section 2.4. Full and Complete Consideration to the Settlement Class. The ------------------------------------------------------- consideration provided to the Members of the Settlement Sub-Classes pursuant to Sections 2.1, 2.2, 2.3 and Section 7.1 hereof is in full and complete settlement of the Action and all Settled Claims as between the Members of the Settlement Class, on the one hand, and each of the Released Parties, on the other hand. However, in the event any portion of the Settlement is terminated pursuant to Section 5.2, or for any other reason, the Defendants may elect, but will not be obligated, to proceed with Settlement of both the RSL and Trust Sub-Classes pursuant to Sections 2.1 and 2.3. ARTICLE III DISCHARGE OF CLAIMS ------------------- Section 3.1. Release of Claims by the RSL and Trust Settlement --------------------------------------------------------- Sub-Classes. Upon the Effective Date - RSL and Trust Sub-Classes, the Plaintiffs and all other Class Members who are members of the RSL and Trust Sub-Classes, on behalf of themselves and each of their predecessors, successors, parents, subsidiaries, affiliates, custodians, agents, assigns, representatives, heirs, executors, trustees, administrators and any other person or entity having any legal or beneficial interest in the Units or Interests held by any member of the Class (the "Releasing Parties") will be deemed by this Settlement to have, and by operation of the Final Judgment and Order - RSL and Trust Sub-Classes shall have, released and forever discharged the Defendants and all other Released Parties from any and all of the RSL and Trust Sub-Classes Settled Claims, which are defined as all claims, rights, causes of action, suits, matters and issues, whether known or unknown, matured or unmatured, that have been, could have been, or in the future might be asserted in the Action, in the related Massachusetts action entitled, Leonard Rosenblum, et al. v. Equis Financial Group Limited ------------------------------------------------------------- Partnership, et al., C.A. No. 97-3358B, or in any court or any other proceeding ---------------- (including but not limited to any claims arising under federal or state law, including the federal securities laws, relating to alleged fraud, breach of any duty, negligence or otherwise) by or on behalf of the Plaintiffs or any Members of the Class who are also members of the RSL Sub-Class or the Trust Sub-Class, whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity against the Defendants and all other Released Parties (in each case, in each and every capacity) which have arisen, arise now or could have arisen out of, or relate in any way to any of the facts, occurrences or transactions or events described in the Complaint in the Action or any disclosures related thereto (collectively, the "RSL and Trust Sub-Classes Settled Claims"). The RSL and Trust Sub-Classes Settled Claims shall specifically include any Unknown Claims, as defined by the following. "Unknown Claims" means any RSL and Trust Sub-Classes Settled Claim which the Releasing Parties do not know or suspect to exist in their favor at the time of the release of the Defendants and all other Released Parties which, if known by them, might have affected their Settlement with, and release of, the Defendants and all other Released Parties. With respect to any and all RSL and Trust Sub-Classes Settled Claims, the Parties stipulate and agree that, the Releasing Parties shall be deemed to have, and by operation of the Final Judgment and Order- RSL and Trust Sub-Classes shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of 1542 of the California Civil Code which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Further, the Releasing Parties shall be deemed to have, and by operation of the Final Judgment and Order - RSL and Trust Sub-Classes shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to the provision of 1542 of the California Civil Code set forth above. The Releasing Parties may, after entrance into the Stipulation and entry of Final Judgment and Order - RSL and Trust Sub-Classes, discover facts in addition to or different from those which they then knew or believed to be true with respect to the subject matter of the RSL and Trust Sub-Classes Settled Claims, but the Releasing Parties shall nevertheless, then be deemed to have, and by operation of the Final Judgment and Order - RSL and Trust Sub-Classes shall have fully, finally and forever settled and released any and all RSL and Trust Sub-Classes Settled Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence or such different or additional facts. Section 3.2. Release of Claims by the Operating Partnership Sub-Class. ----------------------------------------------------------- Upon the Effective Date - Operating Partnership Sub-Class, the remaining Plaintiffs and all Operating Partnership Sub-Class Members, on behalf of themselves and each of their predecessors, successors, parents, subsidiaries, affiliates, custodians, agents, assigns, representatives, heirs, executors, trustees, administrators and any other person or entity having any legal or beneficial interest in the Units or Interests of the Operating Partnerships held by any member of the Operating Partnership Sub-Class (the "Releasing Parties") will be deemed by this Settlement to have, and by operation of the Final Judgment and Order - Operating Partnership Sub-Class shall have, released and forever discharged the Defendants and all other Released Parties from any and all of the Operating Partnership Sub-Class Settled Claims, which are defined as all claims, rights, causes of action, suits, matters and issues, whether known or unknown, matured or unmatured, from the beginning of time to the present, that have been, could have been, or in the future might be asserted in the Action, in the related Massachusetts action entitled, Leonard Rosenblum, et al. ------------------------- v. Equis Financial Group Limited Partnership, et al., C.A. No. 97-3358B, or in - ------------------------------------------------------ any claim brought in any court or any other proceeding (including but not limited to any claims arising under federal or state law, including the federal securities laws, relating to alleged fraud, breach of any duty, negligence or otherwise) by or on behalf of the Plaintiffs or any Members of the Class who are also members of the Operating Partnership Sub-Class, whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity against the Defendants and all other Released Parties (in each case, in each and every capacity) which have arisen, arise now or could have arisen out of, or relate in any way to any of the facts, occurrences or transactions or events described in the Complaint in the Action or any disclosures related thereto or related in any way to the management, control, operation of or investments made by the Operating Partnerships, excepting however, any claim arising from, relating to or under this Revised Stipulation of Settlement by and between the Releasing Parties, the Defendants and all other Released Parties (collectively, the "Operating Partnership Sub-Class Settled Claims"). The Operating Partnership Sub-Class Settled Claims shall specifically include any Unknown Claims, as defined by the following. "Unknown Claims" means any Operating Partnership Sub-Class Settled Claim which the Releasing Parties do not know or suspect to exist in their favor at the time of the release of the Defendants and all other Released Parties which, if known by them, might have affected their Settlement with, and release of, the Defendants and all other Released Parties. With respect to any and all Operating Partnership Sub-Class Settled Claims, the Parties stipulate and agree that, the Releasing Parties shall be deemed to have, and by operation of the Final Judgment and Order - Operating Partnership Sub-Class shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of 1542 of the California Civil Code which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Further, the Releasing Parties shall be deemed to have, and by operation of the Final Judgment and Order - Operating Partnership Sub-Class shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to the provision of 1542 of the California Civil Code set forth above. The Releasing Parties may, after entrance into the Stipulation and entry of Final Judgment and Order - Operating Partnership Sub-Class, discover facts in addition to or different from those which they then knew or believed to be true with respect to the subject matter of the Operating Partnership Sub-Class Settled Claims, but the Releasing Parties shall nevertheless, then be deemed to have, and by operation of the Final Judgment and Order - Operating Partnership Sub-Class shall have fully, finally and forever settled and released any and all Operating Partnership Sub-Class Settled Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence or such different or additional facts. Section 3.3. Reliance on Section 47(b)(1) of the Investment Company Act of ------------------------------------------------------------- 1940 (the "1940 Act"). In entering into the Revised Stipulation, the Defendants - --------------------- relied on Section 47(b)(1) of the 1940 Act, and in seeking the Court's approval of the Settlement, the Defendants will request that it find under the circumstances that enforcement of any contract that may have been made in, or whose performance may involve a, violation of the 1940 Act, would produce a more equitable result than the non-enforcement and would not be inconsistent with the purposes of the 1940 Act. ARTICLE IV IMPLEMENTATION -------------- Section 4.1. Preliminary Approval of Revised Stipulation; Certification of ------------------------------------------------------------- Settlement Class. On August 20, 1998, the Court issued an order preliminarily - ----------------- approving the Original Stipulation, conditionally certifying the settlement class, and providing for notice of, and hearing on, the proposed Settlement. Thereafter, on March 15, 1999, the Parties entered into an Amended Stipulation. On March 22, 1999, the Court entered an order modifying the August 20, 1998 preliminary approval order and bifurcating the settlement process into two phases. On May 26, 1999, after a hearing, the Court entered an order finally approving the settlement with respect to the RSL and Trust Sub-Classes. Forthwith after the execution of this Revised Stipulation, counsel for the Parties hereto shall jointly submit this Revised Stipulation to the Court and shall jointly request entry of a Preliminary Approval Order substantially in the form of Exhibit A hereto. In the event that this Revised Stipulation shall terminate, be canceled, or not become effective for any reason, the Preliminary Approval Order described in this Section 4.1 shall be vacated without prejudice to the right of the Named Plaintiffs to move the Court for any order they deem appropriate with respect to the certification of a plaintiff class in the Action, and without prejudice to the rights of the other Parties hereto to oppose any such motion. The Preliminary Approval Order shall specifically include provisions which, among other things: a. Preliminarily approve the Settlement as fair, reasonable and adequate and within the range of reasonableness; b. Conditionally re-certify the Operating Partnership Sub-Class and preliminarily approve the Plaintiffs as representatives of the Class and Operating Partnership Sub-Class; c. Approve form of Notice for mailing to the Members of the Operating Partnership Sub-Class to notify them of the Hearing (i) on final approval of the Settlement, (ii) on final certification of the Operating Partnership Sub-Class and approval of the Plaintiffs as representatives of the Sub-Class, and (ii) on Class Counsel's application for an award of attorneys' fees and reimbursement of costs and litigation expenses, as set forth in Section 7.1 below. d. Direct Counsel for the Defendants to mail or cause to be mailed the Notices to all Members of the Operating Partnership Sub-Class; e. Direct Counsel for the Defendants to serve on Plaintiffs' Lead Counsel and file with the Court proof, by affidavits or declarations, of the mailing of the Notice; f. Find that the mailing pursuant to Subsection (d) above constitutes the best and most practicable notice to the Members of the Operating Partnership Sub-Class, and is due and sufficient notice of the Hearing, Proposed Settlement, application for an award of attorneys' fees and expenses, and other matters set forth in the Notice to all Members of the Operating Partnership Sub-Class and that the Notice fully satisfies the requirements of due process, the Federal Rules of Civil Procedure and any other applicable law; g. Provide that, pending final determination of whether the Settlement should be approved, neither the Plaintiffs nor any Operating Partnership Sub-Class Member either directly, in a representative capacity, a derivative capacity or in any other capacity, shall commence, maintain or prosecute any other action or proceeding in any court or tribunal against any of the Defendants, asserting any of the Settled Claims, as that term is defined herein, except in this Action; h. Provide that, pending final determination of whether the Settlement should be approved, the Plaintiffs and all other Operating Partnership Sub-Class Members are barred and enjoined from (i) transferring, selling, assigning, giving, pledging, hypothecating or otherwise disposing of any Units of the Operating Partnerships to any person other than a family member or in cases of divorce, incapacity or death of the Unitholder; or (iii) commencing a tender offer for the Units. In addition, provide that, pending final determination of whether the Settlement should be approved, the General Partners of the Operating Partnerships are enjoined from (i) recording any transfers made in violation of the Order and (ii) providing the list of investors in any Operating Partnership to any person for the purpose of conducting a tender offer; i. Schedule a Hearing to be held by the Court to consider and determine (i) whether the proposed Settlement, including the dissolution of the Operating Partnerships should be approved as fair, reasonable and adequate with respect to the Operating Partnership Sub-Class; (ii) whether, in view of the allegation that certain of the Operating Partnerships may be unregistered investment companies under the 1940 Act, and that, as such, contracts entered into by such Partnerships may be unenforceable, the Court should find that under the circumstances, including the terms and conditions of the Settlement, enforcement of said contracts would produce a more equitable result than non-enforcement and would not be inconsistent with the purpose of said Act; (iii) whether the Operating Partnership Sub-Class should be certified and the Plaintiffs approved as representatives of the Sub-Class; (iv) whether an order approving the Settlement and a Final Judgment - Operating Partnership Sub-Class should be entered thereon dismissing this Action on the merits and with prejudice with respect to the claims brought on behalf of the Operating Partnerships and the Operating Partnership Sub-Class; and (v) whether the application of Class Counsel for an award of attorney's fees and reimbursement of expenses should be approved with respect to the Operating Partnerships and the Operating Partnership Sub-Class; j. Provide that any objections by Members of the Operating Partnership Sub-Class to (i) the proposed Settlement and the entry of the Final Judgment approving the Settlement, or (ii) the application of Class Counsel for an award of attorneys' fees and expenses, shall be heard and any papers submitted in support of said objections shall be received and considered by the Court at the Hearing (unless, in its discretion, the Court shall direct otherwise) only if, on or before a date to be specified in the Approval Order, persons making objections shall file notice of their intention to appear and copies of any papers in support of their position with the Clerk of the Court and serve such notice and papers on: Wechsler Harwood Halebian & Nixon Peabody LLP Feffer LLP 101 Federal Street 488 Madison Avenue, 8th Floor Boston, MA 02110 New York, NY 10022 Attn: Deborah L. Thaxter, P.C. Attn: Andrew Friedman, Esq. Counsel for Defendants Plaintiffs' Lead Counsel k. Provide that the Hearing may, from time to time, and without further notice to the Class Members, be continued or adjourned by Order of the Court. Section 4.2. Notice to Settlement Class. Upon entry of the Preliminary -------------------------- Approval Order, and as provided for therein, Defendants' Counsel shall direct the General Partners to send copies of the Notice - Operating Partnership Sub-Class, by U.S. Mail, postage prepaid, to the Operating Partnership Sub-Class Members at their last known address as appearing in the records maintained by the Partnerships. The Notice - Operating Partnership Sub-Class shall be substantially in the form of Exhibit B hereto. The terms of the Notice - Operating Partnership Sub-Class are hereby incorporated as a material part of this Revised Stipulation. Section 4.3. Settlement Hearings. Pursuant to Fed. R. Civ. P. 23, the -------------------- Settlement Hearing on the Operating Partnership Sub-Class shall be held 45 days, or such other period as the Court directs, after the sending of Notice - Operating Partnership Sub-Class to Members of the Operating Partnership Sub-Class as provided in Sections 4.1 and 4.2 hereof. In connection with the Settlement Hearing, the Parties hereto shall file with the Court all such papers as their counsel believe to be necessary. At the Settlement Hearing, the Court will be asked to consider the fairness of the terms and conditions of the Settlement and all of the transactions contemplated by this Revised Stipulation. The Court will also be asked to consider the application of Class Counsel for attorneys' fees and expenses. Section 4.4. Entry of Final Judgments and Orders. At or prior to the ---------------------------------------- Settlement Hearing, counsel for the Parties to this Stipulation shall jointly submit to the Court an appropriate proposed Final Judgment and Order, in substantially the form annexed hereto as Exhibit C which shall: (a) Find the Revised Stipulation and Settlement and the transactions contemplated thereby (i) to be fair, reasonable and adequate to the Operating Partnerships and the Class, and (ii) to be in the best interests of the Operating Partnerships and the Operating Partnership Sub-Class, and directing consummation of the Settlement in accordance with the terms and conditions of the Revised Stipulation; (b) In accordance with Section 47(b) of the 1940 Act, find that, under the circumstances surrounding this Revised Stipulation of Settlement and the transactions contemplated thereby, enforcement of this Settlement and any contracts entered into, or to be entered into, by the Operating Partnerships and their affiliates (i) would produce a more equitable result than would non-enforcement, and (ii) would not be inconsistent with the purposes of the 1940 Act, as described in Section 1 of that Act. Accordingly, even if any of the Operating Partnerships is or has been an "investment company," as that term is defined in Section 3 of the 1940 Act, this order shall be enforceable and binding upon the Parties hereto, notwithstanding Section 7 of the 1940 Act. Nothing herein shall be deemed to constitute either (a) a finding by the Court, or (b) an admission or acknowledgment by any Party hereto that any Operating Partnership is or has been an "investment company" within the meaning of Section 3 of the 1940 Act. (c) Dismiss the Class and Derivative Action Complaint and each and every cause of action and claim set forth therein brought by the Sub-Class(es) seeking Final Judgment and Order on the merits as to all Defendants and with prejudice to the Operating Partnership Sub-Class; extinguishing all claims, rights, demands and causes of action (including Unknown Claims) that might have been asserted therein by the Named Plaintiffs on behalf of themselves or the Nominal Defendants and Operating Partnership Sub-Class; and discharging Defendants and all Released Parties therefrom; (d) Permanently bar the Operating Partnership Sub-Class Members from asserting against the Released Parties, and releasing the Released Parties from, the Settled Claims; (e) Bar and permanently enjoin each Operating Partnership Sub-Class Member from transferring, selling, assigning, giving, pledging, hypothecating or otherwise disposing of any Units of the Operating Partnerships to any person until the dissolution of the Operating Partnerships or termination of this Settlement, whichever occurs sooner; and (f) Reserve jurisdiction in the Court over all matters relating to the administration and consummation of this Revised Stipulation and the Settlement provided for herein. If, at the Settlement Hearing, the Court finally approves this Revised Stipulation and the Settlement contemplated hereby, and the Settlement has not been terminated for failure to satisfy any of the conditions set forth in Article V hereof, then counsel for the parties hereto shall request entry by the Court of such proposed Final Judgment and Order. ARTICLE V CONDITIONS Section 5.1. Conditions to the Settlement. The consummation of the ------------------------------- Settlement shall be contingent on and subject to the fulfillment of each of the following conditions: (a) The Class Certification and Notice Order shall have been entered by the Court in substantially the form of Exhibit B to this Revised Stipulation. (b) The Settlement Class shall not have been materially modified by the Court. (c) The Final Judgment and Order shall have been entered by the Court in substantially the form of Exhibit C hereto, and shall have become a final order within the meaning of Section 4.4 hereof. Section 5.2. Termination. ----------- (a) If: (i) the Court does not enter the Final Judgment and Order, or (ii) the Court enters the Final Judgment and Order and appellate review is sought and on such review the Final Judgment and Order is materially modified or reversed, or (iii) any of the conditions of Section 5.1 is not satisfied, then this Revised Stipulation shall be canceled and terminated unless counsel for each of the Parties within ten (10) days from the receipt of such ruling or written notice of such circumstances, agrees in writing with counsel for all other Parties hereto to proceed with this Revised Stipulation. For purposes of this provision, an intent to proceed shall not be valid unless it is expressed by: (a) Plaintiffs' Lead Counsel and (b) Counsel for the Defendants. Such notice shall be provided on behalf of the Parties to this Revised Stipulation only by their counsel. Neither a modification nor reversal on appeal of any amount of fees, costs, expenses and interest awarded by the Court to any of Class Counsel shall be deemed a material modification or reversal of a part of the material terms of the Final Judgment or of this Revised Stipulation. (b) If either Effective Date does not occur, or if the Revised Stipulation is disapproved, terminated or canceled pursuant to its terms, neither Plaintiffs nor Class Counsel shall have any obligation to pay any amounts for the costs of printing or mailing of the Notices. In addition, any costs or expenses already incurred for the costs of printing or mailing of the Notices at the time of such termination or cancellation, but which have not been paid, shall be paid by the Defendants and/or the Nominal Defendants and not by Plaintiffs or Class Counsel. --- (c) If neither Effective Date occurs, or if this Revised Stipulation is disapproved, terminated or canceled with respect to the Operating Partnership Sub-Class pursuant to its terms, all of the Parties to this Revised Stipulation shall be deemed to have reverted to their respective status as prior to the execution of this Revised Stipulation, and they shall proceed in all respects as if this Revised Stipulation had not been executed and the related orders and judgments had not been entered, preserving in that event all of their respective claims and defenses in the Action. If only the Effective Date - Operating Partnership Sub-Class does not occur, or if this Revised Stipulation is not approved with respect to the Operating Partnership Sub-Class provisions, all terms and conditions of this Revised Stipulation pertaining to the RSL and Trust Sub-Classes shall remain in full force and effect. (d) In the event that this Revised Stipulation is terminated and the Final Judgments and Orders are vacated, this Revised Stipulation shall be of no further force and effect, except for the provisions of this Section 5.2 and Section 7.1(c) hereof. ARTICLE VI COVENANTS Section 6.1. Entry of Order and Reasonable Efforts. Counsel for all of --------------------------------------- the Parties hereto shall use their best good faith efforts to obtain the entry of the Final Judgments and Orders. The Parties hereto, and their respective counsel, agree to use their best good faith efforts to effectuate the transactions contemplated hereby and to fulfill the conditions set forth in Article V hereof. Section 6.2. No Representations. The Named Plaintiffs acknowledge, for ------------------- themselves and for the Settlement Class, that they have not relied upon any representations, warranties, guarantees, promises, statements or estimates, whether written or oral, express or implied, by any of the Defendants, any affiliate, broker, agent, employee, accountant, attorney-in-fact or at-law or other person representing or purporting to represent any such Defendant, including, without limitation, any representations, warranties, guarantees, promises, statements or estimates regarding the value of the Partnerships, their properties, interests therein or the Units. The Named Plaintiffs acknowledge that they or their counsel have undertaken such investigation of the Partnerships and Trusts as they have deemed necessary in connection with entering into this Revised Stipulation. ARTICLE VII EXPENSES Section 7.1. Attorneys' Fees. ---------------- (a) The procedure for and the allowance or disallowance by the Court of any applications by Class Counsel for an award or reimbursement of reasonable attorneys' fees and expenses shall not constitute a part of this Revised Stipulation and are to be considered by the Court separately from the Court's consideration of the fairness, reasonableness and adequacy of the Settlement, and any order or proceeding relating to any such fee application or procedure shall not operate to terminate or cancel this Revised Stipulation or affect the finality of the Final Judgments and Orders approving this Revised Stipulation and the Settlement. (b) Defendants agree to pay an amount equal to forty percent (40%) of the aggregate amount of attorneys' fees and the reimbursement of expenses that are approved by the Court. Plaintiffs will agree to limit the amount sought by their application(s) for attorneys' fees and reimbursement of expenses so as to request an amount up to, but not in excess of $2.5 million in the aggregate, thus requiring the Defendants to separately pay an amount up to, but not in excess of, $1 million in the aggregate, as payment for their 40% portion of the aggregate award of attorneys' fees and reimbursement of expenses approved by the Court. The Defendants will agree not to oppose any such application(s) that are so limited pursuant to this provision. The remaining sixty percent (60%) of the aggregate amount of attorneys' fees and reimbursement of expenses approved by the Court -- an amount up to, but not in excess of $1.5 million -- will be paid by the Class Members and Nominal Defendants receiving benefits from the Settlement out of, inter alia, the Cash Funds that are to be established for the benefit of the Class Members and Nominal Defendants pursuant to Sections 2.1(a), 2.2(b) and 2.3(a) and (b) of this Revised Stipulation above. Plaintiffs will agree to limit the amounts sought from each Cash Fund for the payment of the 60% portion of the aggregate amount of attorneys' fees and reimbursement of expenses approved by the Court as follows: (i) up to $100,000, or 16.6%, of the $600,000 Cash Fund established for the benefit of the RSL Sub-Class; (ii) up to $700,000, or 4.67%, of the minimum $15,000,000 Cash Distribution to the Operating Partnership Sub-Class; (iii) up to $215,000, or 5.37%, of the $4,000,000 Cash Fund established for the benefit of the Trust Sub-Class; and (iv) up to $485,000, or 5.39%, of the $9,000,000 Cash Fund established for the benefit of the Trust Sub-Class and the Trusts. Other than as set forth above, the Defendants and the Class shall not have any obligations with respect to Plaintiffs' Counsel's attorneys' fees and expenses. Subject to the terms and conditions of this Revised Stipulation, the Defendants will cause the aggregate amount of the attorneys' fees and reimbursement of expenses as may be approved by the Court to be contributed to the Expense Fund and transferred to Plaintiffs' Lead Counsel within fifteen (15) days of the Effective Dates for the subsequent distribution to all Class Counsel. In no event shall the Plaintiffs or Class Counsel pay, or be liable for, the costs of mailing and printing the Notices. ARTICLE VIII MISCELLANEOUS Section 8.1. Stipulation Not Admission. Neither this Revised Stipulation, ------------------------- any exhibit or document referenced herein, nor any action taken to effectuate or further this Revised Stipulation or the Settlement set forth herein is, may be construed as, or may be used as an admission by or against any other parties of any fault, wrongdoing or liability whatsoever, or as a waiver or limitation of any defenses otherwise available to any of the Parties. Entering into or carrying out this Revised Stipulation, the exhibits hereto, and any negotiations or proceedings related thereto shall not in any event be construed as, or deemed to be evidence of, an admission or concession by any of the Parties, or to be a waiver of any applicable defense, and shall not be offered or received in evidence in any action or proceeding against any Party hereto in any court, administrative agency or other tribunal for any purpose whatsoever other than to enforce or effectuate the provisions of this Revised Stipulation or the provisions of any of the exhibits to this Revised Stipulation. The Parties hereto each specifically reserve all rights, claims, demands, defenses, actions or causes of action which each Party presently has, or claims to have, against any of the others and nothing contained herein will be deemed to affect the same, until the Effective Dates as set forth herein, at which time the releases described in Article III hereof shall become effective. Section 8.2. Captions. The definitions and recitals set forth above are -------- essential elements of this Revised Stipulation. The captions contained in this Revised Stipulation are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope of this Revised Stipulation or the intent of its provisions. Section 8.3. Entire Agreement. This Revised Stipulation sets forth the entire ---------------- agreement of the Parties in respect to the Settlement and supersedes all prior oral or written agreements, arrangements, understandings, inducements, promises, and warranties, not embodied or incorporated herein, relating to the subject matter of this Revised Stipulation. Prior discussions and negotiations are superseded by, and merged into, this Revised Stipulation. Section 8.4. Counterparts. This Revised Stipulation may be executed in one or ------------ more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Section 8.5. Modifications. The provisions of this Revised Stipulation ------------- (including any time periods specified herein) may be modified by written agreement of counsel for all the Parties with the consent of the Court and without further notice to the Settlement Class unless the Court requires such notice. The terms and provisions of this Revised Stipulation may not be changed, waived, modified, or varied in any manner unless in writing duly signed by counsel for Defendants and Plaintiffs' Lead Counsel. Section 8.6. Waiver. The failure of any Party hereto to enforce at any time ------ any provision of this Revised Stipulation shall not be construed as a waiver of such provision, nor be construed in any way to effect the validity of this Revised Stipulation or any part hereof or the right of any Party thereafter to enforce each and every such provision. No waiver of any breach of this Revised Stipulation shall be held to constitute a waiver of any other breach. Section 8.7. Successors. This Revised Stipulation shall be binding upon and ---------- inure to the benefit of the Parties hereto and their successors and assigns. No Party hereto may assign its rights or obligations hereunder without the prior written consent of all of the other Parties hereto. Section 8.8. Third Parties. Nothing in this Revised Stipulation, whether -------------- express or implied, is intended to confer any rights or remedies under or by reason of this Revised Stipulation on any persons other than the Parties hereto and their respective successors and assigns, nor is anything in this Revised Stipulation intended to relieve or discharge the obligations or liabilities of any third parties to any party to this Revised Stipulation, nor shall any provision give any third parties any right of subrogation or action over or against any Party to this Revised Stipulation. Section 8.9. Notices. Any and all notices, requests, consents, directives or ------- communications by any party intended for any other party shall be in writing, shall be given personally or by postage prepaid certified or registered mail, return receipt requested, and shall be deemed delivered on the earlier of (a) the date received and (b) the date four business days after the date of deposit in a United States Postal Depository, and shall be addressed as follows: (a) If to the Defendants: Nixon Peabody LLP 101 Federal Street Boston, MA 02110-1832 (617) 345-1000 Attn: Deborah L. Thaxter, P.C. Gregory P. Deschenes, Esq. (b) If to the Named Plaintiffs: Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Attn: Andrew D. Friedman, Esq. Any Party may, from time to time, change the address to which such written notice, requests, consents, directives or communications are to be mailed, by giving the other parties ten (10) days prior written notice of the changed address in the manner hereinabove provided. Section 8.10. Governing Law. This Revised Stipulation and the attached -------------- exhibits shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts, without reference to principles of choice or conflicts of laws. This Revised Stipulation (including, without limitation, its execution and consummation) shall be enforced solely in this Court. The Defendants, the Named Plaintiffs and the Settlement Class hereby waive any objection they may now or hereafter have to the venue or forum of any such enforcement proceedings, and irrevocably consent to and acknowledge jurisdiction and service of any and all process of the Court in any such proceedings. Section 8.11. Collaborative Effort. The undersigned agree that no single party -------------------- shall be deemed to have drafted this Stipulation or any portion thereof. This Revised Stipulation is the product of the collaborative effort of the undersigned counsel. Section 8.12. Exhibits. All of the exhibits hereto are hereby incorporated by -------- reference as though fully set forth herein. Section 8.13. Plaintiffs' Lead Counsel Authorization. Plaintiffs' Lead Counsel -------------------------------------- on behalf of the Class has been expressly authorized by the Plaintiffs to take all appropriate action required or permitted to be taken by the Class to effectuate its terms and is also authorized by the Plaintiffs to enter into any modifications or amendments to the Revised Stipulation on behalf of the Class. Section 8.14. Defendants' Counsel Authorization. Counsel for the Defendants is --------------------------------- authorized to sign this Revised Stipulation on behalf of each of its clients. Section 8.15. Defendants' Acknowledgment. The Defendants hereby acknowledge --------------------------- that various revisions to the terms and conditions of the sale of Class B Interests that were made by the Defendants prior to the consummation of the sale of the Class B Interests, and all of the consideration to be paid to, or on behalf of, the Class and Nominal Defendants pursuant to the terms of the Settlement set forth herein, are attributable to the Action and the efforts of the Plaintiffs and Plaintiffs' Counsel in connection therewith. Section 8.16. No Assignment. The Plaintiffs and their counsel represent and -------------- warrant that none of the Plaintiffs' alleged claims or causes of action against the Defendants have been assigned, encumbered or in any manner transferred in whole or in part. ATTORNEYS FOR PLAINTIFFS: s/Andrew D. Friedman - ---------------------------- WECHSLER HARWOOD HALEBIAN & FEFFER LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 (212) 935-7400 LAW OFFICES OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Ste. 1445 Atlanta, GA 30328 (770) 552-5270 GILMAN AND PASTOR Peter A. Lagorio One Boston Place Boston, MA 02108-4400 (617) 589-3750 BENJAMIN S. SCHWARTZ, CHARTERED Benjamin S. Schwartz 4600 Olympic Way Evergreen, CO 80439 (303) 670-5941 GLANCY & BINKOW Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 LAW OFFICES OF ALLEN M. LERNER Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 (305) 563-8111 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Ste. 2700 New York, NY 10110 (212) 921-4100 THOMAS A. HOADLEY, PA 310 Australian Avenue Palm Beach, FL 33480 (561) 792-9006 GOODKIND, LABATAN, RUDOFF & SUCHAROW, LLP Lynda J. Grant Robert N. Cappucci 100 Park Avenue New York, NY 10017 (212) 907-0700 LASKY & RIFKIND, LTD. Leigh Lasky 30 North LaSalle Street, Ste. 2140 Chicago, IL 60602 (312) 759-7670 HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld 260 Madison Avenue New York, NY 10116 (212) 696-1212 ATTORNEYS FOR DEFENDANTS: s/Deborah L. Thaxter - -------------------------- NIXON PEABODY LLP Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 (617) 345-1000 Exhibit A - Preliminary Approval Order Exhibit B - Notice of Class Action Determination, Proposed Settlement and Fairness Hearing Exhibit C - Final Judgment and Order Those thirteen (13) Partnerships are as follows: American Income 4 Limited Partnership, American Income 5 Limited Partnership, American Income 6 Limited Partnership, American Income 7 Limited Partnership, American Income 8 Limited Partnership, American Income Partners III-A Limited Partnership, American Income Partners III-B Limited Partnership, American Income Partners III-C Limited Partnership, American Income Partners III-D Limited Partnership, American Income Partners IV-A Limited Partnership, American Income Partners IV-B Limited Partnership, American Income Partners IV-C Limited Partnership, American Income Partners IV-D Limited Partnership. Those two (2) Partnerships are American Income Partners V-A Limited Partnership and American Income Partners V-C Limited Partnership. EXHIBIT 2.13 EX B ----------------- EXHIBIT B --------- IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS, BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES, BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of themselves and all others similarly situated and derivatively on behalf of the Nominal Defendants, Plaintiffs, v. Case No. 98-8030-CIV-Hurley EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, EQUIS CORPORATION, a Massachusetts Corporation, GDE ACQUISITION LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AFG LEASING INCORPORATED, a Massachusetts Corporation, AFG LEASING IV INCORPORATED, a Massachusetts Corporation, AFG LEASING VI INCORPORATED, a Massachusetts Corporation, AFG AIRCRAFT MANAGEMENT CORPORATION, a Massachusetts Corporation, AFG ASIT CORPORATION, a Massachusetts Corporation, AF/AIP PROGRAMS LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, GARY D. ENGLE and GEOFFREY A. MACDONALD, Defendants, AIRFUND I INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 4 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 5 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 6 LIMITED PARTNERSHIP, a Massachusetts Limited partnership, AMERICAN INCOME 7 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME 8 LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-B, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-C, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-D, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-E, a Massachusetts Limited Partnership, AFG INVESTMENT TRUST A, a Delaware business trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST C, a Delaware business trust, and AFG INVESTMENT TRUST D, a Delaware business trust, Nominal Defendants. 5 ORDER AND FINAL JUDGMENT ------------------------ This matter having come before the Court on the application of the parties for approval of the settlement set forth in the Revised Stipulation of Settlement dated January 29, 2002 and the exhibits annexed thereto, as amended by the agreement of the parties dated June 11, 2002 (the "Revised Stipulation") relating to the claims of the Class that was conditionally certified for settlement purposes by this Court's Preliminary Approval Order dated March 1, 2002 in the above-captioned Action (the "Settlement"), and the Court having considered all papers filed and proceedings had herein and otherwise being fully informed in the premises and good cause appearing therefor, ORDERED, ADJUDGED AND DECREED THAT: 1. For purposes of this Final Judgment, the Court adopts and incorporates by reference the definitions contained in the Revised Stipulation. 2. This Court has jurisdiction over the subject matter of this litigation, over all actions within this litigation and over all parties to this litigation, including all members of the Settlement Class. 3. This Court hereby approves the Settlement and the transactions contemplated thereby with respect to the Settlement Class and the Operating Partnerships, and finds, in accordance with Rule 23 and 23.1 of the Federal Rules of Civil Procedure, that the Settlement is in all respects, fair, reasonable and adequate, and directs implementation of all of its terms and provisions with respect to the Operating Partnerships and the Class. The Class, as defined in the Settlement and Preliminary Approval Order, consists of all persons and entities who owned Units of any of the Operating Partnerships as of this Court's Order dated March 1, 2002. 4. The Court hereby finds that, (a) the benefits provided under the Settlement compare favorably to the likely recovery at trial; (b) the claims asserted in the Action are complex and the alternative to the Settlement now would be lengthy, burdensome and expensive litigation; (c) the Settlement was reached at a stage in the litigation sufficient to assure that counsel for the parties had sufficient information regarding the strength and weaknesses of the claims and defenses so as to make reasoned judgments concerning the Settlement of the Action; (d) Plaintiffs' Lead Counsel and the ten other law firms representing the plaintiffs ("Class Counsel") are well qualified and have substantial experience in class action and other complex litigation on behalf of investors, and it is the collective judgment of Class Counsel that the benefits of the Settlement outweigh the delay and risk of proceeding to trial; (e) the substance and amount of opposition to this Settlement, from three out of over fourteen thousand members of the Class, was small and the objections were resolved, in large part, by the parties' agreement to amend the Revised Stipulation to clarify the intent of the parties as to a clause previously set forth in subsection 2.2(f) of the Revised Stipulation; and (f) the Settlement resulted from arms' length bargaining between the parties and there is no evidence that the Settlement is the product of collusion. 5. It is appropriate to finally certify the Class defined in the Revised Stipulation and in Paragraph 3 hereof, for settlement purposes only, and without prejudice to further litigation in the event the Revised Stipulation does not become effective (as described in the Revised Stipulation). With respect to the certification of the Class solely for, and contingent upon, the Settlement of the Action, this Court finds: (A) the members of the Class are so numerous that joinder of all Class members in this Action is impracticable; (B) there are common questions of law and fact which predominate over any individual questions; (C) the claims of the Plaintiffs are typical of the respective claims of the Class; (D) the Class is adequately represented by the Plaintiffs who have fairly and adequately represented and protected the interests of all of the Class members, have no interests which conflict with the interests of the Class, and have retained counsel who are well qualified and highly experienced in the representation of limited partners in class and derivative actions similar to the Action; and (E) a class action is superior to other available methods for the fair and efficient adjudication and settlement of the controversy, considering, among other matters, (i) the interest of the members of the Operating Partnership Sub-Class in individually controlling the prosecution and settlement of separate actions, (ii) the extent and nature of any litigation concerning the controversy already commenced by or against members of the Class, (iii) the desirability or undesirability of concentrating the litigation of these claims in this particular forum, and (iv) the difficulties likely to be encountered in the management of this Action. 6. This Court hereby dismisses the Class and Derivative Action Complaint, and each and every claim stated therein brought by or on behalf of the members of the Class and the Operating Partnerships, on the merits and with prejudice as against the Defendants and without costs to any of the parties, as against any other party, except as set forth in the Revised Stipulation. 7. Defendants and the Released Parties are hereby and forever acquitted, released and discharged by each Plaintiff and Class Member and Releasing Parties with respect to any and all Settled Claims as set forth in Section 3.2 of the Revised Stipulation. 8. Each Plaintiff and Class Member and Releasing Parties is hereby deemed conclusively to have compromised, settled, discharged, dismissed and released any and all rights, claims or causes of action against the Defendants and Released Parties arising out of or based upon the Settled Claims and is hereby forever barred and enjoined from asserting, either directly or indirectly, any Settled Claims against any of the Defendants and Released Parties. 9. On March 1, 2002, the Court entered an Order Preliminarily Approving the Settlement by which it approved the form of Notice of Class Action Determination, Proposed Settlement and Fairness Hearing (the "Notice") and ordered that copies of the Notice be sent by mail to all Members of the Class at the addresses set forth in the books and records maintained by the Operating Partnerships. Pursuant to and in accordance with such order, the Notice was provided to the Class members. The Notice given to the Class pursuant to the Revised Stipulation was the best notice practicable under the circumstances. Said Notice provided due and adequate notice to all Class Members of all material elements of the Action, the terms and conditions of the Settlement, the request for attorneys' fees and expenses and all relevant proceedings in the Action. Said Notice fully satisfied the requirements of Rules 23(c)(2) and 23(e) of the Federal Rules of Civil Procedure and the United States Constitution. 10. Without affecting the finality of this Final Judgment in any way, this Court hereby retains continuing jurisdiction: (a) over implementation of the Settlement and all distributions to the Plaintiffs and Class Members pursuant to further orders of this Court; (b) over the Action until the final judgment contemplated hereby has become effective and each and every act agreed to be performed by the parties shall have been performed pursuant to the Settlement; and (c) over all parties to the Action for the purpose of enforcing and administering the Revised Stipulation. 11. If the Settlement does not become final and effective, then this Final Judgment shall be rendered null and void ab initio and be vacated and the -- ------ Settlement and all orders entered in connection therewith shall be rendered null and void, except for the provisions of the Revised Stipulation concerning the payment of the costs of Notice, and the Action shall be reinstated with the parties having all rights as existed prior to the execution of the Revised Stipulation. 12. Class Counsel in the Action are awarded attorneys' fees and reimbursement of costs and expenses incurred from May 7, 1999 through May 30, 2002, in the aggregate amount of $1,166,667.00, which is to be paid, pursuant to the terms of the Revised Stipulation, to Plaintiffs' Lead Counsel who will allocate $100,000.00 of such amount among the Plaintiffs for incentive awards approved by the Court and the remainder among Class Counsel. 13. In accordance with Section 47(b) of the Investment Company Act of 1940, as amended (the "1940 Act"), the Court finds, under the circumstances surrounding the Revised Stipulation and the transactions contemplated thereby, enforcement of this Settlement and any contracts entered into, or to be entered into, by the Operating Partnerships and their affiliates (a) would produce a more equitable result than would non-enforcement, and (b) would not be inconsistent with the purposes of the 1940 Act, as described in Section 1 of that Act. Accordingly, even if any of the Operating Partnerships is now, or has been, an "investment company," as that term is defined in Section 3 of the 1940 Act, this Order shall be enforceable and binding on the parties hereto, notwithstanding Section 7 of the 1940 Act. Nothing herein shall be deemed to constitute either (a) a finding by the Court, or (b) an admission or acknowledgment by any party hereto that any Operating Partnership is now, or has been, an "investment company" within the meaning of Section 3 of the 1940 Act. 14. This Court hereby decrees that neither the Settlement, this Final Judgment, nor the fact of settlement are an admission or concession by the Defendants of any liability or wrongdoing whatsoever. This Final Judgment is not a finding of the validity or invalidity of any claims in the Action or of any wrongdoing by the Defendants. Neither the Settlement, nor this Final Judgment, nor the fact of settlement, nor the settlement proceedings, nor the settlement negotiations, nor any related documents shall be used or construed as an admission of any fault, liability or wrongdoing by any person or entity or shall be offered or received in evidence as an admission, concession, presumption or inference against any party in any proceeding other than such proceedings as may be necessary to consummate or enforce the Settlement. DONE AND SIGNED in Chambers at West Palm Beach, Florida, this 12th day of June, 2002. /s/ Daniel T.K. Hurley ------------------------- Daniel T.K. Hurley United States District Judge Copies To All Counsel Of Record EX-2 4 doc3.txt EXHIBIT 2.14 PLAN OF LIQUIDATION AND DISSOLUTION This Plan of Liquidation and Dissolution (this "Plan"), is entered into as of July 18, 2002, by and among AFG Leasing IV Incorporated, a Massachusetts corporation ("AFG IV"), both in its individual capacity and as the general partner, and on behalf, of American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Partners V-C Limited Partnership and American Income Partners V-D Limited Partnership (together, the "AIP Partnerships"), AFG Leasing VI Incorporated, a Massachusetts corporation ("AFG VI"), both in its individual capacity and as the general partner, and on behalf, of American Income Fund I-A, a Massachusetts Limited Partnership, American Income Fund I-B, a Massachusetts Limited Partnership, American Income Fund I-C, a Massachusetts Limited Partnership, American Income Fund I-D, a Massachusetts Limited Partnership and American Income Fund I-E, a Massachusetts Limited Partnership (collectively, the "AIF Partnerships"), AFG Aircraft Management Corporation, a Massachusetts corporation ("AFG AMC", and, together with AFG IV and AFG VI, hereinafter collectively referred to as the "General Partners"), both in its individual capacity and as the general partner, and on behalf, of AIRFUND International Limited Partnership and AIRFUND II International Limited Partnership (together, the "Airfund Partnerships," and hereinafter, together with the AIP Partnerships and the AIF Partnerships, collectively referred to as the "Partnerships"). R E C I T A L S - - - - - - - - WHEREAS, the Partnerships are nominal defendants in a class action lawsuit in the United States District Court for the Southern District of Florida (the "Court") captioned Leonard Rosenblum, et al. v. Equis Financial Group Limited Partnership, et al. (Civ. 98-8030) (the "Litigation"); and WHEREAS, the Court approved a Revised Stipulation of Settlement of the litigation, a copy of which is attached hereto as Exhibit A (as amended, the ------- - "Settlement Stipulation"), pursuant to a Final Judgment and Order entered onto the docket on June 18, 2002, a copy of which is attached hereto as Exhibit B (as ------- - amended, the "Order"); and WHEREAS, pursuant to the terms of the Order, the Partnerships have agreed to dissolve and commence liquidation of their remaining assets on or before July 18, 2002, the date that is thirty days following the first date on which the Order becomes final, binding and non-appealable (the "Effective Date"); and WHEREAS, the Settlement Stipulation and Order contemplate that upon dissolution, the General Partners shall (i) cancel each Partnership's Certificate of Limited Partnership; (ii) apply and distribute all cash and proceeds in accordance with the provisions set forth in their respective limited partnership agreements and further distributions noted below; (iii) after allocating reasonable estimates of cash amounts to be used for contingent or existing liabilities, liquidate each Partnership's assets; (iv) place all cash other than the cash reserves referred to in (ii) above and any assets that could not be sold for cash prior to dissolution in a liquidating trust for the benefit of the unitholders of each of the Partnerships (the "Unitholders") with a nationally recognized financial institution as its trustee (each, a "Liquidating Trust"); (v) distribute all of the net cash proceeds from the sale of assets of each Liquidating Trust and cash, less reserves for any contingent liabilities, to the beneficiaries of each Liquidating Trust no later than December 31, 2003; and (vi) undertake certain other transactions, all as more fully described in the Settlement Stipulation and the Order; and WHEREAS, in furtherance of the liquidation and dissolution of the Partnerships as described herein, the General Partners have negotiated the appointment of Wilmington Trust FSB as the trustee of each Liquidating Trust (the "Trustee"), each substantially pursuant to the terms of a Liquidating Trust Agreement, a form of which is attached hereto as Exhibit C; and ------- - WHEREAS, in furtherance of the liquidation and dissolution of the Partnerships as described herein, the General Partners have adopted and approved this Plan; NOW THEREFORE, the General Partners authorize the following on behalf of the Partnerships: 1. Each of the Partnerships shall enter into, execute and deliver a Liquidating Trust Agreement with the Trustee. 2. Upon dissolution, pursuant to Section 10 of Chapter 109 of the Massachusetts General Laws, the General Partner of each Partnership shall cause it to file with the Secretary of State of The Commonwealth of Massachusetts, a Certificate of Cancellation, a form of which is attached hereto as Exhibit D and ------- - cancels the Partnership's Limited Partnership Certificate. 3. The Partnerships shall, after having set aside cash funds that the General Partners have determined sufficient for the satisfaction of any contingent or existing obligations or the payment of any fees or expenses with respect to any Partnership (the "Cash Reserves") and reserving cash to be transferred to each Liquidating Trust for estimated fees, expenses and contingent liabilities of each Liquidating Trust (the "Retained Assets"), in accordance with each Partnership's limited partnership agreement and the terms of the Settlement Stipulation, distribute all available cash to each respective Partnership's Unitholders. 4. American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Fund I-C, a Massachusetts limited partnership, American Income Fund I-D, a Massachusetts limited partnership and American Income Fund I-E, a Massachusetts limited partnership shall each transfer to the Trustee on behalf of such Partnership's respective Liquidating Trust, all its right, title and interest: (i) as indirect payee in and to promissory notes issued indirectly by Semele Group Inc. on April 30, 1997 (the "Semele Notes"), if the Semele Notes have not previously been sold or repaid, in accordance with the terms of the Order, on or prior to the Effective Date and (ii) as indirect stockholder in and to 177,730 shares of common stock of Semele Group, Inc. (the "Semele Stock"), each of which were issued as partial consideration paid to such Partnerships for the purchase of three vessels formerly owned by subsidiaries of such Partnerships. 5. Each of the Partnerships shall assign all of its right, title and interest (i) as lender in and to promissory notes issued by Echelon Residential Holdings LLC as of March 8, 2000, as amended, together with the right to receive any accrued but unpaid interest relating thereto (the "Echelon Notes") and (ii) in and to that certain Pledge Agreement (Partnerships) dated as of March 8, 2000 relating to the Echelon Notes (the "Pledge Agreement"). The Partnerships acknowledge that from and after the Effective Date, the Trustee shall be the Agent (as such term is defined in the Pledge Agreement). 6. Without limiting the foregoing, the Partnerships shall enter into, execute and deliver to the Trustee a Bill of Sale, Assignment, Acceptance and Assumption Agreement, a form of which is attached hereto as Exhibit E, which, ------- - together with related transfer instruments, shall transfer and assign to the Trustee, on behalf of each Liquidating Trust, all right, title, interest in and to, and obligations related to, all assets, including, but not limited to, the Partnership's cash and/or cash equivalents, the Cash Reserves, the Retained Assets, the Semele Notes, the Semele Stock and the Echelon Notes, held by each of each of the Partnerships that have not been, as of the Effective Date, distributed as provided in the Order. Such assets shall be reserved, liquidated or distributed by the Trustee in accordance with the terms of each Liquidating Trust. 7. The General Partners shall take any and all other actions deemed required, necessary or desirable to complete the liquidation and dissolution of the Partnerships, including but not limited to, the execution and delivery of any and all agreements, certificates, instruments or other documents. [The remainder of this page is left intentionally blank.] IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the date first set forth above. AFG LEASING IV INCORPORATED AFG LEASING VI INCORPORATED By: /s/ Wayne E. Engle By: /s/ Wayne E. Engle ------------------------- --------------------- Wayne E. Engle, Vice President Wayne E. Engle, Vice President AFG AIRCRAFT MANAGEMENT CORPORATION By: /s/ Wayne E. Engle --------------------- Wayne E. Engle, Vice President AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, General Partner By: /s/ Wayne E. Engle --------------------- Wayne E. Engle, Vice President AMERICAN INCOME FUND I-A, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-B, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-C, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-D, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-E, A MASSACHUSETTS LIMITED PARTNERSHIP By: AFG Leasing VI Incorporated, General Partner By: /s/ Wayne E. Engle --------------------- Wayne E. Engle, Vice President AIRFUND INTERNATIONAL LIMITED PARTNERSHIP AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP By: AFG Aircraft Management Corporation, General Partner By: /s/ Wayne E. Engle --------------------- Wayne E. Engle, Vice President EXHIBIT A [REVISED STIPULATION OF SETTLEMENT] EXHIBIT B [FINAL JUDGMENT AND ORDER] EXHIBIT C [LIQUIDATING TRUST AGREEMENT] EXHIBIT D [CERTIFICATE OF CANCELLATION] EXHIBIT E [ASSIGNMENT AND ASSUMPTION AGREEMENT] EXHIBIT E --------- EXHIBIT E BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT This BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT, made, executed and entered into as of July 18, 2002, by and among American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Partners V-C Limited Partnership and American Income Partners V-D Limited Partnership, American Income Fund I-A, a Massachusetts Limited Partnership, American Income Fund I-B, a Massachusetts Limited Partnership, American Income Fund I-C, a Massachusetts Limited Partnership, American Income Fund I-D, a Massachusetts Limited Partnership and American Income Fund I-E, a Massachusetts Limited Partnership, AIRFUND International Limited Partnership and AIRFUND II International Limited Partnership (each an "Assignor" and, together, the "Assignors"), and Wilmington -------- --------- Trust Company, a Delaware banking corporation, not in its individual capacity, but solely as trustee (the "Trustee") of each of the American Income Partners ------- V-A Limited Partnership Liquidating Trust, the American Income Partners V-B Limited Partnership Liquidating Trust, the American Income Partners V-C Limited Partnership Liquidating Trust, the American Income Partners V-D Limited Partnership Liquidating Trust, the American Income Fund I-A, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-B, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-C, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-D, a Massachusetts Limited Partnership, Liquidating Trust and the American Income Fund I-E, a Massachusetts Limited Partnership, Liquidating Trust, the AIRFUND International Limited Partnership Liquidating Trust and the AIRFUND II International Limited Partnership Liquidating Trust (each a "Liquidating Trust" and together, the "Liquidating Trusts"). ---------- ------------------- RECITALS -------- WHEREAS, the Trustee and each the Assignors are parties to Liquidating Trust Agreements dated as of the date hereof, pursuant to which each of the Assignors has created a Liquidating Trust and engaged the Trustee as trustee to administer the Liquidating Trust (the "Agreements") pursuant to the terms of a ---------- Revised Stipulation of Settlement, entered into by the Assignors and certain plaintiffs in settlement of a lawsuit, that was approved pursuant to a Final Judgment and Order entered on the court's docket on June 18, 2002; and WHEREAS, the Agreements contemplate that each of the Assignors will place, as of the date hereof and in accordance with a Plan of Liquidation adopted by the Assignors as of the date hereof, all of its undistributed assets, including but not limited to, cash, equipment and securities, along with certain Cash Reserves (as defined in the Revised Stipulation of Settlement) subject to disbursement for the Assignor's contingent liabilities and cash designated as reserves for the Liquidating Trust's contingent liabilities, into the Liquidating Trust established to receive said assets and reserves of each Assignor; and WHEREAS, the Trustee and each of the Assignors now desire to carry out the intent and purpose of the Agreements by the execution and delivery to the Trustee by each Assignor of this instrument evidencing the conveyance, assignment, transfer, sale and delivery to the Trustee of the Transferred Assets (as hereinafter defined) and the acceptance by the Trustee of the Assumed Obligations (as hereinafter defined); NOW, THEREFORE, in consideration of the foregoing premises and for $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: ASSIGNMENT ---------- Each of the Assignors does hereby convey, assign, transfer, sell and deliver unto the Trustee and its successors and assigns, forever, for the benefit of each Assignor's Liquidating Trust, all of each such Assignor's right, title and interest in, to and under all of the assets of each of the Assignors as set forth and more fully described by category of asset and more fully enumerated by Assignor on Exhibit A, hereto, including, without limitation any ------- - accounts receivable, limited partnership interests, beneficial interests, rights in litigation, security interests, contract rights or agreements, rights to payment or distributions or similar rights that each Assignor may possess in same (together, the "Transferred Assets"). ------------------- ACCEPTANCE AND ASSUMPTION --------------------------- The Trustee accepts the foregoing conveyance, assignment, transfer and delivery of the Transferred Assets and agrees to assume all liabilities and obligations relating to the Transferred Assets to the extent specifically set forth in the Agreements (the "Assumed Obligations"). -------------------- TO HAVE AND TO HOLD the Transferred Assets and the Assumed Obligations unto the Trustee, its successors and assigns, FOREVER, for the benefit of each Assignor's Liquidating Trust. Each Assignor hereby constitutes and appoints the Trustee and its successors and assigns as its true and lawful attorneys in fact in connection with the transactions contemplated by this instrument, with full power of substitution, in the name and stead of each Assignor but on behalf of and for the benefit of the Trustee and its successors and assigns, to demand and receive any and all of the assets, properties, rights and business hereby conveyed, assigned, and transferred or intended so to be, and to give receipt and releases for and in respect of the same and any part thereof, and from time to time to institute and prosecute, in the name of the Assignor or otherwise, for the benefit of the Trustee or its successors and assigns, proceedings at law, in equity, or otherwise, which the Trustee or its successors or assigns reasonably deem proper in order to collect or reduce to possession or endorse any portion of the Transferred Assets and to do all acts and things in relation to the assets which the Trustee or its successors or assigns reasonably deem desirable. This instrument shall be binding upon and shall inure to the benefit of the respective successors and assigns of the Assignors and the Trustee. This instrument shall be construed and enforced in accordance with the laws of the State of Delaware, without regard to conflict of law. [The remainder of this page is left intentionally blank.] B583425.2 IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale, Assignment, Acceptance and Assumption Agreement under seal on the date first above written. ASSIGNORS AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, General Partner By: _________________________________ Wayne E. Engle, Vice President AMERICAN INCOME FUND I-A, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-B, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-C, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-D, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-E, A MASSACHUSETTS LIMITED PARTNERSHIP By: AFG Leasing VI Incorporated, General Partner By: _________________________________ Wayne E. Engle, Vice President AIRFUND INTERNATIONAL LIMITED PARTNERSHIP AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP By: AFG Aircraft Management Corporation, General Partner By: _________________________________ Wayne E. Engle, Vice President TRUSTEE WILMINGTON TRUST COMPANY, not in its individual capacity but solely as trustee of each of the Liquidating Trusts By: ________________________________ Its: ________________________________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Leasing IV Incorporated (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Leasing VI Incorporated (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Aircraft Management Corporation (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ EXHIBIT A TRANSFERRED ASSETS ------------------ Described by Category of Asset and on an Assignor by Assignor Basis ------------------------------------------------------------------- I. ACCOUNTS RECEIVABLE: (see the accounts receivable schedule attached hereto) II. BENEFICIAL INTERESTS: A. Beneficial Interests in a trust, relating to, inter alia, a McDonnell Douglas MD-82 aircraft bearing MSN 49151, pursuant to a Trust Agreement dated as of September 12, 2001, as amended, by and among Investor Asset Holding Corp., as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 11.872% - --------------------------- American Income Fund I-D: 14.391% - --------------------------- American Income Fund I-E: 9.714% - --------------------------- Airfund International: 49.17% - ---------------------- Airfund II International: 14.853% - -------------------------- B. Beneficial Interests in a trust, relating to, inter alia, a Boeing 737-2H4 aircraft bearing serial number 21722, pursuant to a Trust Agreement dated as of December 30, 1991, as amended, by and among Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank of Utah, National Association), as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 14.35% - --------------------------- American Income Fund I-D: 17.39% - --------------------------- American Income Fund I-E: 11.74% - --------------------------- Airfund International: 43.41% - ---------------------- Airfund II International: 13.11% - -------------------------- C. Beneficial Interests in a trust, relating to, inter alia, a Boeing 737-200A aircraft bearing MSN 21721 pursuant to a Trust Agreement dated as of December 30, 1991, as amended, by and among Wells Fargo Bank Northwest, National Association, as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 14.35% - --------------------------- American Income Fund I-D: 17.39% - --------------------------- American Income Fund I-E: 11.74% - --------------------------- Airfund International: 43.41% - ---------------------- Airfund II International: 13.11% - -------------------------- D. Beneficial Interests in a trust, relating to certain equipment pursuant to a certain Trust Agreement dated as of December 13, 1989, as amended, by and among Wells Fargo Bank Northwest, National Association and Investors Asset Holding Corp., as Trustees and the following Assignors as Owner Participants in the percentages set forth below: American Income Partners V-A: 14.93333% - ------------------------------- American Income Partners V-B: 40.00000% - ------------------------------- American Income Partners V-C: 4.00000% - ------------------------------- American Income Fund I-A: 7.73331% - --------------------------- Airfund II International: 33.33336% - -------------------------- III. LIMITED PARTNERSHIP INTERESTS IN THE HOLDERS OF SEMELE GROUP, INC. NOTES AND COMMON STOCK: A. Limited partnership interests in AFG Hato Arrow Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Fund I-E: 67.00% - --------------------------- B. Limited partnership interests in AFG Dove Arrow Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Fund I-C: 33.85% - --------------------------- American Income Fund I-D: 66.15% - --------------------------- C. Limited partnership interests in AIP/Larkfield Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Partners V-A: 46.4646% - ------------------------------- American Income Partners V-B: 53.5354% - ------------------------------- IV. RIGHTS IN LITIGATION: A. The rights of American Income Fund I-E as a plaintiff in an action ------------------------ filed in December 1998 against General Motors Corporation in the Superior Court for The Commonwealth of Massachusetts relating to a Master Lease Agreement No. 9108MIG433 and Rental Schedules B-4, B-5, B-8 and B-14. V. ECHELON NOTES AND PLEDGE AGREEMENT: A. The rights of the following Assignors in certain promissory notes dated March 8, 2000, as amended, made by Echelon Residential Holdings LLC in favor of the Assignors, as lenders, having principal amounts set forth opposite each Assignor's name, together with any accrued but unpaid interest: American Income Partners V-A: $2,160,000 - ------------------------------- American Income Partners V-B: $5,700,000 - ------------------------------- American Income Partners V-C: $2,390,000 - ------------------------------- American Income Partners V-D: $2,730,000 - ------------------------------- American Income Fund I-A: $1,650,000 - --------------------------- American Income Fund I-B: $1,310,000 - --------------------------- American Income Fund I-C: $2,780,000 - --------------------------- American Income Fund I-D: $3,050,000 - --------------------------- American Income Fund I-E: $4,790,000 - --------------------------- Airfund International: $1,800,000 - ---------------------- Airfund II International: $3,640,000 - -------------------------- B. The rights of the foregoing Assignors in that certain Pledge Agreement, dated March 8, 2000, by and among the Assignors and Holdings relating to the pledge of all of the membership interests in Echelon Residential LLC by Holdings as security for the payment of the Notes. VI. CONTRACT RIGHTS, RIGHTS TO PAYMENT: A. All right, title and interest of American Income Partners V-A in and ---------------------------- to that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. B. (1) All right, title and interest of American Income Partners ------------------------ V-C in and to that certain Purchase and Sale Agreement dated as of April 1, 2002 - by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. (2) All right, title and interest and rights to payment of American Income Partners V-C relating to: (a) that certain Renewal Rental ------------------------ Schedule No. A-15RN3 dated as of June 1, 2002 to Master Equipment Lease Agreement No. 8607TXG245 dated as of July 15, 1986 and (b) that certain Renewal Rental Schedule No. A-16RN3 dated as of June 1, 2002 to Master Equipment Lease Agreement No. 8607TXG245 dated as of July 15, 1986. C. All right, title and interest of American Income Partners V-D in and ---------------------------- to that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. D. All right, title and interest of American Income Fund I-A in and to ------------------------ that certain Purchase and Sale Agreement dated as of April l, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. E. All right, title and interest of American Income Fund I-B in and to ------------------------ that certain Purchase and Sale Agreement dated as of April l, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. F. All right, title and interest of American Income Fund I-C in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. G. All right, title and interest of American Income Fund I-D in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. H. All right, title and interest of American Income Fund I-E in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. EX-2 5 doc4.txt EXHIBIT 2.15 ------------ ACCOUNT AGENCY AGREEMENT ------------------------ Account Agency Agreement made as of this 11 day of April, 2002, (the "Account Agency Agreement"), by and between EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP, a Massachusetts Limited Partnership (the "Company"), and Wilmington Trust Company, a Delaware banking corporation (the "Account Agent"). The parties hereto are entering into this Account Agency Agreement pursuant to the Revised Stipulation of Settlement, dated as of April __, 2002 (the "Settlement Agreement"), among the Company and certain of its affiliates, and LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS, BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES, BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of themselves and all others similarly situated and derivatively on behalf of the Nominal Defendants, (the "Plaintiffs"). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Settlement Agreement. This Account Agency Agreement is designed to implement the provisions of Section 2.2(g) of the Settlement Agreement pursuant to which (i) the Company will deposit an aggregate amount of $8 million cash in a Cash Collateral Account with the Account Agent; and (ii) the Company, upon receipt from the General Partners of cash distributions from the Operating Partnerships, shall promptly deposit 50% of such distributions in the Cash Collateral Account which sums shall be distributed in accordance with the terms hereof. Accordingly, in consideration of the mutual agreements herein contained, the parties hereto hereby agree as follows: 1. APPOINTMENT OF ACCOUNT AGENT. The Account Agent is hereby appointed to ------------------------------ act as Account Agent hereunder and the Account Agent agrees to act as such, pursuant to the terms set forth herein. 2. CASH COLLATERAL FUND. The Company shall deliver funds to the Account ---------------------- Agent as follows: (i) on the date hereof, in accordance with Section 2.2(g) of the Settlement Agreement, the Company is delivering to the Account Agent by wire transfer to the Cash Collateral Account, the sum of $8,000,000, and (ii) upon receipt from the General Partners of cash distributions from the Operating Partnerships, the Company shall promptly deposit 50% of such distributions with the Account Agent (such sums, together with all investments made therewith and earnings thereon, being collectively referred to herein as the "Cash Collateral Fund"). The Account Agent shall deposit the Cash Collateral Fund in an account or accounts specified by the Account Agent and the Account Agent is accepting such sum for deposit in escrow pursuant to the provisions of this Account Agency Agreement. 3. PERMITTED INVESTMENTS. The Account Agent shall invest and reinvest the ----------------------- Cash Collateral Fund in any or all of the following: (i) short-term direct obligations of, or obligations fully guaranteed by, the United States of America or any agency thereof; (ii) certificates of deposit issued by any bank trust company or national banking association having total capital and surplus in excess of Fifty Million Dollars ($50,000,000); (iii) Bank repurchase agreements covering securities issued or guaranteed by the United States government or any agency or instrumentality thereof; (iv) money market funds having a net worth of at least $100,000,000 or similar highly liquid investments (other than tax-exempt securities or obligations) including, the Wilmington Fund, an AAA rated money market fund managed by Rodney Square, and an affiliate of the Account Agent (such investments being collectively referred to herein as the "Permitted Investments"). Any loss incurred from an investment in or sale of Permitted Investments will be borne solely by the Cash Collateral Fund. Investment and reinvestment of the Cash Collateral Fund shall be made only in Permitted Investments, but the Account Agent may in its sole and absolute discretion select which Permitted Investments to reinvest the Cash Collateral Fund. It is hereby acknowledged that the Account Agent shall not be required to maximize the investment return on the Cash Collateral Fund during the term of this Account Agency Agreement. The Account Agent shall be and hereby is relieved of all liability with respect to the purchasing, holding or selling of Permitted Investments in accordance with the terms hereof. The Account Agent is not responsible for any losses to the Cash Collateral Fund which may occur, including, without limitation, by reason of bank failure or the amount of the Cash Collateral Fund exceeding the Federal Deposit Insurance Corporation limits. 4. DISPOSITION OF SECURITIES. At the time the Account Agent shall be ---------------------------- required to make any payment of principal under this Account Agency Agreement, the Account Agent shall liquidate the Permitted Investments held hereunder to make such payment. 5. RIGHTS TO CASH COLLATERAL FUND. Except as provided herein, the Cash ---------------------------------- Collateral Fund shall be for the exclusive benefit of the Company its successors and assigns, and no other person or entity shall have any right, title or interest therein. 6. COMPANY REPRESENTATIONS. The Company represents and warrants to the ------------------------ Account Agent that (i) it has irrevocable right, power and authority to enter into and perform this Agreement, (ii) it has irrevocable right, power and authority to give and receive directions and notices hereunder; (iii) it has irrevocable right, power and authority to make all determinations that may be required or that it deems appropriate under this Agreement; and (iv) it has given the Nixon Peabody Partners (as defined in Section 7) the right, power and authority to give and receive direction and notices hereunder and to make required determinations that may be required or appropriate on behalf of the Company as contemplated herein. 7. DISTRIBUTIONS FROM THE CASH COLLATERAL FUND. The Account Agent shall ------------------------------------------------ continue to hold the principal of the Cash Collateral Fund in its possession until authorized hereunder to distribute the principal of and income from the Cash Collateral Fund as follows: (a) upon receipt by the Account Agent of written Instructions from two of Alexander J. Jordan, Jr., Deborah L. Thaxter and Gregory P. Deschenes, or such other individuals as may be designated by the Managing Partner of Nixon Peabody, LP in the event that any of the foregoing shall, for any reason, cease to be partners of Nixon Peabody LP or cease to be able to serve in the capacity contemplated herein (the "Nixon Peabody Partners") before the Note Payment Date (as defined below) , including notice of entry of an order by the United States District Court for the Southern District of Florida that (i) rejects the Settlement Agreement or (ii) in the opinion of such Nixon Peabody Partners, makes it unlikely that the Settlement Agreement will be approved, the Account Agent will, at the direction of such Nixon Peabody Partners, return the entire Cash Collateral Fund to the Company; or (b) Within seven (7) business days after receipt by the Account Agent of written Instructions, including notice from any of the Nixon Peabody Partners of the day on which the Note Payment Date has occurred or will occur, or, if later, on the Note Payment Date, to the extent that any Echelon Notes (as defined in the Settlement Agreement) remain outstanding, the Account Agent shall pay the Cash Collateral Fund as follows: (i) Two of the Nixon Peabody Partners shall give the Account Agent Instructions in writing of the extent that any Echelon Notes remain outstanding, and, to that extent and in accordance with such Instructions, the Account Agent shall pay the Echelon Notes out of the funds on deposit in the Cash Collateral Account plus any interest earned on them net of the Account Agent's reasonable fees and expenses to the Liquidating Trustee as payments reducing, first, the principal amount due on the Echelon Notes and, second, any interest accrued at 7.5%. If, for any reason, the Liquidating Trustee has not been appointed by the Note Payment Date (and assuming that Cash Collateral Fund has not been returned to the Company pursuant to Section 7(a), above), the cash distributions shall be made to each of the Operating Partnerships in the following proportions: AMERICAN INCOME PARTNERS V-A 6.75% AMERICAN INCOME PARTNERS V-B 17.81% AMERICAN INCOME PARTNERS V-C 7.47% AMERICAN INCOME PARTNERS V-D 8.53% AMERICAN INCOME FUND 1-A 5.16% AMERICAN INCOME FUND 1-B 4.09% AMERICAN INCOME FUND 1-C 8.69% AMERICAN INCOME FUND 1-D 9.53% AMERICAN INCOME FUND 1-E 14.97% AIRFUND 5.63% AIRFUND II 11.38% (ii) Upon the payment of all of the outstanding aggregate principal amount and interest accrued at 7.5% on the Echelon Notes, the Account Agent, in accordance with such Instructions, shall promptly release any remaining funds in the Cash Collateral Account to the Defendants and terminate the Cash Collateral Account (c) The "Note Payment Date" shall mean the last day of the first calendar quarter after the first date on which the Final Judgment and Order with respect to the Operating Partnership Sub Class entered by the Court, as described in Section 4.4 of the Settlement Agreement, becomes final, binding and nonappealable. (d) The Instructions shall contain the following: (i) the party or parties to whom, or the account or accounts to which, the Account Agent is thereby directed to pay such amounts; and (ii) the date upon which the Account Agent is directed to pay such amount. The Account Agent may rely fully on the provisions set forth in the Instructions without any responsibility to determine whether such Instructions comply with this Section 7, or the Settlement Agreement. The Company agrees to promptly issue the Account Agent instructions to distribute the Cash Collateral Fund. (e) In the event transfer Instructions are given, whether in writing, by telecopier or otherwise, the Account Agent is authorized (but not required) to seek confirmation of such Instructions by telephone call-back and the Account Agent may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for callbacks may be changed only in a writing actually received and acknowledged by the Account Agent. The parties to this Agreement acknowledge that such security procedure is commercially reasonable. The Account Agent may disburse the Cash Collateral Funds pursuant to Paragraph 7 hereof, either by wire transfer or certified or bank check, at the sole discretion of the Account Agent. It is understood, however, that the Account Agent may disburse any funds in the Cash Collateral Fund without any Instructions, if such distributions are pursuant to Section 7. (f) It is understood that the Account Agent in any funds transfer may rely solely upon any account numbers or similar identifying number provided by the Nixon Peabody Partners hereto to identify (i) each transferee, (ii) its bank, or (iii) an intermediary bank. The Account Agent may apply any of the Cash Collateral Funds for any payment order it executes using any such identifying number, even where its use may result in a person other than the transferee being paid, or the transfer of funds to a bank other than the transferee's bank, or an intermediary bank designated. 8. TERMINATION OF AGENCY. In the event that a dispute arises in connection ---------------------- with the release of the Cash Collateral Fund, the Account Agent shall have the sole and absolute right to resign in accordance with the provisions of Section 10 hereof. This Account Agency Agreement shall automatically terminate if and when all amounts in the Cash Collateral Account (including all the cash, securities or other instruments in which any of the funds deposited in the Cash Collateral Account shall have been invested) shall have been distributed by the Account Agent in accordance with the terms of this Account Agency Agreement. 9. THE ACCOUNT AGENT'S OBLIGATIONS. (a) The obligations of the Account ----------------------------------- Agent are those specifically provided in this Agreement and no other, and the Account Agent shall have no liability under, and no duty to inquire into the terms and provisions, of any agreement between the Company and the Plaintiffs. The Account Agent is acting hereunder as an accommodation to the Company hereto. The duties of the Account Agent are purely ministerial in nature, and it shall not incur any liability whatsoever, except for willful misconduct or gross negligence. The Account Agent may consult with counsel of its choice and shall not be liable for following the advice of such counsel. (b) The Account Agent shall not have any responsibility for the genuineness or validity of any document or other item deposited with it or of any signature thereon or for the identity, authority or right of any person executing or depositing the same and shall not have any liability for acting in accordance with any written instructions or certificates given to it hereunder signed by the proper parties. 10. RESIGNATION AND REMOVAL. The Account Agent may resign and be fully -------------------------- discharged from its duties hereunder at any time by giving at least thirty (30) days' prior written notice of such resignation to the Company and specifying a date upon which such resignation shall take effect; provided, however, that the Account Agent shall continue to serve until its successor accepts the Cash Collateral Fund. Notwithstanding the foregoing, however, the Account Agent shall, in the alternative have the right, at any time, to deposit the Cash Collateral Fund with a court of competent jurisdiction and the Account Agent shall have no further obligation with respect thereto. Upon receipt of such notice, a successor Account Agent shall be appointed by the Company, such successor Account Agent to become the Account Agent hereunder on the resignation date specified in such notice. If an instrument of acceptance by a successor Account Agent shall not have been delivered to the Account Agent within forty-five (45) days after the giving of such notice of resignation, the resigning Account Agent may petition any court of competent jurisdiction for the appointment of a successor Account Agent. The Company may at any time substitute a new Account Agent by giving ten (10) days' notice thereof to the Account Agent then acting and paying all fees and expenses of such Account Agent. In the alternative, in the event of a dispute in relation to the release of the Cash Collateral Fund, the Account Agent may resign fifteen (15) days after giving written notice of such resignation to the parties hereto and depositing the Cash Collateral Fund with an appropriate court and the Account Agent shall have no further obligation with respect hereto or under this Agreement, in any manner. 11. INDEMNIFICATION. The Company shall hold the Account Agent harmless from --------------- and against and indemnify the Account Agent for any loss, liability, expense (including reasonable attorneys' fees, costs of investigation, and expenses either paid to retained attorneys or amounts representing the fair value of legal services rendered to itself), claim or demand arising out of or in connection with the performance of its obligations in accordance with the provisions of this Account Agency Agreement or relating to the Settlement Agreement, except for any of the foregoing to the extent it arises out of the gross negligence or willful misconduct of the Account Agent. In connection therewith, the parties agree as follows: (a) As security for the timely and full payment and satisfaction of all of the present and future obligations of the parties to the Account Agent under this Agreement, whether joint or several, the Company hereby grants to the Account Agent a continuing security interest in and to any and all of the Cash Collateral Funds under this Agreement, whether now existing or hereafter acquired or created, together with the products and proceeds thereof, all payments and other distributions with respect thereto, and any and all investments, renewals, substitutions, modifications and extensions of any and all of the foregoing. The Account Agent shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. (b) In addition, in the event the Account Agent has not received any payment, indemnity, reimbursement or other amount due it under this Agreement, then, notwithstanding any other term or provision of this Agreement, the Account Agent may in its discretion: (i) retain any and all of the Cash Collateral Fund until such time as those obligations have been satisfied; and/or (ii) set off and apply any and all of the Cash Collateral Fund towards the payment and satisfaction of those obligations. The Account Agent shall have a lien for the amount of any such expense or loss on the Cash Collateral Fund held by it hereunder and shall be entitled to reimburse itself from the Cash Collateral Fund for the amount of any such expense or loss. Promptly after the receipt by the Account Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Account Agent shall, if a claim in respect thereof is to be made against the Company, notify the Company thereof in writing; but the failure by the Account Agent to give such notice shall not relieve the Company from any liability which it may have to the Account Agent hereunder. Notwithstanding any obligation to make payments and deliveries hereunder, the Account Agent may retain and hold for such time as it deems necessary such amount of the Cash Collateral Fund as it shall from time to time in its sole discretion deem sufficient to indemnify itself for any such loss or expense and for any amounts due it under Paragraph 11. For the purposes hereof, the term "expense or loss" shall include all amounts paid or payable to satisfy any claim, demand or liability, or in settlement of any claim, demand, action, suit or proceeding settled with the express written consent of the Account Agent, and all costs and expenses, including, but not limited to, reasonable counsel fees and disbursements paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding. (c) The Account Agent shall be under no duty to institute any suit, or to take any remedial procedures under this Account Agency Agreement, or to enter any appearance or in any way defend any suit in which it may be made a defendant hereunder until it shall be indemnified as provided above. 12. CONTRIBUTION BACK. The Company, and by signing below, each of the ------------------ Operating Partnerships agrees that in the event any amount of Cash Collateral Fund released to the Company or any other person under this Agreement is invalidated, declared to be fraudulent or preferential or must otherwise be restored or returned by the Account Agent in connection with the insolvency, bankruptcy or reorganization of the Company or other person, whether by order of or settlement before any court or other authority or otherwise, the Company and such other person shall contribute back to the Account Agent an amount such that each will be affected by that invalidation, declaration, restoration or return ratably in proportion to the distributions it received under this Agreement, together with any related assignment, release or other instrument or document the Account Agent may request to restore the status quo ante. 13. TAXES. To the extent that the Account Agent becomes liable for the ------ payment of taxes, including withholding taxes, in respect of income derived from the investment of funds held hereunder or any payment made hereunder (collectively, the "Taxes"), the Account Agent may pay such Taxes. The Account Agent may (but shall not be required to) withhold from any payment of the Cash Collateral Fund such amount as the Account Agent estimates to be sufficient to provide for the payment of such Taxes not yet paid, and may use the sum withheld for that purpose. The Account Agent shall be indemnified and held harmless against any liability for Taxes and for any penalties or interest in respect of Taxes on such investment income or payments in the manner provided in Paragraph 13. 14. FEES. The Account Agent shall be paid by the Company in accordance with ---- the Schedule of Fees annexed hereto as Exhibit "A" and shall be reimbursed for the fees and disbursements of its attorneys, or, at the request of the Account Agent, shall pay such fees and disbursements directly to its attorneys promptly following execution of this Account Agency Agreement. All fees and payments shall be paid in United States currency and payable in the United States at the office of the Account Agent. 15. DISPUTES. (a) If any dispute should arise with respect to the payment --------- and/or ownership or right of possession of the Cash Collateral Fund, the Account Agent is authorized and directed to retain in its possession, without liability to anyone, all or any portion of the Cash Collateral Fund until such dispute shall have been settled either by agreement of the parties concerned or by a Final Decree, but the Account Agent shall be under no duty whatsoever to institute or defend any such proceedings. (b) The Company shall bear all of its and the Account Agent's fees and expenses incurred by them in resolving any dispute arising under this Account Agency Agreement, except that the Account Agent shall bear its own fees and expenses in the event of a final Judgment and Order determining that the dispute arises out of the gross negligence or willful misconduct of the Account Agent. 16. NOTICES. All notices or other communications which are required or -------- permitted to be given hereunder shall be in writing and shall personally be delivered, sent by certified mail, return receipt requested, or facsimile, or sent by a nationally-recognized overnight courier, to the other parties as follows: To the Company: Equis Financial Group Limited Partnership 200 Nyala Farms Westport, CT 0880 Attn: Gary D. Engle Telephone: (__) ________ Facsimile: (___) ________ with a copy to: Nixon Peabody LLP 101 Federal Street Boston, MA 02110-1832 Attn: Alexander J. Jordan, Esq. Telephone: (617) 345-1000 Facsimile: (617) 345-1300 If to the Account Agent, to: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19891-0001 Attn: Lloyd Martin Corporate Trust Administration Telephone: (302) 636-6438 Facsimile: (302) 636-4149 with a copy to: Putney Twombly Hall & Hirson, LLP 521 Fifth Avenue New York, New York, 10175 Attn: William M. Pollak, Esq. Telephone: (212) 682-0020 Facsimile: (212) 682-9380 or to such other addresses as the party to whom notice is to be given may have furnished to the other parties in writing. Any such communication shall be deemed to have been given when (i) delivered, if personally delivered, (ii) on receipt, if sent by mail, and (iii) on the business day after dispatch, if sent by nationally-recognized overnight courier. 16. COUNTERPARTS. This Account Agency Agreement may be executed in any ------------- number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. 17. GOVERNING LAW AND JURISDICTION. This Account Agency Agreement shall be -------------------------------- governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of laws thereunder. This Account Agency Agreement shall be subject to the exclusive jurisdiction of the courts located in New York County, New York. The parties to this Account Agency Agreement agree that any breach of any term or condition of this Account Agency Agreement shall be deemed to be a breach occurring in the State of Delaware by virtue of a failure to perform an act required to be performed in the State of New York and the parties irrevocably and expressly agree to submit to the jurisdiction of the courts of the State of New York for the purpose of resolving any disputes among the parties relating to this Account Agency Agreement or the transactions contemplated hereby. The parties hereto irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, or any judgment entered by any court in respect hereof brought in New York County, New York, and further irrevocably waive any claim that any suit, action or proceeding brought in New York County, New York has been brought in an inconvenient forum. 18. BENEFITS OF AGREEMENT. All the terms and provisions of this Account ------------------------ Agency Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; and nothing in this Account Agency Agreement, express or implied, is intended to confer on any person, corporation, group or other entity other than the parities hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Account Agency Agreement. Anything contained herein to the contrary notwithstanding, this Account Agency Agreement shall not be assignable by any party hereto without the consent of the other parties hereto. 19. FULL FORCE AND EFFECT. This Account Agency Agreement shall remain in ------------------------- full force and effect until the Account Agent has delivered all amounts in the Cash Collateral Fund in accordance with the terms hereof. 20. MODIFICATION. This Account Agency Agreement shall not be altered or ------------- otherwise amended, except pursuant to an instrument in writing signed by each of the parties hereto. 21. DESCRIPTIVE HEADINGS. The descriptive headings in this Account Agency ---------------------- Agreement are for convenience only and shall not control or affect the meaning or constructing of any provision of this Account Agency Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date and year first above written. EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP By: Equis Corp., General Partner ____________________________________ Gary D. Engle, President Wilmington Trust Company By:____________________________ Name: Title: The undersigned agree to be bound by the terms of Section 12: AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, General Partner By: _________________________________ Gary D. Engle, President AMERICAN INCOME FUND I-A LIMITED PARTNERSHIP AMERICAN INCOME FUND I-B LIMITED PARTNERSHIP AMERICAN INCOME FUND I-C LIMITED PARTNERSHIP AMERICAN INCOME FUND I-D LIMITED PARTNERSHIP AMERICAN INCOME FUND I-E LIMITED PARTNERSHIP By: AFG Leasing VI Incorporated, General Partner By: _________________________________ Gary D. Engle, President AIRFUND INTERNATIONAL LIMITED PARTNERSHIP AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP By: AFG Aircraft Management Corp., General Partner By: _________________________________ Gary D. Engle, President EX-2 6 doc5.txt Exhibit 2.16 EXHITIB C --------- Conformed --------- LIQUIDATING TRUST AGREEMENT Dated as of July 18, 2002 Pursuant to the Revised Stipulation of Settlement dated as of January 29, 2002 IN RE Rosenblum, et al. v. Equis Financial Group Limited Partnership, et al., ---------------------------------------------------------------------- Case No. 98-8030, as approved by Order of the United States District Court for the Southern District of Florida by and among AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP, individually as Grantor and WILMINGTON TRUST COMPANY, as the Trustee _ __ iv B584550.1 TABLE OF CONTENTS ARTICLE I: NAME AND DEFINITIONS 2 1.1 Name 2 1.2 Certain Terms Defined 2 ARTICLE II: NATURE OF TRANSFER 3 2.1 Purpose of Trust 3 2.2 Prohibited Activities 4 2.3 No Reversion to the Partnerships 5 2.4 Payment of Liabilities 5 2.5 Bill of Sale, Assignment, Acceptance and Assumption Agreement; Instruments of Further Assurance 5 2.6 Incidents of Ownership 5 2.7 Notice to Unlocated Holders of Partnership Units 5 ARTICLE III: BENEFICIARIES 5 3.1 Beneficial Interests 5 3.2 Rights of Beneficiaries 6 3.3 No Transfer of Interests of Beneficiaries 7 3.4 Trustee as Beneficiary 7 ARTICLE IV: DURATION AND TERMINATION OF TRUST 7 4.1 Duration 7 4.2 Other Obligations of the Trustee upon Termination 7 ARTICLE V: ADMINISTRATION OF TRUST ASSETS 8 5.1 Sale of Trust Assets 8 5.2 Transactions with Related Persons 8 5.3 Payment of Claims, Expenses and Liabilities 8 5.4 Interim Distributions 8 5.5 Final Distribution 8 5.6 Reports to Beneficiaries and Others 9 5.7 Federal Income Tax Information 9 5.8 Employment of Manager 9 ARTICLE VI: POWERS OF AND LIMITATIONS ON THE TRUSTEES 9 6.1 Limitations on Trustee 9 6.2 Specific Powers of the Trustee 9 ARTICLE VII: CONCERNING THE TRUSTEES, EMPLOYEES AND AGENTS 9 7.1 Generally 9 7.2 Reliance by Trustee 9 7.3 Limitation on Liability to Third Persons 9 7.4 Recitals 9 7.5 Indemnification 9 7.6 Rights of Trustees, Employees, Independent Contractors and Agents to Own Trust Units or Other Property and to Engage in Other Business 9 7.7 Contribution Back 9 ARTICLE VIII: PROTECTION OF PERSONS DEALING WITH THE TRUSTEE 9 8.1 Action by Trustee 9 8.2 Reliance on Statements by the Trustee 9 ARTICLE IX: COMPENSATION OF TRUSTEE 9 9.1 Amount of Compensation 9 9.2 Dates of Payment 9 9.3 Expenses 9 ARTICLE X: THE TRUSTEE AND SUCCESSOR TRUSTEE 9 10.1 Number and Qualification of Trustees 9 10.2 Resignation and Removal 9 10.3 Appointment of Successor 9 10.4 Acceptance of Appointment by Successor Trustee 9 10.5 Bonds 9 ARTICLE XI: CONCERNING THE BENEFICIARIES 9 11.1 Evidence of Action by Beneficiaries 9 11.2 Limitation on Suits by Beneficiaries 9 11.3 Requirement of Undertaking 9 ARTICLE XII: MEETING OF BENEFICIARIES 9 12.1 Purpose of Meetings 9 12.2 Meeting Called by Trustee 9 12.3 Meeting Called on Request of Beneficiaries 9 12.4 Persons Entitled to Vote at Meeting of Beneficiaries 9 12.5 Quorum 9 12.6 Adjournment of Meeting 9 12.7 Conduct of Meetings 9 12.8 Record of Meeting 9 ARTICLE XIII: AMENDMENTS 9 13.1 Consent of Beneficiaries 9 13.2 Notice and Effect of Amendment 9 13.3 Trustee's Declining to Execute Documents 9 ARTICLE XIV: MISCELLANEOUS PROVISIONS 9 14.1 Filing Documents 9 14.2 Intention of Parties to Establish Trust 9 14.3 Beneficiaries Have No Rights or Privileges as Holders of Partnership Units 9 14.4 Laws as to Construction 9 14.5 Severability 9 14.6 Notices 9 14.7 Counterparts. 9 25 B584550.1 LIQUIDATING TRUST AGREEMENT This LIQUIDATING TRUST AGREEMENT (this "Agreement"), dated as of July 18, 2002 (the "Effective Date"), by and among American Income Partners V-D Limited Partnership (the "Partnership") and WILMINGTON TRUST COMPANY, a Delaware banking corporation as Trustee (the "Trustee"). WHEREAS, the Partnership is a nominal defendant, with ten affiliated limited partnerships (the "Affiliated Partnerships"; together with the Partnership, the "Partnerships") in an action filed on January 15, 1998 in the United States District Court for the Southern District of Florida (the "Court") entitled Leonard Rosenblum, et al. v. Equis Financial Group Limited Partnership, ----------------------------------------------------------------------- et al.; and - ------- WHEREAS, AFG Leasing IV Incorporated, General Partner (the "General Partner" and, together with the General Partners of the Affiliated Partnerships, the "General Partners") and the other Defendants (as defined therein) have agreed with the Plaintiffs in such action to settle the claims made in such action pursuant to the terms of that certain Revised Stipulation of Settlement dated as of January 29, 2002 (the "Settlement Agreement"), a copy of which is attached hereto as Exhibit A; and ---------- WHEREAS, the terms of the settlement set forth in the Settlement Agreement have been approved by the Court, pursuant to a Final Judgment and Order dated June 12, 2002 (the "Order"); and WHEREAS, the terms of the Settlement Agreement provide that each of the Partnerships dissolve and begin liquidating their assets on or before the date that is thirty (30) days following the date on which the Order becomes final, binding and non-appealable; and WHEREAS, upon dissolution, the General Partners (or their successors) (i) shall cause the cancellation of each Partnership's Certificate of Limited Partnership, (ii) shall apply and distribute all cash and proceeds in accordance with the provisions set forth in each Partnership's limited partnership agreement, and, after reserving cash amounts for any contingent or existing sales, use and property tax or other types of liabilities that are reasonably estimated for each Partnership (the "Cash Reserves"), which such reserves shall be maintained in a separate account for each of the Partnerships (the "Cash Reserve Accounts") held by the Trustee in the respective Partnership's liquidating trust (as defined below) to be utilized to satisfy such contingent liabilities with the residue distributed to the Beneficiaries as directed by the General Partner of such Partnerships (or their successors) and (iii) liquidate the assets of the Partnerships; and WHEREAS, pursuant to the terms of the Settlement Agreement, all cash including the Cash Reserves and all right, title and interest in and to all other assets of each of the Partnerships that could not be sold for cash prior to the dissolution of such Partnership (the "Retained Assets") shall be placed in a separate liquidating trust, each identified individually by each Partnership's name as a prefix to "Liquidating Trust," for the benefit of the Beneficiaries (as hereinafter defined), with an independent, nationally-recognized financial institution as its trustee; and WHEREAS, the General Partner, on behalf of the Partnership, wishes to engage the Trustee as the trustee of the American Income Partners V-D Limited Partnership Liquidating Trust (referred to hereafter as the "Trust"), and the Trustee wishes to accept such engagement, each on the terms set forth in and in accordance with this Agreement; NOW, THEREFORE, for good and valuable consideration, the Partnership hereby agrees to grant, release, assign, convey and deliver unto the Trustee for the benefit of the Beneficiaries (as hereinafter defined), all of the right, title and interest of the Partnership in and to the Retained Assets for the uses and purposes stated herein on the Effective Date, subject to the terms and provisions set out below, and the Trustee hereby agrees to accept such Retained Assets and such Trust, subject to the following terms and provisions: ARTICLE I NAME AND DEFINITIONSARTICLE INAME AND DEFINITIONS 1.1 Name1.1 Name. This Trust shall be known as the American Income ---- Partners V-D Limited Partnership Liquidating Trust. 1.2 Certain Terms Defined1.2 Certain Terms Defined. For all ----------------------- purposes of this instrument, unless the context otherwise requires: (a) "AFFILIATED PERSON" shall mean a Person (i) who in his individual capacity is a director, trustee, officer, partner or employee of the Manager or of a Person who controls, is controlled by or is under common control with the Manager or (ii) who controls, is controlled by or is under common control with the Manager. (b) "AGREEMENT" shall mean this instrument as originally executed or as it may from time to time be amended pursuant to the terms hereof. (c) "BENEFICIAL INTEREST" shall mean each Beneficiary's proportionate share of the Trust Assets in the Trust determined by the ratio of the number of Partnership Units held by the Initial Beneficiary on the close of business on the Record Date in the Partnership over the total number of Partnership Units existing on such Record Date in the Partnership and thereafter each Beneficiary's proportional beneficial interest in the Partnership's Trust represented by Trust Units. (d) "BENEFICIARIES" shall mean the holders from time to time on or after the Record Date, including the Initial Beneficiaries and the Subsequent Beneficiaries. (e) "INITIAL BENEFICIARIES" shall mean the initial holders of Trust Units. (f) "LIQUIDATING TRUST" shall mean the liquidating trust maintained by the Trustee holding the Trust Assets of the Partnership, identified as the "American Income Partners V-D Limited Partnership Liquidating Trust"; also referred to herein as the "Trust." (g) "MANAGER" shall mean such Person or Persons who have been employed by, or who have contracted with, the Trustee to assist in the management of the Trust. (h) "PARTNERSHIP UNITS" shall mean the limited partnership units in the Partnership held by each of the Beneficiaries as of the Record Date. (i) "PERSON" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a limited liability company, a trust, a joint venture, any unincorporated organization, or a government or political subdivision thereof. (j) "RECORD DATE" shall mean the date selected by the Grantors for determination of the holders of Partnership Units entitled to become Beneficiaries. (k) "SUBSEQUENT BENEFICIARIES" shall mean Beneficiaries as reflected on the books and records of the Trust from time to time after the Effective Date, other than the Initial Beneficiaries. (l) "TRUST" shall mean the Trust created by this Agreement; "TRUSTS" shall mean this Trust and the other Trusts established by similar Liquidating Trust Agreements of even date herewith. (m) "TRUST ASSETS" shall mean all the property held from time to time by the Trustee under this Agreement, which initially shall consist of the Retained Assets of the Partnership granted, assigned and conveyed to the Trustee by the Partnership pursuant to the Order, the Cash Reserves, and, in addition, shall thereafter include all proceeds and other receipts of, from, or attributable to any assets, causes of actions or claims held by the Trust. (n) "TRUST UNITS" shall mean those equal, undivided portions into which the Beneficial Interests in the Partnership's Trust Assets are divided, as evidenced on the books and records of the Trust. (o) "TRUSTEE" shall mean the original Trustee under this Agreement and its successor(s), if any. ARTICLE II NATURE OF TRANSFERARTICLE IINATURE OF TRANSFER 2.1 Purpose of Trust2.1 Purpose of Trust. ------------------ (a) The Settlement Agreement, which was approved by the Court pursuant to the Order, permits the establishment of the Trust. It is expected that the Partnerships shall liquidate and dissolve prior to fully winding up their affairs, including, but not limited to, the sale of their remaining assets, the collection of any receivables and the payment of any unsatisfied debts, claims, liabilities, commitments, suits and other obligations, whether contingent or fixed or otherwise (the "Liabilities"), except for such Liabilities for which the Partnerships have previously reserved by the retention of the Cash Reserves as described in the recitals hereto. The Trust hereby is organized for the sole purpose of winding up the affairs of the Partnership as promptly as reasonably possible and with no objective to continue or engage in the conduct of a trade or business. (b) The Partnership's Cash Reserves and Retained Assets to be granted, assigned and conveyed to the Trustee as of the Effective Date will be held in the Trust, and the Trustee will: (i) further liquidate the Partnership's Trust Assets as it deems to be necessary to carry out the purpose of the Trust and facilitate distribution of the Trust Assets; (ii) protect, conserve and manage the Partnership's Trust Assets in accordance with the terms and conditions hereof; and (iii) distribute the Partnership's Trust Assets in accordance with the terms and conditions hereof. (c) It is intended that the granting, assignment and conveyance of the Cash Reserves and the Retained Assets by the Partnership to the Trustee pursuant hereto shall be treated for federal and state income tax purposes as if the Partnerships made such distributions directly to the holders of Partnership Units. It is further intended that for federal, state and local income tax purposes the Trust shall be treated as a liquidating trust under Treasury Regulation Section 301.7701-4(d) and any analogous provision of state or local law, and the Beneficiaries shall be treated as the owners of their respective share of the Trust pursuant to Sections 671 through 679 of the Code and any analogous provision of state or local law and shall be taxed on their respective share of the Trust's taxable income (including both ordinary income and capital gains) pursuant to Section 671 of the Code and any analogous provision of state or local law. The Trustee shall file all tax returns required to be filed with any governmental agency consistent with this position, including, but not limited to, any returns required of grantor trusts pursuant to Section 1.671-4(a) of the Income Tax Regulations. The Partnership agrees that the Transfer Agent acting on its behalf may prepare and file applicable K-1's respecting the Beneficiaries' Partnership income. To the extent that the Trustee becomes liable for the payment of taxes, including withholding taxes, in respect of income derived from the investment of funds held hereunder or any payment made hereunder (collectively, the "Taxes"), the Trustee may pay such Taxes. The Trustee may withhold from any payment of the Liquidating Trust Assets such amount as the Trustee estimates to be sufficient to provide for the payment of such Taxes not yet paid, and may use the sum withheld for that purpose. The Trustee shall be indemnified and held harmless against any liability for Taxes and for any penalties or interest in respect of Taxes on such investment income or payments in the manner provided herein. 2.2 Prohibited Activities2.2 Prohibited Activities. Except as ---------------------- provided herein and in a certain Escrow Agreement dated April 1, 2002, the Trust shall not continue or engage in the conduct of any trade or business, and the Trustee is expressly prohibited from, and shall have no power or authority to, continue or engage in the conduct of any trade or business on behalf of the Trust or the Beneficiaries, and all of the terms and conditions hereof shall be construed accordingly. 2.3 No Reversion to the Partnerships2.3 No Reversion to the ------------------------------------ Partnerships. In no event shall any part of the Trust Assets revert to or be distributed to the Partnership. 2.4 Payment of Liabilities2.4 Payment of Liabilities. To the ------------------------ extent that there are available Trust Assets in the Trust, the Trust hereby agrees to assume all Liabilities of the Partnership on the Effective Date. Should any Liability be asserted against the Trust as the transferee of the Partnership's Trust Assets or as a result of the assumption made in this paragraph, the Trustee may use such part of the Partnership's Trust Assets as may be necessary in contesting any such Liability or in payment thereof. In no event shall the Trustee, Beneficiaries or employees or agents of the Trust be personally liable, nor shall resort be had to the private property of such Persons or to any other Partnership's Trust Assets, in the event the Partnership's Trust Assets are not sufficient to satisfy the Liabilities asserted against or payable out of such Partnership's available Trust Assets in the Trust. 2.5 Bill of Sale, Assignment, Acceptance and Assumption Agreement; ------------------------------------------------------------------- Instruments of Further Assurance2.5 Bill of Sale, Assignment, Acceptance and ---------------------------- Assumption Agreement; Instruments of Further Assurance. On the Effective Date, the Partnerships and the Trust shall execute a Bill of Sale, Assignment, Acceptance and Assumption Agreement conveying the Retained Assets, Cash Reserves and Liabilities to the Trust, a form of which is attached as Exhibit B hereto. ------- - After the dissolution of the Partnership, such Persons as shall have the right and power to so act, will, upon reasonable request of the Trustee, execute, acknowledge, and deliver such further instruments and do such further acts as may be necessary or proper to carry out effectively the purposes of this Agreement, to confirm or effectuate the transfer to the Trustee of any property intended to be covered hereby, and to vest in the Trustee, their successors and assigns, the estate, powers, instruments or funds in trust hereunder. 2.6 Incidents of Ownership2.6 Incidents of Ownership. The holders ----------------------- of Partnership Units as of the Record Date shall be the Initial Beneficiaries of the Trust as holders of Trust Units in the Partnership's Trust, and the Trustee shall retain only such incidents of legal ownership as are necessary to undertake the actions and transactions authorized herein. 2.7 Notice to Unlocated Holders of Partnership Units2.7 Notice to -------------------------------------------------- Unlocated Holders of Partnership Units. If the Trust holds Trust Assets for unlocated holders of any Partnership Units, due notice shall be given to such holders of Partnership Units in accordance with Delaware law. ARTICLE III BENEFICIARIESARTICLE IIIBENEFICIARIES547 3.1 Beneficial Interests3.1 Beneficial Interests. --------------------- (a) The Beneficial Interest of each Initial Beneficiary hereof shall be determined by the Partnership in accordance with a certified copy of the Partnership's list of Partnership Unit holders as of the Record Date (the "List"). The Partnership will deliver the certified copy of the List to the Trustee within a reasonable time after the Record Date specifying the Beneficial Interests of each Initial Beneficiary in such Partnership. For ease of administration, the List shall express the Beneficial Interest of each Initial Beneficiary in terms of units and it is intended that each unit shall represent one Trust Unit in the Partnership's Trust. (b) In the case of the Partnership Unit holders, customary institutional book-entry or other records or any other evidence of ownership satisfactory to the Trustee will be deemed to evidence the Beneficial Interest in the Trust of each such Beneficiary. (c) If any conflicting claims or demands are made or asserted with respect to the ownership of any Trust Units, or if there should be any disagreement between the transferees, assignees, heirs, representatives or legatees succeeding to all or part of the interest of any Beneficiary resulting in adverse claims or demands being made in connection with such Trust Units, then, in any of such events, the Trustee shall be entitled, at its sole election, to refuse to comply with any such conflicting claims or demands. In so refusing, the Trustee may elect to make no payment or distribution with respect to such Trust Units, or to make such payment to a court of competent jurisdiction or an escrow agent, and in so doing the Trustee shall not be or become liable to any of such parties for their failure or refusal to comply with any of such conflicting claims or demands, nor shall the Trustee be liable for interest on any funds which it may so withhold. The Trustee shall be entitled to refrain and refuse to act until either (i) the rights of the adverse claimants have been adjudicated by a final judgment of a court of competent jurisdiction, (ii) all differences have been adjusted by valid written agreement between all of such parties, and the Trustee shall have been furnished with an executed counterpart of such agreement, or (iii) there is furnished to the Trustee a surety bond or other security satisfactory to the Trustee, as it shall deem appropriate, to fully indemnify it as between all conflicting claims or demands. 3.2 Rights of Beneficiaries3.2 Rights of Beneficiaries. Each ------------------------- Beneficiary shall be entitled to participate in the rights and benefits due to a Beneficiary hereunder according to his Beneficial Interest. Each Beneficiary shall take and hold the same subject to all the terms and provisions of this Agreement. The interest of the Beneficiary hereby is declared and shall be in all respects personal property and upon the death of an individual Beneficiary, his Beneficial Interest shall pass as personal property to his legal representative and such death shall in no way terminate or affect the validity of this Agreement, provided that the Trustee shall not be required to evidence a book entry transfer of a deceased Beneficiary's Beneficial Interest to his legal representative until the Trustee shall have received Letters Testamentary or Letters of Administration and written notice of the death of the deceased Beneficiary. A Beneficiary shall have no title to, right to, possession of, management of, or control of, the Partnership's Trust Assets except as herein expressly provided. No widower, widow, heir, or devisee of any person who may be a Beneficiary shall have any right of dower, homestead, or inheritance, or of partition, or of any other right, statutory or otherwise, in any property forming a part of Trust Assets but the whole title to the Partnership's Trust Assets shall be vested in the Trustee and the sole interest of the applicable Beneficiaries shall be the rights and benefits given to such Persons under this Agreement. 3.3 No Transfer of Interests of Beneficiaries3.3 No Transfer of --------------------------------------------- Interests of Beneficiaries. The Beneficial Interest of a Beneficiary may not be transferred by any Beneficiary in person or by a duly authorized agent or attorney, or by the properly appointed legal representatives of the Beneficiary, nor may a Beneficiary have authority or power to sell, assign, transfer, encumber, or in any other manner dispose of his Beneficial Interest; provided, however, that the Beneficial Interest shall be assignable or transferable by will, intestate succession, or operation of law and, further provided, that the executor or administrator of the estate of a Beneficiary may mortgage, pledge, grant a security interest in, hypothecate or otherwise encumber, the Beneficial Interest held by the estate of such Beneficiary if necessary in order to borrow money to pay estate, succession or inheritance taxes or the expenses of administering the estate of the Beneficiary, upon written notice to and upon written consent of the Trustee. Except as may be otherwise required by law, the Beneficial Interests of the Beneficiaries hereunder shall not be subject to attachment, execution, sequestration or any order of a court, nor shall such interests be subject to the contracts, debts, obligations, engagements or liabilities of any Beneficiary, but the interest of a Beneficiary shall be paid by the Trustee to the Beneficiary free and clear of all assignments, attachments, anticipations, levies, executions, decrees and sequestrations and shall become the property of the Beneficiary only when actually received by such Beneficiary. 3.4 Trustee as Beneficiary3.4 Trustee as Beneficiary. The Trustee, ---------------------- either individually or in a representative or fiduciary capacity, may be a Beneficiary to the same extent as if it were not a Trustee hereunder and shall have all the rights of a Beneficiary, including, without limitation, the right to vote and to receive distributions, to the same extent as if it was not the Trustee hereunder. ARTICLE IV DURATION AND TERMINATION OF TRUSTARTICLE IV DURATION AND TERMINATION OF TRUST 4.1 Duration4.1 Duration. The existence of this Trust shall -------- terminate upon the earliest of (i) a termination required by the applicable laws of the State of Delaware, (ii) the termination due to the distribution of all Trust Assets as provided in Section 5.5, or (iii) December 31, 2003; provided, however, that the Trustee, in its discretion, may extend the existence of this Trust to such later date as it may designate, if it determines that an extension is reasonably necessary to pay or make provision for then known liabilities, actual or contingent. 4.2 Other Obligations of the Trustee upon Termination4.2 Other ------------------------------------------------------ Obligations of the Trustee upon Termination. Upon distribution of all the Trust Assets, the Trustee shall provide for the retention of all necessary books, records, lists of holders of Trust Units in the Trust, certificates and files that shall have been delivered to or created by the Trustee for a period of ten (10) years thereafter, at the Trustee's discretion, all of such records and documents may be destroyed. Except as otherwise specifically provided herein, upon the distribution of all Trust Assets in the Trust, the Trustee shall have no further duties or obligations hereunder. ARTICLE V ADMINISTRATION OF TRUST ASSETSARTICLE V ADMINISTRATION OF TRUST ASSETS 5.1 Sale of Trust Assets5.1 Sale of Trust Assets. The Trustee is ---------------------- hereby authorized and directed, at such times as it may deem appropriate, to transfer, assign, or otherwise dispose of all or any part of the Trust Assets in the Trust as it deems appropriate at public auction or at private sale for cash, securities or other property, or upon credit (either secured or unsecured as the Trustee shall determine). 5.2 Transactions with Related Persons5.2 Transactions with Related ---------------------------------- Persons. Notwithstanding any other provisions of this Agreement, the Trustee shall not knowingly, directly or indirectly, sell or otherwise transfer all or any part of any Trust Assets to, or contract with, (i) itself or any other Trustee or an employee or agent (acting in its or their individual capacities) of this Trust, or (ii) any Person of which any Trustee, employee or agent of this Trust is an affiliate by reason of being a trustee, director, officer, partner or direct or indirect beneficial owner of 5% or more of the outstanding capital stock, shares or other equity interest of such Persons. 5.3 Payment of Claims, Expenses and Liabilities5.3 Payment of ------------------------------------------------ Claims, Expenses and Liabilities. Provided the Trustee has been advised in writing respecting such claims, expenses, charges, liabilities and obligations. The Trustee shall pay from the Trust Assets in the Trust all claims, expenses, charges, liabilities, and obligations of the Trust Assets in the Trust and all Liabilities relating to the Trust Assets held in the Trust and obligations which the Trustee specifically assumes and agrees to pay pursuant to this Agreement and such transferee liabilities which the Trustee may be obligated to pay as transferees of the Trust Assets in the Trust, including among the foregoing, and without limiting the generality of the foregoing, interest, penalties, taxes, assessments, and public charges of every kind and nature and the costs, charges, and expenses connected with or growing out of the execution or administration of this Trust and such other payments and disbursements as are provided in this Agreement or which may be determined to be a proper charge against the Trust Assets in the Trust by the Trustee. 5.4 Interim Distributions5.4 Interim Distributions. At such times ---------------------- as may be determined by it in its sole discretion, the Trustee shall distribute, or cause to be distributed, to the Beneficiaries, in proportion to the number of Trust Units held by each Beneficiary relating to the Trust, such cash or other property comprising a portion of the Trust Assets in the Trust as the Trustee may in its sole discretion determine may be distributed without detriment to the conservation and protection of the Trust Assets in the Trust. 5.5 Final Distribution5.5 Final Distribution. If the Trustee ------------------- determines that the Liabilities and all other claims, expenses, charges, liabilities and obligations of the Trust have been paid or discharged, or if the existence of the Trust shall terminate pursuant to Section 4.1, the Trustees shall, as expeditiously as is consistent with the conservation and protection of the Trust Assets, distribute the Trust Assets in the Trust to the Beneficiaries in proportion to the number of Trust Units held by each Beneficiary in the Trust based on the list submitted to the Trustee by the Partnership pursuant to Section 3.1 above, as such list may be amended. The Trustee shall hold in the Trust and thereafter make disposition of all liquidating distributions and other payments due any Beneficiaries who have not been located, in accordance with Delaware law, subject to applicable state laws regarding escheat and abandoned property. It is understood that the Trustee and the Beneficiary's bank in any funds transfer may rely solely upon any account numbers or similar identifying number provided by the parties hereto to identify (i) the Beneficiary, (ii) the Beneficiary's bank, or (iii) and intermediary bank. The Trustee may apply any of the Trust Assets for any payment order it executes using any such identifying number, even where its use may result in a person other than the Beneficiary being paid, or the transfer of funds to a bank other than the Beneficiary's bank, or an intermediary bank designated. 5.6 Reports to Beneficiaries and Others5.6 Reports to Beneficiaries ----------------------------------- and Others. As soon as practicable after the end of each taxable year of the Trust and after termination of the Trust, the Trustee shall submit a written report and account to the Beneficiaries showing (i) the assets and liabilities of the Trust at the end of such taxable year or upon termination and the receipts and disbursements of the Trustee for such taxable year or period, certified by an independent certified public accountant, (ii) any changes in the Trust Assets in the Trust which they have not previously reported, and (iii) any action taken by the Trustee in the performance of its duties under this Agreement which it has not previously reported and which, in its opinion, materially affects the Trust Assets. The Trustee may submit similar reports for such interim periods during the taxable year as it deems advisable or as may be required by the Securities and Exchange Commission. The taxable year of the Trust shall end on December 31 of each year unless the Trustee deems it advisable to establish some other date as the date on which the taxable year of the Trust shall end. 5.7 Federal Income Tax Information5.7 Federal Income Tax --------------------------------- Information. As soon as practicable after the close of each taxable year, the Trustee shall direct the Transfer Agent to mail to each Person who was a Beneficiary at the close of the year, a statement showing on a Trust Unit basis in the Trust the dates and amounts of all distributions made by the Trustee, if any, income earned on assets held by the Trust, if any, such other information as is reasonably available to the Trustee which the Trustee determines may be helpful in determining the amount of gross income and expenses attributable to the Trust that such Beneficiary should include in such Person's federal income tax return for the preceding year and any other information as may be required to be furnished under the tax laws. In addition, after receipt of a written request in good faith, or in its discretion without such request or if required by applicable law, the Transfer Agent (or if it cannot, the Trustee) shall furnish to any Person who has been a Beneficiary at any time during the preceding year a statement containing such further information as is reasonably available to the Transfer Agent or Trustee, respectively, which shall be helpful in determining the amount of taxable income which such Person should include in such Person's federal income tax return. 5.8 Employment of Manager5.8 Employment of Manager. ----------------------- (a) The Trustee shall be responsible for the general policies of the Trust and for the general supervision of the activities of the Trust conducted by all agents, employees, advisors or managers of the Trust. However, the Trustee is not and shall not be required personally to conduct the activities of the Trust, and consistent with its ultimate responsibility as stated above, the Trustee shall have the power to appoint, employ or contract with any Person or Persons (including any corporation, partnership, or trust in which one or more of them may be directors, officers, shareholders, partners or trustees) as the Trustee may deem necessary or proper for the transaction of the activities of the Trust, including, but not limited to, Equis Financial Group and its affiliates. The Trustee may therefore employ or contract with such Person or Persons (herein referred to as the "Manager") and may grant or delegate such authority to the Manager as the Trustee may in its sole discretion deem necessary or desirable to carry out the purpose of the Trust without regard to whether such authority is normally granted or delegated by trustees. The Trustee shall have the power to determine the terms and compensation of the Manager or any other Person whom they may employ or with whom they may contract. The Trustee may exercise broad discretion in allowing the Manager to administer and regulate the operations of the Trust, to act as agent for the Trust, to execute documents on behalf of the Trustee, and to make executive decisions which conform to general policies and general principles previously established by the Trustee. (b) The Manager or other Persons shall not be required to administer the Trust as its sole and exclusive function and may have other business interests and may engage in other activities similar or in addition to those relating to the Trust, including the rendering of advice or services of any kind to investors or any other Persons and the management of other investments. ARTICLE VI POWERS OF AND LIMITATIONS ON THE TRUSTEESARTICLE VI POWERS OF AND LIMITATIONS ON THE TRUSTEES 6.1 Limitations on Trustee6.1 Limitations on Trustee. Except as ------------------------ contemplated by this Agreement, the Trustee shall not at any time, on behalf of the Trust or Beneficiaries, enter into or engage in any trade or business, and no part of any Trust Assets shall be used or disposed of by the Trustee in furtherance of any trade or business. Except as the Trustee reasonably believes is consistent with and in furtherance of its obligations under this Agreement, the Trustee shall be restricted to the holding, collection and sale of the Trust Assets and the payment and distribution thereof for the purposes set forth in this Agreement and to the conservation and protection of the Trust Assets and the administration thereof in accordance with the provisions of this Agreement. In no event shall the Trustee receive any property, make any distribution, satisfy or discharge any claims, expenses, charges, liabilities and obligations or otherwise take any action which is inconsistent with a complete liquidation of the Partnerships within the meaning of the Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated thereunder, and rulings, decisions and determinations of the Internal Revenue Service and courts of competent jurisdiction, or take any action which would jeopardize the status of the Trust as a "liquidating trust" for federal income tax purposes within the meaning of Treasury Regulation Section 301.7701-4(d). This limitation shall apply regardless of whether the conduct of any such trade or business is deemed by the Trustee to be necessary or proper for the conservation and protection of the Trust Assets. The Trustee shall not invest any of the cash held as Trust Assets, except that the Trustee may invest in (i) direct obligations of the United States of America or obligations of any agency or instrumentality thereof which mature not later than one year from the date of acquisition thereof; (ii) money market deposit accounts, checking accounts, savings accounts, or certificates of deposit, commercial paper rated not less than A1P1, or other time deposit accounts which mature not later than one year from the date of acquisition thereof which are issued by a commercial bank, brokerage firm or savings institution organized under the laws of the United States of America or any state thereof including, the Wilmington Fund, an AAA rated money market fund managed by Rodney Square, and an affiliate of the Trustee; or (iii) other temporary investments not inconsistent with the Trust's status as a liquidating trust for tax purposes (collectively, "Permitted Investments"). It is hereby acknowledged that the Trustee shall not be required to maximize the investment return on the Trust Assets during the term of this Liquidating Trust Agreement. The Trustee shall be and hereby is relieved of all liability with respect to the purchasing, holding or selling of Permitted Investments in accordance with the terms hereof. The Trustee is not responsible for any losses to the Trust which may occur, including, without limitation, by reason of bank failure or the amount of the Trust exceeding the Federal Deposit Insurance Corporation limits. 6.2 Specific Powers of the Trustee6.2 Specific Powers of the ---------------------------------- Trustee. Subject to the provisions of Section 6.1, the Trustee shall have the following specific powers in addition to any powers conferred upon them by any other Section or provision of this Agreement or any statutory laws of the State of Delaware; provided, however, that the enumeration of the following powers shall not be considered in any way to limit or control the power of the Trustee to act as specifically authorized by any other Section or provision of this Agreement and to act in such a manner as the Trustee may deem necessary or appropriate to conserve and protect any Trust Assets or to confer on the Beneficiaries the benefits intended to be conferred upon them by this Agreement: (a) To determine the nature and amount of the consideration to be received with respect to the sale or other disposition of, or the grant of interests in, any Trust Assets. (b) To collect, liquidate or otherwise convert into cash, or such other property as they deem appropriate, all property, assets and rights in any Trust Assets, and to pay, discharge and satisfy all other claims, expenses, charges, Liabilities, and obligations existing with respect to any Trust Assets, the Trust or the Trustee. (c) To elect, appoint, engage, retain or employ any Persons as agents, representatives, employees, or independent contractors (including without limitation real estate advisors, investment advisors, accountants, transfer agents, custodians, attorneys-at-law, managers, appraisers, brokers, or otherwise) in one or more capacities, and to pay compensation from the Trust Assets for services in as many capacities as such Person may be so elected, appointed, engaged, retained or employed, to prescribe the titles, powers and duties, terms of service and other terms and conditions of the election, appointment, engagement, retention or employment of such Persons and, except as prohibited by law, to delegate any of the powers and duties of the Trustee to any one or more Trustees, agents, representatives, employers, independent contractors or other Persons. (d) To retain and set aside such funds out of the Trust as the Trustee shall deem necessary or expedient to pay, or provide for the payment of (i) unpaid claims, expenses, charges, liabilities, and obligations of the Trust or the Partnerships, except to the extent that liabilities for which the Partnership has previously reserved Cash Reserves are satisfied with funds from said Cash Reserves; (ii) contingencies; and (iii) the expenses of administering the Trust Assets. (e) To do and perform any and all acts necessary or appropriate for the conservation and protection of the Trust Assets, including acts or things necessary or appropriate to maintain Trust Assets held by the Trustee pending sale or other disposition thereof or distribution thereof to the Beneficiaries. (f) To hold legal title to property of the Trust in the name of the Trust, or in the name of the Trustee, or of any other Person, without disclosure of the interest of the Trust therein. (g) To cause any investments of any part of the Trust Assets to be registered and held in the name of any one or more of their names or in the names of a nominee or nominees without increase or decrease of liability with respect thereto. (h) To institute or defend actions or declaratory judgments or other actions and to take such other action, in the name of the Trust or the Partnership or as otherwise required, as the Trustee may deem necessary or desirable to enforce any instruments, contracts, agreements, causes of action, claims or rights relating to or forming a part of the Trust Assets. (i) To determine conclusively from time to time the value of and to revalue the securities and other property of the Trust, in accordance with independent appraisals or other information as they deem necessary or appropriate. (j) To cancel, terminate, or amend any instruments, contracts, agreements, obligations or causes of action relating to or forming a part of any Trust Assets, and to execute new instruments, contracts, agreements, obligations or causes of action notwithstanding that the terms of any such instruments, contracts, agreements, obligations or causes of action may extend beyond the terms of this Trust, provided that no such new instrument, contract, agreement, obligation or cause of action shall permit the Trustee to engage in any activity prohibited by Section 6.1. (k) To vote by proxy or otherwise on behalf of the Beneficiaries and with full power of substitution all shares of stock and all securities held by the Trustee hereunder and to exercise every power, election, discretion, option and subscription right and give every notice, make every demand, and to do every act or thing in respect to any shares of stock or any securities held by the Trustee which the Trustee might or could do if they were the absolute owners thereof. (l) To undertake or join in any merger, plan of reorganization, consolidation, liquidation, dissolution, readjustment or other transaction of any corporation, any of whose shares of stock or other securities, obligations, or properties may at any time constitute a part of any Trust Assets, and to accept the substituted shares of stock, bonds, securities, obligations and properties and to hold the same in trust in accordance with the provisions hereof. (m) In connection with the sale or other disposition or distribution of any securities held by the Trustee, to comply with the applicable federal and state securities laws, and to enter into agreements relating to sale or other disposition or distribution thereof. (n) To authorize transactions between corporations or other entities whose securities, or other interests therein (either in the nature of debt or equity) are held by the Trustee as part of any Trust Assets. (o) To terminate and dissolve any entities owned by the Trust. (p) To have a judicial settlement of their account of the Trust at any time to the extent they determine necessary or advisable. (q) To perform any act authorized, permitted, or required under any instrument, contract, agreement, right, obligation or cause of action relating to or forming a part of any Trust Assets whether in the nature of an approval, consent, demand or notice thereunder or otherwise, unless such act would require the consent of the Beneficiaries in accordance with the express provisions of this Agreement. ARTICLE VII CONCERNING THE TRUSTEES, BENEFICIARIES, EMPLOYEES AND AGENTSARTICLE VII CONCERNING THE TRUSTEES, EMPLOYEES AND AGENTS 7.1 Generally7.1 Generally. The Trustee accepts and undertakes to --------- discharge the Trust created by this Agreement, upon the terms and conditions thereof on behalf of the Beneficiaries. The Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Agreement shall be construed to relieve the Trustee from liability for its own willful misconduct, knowingly and intentionally committed in bad faith, except that: (a) No successor Trustee shall be in any way responsible for the acts or omissions of the Trustee in office prior to the date on which he or it becomes a Trustee. (b) The Trustee shall not be liable for the performance of such duties and obligations as are specifically set forth in this Agreement except for its bad faith or willful misconduct, and no implied covenants or obligations shall be read into this Agreement against the Trustee. (c) The Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Agreement. (d) The Trustee shall not be liable for any act which the Trustee may do or omit to do hereunder, or for any mistake of fact or law, or for any error of judgment, or for the misconduct of any employee, agent, representative or attorney appointed by it, or for anything that it may do or refrain from doing in connection with this Liquidating Trust Agreement while acting in good faith; unless caused by or arising from gross negligence, willful misconduct, fraud or any other breach of fiduciary duty of the Trustee or any of its employees, agents, representatives or attorneys. (e) The duties and obligations of the Trustee shall be limited to and determined solely by the express provisions of this Liquidating Trust Agreement and no implied duties or obligations shall be read into this Liquidating Trust Agreement against the Trustee. The Trustee is not bound by and is under no duty to inquire into the terms or validity of any other agreements or documents, including, but not limited to the Settlement Agreement and any agreements which may be related to, referred to in or deposited with the Trustee in connection with this Liquidating Trust Agreement. 7.2 Reliance by Trustee7.2 Reliance by Trustee. Except as --------------------- otherwise provided in Section 7.1: (a) The Trustee may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (b) The Trustee may consult with legal counsel, auditors or other experts to be selected by it, including firms with which the Trustee may be an affiliate, and the advice or opinion of such counsel, accountants, auditors or other experts shall be full and complete protection to the Trustee, the employees and the agents of the Trustee in respect of any action taken or omitted or suffered by them in good faith and in reliance on, or in accordance with, such advice or opinion. (c) Persons dealing with the Trustee shall look only to the Trust Assets in the Trust to satisfy any liability relating to the Trust Assets in the Trust incurred by the Trustee to such Person in carrying out the terms of this Trust, and the Trustee shall have no obligation to satisfy any such liability. If for any purposes hereunder such liability is properly allocated to two or more Partnerships or Trusts, then such liability shall be satisfied from the Trust Assets of the relevant Trust as directed by the General Partners of the predecessor Partnerships in a manner consistent with the allocation practices prior to the Partnerships' liquidations. (d) As far as practicable and except as expressly permitted above, the Trustee shall cause any written instrument creating an obligation of the Trust to include a reference to this Agreement and to provide that neither the Beneficiaries, the Trustee nor their agents shall be liable thereunder and that the other parties to such instrument shall look solely to the Trust Assets held in the Trust for the payment of any claim thereunder or the performance thereof; provided, however, that the omission of such provision from any such instrument shall not render the Beneficiaries, the Trustee, or their agents liable nor shall the Trustee be liable to anyone for such omission. 7.3 Limitation on Liability to Third Persons7.3 Limitation on --------------------------------------------- Liability to Third Persons. No Beneficiary shall be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Trust Assets or the affairs of this Trust; and neither the Trustee nor any employee or agent of this Trust shall be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with any Trust Assets or the affairs of this Trust, except for such Person's own willful misconduct, knowingly and intentionally committed in bad faith; and all such other Persons shall look solely to any Trust Assets held in such Person's Trust for satisfaction of claims of any nature arising in connection with the affairs of this Trust. The Trustee shall, at all times, maintain insurance for the protection of all Trust Assets, its Beneficiaries, the Trustee and its employees and agents in such amount as the Trustee shall deem adequate to cover all foreseeable liability to the extent available at reasonable rates. 7.4 Recitals7.4 Recitals. Any written instrument creating an -------- obligation of this Trust shall be conclusively taken to have been executed or done by the Trustee, or the employee or agent of this Trust only in its capacity as Trustee under this Agreement or in his capacity as employee or agent of the Trust. 7.5 Indemnification7.5 Indemnification. Each of the Trustee and --------------- each of its employees and agents (each an "Indemnified Person" and collectively, the "Indemnified Persons") shall be indemnified out of all Trust Assets against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and all costs and expenses, including, but not limited to, reasonable counsel fees and disbursements paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding by the Indemnified Persons in connection with the defense or disposition of any action, suit or other proceeding by the Trust or any other Person, whether civil or criminal, in which the Indemnified Person may be involved or with which the Indemnified Person may be threatened while in office or thereafter, by reason of its or his being or having been such a Trustee, employee or agent; provided, however, that the Indemnified Person shall not be entitled to such indemnification in respect of any matter as to which the Indemnified Person shall have been adjudicated to have acted in bad faith or with willful misfeasance or in reckless disregard of the Indemnified Person's duties. The rights accruing to any Indemnified Person under these provisions shall not exclude any other right to which the Indemnified Person may be lawfully entitled. The Trustee may make advance payments in connection with indemnification under this Section, provided that the Indemnified Person shall have given a written undertaking to repay any amount advanced to the Indemnified Person and to reimburse the Trust in the event it is subsequently determined in a final adjudication by a court of law that the Indemnified Person is not entitled to such indemnification. The Trustee may purchase such insurance as it believes, in the exercise of its discretion, adequately insures that each Indemnified Person shall be indemnified against any such loss, liability or damage pursuant to this Section. The rights accruing to any Indemnified Person by reason of the foregoing shall not be deemed to exclude any other right to which he may legally be entitled nor shall anything else contained herein restrict the right of the Trustee to indemnify or reimburse such Indemnified Person in any proper case even though not specifically provided for herein, nor shall anything contained herein restrict the right of any such Indemnified Person to contribution under applicable law. As security for the timely and full payment and satisfaction of all of the present and future obligations of the parties to the Trustee under this Agreement, including without limitation the indemnity obligations hereunder, whether joint or several, the Trust (and by accepting distributions hereunder, each Beneficiary) hereby grants to the Trustee a continuing security interest in and to any and all of the Trust Assets, whether now existing or hereafter acquired or created, together with the products and proceeds thereof, all payments and other distributions with respect thereto, and any and all investments, renewals, substitutions, modifications and extensions of any and all of the foregoing. The Trustee shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. In addition, in the event the Trustee has not received any payment, indemnity, reimbursement or other amount due it under this Agreement, then, notwithstanding any other term or provision of this Agreement, the Trustee may in its discretion set off and apply any of the Trust Assets as is required to pay and satisfy those obligations. Promptly after the receipt by the Trustee of notice of any demand or claim or the commencement of any action, suit or proceeding, the Trustee shall, if a claim in respect thereof is to be made against any of the other parties hereto, notify such other parties thereof in writing; but the failure by the Trustee to give such notice shall not relieve any party from any liability which such party may have to the Trustee hereunder. Notwithstanding any obligation to make payments and deliveries hereunder, the Trustee may retain and hold for such time as it reasonably deems necessary such amount of the Trust Assets as it shall from time to time in its sole discretion reasonably deem sufficient to indemnify itself for any such loss or expense and for any amounts due it hereunder. Except as required by law or as expressly provided herein, the Trustee shall be under no duty to institute any suit, or to take any remedial procedures under this Liquidating Trust Agreement, or to enter any appearance or in any way defend any suit in which it may be made a defendant hereunder until it shall be indemnified as provided above, except as expressly set forth herein. 7.6 Rights of Trustees, Employees, Independent Contractors and Agents ------------------------------------------------------------------- to Own Trust Units or Other Property and to Engage in Other Business7.6 ---------------------------------------------------------------------------- Rights of Trustees, Employees, Independent Contractors and Agents to Own Trust --- Units or Other Property and to Engage in Other Business. Any Trustee, employee, independent contractor or agent may own, hold and dispose of Trust Units for its or his individual account, and may exercise all rights thereof and thereunder to the same extent and in the same manner as if he were not a Trustee, employee, independent contractor or agent. Any Trustee, employee, independent contractor or agent may, in his personal capacity or in a capacity of trustee, officer, director, shareholder, partner, member, advisor, employee of any Person or otherwise, have business interests and holdings similar to or in addition to those relating to the Trust. Subject to the provisions of Article V hereof, any Trustee, employee, independent contractor or agent of the Trust may be a trustee, officer, director, shareholder, partner, member, advisor, employee or independent contractor of, or otherwise have a direct or indirect interest in, any Person who may be engaged to render advice or services to the Trust, and may receive compensation from such Person as well as compensation as Trustee, employee, independent contractor or agent or otherwise hereunder so long as such interest is disclosed to the Trustee. None of these activities in and of themselves shall be deemed to conflict with his duties as Trustee, employee, independent contractor or agent. 7.7 Contribution Back7.7 Contribution Back. In the event any ------------------ amount of Trust Assets released to a party under this Liquidating Trust Agreement is invalidated, declared to be fraudulent or preferential or must otherwise be restored or returned by the Trustee in connection with the insolvency, bankruptcy or reorganization of such party, whether by order of or settlement before any court or other authority or otherwise, such party shall contribute back to the Trustee an amount such that such party will be affected by that invalidation, declaration, restoration or return ratably in proportion to the distributions it received under this Agreement, together with any related assignment, release or other instrument or document the Trustee may request to restore the status quo ante. ARTICLE VIII PROTECTION OF PERSONS DEALING WITH THE TRUSTEEARTICLE VIII PROTECTION OF PERSONS DEALING WITH THE TRUSTEE 8.1 Action by Trustee8.1 Action by Trustee. All action required or ----------------- permitted to be taken by the Trustee, in its capacity as Trustee, shall be taken by a written vote, resolution, or other writing signed by the Trustee then serving. 8.2 Reliance on Statements by the Trustee8.2 Reliance on Statements ------------------------------------- by the Trustee. Any Person dealing with the Trustee shall be fully protected in relying upon the Trustee's certificate or instrument signed by the Trustee that it has authority to take any action under this Trust. ARTICLE IX COMPENSATION OF TRUSTEEARTICLE IXCOMPENSATION OF TRUSTEE 9.1 Amount of Compensation9.1 Amount of Compensation. The ------------------------ compensation of Wilmington Trust Company in its capacity as the initial Trustee shall be in accordance with the terms specified on Schedule A hereto or upon -------- - such other terms and conditions as may be agreed upon by the Trustee and the Beneficiaries holding Trust Units representing at least a majority of the aggregate Beneficial Interests in all of the Liquidating Trust Accounts. Schedule A shall apply only to the initial Trustee and, in the event a successor -- - to the initial Trustee shall serve, such schedule shall be deleted from this Agreement and neither such deletion nor the substitution of a counterpart schedule applicable to the successor Trustee shall constitute an amendment of this Agreement 9.2 Dates of Payment9.2 Dates of Payment. The compensation payable ---------------- to the Trustee pursuant to the provisions of Section 9.1 shall be in accordance with Schedule A or, if Schedule A is no longer in force, at such other times as -------- - -------- - the Trustee may determine. 9.3 Expenses9.3 Expenses. The Trustee shall be reimbursed from the -------- Trust Assets for all expenses reasonably incurred by it in the performance of its duties in accordance with this Agreement including the reasonable compensation and out-of-pocket expenses of attorneys, accountants, appraisers, consultants and other persons retained by the Trustee or the Manager pursuant to the terms of this Agreement. ARTICLE X THE TRUSTEE AND SUCCESSOR TRUSTEEARTICLE X THE TRUSTEE AND SUCCESSOR TRUSTEE 10.1 Number and Qualification of Trustees10.1 Number and ---------------------------------------- Qualification of Trustees. Subject to the provisions of Section 10.3 relating to the period pending the appointment of a successor Trustee, there shall be one Trustee of this Trust, which shall be a citizen and resident of or a corporation which is incorporated under the laws of a state of the United States and, if a corporation, it shall be authorized to act as a corporate fiduciary under the laws of the State of Delaware. The number of Trustees may be increased or decreased from time to time by the Trustee. There shall at all times be a Trustee hereunder which shall be a bank or trust company organized and doing business under the laws of the United States, or of any State of the United States, which at the time of its appointment shall have total capital and surplus of at least $50,000,000 and shall be authorized under such laws to exercise corporate trust powers and be subject to supervision or examination by federal or state authority If any corporate Trustee shall ever change its name, or shall reorganize or reincorporate, or shall merge with or into or consolidate with any other bank or trust company, such corporate Trustee shall be deemed to be a continuing entity and shall continue to act as a Trustee hereunder with the same liabilities, duties, powers, titles, discretions and privileges as are herein specified for a Trustee. 10.2 Resignation and Removal10.2 Resignation and Removal. Any ------------------------ Trustee may resign and be discharged from the Trust hereby created by giving written notice thereof to any remaining Trustee or Trustees or by giving written notice to the Beneficiaries holding Trust Units representing an aggregate of at least a majority of the total Beneficial Interests in all of the Liquidating Trust Accounts. Such resignation shall become effective on the day specified in such notice or upon the appointment of such Trustee's successor and such successor's acceptance of such appointment, whichever is earlier. Any Trustee may be removed at any time, with or without cause, by Beneficiaries having an aggregate Beneficial Interest of at least a majority of the total Beneficial Interests in the Trust. All obligations of the Trustee hereunder shall cease and terminate on the effective date of its resignation and its sole responsibility thereafter shall be to hold the Trust Assets for a period of thirty (30) calendar days following the effective date of resignation, at which time, if a successor Trustee shall have been appointed and have accepted such appointment in a writing to both the Beneficiaries, then upon written notice thereof given by a representative of the Beneficiaries to the resigning Trustee, the resigning Trustee shall deliver the Trust Assets to the successor Trustee. If a successor Trustee shall not have been appointed within a thirty (30) day period from the predecessor Trustee's resignation, for any reason whatsoever, the resigning Trustee shall deliver the Trust Assets to a court of competent jurisdiction in the county in which the Trust Assets are there being held and give written notice of the same to the parties hereto. The resigning Trustee shall be entitled to payment of any unpaid fees (which shall be pro-rated as of the effective date of the resignation) and expenses and to reimbursement by the Beneficiaries for any expenses incurred in connection with the transfer of the Trust Assets pursuant to and in accordance with the provisions of this section. 10.3 Appointment of Successor10.3 Appointment of Successor. Should ------------------------ at any time a Trustee resign or be removed, die, become mentally incompetent or incapable of action (as determined by the Beneficiaries holding Trust Units representing an aggregate of at least a majority of the total Beneficial Interests in the Trust), or be adjudged bankrupt or insolvent, unless any remaining Trustees shall decrease the number of Trustees of the Trust pursuant to Section 10.1 hereof, a vacancy shall be deemed to exist and a successor shall be appointed by any remaining Trustees. If such a vacancy is not filled by any remaining Trustees within ninety (90) days, the remaining Trustees must notify the Beneficiaries of their inability to fill such vacancy, and the Beneficiaries may, pursuant to Article XII hereof, call a meeting to appoint a successor Trustee by Beneficiaries holding Trust Units representing an aggregate of at least a majority of the total Beneficial Interests in the Trust. Pending the appointment of a successor Trustee, the remaining Trustee or Trustees then serving may take any action in the manner set forth in Section 8.1. 10.4 Acceptance of Appointment by Successor Trustee10.4 Acceptance ----------------------------------------------- of Appointment by Successor Trustee. Any successor Trustee appointed hereunder shall execute an instrument accepting such appointment hereunder and shall deliver one counterpart thereof to each of the other Trustees and, in case of a resignation, to the retiring Trustee. Thereupon such successor Trustee shall, without any further act, become vested with all the estates, properties, rights, powers, trusts and duties of his or its predecessor in the Trust hereunder with like effect as if originally named therein; but the retiring Trustee shall nevertheless, when requested in writing by the successor Trustee or by the remaining Trustees, execute and deliver an instrument or instruments conveying and transferring to such successor Trustee upon the trust herein expressed, all the estates, properties, rights, powers and trusts of such retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by him hereunder. 10.5 Bonds10.5 Bonds. No bond shall be required of the original ----- Trustee hereunder, and no bond shall be required of any successor Trustee hereunder. If a bond is required by law, no surety or security with respect to such bond shall be required unless required by law. ARTICLE XI CONCERNING THE BENEFICIARIESARTICLE XICONCERNING THE BENEFICIARIES 11.1 Evidence of Action by Beneficiaries11.1 Evidence of Action by ------------------------------------ Beneficiaries. Whenever in this Agreement it is provided that the Beneficiaries may take any action (including the making of any demand or request, the giving of any notice, consent, or waiver, the removal of a Trustee, the appointment of a successor Trustee, or the taking of any other action), the fact that at the time of taking any such action such Beneficiaries have joined therein may be evidenced (i) by any instrument or any number of instruments of similar tenor executed by Beneficiaries in person or by agent or attorney appointed in writing, or (ii) by the record of the Beneficiaries voting in favor thereof at any meeting of Beneficiaries duly called and held in accordance with the provisions of Article XII. 11.2 Limitation on Suits by Beneficiaries11.2 Limitation on Suits -------------------------------------- by Beneficiaries. No Beneficiary shall have any right by virtue of any provision of this Agreement to institute any action or proceeding at law or in equity against any party other than the Trustees upon or under or with respect to any Trust Assets or the agreements relating to or forming part of any Trust Assets, and the Beneficiaries do hereby waive any such right. 11.3 Requirement of Undertaking11.3 Requirement of Undertaking. ---------------------------- The Trustee may request any court to require, and any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section shall not apply to any suit by the Trustee. ARTICLE XII MEETING OF BENEFICIARIESARTICLE XIIMEETING OF BENEFICIARIES 12.1 Purpose of Meetings12.1 Purpose of Meetings. A meeting of the ------------------- Beneficiaries may be called at any time and from time to time pursuant to the provisions of this Article for the purposes of taking any action which the terms of this Agreement permit a Beneficiary having a specified aggregate Beneficial Interest to take either acting alone or with the Trustees. 12.2 Meeting Called by Trustee12.2 Meeting Called by Trustee. The -------------------------- Trustee may at any time call a meeting of the Beneficiaries of the Trust to be held at such time and at such place within the State of Delaware (or elsewhere if so determined by a majority of the Trustees) as the Trustee shall determine. Written notice of every meeting of the Beneficiaries shall be given by the Trustee (except as provided in Section 12.3), which written notice will set forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, and shall be mailed not more than sixty (60) nor less than ten (10) days before such meeting is to be held to all of the Beneficiaries of record not more than sixty (60) days before the date of such meeting. The notice shall be directed to the Beneficiaries at their respective addresses as they appear in the records of the Trust. 12.3 Meeting Called on Request of Beneficiaries12.3 Meeting Called ------------------------------------------- on Request of Beneficiaries. Within thirty (30) days after written request to the Trustee by Beneficiaries holding Trust Units representing at least a majority of the aggregate Beneficial Interests in the Trust to call a meeting of all of the Beneficiaries of the Trust, which written request shall specify in reasonable detail the action proposed to be taken, the Trustee shall proceed under the provisions of Section 12.2 to call a meeting of the Beneficiaries, and if the Trustee fails to call such meeting within such thirty (30) day period then such meeting may be called by Beneficiaries holding Trust Units representing at least a majority of the aggregate Beneficial Interests in the Trust. 12.4 Persons Entitled to Vote at Meeting of Beneficiaries12.4 ---------------------------------------------------------- Persons Entitled to Vote at Meeting of Beneficiaries. Each Beneficiary shall be entitled to vote at a meeting of the Beneficiaries of the Trust either in person or by his proxy duly authorized in writing. The vote of each Beneficiary shall be weighted based on the number of Trust Units in the Trust held by each Beneficiary determined pursuant to the list described in Section 3.1, as such list is amended hereby. The signature of the Beneficiary on such written authorization need not be witnessed or notarized. 12.5 Quorum12.5 Quorum. At any meeting of Beneficiaries of a ------ Liquidating Trust Account, the presence of Beneficiaries holding Trust Units representing at least a majority of the aggregate Beneficial Interests in the Trust sufficient to take action on any matter for the transaction of which such meeting was called shall be necessary to constitute a quorum; but if less than a quorum be present, Beneficiaries having aggregate Beneficial Interests of more than 50% of the total Beneficial Interests in the Trust of all Beneficiaries represented at the meeting may adjourn such meeting with the same effect and for all intents and purposes as though a quorum had been present. 12.6 Adjournment of Meeting12.6 Adjournment of Meeting. Subject to ---------------------- Section 12.5 hereof, any meeting of Beneficiaries of the Trust may be adjourned from time to time and a meeting may be held at such adjourned time and place without further notice. 12.7 Conduct of Meetings12.7 Conduct of Meetings. The Trustee --------------------- shall appoint the Chairman and the Secretary of the meeting. The vote upon any resolution submitted to any meeting of Beneficiaries shall be by written ballot. An Inspector of Votes, appointed by the Chairman of the meeting, shall count all votes cast at the meeting for or against any resolution and shall make and file with the Secretary of the meeting their verified written report. 12.8 Record of Meeting12.8 Record of Meeting. A record of the ------------------- proceedings of each meeting of Beneficiaries of the Trust shall be prepared by the Secretary of the meeting. The record shall be signed and verified by the Secretary of the meeting and shall be delivered to the Trustee to be preserved by it. Any record so signed and verified shall be conclusive evidence of all the matters therein stated. ARTICLE XIII AMENDMENTSARTICLE XIIIAMENDMENTS01 13.1 Consent of Beneficiaries13.1 Consent of Beneficiaries. At the ------------------------ direction or with the consent of Beneficiaries holding Trust Units representing at least a majority of the aggregate Beneficial Interests in the Trust, or such greater percentage as shall be specified in this Agreement for the taking of an action by the Beneficiaries under the affected provision of this Agreement, the Trustee shall promptly make and execute a declaration amending this Agreement for the purpose of adding any material provisions to or changing in any material manner or eliminating any of the material provisions of this Agreement or amendments thereto as they apply to the Trust; provided, however, that no such amendment shall permit the Trustee to engage in any activity prohibited by Section 6.1 hereof or affect the Beneficiaries' rights to receive their pro rata shares of the Trust Assets in the Trust at the time of distribution; provided further, however, that no consent of the Beneficiaries shall be required with respect to any amendment made solely for the purpose of facilitating the transferability by Beneficiaries of Trust Units or to comply with applicable laws, including tax laws, so long as such amendment has been approved by the Trustee. 13.2 Notice and Effect of Amendment13.2 Notice and Effect of ---------------------------------- Amendment. Promptly after the execution by the Trustee of any such declaration of amendment, the Trustee shall give notice of the substance of such amendment to the Beneficiaries of the Trust or, in lieu thereof, the Trustee may send a copy of the amendment to each Beneficiary. Upon the execution of any such declaration of amendment by the Trustee, this Agreement shall be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties, and immunities of the Trustee and the Beneficiaries under this Agreement with respect to the Trust shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendments, and all the terms and conditions of any such amendment shall be thereby deemed to be part of the terms and conditions of this Agreement for any and all purposes. 13.3 Trustee's Declining to Execute Documents13.3 Trustee's Declining to ---------------------------------------- Execute Documents. If, in the reasonable opinion of the Trustee, any document required to be executed pursuant to the terms of Section 13.2 hereof adversely affects any right, obligation, immunity or indemnity in favor of the Trustee under this Agreement, the Trustee may in its discretion decline to execute such document. ARTICLE XIV MISCELLANEOUS PROVISIONSARTICLE XIVMISCELLANEOUS PROVISIONS 14.1 Filing Documents14.1 Filing Documents. This Agreement shall ----------------- be filed or recorded in such office or offices as the Trustee may determine to be necessary or desirable. A copy of this Agreement and all amendments thereof shall be maintained in the office of the Trustee and shall be available at all times during regular business hours for inspection by any Beneficiary or his duly authorized representative. The Trustee shall file or record any amendment of this Agreement in the same places where the original Agreement is filed or recorded. The Trustee shall file or record any instrument which relates to any change in the office of the Trustee in the same places where the original Agreement is filed or recorded. 14.2 Intention of Parties to Establish Trust14.2 Intention of -------------------------------------------- Parties to Establish Trust. This Agreement is not intended to create and shall not be interpreted as creating a corporation, association, partnership, or joint venture of any kind for purposes of federal income taxation or for any other purpose. 14.3 Beneficiaries Have No Rights or Privileges as Holders of ---------------------------------------------------------------- Partnership Units14.3 Beneficiaries Have No Rights or Privileges as Holders --------- of Partnership Units. Except as expressly provided in this Agreement or under applicable law, the Beneficiaries shall have no rights or privileges attributable to their former status as holders of Partnership Units. 14.4 Laws as to Construction14.4 Laws as to Construction. The -------------------------- Trustee, and the Beneficiaries (by their acceptance of any distributions made to them pursuant to this Agreement), consent and agree that this Liquidating Trust Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the state of New York and the United States District Court for any District within such state for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Liquidating Trust Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Liquidating Trust Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. All parties waive the right to a jury trial of all such disputes, claims and demands. 14.5 Severability14.5 Severability. In the event any provision of ------------ this Agreement or the application thereof to any Person or circumstances shall be finally determined by a court of proper jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 14.6 Notices14.6 Notices. Any notice or other communication by the ------- Trustee to any Beneficiary shall be deemed to have been sufficiently given, for all purposes, if deposited, postage prepaid, in a post office or letter box addressed to such Person at his address as shown in the records of the Trust. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by cable, telegram, telecopier or telex to the Trustee at the following address or at such other addresses as shall be specified by the Trustee: If to the Trustee: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19890 Attention: Corporate Trust Administration Facsimile: (212) 415-0513 with a copy to: Putney, Twombly, Hall & Hirson LLP 521 Fifth Avenue New York, New York 10175 Attention: William M. Pollak, Esq. Facsimile: (212) 682-9380 14.7 Counterparts.14.7 Counterparts. This Agreement may be ------------ executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. [Remainder of page intentionally left blank. Signature page follows.] B584550.1 Wilmington Trust\EquisLiquidatingTrustAgmt IN WITNESS WHEREOF, the General Partner of the Partnership has caused this Agreement to be executed by an authorized officer, and the Trustee hereunder has executed this Agreement, as Trustee and not as an individual, as of the 18th day of July 2002. PARTNERSHIP: AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, General Partner By: /s/ Wayne E. Engle -------------------------- Wayne E. Engle, Vice President TRUSTEE: WILMINGTON TRUST COMPANY By: /s/ James J. McGinley ----------------------------- James J. McGinley, Vice President B584550.1 Wilmington Trust\EquisLiquidatingTrustAgmt SCHEDULE A ---------- WILMINGTON TRUST COMPANY SCHEDULE OF FEES to act as TRUSTEE, REGISTRAR, TRANSFER AGENT AND DISTRIBUTION AGENT LIQUIDATING TRUST EXHIBIT A --------- SETTLEMENT AGREEMENT ------ EXHIBIT B --------- FORM OF BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT EXHIBIT B EXHIBIT B BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT This BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT, made, executed and entered into as of July 18, 2002, by and among American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Partners V-C Limited Partnership and American Income Partners V-D Limited Partnership, American Income Fund I-A, a Massachusetts Limited Partnership, American Income Fund I-B, a Massachusetts Limited Partnership, American Income Fund I-C, a Massachusetts Limited Partnership, American Income Fund I-D, a Massachusetts Limited Partnership and American Income Fund I-E, a Massachusetts Limited Partnership, AIRFUND International Limited Partnership and AIRFUND II International Limited Partnership (each an "Assignor" and, together, the "Assignors"), and Wilmington -------- --------- Trust Company, a Delaware banking corporation, not in its individual capacity, but solely as trustee (the "Trustee") of each of the American Income Partners ------- V-A Limited Partnership Liquidating Trust, the American Income Partners V-B Limited Partnership Liquidating Trust, the American Income Partners V-C Limited Partnership Liquidating Trust, the American Income Partners V-D Limited Partnership Liquidating Trust, the American Income Fund I-A, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-B, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-C, a Massachusetts Limited Partnership, Liquidating Trust, the American Income Fund I-D, a Massachusetts Limited Partnership, Liquidating Trust and the American Income Fund I-E, a Massachusetts Limited Partnership, Liquidating Trust, the AIRFUND International Limited Partnership Liquidating Trust and the AIRFUND II International Limited Partnership Liquidating Trust (each a "Liquidating Trust" and together, the "Liquidating Trusts"). ---------- ------------------- RECITALS -------- WHEREAS, the Trustee and each the Assignors are parties to Liquidating Trust Agreements dated as of the date hereof, pursuant to which each of the Assignors has created a Liquidating Trust and engaged the Trustee as trustee to administer the Liquidating Trust (the "Agreements") pursuant to the terms of a ---------- Revised Stipulation of Settlement, entered into by the Assignors and certain plaintiffs in settlement of a lawsuit, that was approved pursuant to a Final Judgment and Order entered on the court's docket on June 18, 2002; and WHEREAS, the Agreements contemplate that each of the Assignors will place, as of the date hereof and in accordance with a Plan of Liquidation adopted by the Assignors as of the date hereof, all of its undistributed assets, including but not limited to, cash, equipment and securities, along with certain Cash Reserves (as defined in the Revised Stipulation of Settlement) subject to disbursement for the Assignor's contingent liabilities and cash designated as reserves for the Liquidating Trust's contingent liabilities, into the Liquidating Trust established to receive said assets and reserves of each Assignor; and WHEREAS, the Trustee and each of the Assignors now desire to carry out the intent and purpose of the Agreements by the execution and delivery to the Trustee by each Assignor of this instrument evidencing the conveyance, assignment, transfer, sale and delivery to the Trustee of the Transferred Assets (as hereinafter defined) and the acceptance by the Trustee of the Assumed Obligations (as hereinafter defined); NOW, THEREFORE, in consideration of the foregoing premises and for $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: ASSIGNMENT ---------- Each of the Assignors does hereby convey, assign, transfer, sell and deliver unto the Trustee and its successors and assigns, forever, for the benefit of each Assignor's Liquidating Trust, all of each such Assignor's right, title and interest in, to and under all of the assets of each of the Assignors as set forth and more fully described by category of asset and more fully enumerated by Assignor on Exhibit A, hereto, including, without limitation any ------- - accounts receivable, limited partnership interests, beneficial interests, rights in litigation, security interests, contract rights or agreements, rights to payment or distributions or similar rights that each Assignor may possess in same (together, the "Transferred Assets"). ------------------- ACCEPTANCE AND ASSUMPTION --------------------------- The Trustee accepts the foregoing conveyance, assignment, transfer and delivery of the Transferred Assets and agrees to assume all liabilities and obligations relating to the Transferred Assets to the extent specifically set forth in the Agreements (the "Assumed Obligations"). -------------------- TO HAVE AND TO HOLD the Transferred Assets and the Assumed Obligations unto the Trustee, its successors and assigns, FOREVER, for the benefit of each Assignor's Liquidating Trust. Each Assignor hereby constitutes and appoints the Trustee and its successors and assigns as its true and lawful attorneys in fact in connection with the transactions contemplated by this instrument, with full power of substitution, in the name and stead of each Assignor but on behalf of and for the benefit of the Trustee and its successors and assigns, to demand and receive any and all of the assets, properties, rights and business hereby conveyed, assigned, and transferred or intended so to be, and to give receipt and releases for and in respect of the same and any part thereof, and from time to time to institute and prosecute, in the name of the Assignor or otherwise, for the benefit of the Trustee or its successors and assigns, proceedings at law, in equity, or otherwise, which the Trustee or its successors or assigns reasonably deem proper in order to collect or reduce to possession or endorse any portion of the Transferred Assets and to do all acts and things in relation to the assets which the Trustee or its successors or assigns reasonably deem desirable. This instrument shall be binding upon and shall inure to the benefit of the respective successors and assigns of the Assignors and the Trustee. This instrument shall be construed and enforced in accordance with the laws of the State of Delaware, without regard to conflict of law. [The remainder of this page is left intentionally blank.] IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale, Assignment, Acceptance and Assumption Agreement under seal on the date first above written. ASSIGNORS AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, General Partner By: _________________________________ Wayne E. Engle, Vice President AMERICAN INCOME FUND I-A, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-B, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-C, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-D, A MASSACHUSETTS LIMITED PARTNERSHIP AMERICAN INCOME FUND I-E, A MASSACHUSETTS LIMITED PARTNERSHIP By: AFG Leasing VI Incorporated, General Partner By: _________________________________ Wayne E. Engle, Vice President AIRFUND INTERNATIONAL LIMITED PARTNERSHIP AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP By: AFG Aircraft Management Corporation, General Partner By: _________________________________ Wayne E. Engle, Vice President TRUSTEE WILMINGTON TRUST COMPANY, not in its individual capacity but solely as trustee of each of the Liquidating Trusts By: ________________________________ Its: ________________________________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Leasing IV Incorporated (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Leasing VI Incorporated (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ THE COMMONWEALTH OF MASSACHUSETTS ) )ss. COUNTY OF SUFFOLK ) On this 19th day of July 2002 before me, a Notary Public in and for the foregoing jurisdiction, personally appeared Wayne E. Engle, known to me the Vice President of AFG Aircraft Management Corporation (the "Corporation"), who acknowledged to me that he executed the foregoing Bill of Sale, Assignment, Acceptance and Assumption Agreement in said capacity and on behalf of the Corporation as General Partner, that his execution was duly authorized and approved by the Corporation, and that it was the free act and deed of the Corporation. __________________________________ Notary Public My Commission Expires:______________ EXHIBIT A TRANSFERRED ASSETS ------------------ Described by Category of Asset and on an Assignor by Assignor Basis ------------------------------------------------------------------- I. ACCOUNTS RECEIVABLE: (see the accounts receivable schedule attached hereto) II. BENEFICIAL INTERESTS: A. Beneficial Interests in a trust, relating to, inter alia, a McDonnell Douglas MD-82 aircraft bearing MSN 49151, pursuant to a Trust Agreement dated as of September 12, 2001, as amended, by and among Investor Asset Holding Corp., as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 11.872% - --------------------------- American Income Fund I-D: 14.391% - --------------------------- American Income Fund I-E: 9.714% - --------------------------- Airfund International: 49.17% - ---------------------- Airfund II International: 14.853% - -------------------------- B. Beneficial Interests in a trust, relating to, inter alia, a Boeing 737-2H4 aircraft bearing serial number 21722, pursuant to a Trust Agreement dated as of December 30, 1991, as amended, by and among Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank of Utah, National Association), as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 14.35% - --------------------------- American Income Fund I-D: 17.39% - --------------------------- American Income Fund I-E: 11.74% - --------------------------- Airfund International: 43.41% - ---------------------- Airfund II International: 13.11% - -------------------------- C. Beneficial Interests in a trust, relating to, inter alia, a Boeing 737-200A aircraft bearing MSN 21721 pursuant to a Trust Agreement dated as of December 30, 1991, as amended, by and among Wells Fargo Bank Northwest, National Association, as Owner Trustee and the following Assignors as Owner Participants in the percentages set forth below: American Income Fund I-C: 14.35% - --------------------------- American Income Fund I-D: 17.39% - --------------------------- American Income Fund I-E: 11.74% - --------------------------- Airfund International: 43.41% - ---------------------- Airfund II International: 13.11% - -------------------------- D. Beneficial Interests in a trust, relating to certain equipment pursuant to a certain Trust Agreement dated as of December 13, 1989, as amended, by and among Wells Fargo Bank Northwest, National Association and Investors Asset Holding Corp., as Trustees and the following Assignors as Owner Participants in the percentages set forth below: American Income Partners V-A: 14.93333% - ------------------------------- American Income Partners V-B: 40.00000% - ------------------------------- American Income Partners V-C: 4.00000% - ------------------------------- American Income Fund I-A: 7.73331% - --------------------------- Airfund II International: 33.33336% - -------------------------- III. LIMITED PARTNERSHIP INTERESTS IN THE HOLDERS OF SEMELE GROUP, INC. NOTES AND COMMON STOCK: A. Limited partnership interests in AFG Hato Arrow Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Fund I-E: 67.00% - --------------------------- B. Limited partnership interests in AFG Dove Arrow Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Fund I-C: 33.85% - --------------------------- American Income Fund I-D: 66.15% - --------------------------- C. Limited partnership interests in AIP/Larkfield Limited Partnership, a Massachusetts limited partnership, held by the following Assignors in the following percentages: American Income Partners V-A: 46.4646% - ------------------------------- American Income Partners V-B: 53.5354% - ------------------------------- IV. RIGHTS IN LITIGATION: A. The rights of American Income Fund I-E as a plaintiff in an action ------------------------ filed in December 1998 against General Motors Corporation in the Superior Court for The Commonwealth of Massachusetts relating to a Master Lease Agreement No. 9108MIG433 and Rental Schedules B-4, B-5, B-8 and B-14. V. ECHELON NOTES AND PLEDGE AGREEMENT: A. The rights of the following Assignors in certain promissory notes dated March 8, 2000, as amended, made by Echelon Residential Holdings LLC in favor of the Assignors, as lenders, having principal amounts set forth opposite each Assignor's name, together with any accrued but unpaid interest: American Income Partners V-A: $2,160,000 - ------------------------------- American Income Partners V-B: $5,700,000 - ------------------------------- American Income Partners V-C: $2,390,000 - ------------------------------- American Income Partners V-D: $2,730,000 - ------------------------------- American Income Fund I-A: $1,650,000 - --------------------------- American Income Fund I-B: $1,310,000 - --------------------------- American Income Fund I-C: $2,780,000 - --------------------------- American Income Fund I-D: $3,050,000 - --------------------------- American Income Fund I-E: $4,790,000 - --------------------------- Airfund International: $1,800,000 - ---------------------- Airfund II International: $3,640,000 - -------------------------- B. The rights of the foregoing Assignors in that certain Pledge Agreement, dated March 8, 2000, by and among the Assignors and Holdings relating to the pledge of all of the membership interests in Echelon Residential LLC by Holdings as security for the payment of the Notes. VI. CONTRACT RIGHTS, RIGHTS TO PAYMENT: A. All right, title and interest of American Income Partners V-A in and ---------------------------- to that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. B. (1) All right, title and interest of American Income Partners ------------------------ V-C in and to that certain Purchase and Sale Agreement dated as of April 1, 2002 - by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. (2) All right, title and interest and rights to payment of American Income Partners V-C relating to: (a) that certain Renewal Rental ------------------------ Schedule No. A-15RN3 dated as of June 1, 2002 to Master Equipment Lease Agreement No. 8607TXG245 dated as of July 15, 1986 and (b) that certain Renewal Rental Schedule No. A-16RN3 dated as of June 1, 2002 to Master Equipment Lease Agreement No. 8607TXG245 dated as of July 15, 1986. C. All right, title and interest of American Income Partners V-D in and ---------------------------- to that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. D. All right, title and interest of American Income Fund I-A in and to ------------------------ that certain Purchase and Sale Agreement dated as of April l, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. E. All right, title and interest of American Income Fund I-B in and to ------------------------ that certain Purchase and Sale Agreement dated as of April l, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. F. All right, title and interest of American Income Fund I-C in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. G. All right, title and interest of American Income Fund I-D in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. H. All right, title and interest of American Income Fund I-E in and to ------------------------ that certain Purchase and Sale Agreement dated as of April 1, 2002 by and between such Assignor, as Seller, and Manufacturers' Leasing Services Corp., as Purchaser relating to the sale of certain equipment. EXHIBIT D --------- CERTIFICATE OF CANCELLATION OF LIMITED PARTNERSHIP OF AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP The undersigned, American Income Partners V-D Limited Partnership (the "Partnership"), hereby certifies for purposes of Section 10 of M.G.L. Chapter 109, as follows: 1. The name of the Partnership is American Income Partners V-D Limited Partnership. 2. The date of filing of its certificate (the "Certificate") of limited partnership was May 21, 1990. 3. The reason for filing the certificate of cancellation is that the Partnership has dissolved pursuant to the terms of its limited partnership agreement and will not be henceforth pursuing the activities contemplated in its Certificate. 4. The effective date of cancellation shall be on the date of filing of this certificate. IN WITNESS WHEREOF, the undersigned has executed this instrument under seal as of this _____ day of August 2002. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, its sole General Partner By: ________________________________ Name: Title: BOS490070.1 EX-99 7 doc6.txt Exhibit 99.1 CEO Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 In connection with the Quarterly Report of American Income Partners V-D Limited Partnership, a Massachusetts limited partnership (the "Partnership"), on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Principal Executive Officer of the Partnership's general partner, hereby certifies pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report of the Partnership filed today fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/ Gary D. Engle -------------------- Gary D. Engle President of AFG Leasing IV Incorporated, the general partner of the Partnership (Principal Executive Officer) August 14, 2002 EX-99 8 doc7.txt Exhibit 99.2 CFO Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 In connection with the Quarterly Report of American Income Partners V-D Limited Partnership, a Massachusetts limited partnership (the "Partnership"), on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Principal Financial and Accounting Officer of the Partnership's general partner, hereby certifies pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report of the Partnership filed today fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/ Michael J. Butterfield ----------------------------- Michael J. Butterfield Treasurer of AFG Leasing IV Incorporated, the general partner of the Partnership (Principal Financial and Accounting Officer) August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----