-----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, Kbyz9GzP5ZKUd//vKS3zLbDGMnh0Pm0cpZIT3NTmxSeGQVY6jTtCmJpaAKX6zIjG 3qu7jOF3bTZmyCPHoFvY/Q== 0000912057-99-003681.txt : 19991108 0000912057-99-003681.hdr.sgml : 19991108 ACCESSION NUMBER: 0000912057-99-003681 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19991105 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-K/A SEC ACT: SEC FILE NUMBER: 000-19135 FILM NUMBER: 99742230 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-K/A 1 FORM 10K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Mark One) [XX] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 ------------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ----------------------- ------------------------- Commission file number 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.) 88 Broad St., Sixth Floor, Boston, MA 02110 - ------------------------------------------ ------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 854-5800 ------------------------------ Securities registered pursuant to Section 12(b) of the Act NONE ---------------------- Title of each class Name of each exchange on which registered - ------------------------------ ------------------------------------------- - ------------------------------ ------------------------------------------- Securities registered pursuant to Section 12(g) of the Act: 480,227 Units Representing Limited Partnership Interest - -------------------------------------------------------------------------------- (Title of class) - -------------------------------------------------------------------------------- (Title of class) 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 XX No ----- ----- State the aggregate market value of the voting stock held by nonaffiliates of the registrant. Not applicable. Securities are nonvoting for this purpose. Refer to Item 12 for further information. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's Annual Report to security holders for the year ended December 31, 1998 (Part I and II) PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) Documents filed as part of this report: (1) Financial Statements: Report of Independent Auditors............................* Statement of Financial Position at December 31, 1998 and 1997.............................* Statement of Operations for the years ended December 31, 1998, 1997 and 1996......* Statement of Changes in Partners' Capital for the years ended December 31, 1998, 1997 and 1996......* Statement of Cash Flows for the years ended December 31, 1998, 1997 and 1996......* Notes to the Financial Statements.........................* (2) Financial Statement Schedules: None required. (3) Exhibits: Except as set forth below, all Exhibits to Form 10-K, as set forth in Item 601 of Regulation S-K, are not applicable. A list of exhibits filed or incorporated by reference is as follows: 2.1 Plaintiffs' and Defendants' Joint Motion to Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement. 2.2 Plaintiffs' and Defendants' Joint Memorandum in Support of Joint Motion to Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement. 2.3 Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement (August 20, 1998). 2.4 Modified Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement (March 22, 1999). * Incorporated herein by reference to the appropriate portion of the 1998 Annual Report to security holders for the year ended December 31, 1998 (see Part II). 2 4 Amended and Restated Agreement and Certificate of Limited Partnership included as Exhibit A to the Prospectus, which is included in Registration Statement on Form S-1 (No. 33-35148) is incorporated herein by reference. 13 The 1998 Annual Report to security holders, a copy of which is furnished for the information of the Securities and Exchange Commission. Such Report, except for those portions thereof which are incorporated herein by reference, is not deemed "filed" with the Commission. 23 Consent of Independent Auditors. 99 (a) Lease agreement with Northwest Airlines, Inc. was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 as Exhibit 28 (a) and is incorporated herein by reference. 99 (b) Lease agreement with Consolidated Rail Corporation was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 as Exhibit 99 (c) and is incorporated herein by reference. 99 (c) Lease agreement with Awin Leasing Company, Inc. was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997 as Exhibit 99 (c) and is incorporated herein by reference. 99 (d) Lease agreement with Ford Motor Company was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997 as Exhibit 99 (d) and is incorporated herein by reference. 99 (e) Lease agreement with Transnet Limited was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997 as Exhibit 99 (e) and is incorporated herein by reference. 99 (f) Lease agreement with Tenneco Packaging Company was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 and is incorporated herein by reference. 99 (g) Lease agreement with Mobil Oil Corporation was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 and is incorporated herein by reference. (b) Reports on Form 8-K None. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on behalf of the registrant and in the capacity and on the date indicated. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, a Massachusetts corporation and the General Partner of the Registrant. By: /s/ Gary D. Engle ------------------------------------- Gary D. Engle President and Chief Executive Officer of EFG and a Director of the General Partner (Principal Executive Officer) Date: November 5, 1999 ----------------------------------- 4 EXHIBIT INDEX Exhibit Page 2.1 Plaintiffs' and Defendants' Joint Motion to Modify Order 6-25 Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement. 2.2 Plaintiffs' and Defendants' Joint Memorandum in Support 26-50 of Joint Motion to Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement. 2.3 Order Preliminarily Approving Settlement, Conditionally 51-58 Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement (August 20, 1998). 2.4 Modified Order Preliminarily Approving Settlement, 59-68 Conditionally Certifying Settlement Class and Providing for Notice of, and Hearing on, the Proposed Settlement (March 22, 1999). 5 EX-2.1 2 EX 2.1 EXHIBIT 2.1 IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA RECEIVED MAR 17 1999 PEABODY & BROWN CASE NO. 98-8030-CIV-HURLEY - -------------------------------------------------------------------------------- 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, vs. 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 6 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, 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. - -------------------------------------------------------------------------------- PLAINTIFFS' AND DEFENDANTS' JOINT MOTION TO MODIFY ORDER PRELIMINARILY APPROVING SETTLEMENT. CONDITIONALLY CERTIFYING SETTLEMENT CLASS AND PROVIDING FOR NOTICE OF, AND HEARING ON, THE PROPOSED SETTLEMENT 7 The Plaintiffs and Defendants in the above-captioned action (the "Action") hereby jointly move and respectfully request that the Court grant this Motion to Modify this Court's Order dated August 20, 1998, titled Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, And Hearing On, The Proposed Settlement (the "Order"). As grounds for this Motion, the parties state that they have agreed to amend the Stipulation of Settlement to enable the Settlement to be completed despite an unanticipated delay in the completion of the Securities and Exchange Commission's ("SEC") regulatory review of the Consent Solicitation Statement that under the Order is to be sent to members of only one of the three sub-classes of the Settlement Class, the Operating Partnership Sub-Class. Specifically, and as a set forth more fully in the accompanying memorandum, which is incorporated herein by reference, the parties state as follows. 1. In the Order, this Court preliminarily approved the Stipulation of Settlement (the "Stipulation"), conditionally certified the Settlement Class as three sub-classes, and provided for service of Notice of the Settlement, and a Hearing on the proposed Settlement. A true and complete copy of the Court's August 20, 1998 Order is attached hereto as Exhibit 1. The three sub-classes certified by the court are referred to in the Stipulation and Order as: (a) the "RSL Sub-Class"; (b) the "Operating Partnership Sub-Class"; and (c) the "Trust Sub-Class". 2. As part of the consideration for the settlement of the claims brought on behalf of the Operating Partnership Sub-Class, the Stipulation provides for Defendants to pursue and cause the consummation of an exchange transaction (the "Exchange"), pursuant to which eleven (11) of the limited partnerships named as Nominal Defendants (the "Operating 8 Partnerships") would be restructured and converted into a publicly-traded entity whose securities would be listed and traded on the NASDAQ National Market System or other national securities exchange. Pursuant to the Stipulation, in addition to the Notice to be sent to all members of the Class concerning the terms of Settlement, the members of the Operating Partnership Sub-Class are also to be sent copies of a Consent Solicitation Statement describing the proposed Exchange in greater detail. As set forth in the Stipulation, the consummation of the Exchange does not, however, affect the terms of the Settlement with respect to the RSL and Trust Sub-Classes. 3. Following the Court's entry of the Preliminary Order, on August 24, 1998, Defendants filed with the SEC for its review a Consent Solicitation Statement. The parties anticipated that the SEC review of the Consent Solicitation Statement would be completed within eight to twelve weeks and Notice would be sent to all Class Members shortly thereafter. This regulatory review process, however, has not been completed within the anticipated time frame and may be delayed for a substantial additional period of time. 4. Because Class Notice to the Operating Partnership Sub-Class members must be accompanied by the Consent Solicitation Statement, the Defendants have been unable to mail the Notice and to begin the 45 day notice period required by the Stipulation before the fairness hearing on the Final Approval of the Settlement. 5. The parties do not believe that the completion of the Settlement on behalf of the RSL and Trust Sub-Classes should be further delayed during the completion of the SEC's review process, and therefore have agreed to amend the Stipulation to bifurcate the Settlement. Thus, the parties are now ready to seek Final Approval of the Settlement with respect to only the RSL and Trust Sub-Classes. 9 6. Accordingly, the parties now move the Court to modify its Order, as set forth below and in the accompanying Memorandum, to (a) bifurcate the consummation of the terms of the Settlement and permit the parties to serve Notice and seek Final Approval of the Settlement with respect to the RSL and Trust Sub-Classes, and entry of Final Judgment on the claims brought by the RSL and Trust Sub-Classes, separate and apart from the claims brought by the Operating Partnership Sub-Class; and (b) permit the Operating Partnerships to conduct business in a manner consistent with the objectives of the Exchange during and after the pendency of the SEC review and prior to entry of Final Judgment on the claims brought by the Operating Partnership Sub-Class. A copy of the proposed Modified Order is attached to the Amended Stipulation of Settlement ("Amended Stipulation") as Exhibit A. 7. Specifically, the parties have agreed to the following amendments to the original Stipulation: (a) amend Section 4.2 to bifurcate the Class Notice process so that a Class Notice may be sent to the RSL and Trust Sub-Classes, prior to and separate from, the Class Notice to be sent to the Operating Partnership Sub-Class with the Consent Solicitation Statement; (b) amend Sections 4.1(j) and 4.4 to bifurcate the Final Approval process so that a Final Approval Hearing on the Settlement as it pertains to the RSL and Trust Sub-Classes may take place before a Final Approval Hearing on the Settlement as it pertains to the Operating Partnership Sub-Class; (c) amend Section 4.5 to bifurcate the entry of Final Judgments so that Final Judgment may enter on the claims brought by the RSL and Trust Sub-Classes 10 separate and apart from the claims brought by the Operating Partnership Sub-Class; and (d) amend Article III to permit bifurcation of the discharge of the claims so that the claims brought by the RSL and Trust Sub-Classes can be discharged separately from the claims brought by the Operating Partnership Sub-Class. (e) amend Section 4.1(i) to permit the Operating Partnerships to reinvest a portion of their cash balances, subject to certain limitations and protections afforded to the Operating Partnership Sub-Class members; (f) amend Section 4.1(h) to permit transfers of Units under certain limited circumstances during the pendency of the Settlement and during the SEC's review process; (g) amend Section 2.2(b) and 5.2(b) to state that Newco shall use its best efforts to list the new shares on the NASDAQ National Market or another national exchange once certain conditions have been met; and (h) amend Section 2.2(i) to clarify (a) that the Target Net Income will be determined by using the pooling of interest method of accounting as originally contemplated, and (b) allowing Escrowed Shares, only as agreed upon by the parties, to be distributed to the Equis Owners in the event Newco is sold. 8. The parties also propose to revise the original Notice of Class Action Determination, Proposed Settlement, and Fairness Hearing, attached as Exhibit B to the Amended Stipulation, to reflect that it pertains only to the RSL and Trust Sub-Classes, and issue a second Notice of Class Action Determination, Proposed Settlement, and Fairness 11 Hearing, attached as Exhibit C to the Amended Stipulation, pertaining only to the Operating Partnership Sub-Class. WHEREFORE, the Plaintiffs and Defendants jointly request that this Court: A. Grant this Joint Motion to Modify the Court's Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, and Hearing on, The Proposed Settlement; B. Issue an Amended Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, and Hearing on, The Proposed Settlement, in a form substantially similar to that set forth in Exhibit A to the Amended Stipulation of Settlement; and 12 C. Grant such other relief as the Court deems just and proper. Respectfully submitted, this 15 day of March, 1999, ATTORNEYS FOR DEFENDANTS: /s/ Joseph F. Hession ------------------------------------ RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, P.A. Gerald F. Richman Joseph F. Hession Phillips Point - East Tower 777 South Flager Drive - Suite 1100 West Palm Beach, Florida 33401 (561) 803-3500 PEABODY & BROWN Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 (617) 345-1000 13 ATTORNEYS FOR PLAINTIFFS: /s/ Allan Lerner BY/ ADF ------------------------------------- LERNER & PEARCE, P.A. Allan M. Lerner 2888 East Oakland Park Boulevard Ft. Lauderdale, FL 33306 (954) 568-6111 /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 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1501 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 14 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 15 Case No.: 98-8030-CIV-HURLEY WE HEREBY CERTIFY that a true and correct copy of the foregoing Plaintiffs' and Defendants' Joint Motion to Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of and Hearing on the Proposed Settlement has been furnished via U.S. Mail to: all parties listed on the attached service list this 15th day of March, 1999. RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, P.A. Co-Counsel for Defendants Phillips Point East Tower 777 South Flagler Drive, Suite 1100 West Palm Beach, Florida 33401 Telephone: (561) 803-3500 Facsimile: (561) 820-1608 By: /s/ Joseph F. Hession ------------------------------------- GERALD F. RICHMAN Florida Bar No.: 0066457 JOSEPH F. HESSION Florida Bar No.: 061476 16 Case No.: 98-8030-CIV-HURLEY SERVICE LIST: PEABODY & BROWN LAW OFFICES OF JAMES V. BASHIAN Deborah L. Thaxter, P.C. 500 Fifth Avenue, Suite 2700 Gregory P. Deschenes New York, NY 10110 101 Federal Street THOMAS A. HOADLEY, P.A. Boston, MA 02110-1832 310 Australian Avenue (617) 345-1000 Palm Beach, FL 33480 (561) 792-9006 WECHSLER HARWOOD HALEBIAN & FEFFER, LLP GOODKIND, LABATAN, Andrew D. Friedman RUDOFF & SUCHAROW, LLP 488 Madison Avenue, 8th Floor Lynda J. Grant New York, NY 10022 Robert N. Cappucci (212) 935-7400 100 Park Avenue New York, NY 10017 LAW OFFICE OF VINCENT T. GRESHAM (212) 907-0700 Vincent T. Gresham 6065 Roswell Road, Suite 1445 LASKY & RIFKIND, LTD. Atlanta, GA 30328 Leigh Lasky (770) 552-5270 30 North LaSalle Street, Suite 2140 Chicago, IL 60602 GILMAN AND PASTOR (312) 759-7670 Peter A. Lagorio One Boston Place HAROLD B. OBSTFELD, P.C. Boston, MA 02108-4400 Harold B. Obstfeld (617) 589-3750 260 Madison Avenue New York, NY 10116 BENJAMIN S. SCHWARTZ, CHARTERED (212) 696-1212 Benjamin S. Schwartz 4600 Olympic Way Evergreen, CO 80439 (303) 670-5941 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 LERNER & PEARCE Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 (954) 563-8111 17 IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: 98-8030-CIV-HURLEY 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, ----------------------------- FILED BY D.C. AUG 20 1998 CARLOS JUENKE CLERK U.S. DIST. CT. S.D. OF FLA. - W.P.B. ------------------------- Plaintiffs, v. 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 RECEIVED AUG 24 1998 PEABODY & BROWN EXHIBIT 1 18 Case No.: 98-8030-CIV-HURLEY 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, AGF INVESTMENT TRUST A, a Delaware business trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST C, a Delaware business trust, AFG INVESTMENT TRUST D, a Delaware business trust, Nominal Defendants. - -------------------------------------------------------------/ ORDER PRELIMINARILY APPROVING SETTLEMENT, CONDITIONALLY CERTIFYING SETTLEMENT CLASS AND PROVIDING FOR NOTICE OF, AND HEARING ON, THE PROPOSED SETTLEMENT WHEREAS, the parties to the above-captioned action (the "Action"), having made application, pursuant to Fed. R. Civ. P. 23(e), for an order approving the settlement of this Action, in accordance with the Stipulation of Settlement dated July 16, 1998 (the "Stipulation"), which, together with the exhibits annexed thereto, sets forth the terms and conditions for a proposed settlement of the Action ("Settlement") and for dismissal of the Action with prejudice; and the Court having read and considered the Stipulation and the exhibits annexed thereto: 19 Case No.: 98-8030-CIV-HURLEY NOW, THEREFORE, IT IS HEREBY ORDERED: 1. For purposes of this Preliminary Order, the Court adopts and incorporates the definitions in the Stipulation. 2. The Court does hereby preliminarily approve the Stipulation and the Settlement set forth therein as being within the range of reasonableness and fair, just and adequate, and thus hereby conditionally certifies for settlement purposes only: (a) the Settlement Class consisting of all persons and entities who (i) owned Units of any of the RSL Partnerships as of September 30, 1996, (ii) owned Units of any of the Operating Partnerships as of the date of this Order, and (iii) owned Interests of any of the Trusts as of September 1, 1997, and/or their successors or assigns (the "Class" or "Settlement Class" or "Class Members"); (b) the named plaintiffs -- 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 Parson and Cleva Parsons ("Class Plaintiffs") -- as the representatives of the Class; and (c) counsel for the Plaintiffs ("Class Counsel") as counsel for the Class and Andrew D. Friedman, Esquire of Wechlser Harwood Halebian & Feffer, LLP ("Plaintiffs' Lead Counsel") as lead counsel for the Settlement Class. 3. A hearing (the "Hearing") shall be held before this Court on December 11th, 1998 at 701 Clematis Street, West Palm Beach, Florida, at 3:30 p.m., in Courtroom 5, to determine whether the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation, including the issuance and exchange of the securities in the Exchange, is fair, reasonable and adequate and should be finally approved by the Court; whether a final judgment as provided in the Stipulation should be entered herein; and whether Class Counsels applications(s) for attorneys' fees, awards to the Class Plaintiffs and the 20 Case No.: 98-8030-CIV-HURLEY reimbursement of out-of-pocket expenses should be granted. The Court may continue the Hearing without further notice to Class Members. 4. The Court approves, as to form and content, the Notice of Pendency and Proposed Settlement of Class and Derivative Action (the "Notice"), annexed as Exhibit A hereto and finds that the mailing of the Notice substantially in the manner and form set forth in paragraph 4 of this Order meets the requirements of Rule 23 of the Federal Rules of Civil Procedure, the Constitution of the United States and any other applicable law, is the best notice practicable under the circumstances, and constitutes due and sufficient notice to all persons entitled thereto. 5. (a) Within five (5) days following review by the SEC of the Consent Solicitation Statement (said fifth day being referred to hereafter as the "Notice Date"), the Defendants shall cause a copy of the Notice, substantially in the form annexed as Exhibit A, to be mailed by mail to all Class Members who can be identified with reasonable effort from the books and records maintained by the Partnerships and Trusts and the Consent Solicitation Statement to Members of the Operating Partnership Sub-Class; (b) At or prior to the Hearing, Defendants' counsel shall serve and file with the Court proof, by affidavit or declaration, of such mailing; and (c) All reasonable costs incurred in identifying and notifying Class Members shall be paid as set forth in the Stipulation. In the event that the Settlement is not approved by the Court, or otherwise fails to become effective, Defendants shall not have any recourse against the Plaintiffs, Class Counsel or the Claims Administrator for such costs and expenses which have been incurred or advanced pursuant to the Stipulation or Court Order. 6. Persons who may exclude themselves from the Class and who wish to do so, must do so in accordance with the instructions contained in the Notice. 21 Case No.: 98-8030-CIV-HURLEY 7. Class Members may enter an appearance in the Action, at their own expense, individually or through counsel of their own choice. If they do not enter an appearance, they will be represented by Class Counsel. 8. Pending final determination of whether the Settlement should be approved, neither the Class Plaintiffs nor any Class Member, either directly, representatively, derivatively, or in any other capacity, shall commence or prosecute against any of the Defendants or the Released Parties, any action or proceeding in any court or tribunal asserting any of the Settled Claims. 9. Pending final determination of whether the Settlement should be approved, the Class Plaintiffs and all other Class Members are barred and permanently enjoined from (i) transferring, selling, assigning, giving, pledging, hypothesizing or otherwise disposing of any Units of the Operating Partnerships to any person; (ii) granting a proxy to object to the Exchange; or (iii) commencing a tender offer for the Units. In addition, 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. 10. Any Member of the Settlement Class -- i.e., any member of the Class who has not requested exclusion in the manner provided above -- may appear at the Settlement Hearing and object to (a) the approval of the proposed Settlement of the Action as fair, reasonable and adequate, (b) the entrance of a final judgment, and/or (c) the applications(s) for attorneys' fees and expenses; provided, however, that no Class Member or any other person shall be heard or entitled to contest the approval of the terms and conditions of the proposed Settlement, or, if approved, the judgment to be entered thereto approving the same, or the attorneys' fees and expenses to Class Counsel, unless on or before fourteen (14) days prior to the Hearing, that person has served, by hand or by first-class mail, written objections and copies of any papers and briefs desired to be 22 Case No.: 98-8030-CIV-HURLEY considered by the Court, together with proof of membership in the Settlement Class, upon both Plaintiffs' Lead Counsel: Andrew Friedman, Esquire, Wechsler Harwood Halebian & Feffer, LLP, 488 Madison Avenue, New York, NY 10022; and Defendants' Counsel: Deborah L. Thaxter, Esquire, Peabody & Brown, 101 Federal Street, Boston, MA 02110, and filed said objections, papers and briefs with the Clerk of the United States District Court for the Southern District of Florida. Any Member of the Settlement Class who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection, including the right to appeal, and shall forever be foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as incorporated in the Stipulation and the award of attorneys' fees and expenses to Class Counsel, unless otherwise ordered by the Court. 11. The Court reserves the right to continue the date of the Hearing and any continuation thereof without further notice to the members of the Settlement Class, and retains jurisdiction to consider all further applications arising out of or connected with the proposed Settlement. DONE AND SIGNED, in Chambers, at West Palm Beach, Palm Beach County, Florida, this 20th day of August, 1998. /s/ Daniel T.K. Hurley ----------------------------------- United States District Judge DANIEL T.K. HURLEY Copies furnished: To All Parties Listed on the Attached Service List 23 SERVICE LIST: RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, P.A. Gerald F. Richman Joseph F. Hession Phillips Point - East Tower 777 South Flager Drive - Suite 1100 West Palm Beach, FL 33401 Telephone: (561) 803-3500 Facsimile: (561) 820-1608 PEABODY & BROWN Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 Telephone: (617) 345-1000 Facsimile: (617) 345-1300 WECHSLER HARWOOD HALEBIAN & FEFFER, LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 Telephone: (212) 935-7400 Facsimile: (212) 753-3630 LAW OFFICE OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Suite 1445 Atlanta, GA 30328 Telephone: (770) 552-5270 Facsimile: GILMAN AND PASTOR Peter A. Lagorio One Boston Place Boston, MA 02108-4400 Telephone: (617) 589-3750 Facsimile: (617) 589-3749 BENJAMIN S. SCHWARTZ, CHARTERED Benjamin S. Schwartz 4600 Olympic Way Evergreen, CO 80439 Telephone: (303) 670-5941 Facsimile: 24 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: LERNER & PEARCE Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 Telephone: (954) 563-8111 Facsimile: (954) 563-8522 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Suite 2700 New York, NY 10110 THOMAS A. HOADLEY, P.A. 310 Australian Avenue Palm Beach, FL 33480 Telephone: (561) 792-9006 Facsimile: (561) GOODKIND, LABATAN, RUDOFF & SUCHAROW, LLP Lynda J. Grant Robert N. Cappucci 100 Park Avenue New York, NY 10017 Telephone: (212) 907-0700 Facsimile: (212) LASKY & RIFKIND, LTD. Leigh Lasky 30 North LaSalle Street, Suite 2140 Chicago, IL 60602 Telephone: (312) 759-7670 Facsimile: (312) HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld 260 Madison Avenue New York, NY 10116 Telephone: (212) 696-1212 Facsimile: (212) 25 EX-2.2 3 EX 2.2 EXHIBIT 2.2 RECEIVED MAR 17 1999 PEABODY & BROWN IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO 98-8030-CIV-HURLEY - -------------------------------------------------------------------------------- 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, vs. 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 26 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, 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. - -------------------------------------------------------------------------------- 27 PLAINTIFFS' AND DEFENDANTS' JOINT MEMORANDUM IN SUPPORT OF JOINT MOTION TO MODIFY ORDER PRELIMINARILY APPROVING SETTLEMENT, CONDITIONALLY CERTIFYING SETTLEMENT CLASS AND PROVIDING FOR NOTICE OF, AND HEARING ON, THE PROPOSED SETTLEMENT Plaintiffs ("Plaintiffs" or "Class Counsel") and Defendants submit this Joint Memorandum in support of their Joint Motion To Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, And Hearing On, The Proposed Settlement. Background By Order dated August 20, 1998, this Court preliminarily approved the original Stipulation of Settlement dated July 16, 1998, conditionally certified the Settlement Class, and three sub-classes,(1) and provided for Notice of, and Hearing on, the proposed Settlement (the "Settlement"). A true and complete copy of the Court's August 20, 1998 Order (the "Order") is attached to the Motion as Exhibit 1. As part of the settlement of the claims brought by the Operating Partnership Sub-Class, the Settlement provides for Defendants to pursue and cause the consummation of an exchange transaction (the "Exchange"), pursuant to which eleven (11) of the limited partnerships named as Nominal Defendants (the "Operating Partnerships") would be restructured, and converted into a publicly-traded entity ("Newco") whose securities would be listed and traded on the NASDAQ National Market System or other national securities exchange. The Exchange, however, does not affect the terms of the Settlement with respect to the RSL and Trust Sub-Classes. - ---------- (1) The three sub-classes are referred to as: (a) the "RSL Sub-Class"; (b) the "Operating Partnership Sub-Class"; and (c) the "Trust Sub-Class". 28 On or about August 24, 1998, four days after the Court's entry of the Preliminary Approval Order, Defendants filed a Consent Solicitation Statement (Form 14A) to be used in connection with the solicitation of the Operating Partnership Sub-Class' consent to the Exchange for review with the U.S. Securities and Exchange Commission (the "SEC"). The parties had anticipated that the SEC would be able to complete the review within several months, and thereafter the Notice of the Settlement and fairness hearing would be sent to all Class members, with the Consent Solicitation Statement inlcuded only with the Notice sent to the Operating Partnership Sub-Class members. However, there have been numerous unanticipated delays in completing the regulatory review of the Consent Solicitation Statement, and that process is still not yet complete. Because Class Notice to the Operating Partnership Sub-Class members must be accompanied by the Consent Solicitation Statement, the Defendants have been unable to mail the Notice and to begin the 45 day notice period required by the Stipulation before the fairness hearing on the Final Approval of the Settlement. However, the parties are, and have been for some time, ready to seek Final Approval of the Settlement with respect to the RSL and Trust Sub-Classes. Accordingly, in order to complete the Settlement while also accommodating the SEC's ongoing review, the parties agreed to amend the Stipulation to permit the separate settlement of the claims of the RSL and Trust Sub-Classes to go forward now, and to enable the Notice of Settlement of the claims of the Operating Partnership Sub-Class and the Consent Solicitation Statement to be completed separately. Therefore, the parties now move this Court to grant certain relief, set forth in detail below, in order to (a) promptly seek Final Approval of the Settlement with respect to the RSL and Trust Sub-Classes, and entry of a separate Final Judgment on the 29 claims brought by the RSL and Trust Sub-Classes; and (b) permit the Operating Partnerships to conduct business in a manner consistent with the objectives of the Exchange during and after the ongoing SEC review and prior to entry of Final Judgment relating to the claims brought by the Operating Partnership Sub-Class. The Proposed Amendments The following is a description of the proposed amendments to the Settlement that were negotiated on an arm's-length basis by Class Counsel and the Defendants. The vast majority of the original Stipulation has not been altered, and the sub-classes, which were conditionally certified by the Court in its August 20, 1998 Order, remain the same. A. Amendments Pertaining to the Bifurcation of the Settlement In order for the RSL Sub-Class and the Trust Sub-Class portions of the Settlement, already preliminarily approved by the Court, to proceed to Final Approval and entry of Final Judgment without the delay caused by the SEC's review of the Consent Solicitation Statement, the parties seek to bifurcate the consummation of the Settlement. Specifically, the parties have agreed to the following changes to the Stipulation: (a) amend Section 4.2 to bifurcate the Class Notice process so that a Class Notice may be sent to the RSL and Trust Sub-Classes before and separate from a Class Notice to the Operating Partnership Sub-Class; (b) amend Sections 4.1(j) and 4.4 to bifurcate the Final Approval process so that a Final Approval Hearing on the Settlement as it pertains to the RSL and Trust Sub-Classes may take place before and separate from a Final Approval Hearing on the Settlement as it pertains to the Operating Partnership Sub-Class; 30 (c) amend Section 4.5 to bifurcate the entry of Final Judgments so that Final Judgment may enter on the claims brought by the RSL and Trust Sub-Classes before and separate from the claims brought by the Operating Partnership Sub-Class; and (d) amend Article III to permit bifurcation of the discharge of the claims so that the claims brought by the RSL and Trust Sub-Classes can be discharged separately from the claims brought by the Operating Partnership Sub-Class. Correspondingly, the parties request that this Court issue an Amended Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, and Hearing on, The Proposed Settlement, in a form substantially similar to that set forth as Exhibit A to the Amended Stipulation. Under the terms of this Order, two Final Approval hearings will take place: the first will address only the provisions of the Settlement pertaining to the RSL and Trust Sub-Classes, and the second will pertain only to the Exchange and the Operating Partnership Sub-Class. The parties also propose to revise the original Notice of Class Action Determination, Proposed Settlement, and Fairness Hearing to reflect that it pertains only to the RSL and Trust Sub-Classes, and issue a second Notice of Class Action Determination, Proposed Settlement, and Fairness Hearing pertaining only to the Operating Partnership Sub-Class. Copies of the proposed Notices are attached as Exhibits B and C to the Amended Stipulation. B. Amendments Pertaining To Operating Partnership Sub-Class When the original Stipulation was executed, the parties were optimistic that a definitive Consent Solicitation Statement would be completed and distributed to the Limited Partners within several months and that the Exchange could be consummated 31 soon thereafter. That timetable was not met because the SEC review process has taken longer than anticipated. As a result of the delay, the General Partners of the Operating Partnerships must now, among other things, update the Partnership financial statements that were originally provided to the SEC. The audit of these updated financials is not yet complete and the Exchange, if approved, may be delayed for several more months. As a result, the parties now seek to amend Article IV of the Stipulation to include certain provisions that will minimize any potential loss of value in the Exchange and Settlement caused by the delay in the review of the Consent Solicitation Statement. These provisions are intended to maintain and maximize the projected value of the Shares in the new public company, Newco, that will be given to the Operating Partnership Sub-Class members by allowing Newco to receive the benefit of ongoing reinvestments by the Partnerships. The proposed amendments will permit the Operating Partnerships, pending the completion of the SEC review process and ultimately the Exchange, to reinvest a certain portion of the money (40% of the total aggregate net asset value of the Partnerships) they have received from the sales of equipment. Currently, each partnership has been selling, and will continue to sell, equipment as favorable opportunities may arise. However, in their current status, the Operating Partnerships cannot reinvest the cash received from the sales under the terms of the Partnership Agreements.(2) Class Counsel and Defendants believe the inability to reinvest cash during the ongoing review process of the SEC will likely cause the Operating Partnerships to lose business opportunities that could be extremely beneficial to - ---------- (2) The Partnership Agreements prohibit the reinvestment of cash except in limited circumstances. 32 the new public company. The flexibility that reinvestment will provide will enable the Operating Partnerships to take advantage of the investment opportunities as they arise that will likely yield a higher rate of return for the partnerships than the investment of such cash in short term investment vehicles, such as Treasury Bills. Had the Exchange not been delayed, such moneys would be reinvested by Newco in new assets as a matter of course. This approach, therefore, is consistent with the business plan of Newco, and will be beneficial to the members of the Operating Partnership Sub-Class. In addition, in the absence of reinvestment by the Operating Partnerships in advance of the Exchange, Newco will be forced after the Exchange to invest all of the cash accumulated by the Operating Partnerships in an accelerated fashion, whether or not the market conditions are favorable at such time. The parties believe it is preferable for investments to be made currently and on an ongoing basis rather than all at once, to allow the Partnerships to take advantage of favorable pricing and financing opportunities. Moreover, the amendments contain provisions to return Operating Partnerships Sub-Class members to the pre-Exchange status quo in the event that either an Operating Partnership does not participate in the Exchange or the Exchange itself is not consummated. For example, the amendments provide that any Operating Partnership that elects not to participate in the Exchange shall be returned to its present position by providing that Newco will acquire any new investments of such non-participating Operating Partnerships for the amount of its net equity investment, plus an annualized return of 7.5%. The amendments also provide, in the event that the Exchange is not consummated, that the General Partners shall (1) use their best efforts to divest all such 33 new investments in an orderly and timely fashion, and (2) cancel or return any acquisition or management fees relating to the new investments. Specifically, the parties have agreed to a new Section 4.1(i) which has been inserted into the Amended Stipulation to allow for a Preliminary Approval Order containing the following provisions.(3) i. Provide that, effective March 19, 1999, the Operating Partnerships may collectively invest up to forty percent (40%), to be increased only upon agreement of the parties, of the total aggregate net asset values of all the Operating Partnerships, in any investment, including, but not limited to additional equipment and other business activities, that the General Partner and the Manager reasonably believe to be consistent with the operating objectives and business interests of Newco after the Exchange (the "New Investments"), subject to the following limitations: a. Under no circumstances may the Operating Partnership reduce its cash balance to an amount less than the amount required to pay the Operating Partnership's share of the $10 Million Cash Distribution provided for herein, plus such additional amount as the General Partner reasonably - ---------- (3) Paragraph 11 of the proposed Amended Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice Of, And Hearing On, The Proposed Settlement, attached as Exhibit A to the Amended Stipulation, has also been amended to incorporate these changes. 34 believes to be necessary to meet working capital and other cash reserve requirements of the Operating Partnership. b. To the extent that New Investments are made in additional equipment, the Manager will (i) defer, until the earlier of the effective date of the Exchange or December 31, 1999, any Acquisition Fees resulting therefrom and (ii) limit its Management Fee on all such assets to 2% of rental income. In the event the Exchange is consummated, all such Acquisition and Management Fees relating to the New Investments will be paid to Newco. c. To the extent that New Investments are not represented by equipment (i.e.: business acquisitions), the Manager will forego any Acquisition Fees and Management Fees related to such assets. d. Except for permitting New Investments, or as otherwise provided for herein, all other provisions of the Partnership Agreements governing the investment objectives and policies of the Partnership shall remain in full force and effect. e. In the event that an Operating Partnership has acquired New Investments pursuant to Section 4.1(i)(a) through (d) 35 above, and is not a party to the Exchange, Newco shall acquire all such New Investments from such Operating Partnership for an amount equal to the Operating Partnership's net equity investment in such New Investments plus an annualized return thereon of 7.5%; f. In the event that an Operating Partnership has acquired New Investments pursuant to Section 4.1(i)(a) through (d) above and the Exchange is not consummated, the General Partner(s) shall (i) use its (their) best efforts to divest all such New Investments in an orderly and timely fashion, and (ii) cancel or return to each Operating Partnership any accumulated or deferred fees on New Investments. In addition, Section 4.1(h) has been amended to exclude from the current injunction against the transfer of units, any transfers to family members or in the cases of divorce, death or incapacity of a Unitholder. This amendment has been incorporated to facilitate certain transfers for the benefit of the Operating Partnership Sub-Class members during the prolonged delay expected to be caused by the SEC's continued review of the Consent Solicitation Statement. 2. Amendment to Permit More Flexibility Concerning Listing on NASDAQ National Market In the original Stipulation, the consummation of the Exchange was contingent on and subject to several conditions, including the acceptance of the Shares for listing on the 36 NASDAQ National Market or another national exchange or market.(4) The original Stipulation did not take into account the fact that the Defendants may need flexibility in meeting this condition in order to meet certain requirements and preconditions to listing. As set forth below, the Amended Stipulation corrects this situation. The parties anticipate a possible delay in listing the Newco Shares on the NASDAQ National Market or another national exchange for two reasons. First, the Shares must be registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"). Generally, where registration of the offering of securities is also required under the Securities Act of 1933, as amended (the "Securities Act"), registration under the Exchange Act can be accomplished by filing a simplified registration statement that describes the - ---------- (4) Another condition to the consummation of the Exchange is the approval of the Limited Partners of at least seven (7) Operating Partnerships. The Staff of the SEC has inquired whether this Court has carefully considered the method of approval by the Operating Partnerships under the Settlement since, in the SEC's view, it represents a change from the voting procedures described in the Partnership Agreements regarding votes to liquidate the Partnership. As is specifically set forth in the Stipulation and Notice that was preliminarily approved by the Court on August 20, 1998, the Limited Partners of an Operating Partnership will be deemed to have consented to participation in the Exchange by their consent to the Settlement and, therefore, unless more than one-third (1/3) of the outstanding Units of such Partnership object to the Exchange, the Partnership's Limited Partners will be deemed to have consented to participation. This method for inclusion of the Operating Partnerships in Newco was adopted after Class Counsel and Counsel for the Defendants had considered an identical voting procedure that was part of the settlement in the case of In re Prudential Securities Incorporated Limited Partnerships Litigation, MDL Docket No. 1005M-21-67(MP)(S.D.N.Y.) (the "Related Class Action Settlement") as precedent for the use of this type of procedure and had reviewed the law, regulations and the Partnership Agreements and prospectuses of the Operating Partnerships with respect to its use. As here, the parties to the Related Class Action, relying upon the ss.3(a)(10) exemption, requested a no-action letter from the SEC to confirm the availability of the exemption. The no-action letter of inquiry specifically described the voting procedure. Similarly, the Defendants in the present action filed a no-action letter of inquiry with the SEC concerning the ss.3(a)(1O) exemption, modeled in part on the Related no-action inquiry letter, and describing the voting procedure. In both the Related action and the present action, the SEC Staff reply stated that it would not recommend enforcement action. (For the Court's convenience, copies of memoranda concerning the voting procedure prepared by Defendants' counsel in response to the SEC are attached hereto as Exhibit 1). In the event that the Court wishes additional information at this time or in connection with the fairness hearing, the parties will submit a more detailed memorandum addressing the voting procedure. 37 securities being registered and becomes effective at the same time as the more detailed Securities Act registration statement. In this situation, however, where Newco is exempt from registration under ss.3(a)(l0) of the Securities Act, a detailed Exchange Act registration statement must be filed and cleared by the SEC before Newco can be listed on the NASDAQ National Market or another national exchange. Second, in addition to registration under the Exchange Act, NASDAQ will impose additional conditions that Newco must satisfy, including the requirements that Newco must provide (a) information supporting its compliance with NASDAQ's minimum bid price criteria ($5.00) given the absence of a current market or quotation medium for the Shares, including the projected and/or anticipated bid price per Share and the basis for the valuation of the Shares, and (b) indications from at least four market makers of their intentions to make a market in the Shares upon the commencement of trading on NASDAQ. As a result, although all other conditions may be met for the consummation of the Exchange, Newco may nevertheless need to delay the listing of its Shares until it has satisfied both the NASDAQ listing and the Exchange Act registration requirements. Therefore, Class Counsel and the Defendants request that the Court amend Sections 2.2(b) and 5.2(b) of the Stipulation to read in its entirety as follows: Newco shall use its best efforts to list the Shares on the NASDAQ National Market or another national exchange or market as soon after the Exchange as Newco deems that its business operations and market conditions are suitable for the listing of the Shares and (i) has filed a registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 covering the Shares which the SEC has declared effective, and (ii) can satisfy the other listing requirements of NASDAQ National Market or another national exchange. 3. Amendments to Clarify (a) Accounting Procedure for Determining Target Net Income; and (b) Distribution of Escrowed Shares to Equis if Newco is Sold 38 The parties seek to amend Section 2.2(i)(ii) of the Stipulation to make clear that the Target Net Income will be determined using pooling of interest accounting, as follows: Target Net Income has been determined assuming Newco uses pooling of interest accounting and therefore, notwithstanding the accounting method actually used by Newco, Actual Net Income will be determined with pooling of interest accounting. If Newco does not use pooling of interest accounting, Newco will separately disclose Actual Net Income in the footnotes to its annual financial statements. In addition, the parties seek to clarify the Stipulation to make clear that, in the event Newco is sold, they will agree to establish a method for the distribution of the Escrowed Shares, if any, to the Equis Owners. Accordingly, Section 2.2(i)(ii) has been amended to expressly provide that the parties agree to establish a method for the distribution of the Escrowed Shares to the Equis Owners in the event that Newco is sold. Conclusion For the foregoing reasons, Plaintiffs and Defendants request that this Court grant the Joint Motion To Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing For Notice of, And Hearing On, The Proposed Settlement. Respectfully submitted, this 15 day of March, 1999, ATTORNEYS FOR DEFENDANTS: /s/ Joseph F. Hession -------------------------------- RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, P.A. Gerald F. Richman Joseph F. Hession Phillips Point - East Tower 777 South Flager Drive - Suite 1100 West Palm Beach, Florida 33401 (561) 803-3500 39 PEABODY & BROWN Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 (617) 345-1000 ATTORNEYS FOR PLAINTIFFS: /s/ Allan Lerner By ADF ------------------------------- LERNER & PEARCE, P.A. Allan M. Lerner 2888 East Oakland Park Boulevard Ft. Lauderdale, FL 33306 (954) 563-8111 40 /s/ Andrew D. Friedman ------------------------------- WECHSLER HARWOOD HALEBIAN & FEFFER LLP Andrew D. Friedman 468 Madison Avenue, 8th Floor New York, NY 10022 (212) 985-7400 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 LAW OFFICES OF LIONEL Z. GLANCY 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 41 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 42 Case No.: 98-8030-CIV-HURLEY WE HEREBY CERTIFY that a true and correct copy of the foregoing Plaintiffs' and Defendants' Memorandum in Support of Joint Motion to Modify Order Preliminarily Approving Settlement, Conditionally Certifying Settlement Class and Providing for Notice of and Hearing on the Proposed Settlement has been furnished via U.S. Mail to: all parties listed on the attached service list this 15th day of March, 1999. RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, PA. Co-Counsel for Defendants Phillips Point East Tower 777 South Flagler Drive, Suite 1100 West Palm Beach, Florida 33401 Telephone: (561) 803-3500 Facsimile: (561) 820-1608 By: /s/ Joseph F. Hession -------------------------------- GERALD F. RICHMAN Florida Bar No.: 0066457 JOSEPH F. HESSION Florida Bar No.: 061476 43 Case No.: 98-8030-CIV-HURLEY SERVICE LIST: PEABODY & BROWN Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 (617) 345-1000 WECHSLER HARWOOD HALEBIAN & FEFFER, LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 (212) 935-7400 LAW OFFICE OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Suite 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 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 LERNER & PEARCE Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 (954) 563-8111 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Suite 2700 New York, NY 10110 THOMAS A. HOADLEY, P.A. 310 Australian Avenue Palm Beach, FL 33480 (561) 792-9006 GOODKIND, LABATAN, RUDDOFF & 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, Suite 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 44 [LETTERHEAD OF PEABODY & BROWN] MEMORANDUM To: United States Securities and Exchange Commission From: Peabody & Brown Date: November 24, 1998 Re Voting on the Equis Financial Group, Inc., Consolidation - -------------------------------------------------------------------------------- You have asked us, in your comment letter dated October 30, 1998, to provide you with our analysis under state and federal law of the validity of the voting procedure being used in connection with the proposed Consolidation of eleven Partnerships into a new entity, Equis Financial Group, Inc. A Partnership will participate in the Consolidation (assuming that the Consolidation is approved by the Court and the other conditions to effecting the Consolidation are satisfied or waived) unless limited partners holding more than 33 1/3% of the outstanding Units in such Partnership Object to the Consolidation. I. Applicable Voting Requirements A. Massachusetts Statutes All of the Partnerships were formed under the Massachusetts Uniform Limited Partnership Act (Massachusetts General Laws, c. 109). Section 18 of the Act provides that a partnership agreement may grant to limited partners the right to vote: it does not require that the limited partners be given the right to vote, nor does it mandate the particular form that a vote must take if the limited partners are given the right to vote. B. Federal Statutes and Regulations, SEC Releases and Policy Statements There is nothing in Section 14 of the Securities Exchange Act of 1934 or the related proxy rules (Rule 14a (17 CFR ss.240.14(a)), or in SEC releases or policy statements, that specifies that a vote must be obtained from the limited partners of a partnership in connection with a partnership transaction, nor is there anything that mandates the particular form a vote 45 EXHIBIT 1 Memorandum to United States Securities and Exchange Commission November 24, 1998 Page 2 must take when limited partners are voting directly on a matter on which they have been given the right to vote. Further. the definition of "proxy" in Rule 14a-1(f) under the '34 Act provides that "The consent or authorization may take the form of failure to object or to dissent." Although the Partnerships believe that the Objection Notice that is Appendix B to the Solicitation Statement is already clear on this point, they would be willing to revise the Notice to add the statement that a Notice not returned will be counted as a vote in favor. C. Securities Regulation Treatises We found nothing in the treatise Fundamentals of Securities Regulation, 3rd ed., Loss and Seligman, or in Clark Boardman Callaghan's Securities Law Series that addresses this issue. D. Case Law We did not find any decision on this issue in a Westlaw search of the Delaware, Massachusetts and New York case law databases. E. Partnership Agreements None of the partnership agreements of the eleven Partnerships mandates a specific form a vote must take when limited partners are voting directly on a matter on which the have been given the right to vote. Each of the partnership agreements states, in a Section captioned "Other Amendments" and numbered Section 11.2 or Section 12.2, depending upon the agreement, that the General Partner shall not amend the agreement without "Majority Consent" or the "Consent of a Majority in Interest" to "(iii) sell all or substantially all of the [Equipment] [Aircraft] and the other assets of the Partnership in a single sale or multiple sales in the same 12-month period, except in the ordinary liquidation and winding up of the Partnership upon its termination and dissolution." "Consent" is defined in the agreements as "either the consent given by vote at a meeting called and held in accordance with the provisions of Section [10.1] [11.1] or the written consent of a Person to do the act or thing for which the consent is solicited. or the act of granting such consent, as the context may require." In the case of the Consolidation, consent is granted by not objecting, and unless the effective approval of two-thirds of the limited partners of a Partnership is obtained, that Partnership will not participate in the Consolidation. 46 Memorandum to United States Securities and Exchange Commission November 24, 1998 Page 3 F. Prospectuses The Prospectuses for the eleven Partnerships contain the same language as that contained under the caption "Other Amendments" in Section 11.2 or Section 12.2 of the partnership agreements cited above. II. Court's Authority To Revise Contract Terms in Approving Settlements While we found no case which explicitly says that a court may revise the terms of a contract in approving a settlement, this has been done in a number of cases. In addition, the treatise Newberg on Class Actions expressly states that a court has the power to revise the plaintiffs' obligations to the defendant in approving settlements. Newberg on Class Actions, 3rd ed., Vol. 2. n. 263 ("The court has the authority to approve settlements abrogating preexisting contractual obligations of class members with the defendant.") Following are examples of some of the cases in which courts have approved settlements which revise the parties' contractual obligations to one another. Rievman v. Burlington Northern Railroad Co., 118 F.R.D. 29 (S.D.N.Y. 1987) (class settlement authorized cash payment to bond holders in return for bond holders release of lien on collateral even though terms of bond mortgages did not provide for cash payment) Ventre v. Datronic Rental Corp., 1995 WL 25308 (N.D. Ill.) (class action settlement agreement amended limited partnership agreements to restructure partnerships and substitute new general partner) In re Clark Oil & Refining Corporation Antitrust Litigation, 422 F.Supp. 503 (E.D. Wisc. 1976) (class action settlement agreement revised terms of lease agreements) Diamond v. Fogelman, 1992 WL 245680 (E.D.N.Y. 1992) (limited partnership units reorganized under terms of class action settlement agreement) Liddell v. Bd. of Educ. of City of St. Louis, 867 F.2d 1153 (8th Cir. 1989) (court approved settlement revised terms of earlier settlement agreement in providing defendant with additional time to comply with desegregation plan) 47 Memorandum to United States Securities and Exchange Commission November 24, 1998 Page 4 Robertson v. National Basketball Association, 72 F.R.D. 64 (S.D.N.Y. 1976), affd. 556 F.2d 682 (1977) (settlement agreement radically modified draft practices, eliminated option clauses, and modified compensation rule) American Basketball Association v. National Basketball Association, 72 F.R D. 594 (S.D.N.Y. 1976) (modification of contractual rights of basketball players) Conclusion. We found nothing under either state or federal law to question the validity of permitting a vote in favor of the Consolidation by means of not returning the Objection Notice. There also is precedent for the voting procedure being used in the consolidation: the same procedure was used, for example, in the consolidation of the several Summit limited partnerships into Aegis Realty, Inc. We know of no case law or statute or regulations prohibiting its use in this transaction. Accordingly, while it is our view that such a procedure would be valid in any case because the Court so ordered, our analysis does not rely only on that view. We do not agree, nor was the Court specifically advised, "that such a procedure appears to violate both state and federal law governing solicitations" as asserted in your comment letter. 48 [LETTERHEAD OF PEABODY & BROWN] MEMORANDUM To: United States Securities and Exchange Commission From: Peabody & Brown Date: December 16, 1998 Re: Voting on the Equis Financial Group. Inc., Consolidation - -------------------------------------------------------------------------------- This Memorandum supplements our Memorandum dated November 24, 1998, and provides further analysis of the validity of the voting procedure being used in connection with the proposed Consolidation. Specifically, this Memorandum supplements the analysis under the heading "I. Applicable Voting Requirements -- E. Partnership Agreements" in the November Memorandum. As we noted in the November Memorandum, each of the partnership agreements states, in a Section captioned "Other Amendments" and numbered Section 11.2 or Section 12.2. depending upon the agreement, that the General Partner shall not amend the agreement without "Majority Consent" or the "Consent of a Majority in Interest" to "(iii) sell all or substantially all of the [Equipment] [Aircraft] and the other assets of the Partnership in a single sale or multiple sales in the same 12-month period, except in the ordinary liquidation and winding up of the Partnership upon its termination and dissolution." As we further noted in the November Memorandum, "Consent" is defined in the agreements as "either the consent given by vote at a meeting called and held in accordance with the provisions of Section [10.1] [11.1] or the written consent of a Person to do the act or thing for which the consent is solicited, or the act of granting such consent, as the context may require." The definition of "Consent" provides for three different ways to evidence consent, separated by the disjunctive "or." In our view, the third of these, "the act of granting such consent," covers the procedure that the Partnerships propose to use in the Consolidation. As proposed, a Partnership will participate in the Consolidation unless limited partners holding more than 33 1/3% of the outstanding Units in such Partnership object to the Consolidation by returning an objection notice. By not returning an objection notice, 49 Memorandum to United States Securities and Exchange Commission December 16, 1998 Page 2 limited partners will be acting in a manner that grants consent. Furthermore, unless limited partners holding at least 66 2/3% of the of the outstanding Units in a Partnership so act, that Partnership will not participate in the Consolidation. 50 EX-2.3 4 EX 2.3 EXHIBIT 2.3 IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: 98-8030-CIV-HURLEY ------------------------- FILED BY D.C. AUG 20 1998 CARLOS JUENKE CLERK U.S. DIST. CT. S.D. OF FLA. - W.P.B. ------------------------- 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. 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 RECEIVED AUG 24 1998 PEABODY & BROWN 51 Case No.: 98-8030-CIV-HURLEY 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, AGF INVESTMENT TRUST A, a Delaware business trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST C, a Delaware business trust, AFG INVESTMENT TRUST D, a Delaware business trust, Nominal Defendants. - -------------------------------------------------------------/ ORDER PRELIMINARILY APPROVING SETTLEMENT, CONDITIONALLY CERTIFYING SETTLEMENT CLASS AND PROVIDING FOR NOTICE OF, AND HEARING ON, THE PROPOSED SETTLEMENT WHEREAS, the parties to the above-captioned action (the "Action"), having made application, pursuant to Fed. R. Civ. P. 23(e), for an order approving the settlement of this Action, in accordance with the Stipulation of Settlement dated July 16, 1998 (the "Stipulation"), which, together with the exhibits annexed thereto, sets forth the terms and conditions for a proposed settlement of the Action ("Settlement") and for dismissal of the Action with prejudice; and the Court having read and considered the Stipulation and the exhibits annexed thereto: 52 Case No.: 98-8030-CIV-HURLEY NOW, THEREFORE, IT IS HEREBY ORDERED: 1. For purposes of this Preliminary Order, the Court adopts and incorporates the definitions in the Stipulation. 2. The Court does hereby preliminarily approve the Stipulation and the Settlement set forth therein as being within the range of reasonableness and fair, just and adequate, and thus hereby conditionally certifies for settlement purposes only: (a) the Settlement Class consisting of all persons and entities who (i) owned Units of any of the RSL Partnerships as of September 30, 1996, (ii) owned Units of any of the Operating Partnerships as of the date of this Order, and (iii) owned Interests of any of the Trusts as of September 1, 1997, and/or their successors or assigns (the "Class" or "Settlement Class" or "Class Members"); (b) the named plaintiffs -- 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 Parson and Cleva Parsons ("Class Plaintiffs") -- as the representatives of the Class; and (c) counsel for the Plaintiffs ("Class Counsel") as counsel for the Class and Andrew D. Friedman, Esquire of Wechlser Harwood Halebian & Feffer, LLP ("Plaintiffs' Lead Counsel") as lead counsel for the Settlement Class. 3. A hearing (the "Hearing") shall be held before this Court on December 11th, 1998 at 701 Clematis Street, West Palm Beach, Florida, at 3:30 p.m., in Courtroom 5, to determine whether the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation, including the issuance and exchange of the securities in the Exchange, is fair, reasonable and adequate and should be finally approved by the Court; whether a final judgment as provided in the Stipulation should be entered herein; and whether Class Counsel's applications(s) for attorneys' fees, awards to the Class Plaintiffs and the 53 Case No.: 98-8030-CIV-HURLEY reimbursement of out-of-pocket expenses should be granted. The Court may continue the Hearing without further notice to Class Members. 4. The Court approves, as to form and content, the Notice of Pendency and Proposed Settlement of Class and Derivative Action (the "Notice"), annexed as Exhibit A hereto and finds that the mailing of the Notice substantially in the manner and form set forth in paragraph 4 of this Order meets the requirements of Rule 23 of the Federal Rules of Civil Procedure, the Constitution of the United States and any other applicable law, is the best notice practicable under the circumstances, and constitutes due and sufficient notice to all persons entitled thereto. 5. (a) Within five (5) days following review by the SEC of the Consent Solicitation Statement (said fifth day being referred to hereafter as the "Notice Date"), the Defendants shall cause a copy of the Notice, substantially in the form annexed as Exhibit A, to be mailed by mail to all Class Members who can be identified with reasonable effort from the books and records maintained by the Partnerships and Trusts and the Consent Solicitation Statement to Members of the Operating Partnership Sub-Class; (b) At or prior to the Hearing, Defendants' counsel shall serve and file with the Court proof, by affidavit or declaration, of such mailing; and (c) All reasonable costs incurred in identifying and notifying Class Members shall be paid as set forth in the Stipulation. In the event that the Settlement is not approved by the Court, or otherwise fails to become effective, Defendants shall not have any recourse against the Plaintiffs, Class Counsel or the Claims Administrator for such costs and expenses which have been incurred or advanced pursuant to the Stipulation or Court Order. 6. Persons who may exclude themselves from the Class and who wish to do so, must do so in accordance with the instructions contained in the Notice. 54 Case No.: 98-8030-CIV-HURLEY 7. Class Members may enter an appearance in the Action, at their own expense, individually or through counsel of their own choice. If they do not enter an appearance, they will be represented by Class Counsel. 8. Pending final determination of whether the Settlement should be approved, neither the Class Plaintiffs nor any Class Member, either directly, representatively, derivatively, or in any other capacity, shall commence or prosecute against any of the Defendants or the Released Parties, any action or proceeding in any court or tribunal asserting any of the Settled Claims. 9. Pending final determination of whether the Settlement should be approved, the Class Plaintiffs and all other Class Members are barred and permanently enjoined from (i) transferring, selling, assigning, giving, pledging, hypothesizing or otherwise disposing of any Units of the Operating Partnerships to any person; (ii) granting a proxy to object to the Exchange; or (iii) commencing a tender offer for the Units. In addition, 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. 10. Any Member of the Settlement Class -- i.e., any member of the Class who has not requested exclusion in the manner provided above -- may appear at the Settlement Hearing and object to (a) the approval of the proposed Settlement of the Action as fair, reasonable and adequate, (b) the entrance of a final judgment, and/or (c) the applications(s) for attorneys' fees and expenses; provided, however, that no Class Member or any other person shall be heard or entitled to contest the approval of the terms and conditions of the proposed Settlement, or, if approved, the judgment to be entered thereto approving the same, or the attorneys' fees and expenses to Class Counsel, unless on or before fourteen (14) days prior to the Hearing, that person has served, by hand or by first-class mail, written objections and copies of any papers and briefs desired to be 55 Case No.: 98-8030-CIV-HURLEY considered by the Court, together with proof of membership in the Settlement Class, upon both Plaintiffs' Lead Counsel: Andrew Friedman, Esquire, Wechsler Harwood Halebian & Feffer, LLP, 488 Madison Avenue, New York, NY 10022; and Defendants' Counsel: Deborah L. Thaxter, Esquire, Peabody & Brown, 101 Federal Street, Boston, MA 02110, and filed said objections, papers and briefs with the Clerk of the United States District Court for the Southern District of Florida. Any Member of the Settlement Class who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection, including the right to appeal, and shall forever be foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as incorporated in the Stipulation and the award of attorneys' fees and expenses to Class Counsel, unless otherwise ordered by the Court. 11. The Court reserves the right to continue the date of the Hearing and any continuation thereof without further notice to the members of the Settlement Class, and retains jurisdiction to consider all further applications arising out of or connected with the proposed Settlement. DONE AND SIGNED, in Chambers, at West Palm Beach, Palm Beach County, Florida, this 20th day of August, 1998. /s/ Daniel T.K. Hurley ---------------------------------------- United States District Judge DANIEL T.K. HURLEY Copies furnished: To All Parties Listed on the Attached Service List 56 SERVICE LIST: RICHMAN GREER WEIL BRUMBAUGH MIRABITO & CHRISTENSEN, PA. Gerald F. Richman Joseph F. Hession Phillips Point - East Tower 777 South Flager Drive - Suite 1100 West Palm Beach, FL 33401 Telephone: (561) 803-3500 Facsimile: (561) 820-1608 PEABODY & BROWN Deborah L. Thaxter, P.C. Gregory P. Deschenes 101 Federal Street Boston, MA 02110-1832 Telephone: (617) 345-1000 Facsimile: (617) 345-1300 WECHSLER HARWOOD HALEBIAN & FEFFER, LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 Telephone: (212) 935-7400 Facsimile: (212) 753-3630 LAW OFFICE OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Suite 1445 Atlanta, GA 30328 Telephone:(770) 552-5270 Facsimile: GILMAN AND PASTOR Peter A. Lagorio One Boston Place Boston, MA 02108-4400 Telephone: (617) 589-3750 Facsimile: (617) 589-3749 BENJAMIN S. SCHWARTZ, CHARTERED Benjamin S. Schwartz 4600 Olympic Way Evergreen, CO 80439 Telephone: (303) 670-5941 Facsimile: 57 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: LERNER & PEARCE Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 Telephone: (954) 563-8111 Facsimile: (954) 563-8522 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Suite 2700 New York, NY 10110 THOMAS A. HOADLEY, P.A. 310 Australian Avenue Palm Beach, FL 33480 Telephone: (561) 792-9006 Facsimile: (561) GOODKIND, LABATAN, RUDOFF & SUCHAROW, LLP Lynda J. Grant Robert N. Cappucci 100 Park Avenue New York, NY 10017 Telephone: (212) 907-0700 Facsimile: (212) LASKY & RIFKIND, LTD. Leigh Lasky 30 North LaSalle Street, Suite 2140 Chicago, IL 60602 Telephone: (312) 759-7670 Facsimile: (312) HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld 260 Madison Avenue New York, NY 10116 Telephone: (212) 696-1212 Facsimile: (212) 58 EX-2.4 5 EX 2.4 EXHIBIT 2.4 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA ------------------------- FILED BY D.C. MAR 23 1999 CARLOS JUENKE CLERK U.S. DIST. CT. S.D. OF FLA. - W.P.B. ------------------------- Case No. 98-8030-CIV-Hurley - -------------------------------------------------------------------------------- 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. 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 - -------------------------------------------------------------------------------- 59 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. - -------------------------------------------------------------------------------- MODIFIED ORDER PRELIMINARILY APPROVING SETTLEMENT, CONDITIONALLY CERTIFYING SETTLEMENT CLASS AND PROVIDING FOR NOTICE OF, AND HEARING ON, THE PROPOSED SETTLEMENT WHEREAS, by Order dated August 20, 1998 (the "August 20, 1998 Order"), this Court issued an order in the above captioned action (the "Action") preliminarily approving the Settlement, conditionally certifying the settlement class and providing for notice of, 60 and hearing on the proposed settlement, and the parties to the Action have now agreed to amend the Stipulation of Settlement ("Amended Stipulation), this Court having read and considered the Amended Stipulation and the exhibits annexed thereto; NOW, THEREFORE, IT IS HEREBY ORDERED THAT THE COURT MODIFIES THE ORDER INSOFAR AS SET FORTH BELOW: 1. A hearing (the "First Hearing") shall be held before this Court on Friday, May 21st, 1999, at 701 Clematis Street, West Palm Beach, Florida, 4:00 p.m. in Courtroom 5, to determine whether the proposed Settlement of the Action on the terms and conditions provided for in the Amended Stipulation, with respect to the RSL and Trust Sub-Classes, is fair, reasonable and adequate and should be finally approved by the Court; whether a final judgment as provided in the Amended Stipulation should be entered herein with respect to the claims brought by the RSL and Trust Sub-Classes; and whether Class Counsel's application(s) for attorneys' fees, awards to the Class Plaintiffs and the reimbursement of out-of-pocket expenses should be granted. The Court may continue the Hearing without further notice to Class Members. 2. A second hearing (the "Second Hearing") shall be held before this Court on July 30th, 1999, at 701 Clematis Street, West Palm Beach, Florida, at 4:00 p.m. in Courtroom 5, to determine whether the proposed Settlement of the Action on the terms and conditions provided for in the Amended Stipulation, with respect to the Operating Partnership Sub-Class, including the issuance and exchange of the securities in the Exchange, is fair, reasonable and adequate and should be finally approved by the Court; whether a final judgment as provided in the Amended Stipulation should be entered herein with respect to the claims brought by the Operating Partnership Sub-Class; and whether Class Counsel's application(s) for attorneys' fees, awards to the Class Plaintiffs and the 61 reimbursement of out-of-pocket expenses should be granted. The Court may continue the Hearing without further notice to Class Members. 3. The Court approves, as to form and content, the Notices of Class Action Determination, Proposed Settlement and Fairness Hearing (the "Notices"), and finds that the mailing of the Notices substantially in the manner and form set forth in paragraph 4 of this Order meets the requirements of Rule 23 of the Federal Rules of Civil Procedure, the Constitution of the United States and any other applicable law, is the best notice practicable under the circumstances, and constitutes due and sufficient notice to all persons entitled thereto. 4. (a) Upon entry of this Order, Defendants' Counsel shall direct the General Partners and Managing Trustee to send copies of the Notice - RSL and Trust Sub-Classes by U.S. mail, postage prepaid, to the RSL and Trust Sub-Class members at their last known address as appearing in the records maintained by the Partnerships and Trusts. The terms of the Notice - RSL and Trust Sub-Class shall be substantially in the form of Exhibit A hereto. (b) Within five (5) days following review by the SEC of the Consent Solicitation Statement (said 5th day being referred to hereafter as the "Notice Date"), the Defendants shall cause a copy of the Notice, substantially in the form annexed as Exhibit B, and the Consent Solicitation Statement, to be mailed to all Operating Partnership Sub-Class Members at their last known address as appearing in the records maintained by the Partnerships; (c) At or prior to the Hearings, Defendants' counsel shall serve and file with the Court proof, by affidavit or declaration, of such mailing to the appropriate Sub-Classes; and 62 (d) All reasonable costs incurred in identifying and notifying Class Members shall be paid as set forth in the Amended Stipulation. In the event that the Settlement is not approved by the Court, or otherwise fails to become effective, Defendants shall not have any recourse against the Plaintiffs, Class Counsel or the Claims Administrator for such costs and expenses which have been incurred or advanced pursuant to the Amended Stipulation or Amended Court Order. 7. Persons who may exclude themselves from the Class and who wish to do so, must do so in accordance with the instructions contained in the Notices. 8. Class Members may enter an appearance in the Action, at their own expense, individually or through counsel of their own choice. If they do not enter an appearance, they will be represented by Class Counsel. 9. Pending final determination of whether the Settlement should be approved, neither the Class Plaintiffs nor any Class Member, either directly, representatively, derivatively, or in any other capacity, shall commence or prosecute against any of the Defendants or the Released Parties, any action or proceeding in any court or tribunal asserting any of the Settled Claims. 10. Pending final determination of whether the Settlement should be approved, the Class Plaintiffs and all other Class Members are barred and permanently enjoined from (i) transferring, selling, assigning, giving, pledging, hypothesizing 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; (ii) granting a proxy to object to the Exchange; or (iii) commencing a tender offer for the Units. In addition, 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 63 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. 11. In addition, effective March 19, 1999, the Operating Partnerships may collectively invest up to forty percent (40%), to be increased only upon agreement of the parties, of the total aggregate net asset values of all Operating Partnerships, in any investment, including, but not limited to additional equipment and other business activities, that the General Partner and the Manager reasonably believe to be consistent with the operating objectives and business interests of Newco after the Exchange (the "New Investments"), subject to the following limitations: a. Under no circumstances may the Operating Partnership reduce its cash balance to an amount less than the amount required to pay the Operating Partnership's share of the $10 Million Cash Distribution provided for herein, plus such additional amount as the General Partner reasonably believes to be necessary to meet working capital and other cash reserve requirements of the Operating Partnership. b. To the extent that New Investments are made in additional equipment, the Manager will (i) defer, until the earlier of the effective date of the Exchange or December 31, 1999, any Acquisition Fees resulting therefrom and (ii) limit its Management Fee on all such assets to 2% of rental income. In the event the Exchange is consummated, all such Acquisition and Management Fees related to the New Investments will be paid to Newco. 64 c. To the extent that New Investments are not represented by equipment (ie: business acquisitions), the Manager will forego any Acquisition Fees and Management Fees related to such assets. d. Except for permitting New Investments, or as otherwise provided for herein, all other provisions of the Partnership Agreements governing the investment objectives and policies of the Partnership shall remain in full force and effect. e. In the event that an Operating Partnership has acquired New Investments pursuant to Section 4.1(i)(a) through (d) above, and is not a party to the Exchange, Newco shall acquire all such New Investments from such Operating Partnership for an amount equal to the Operating Partnership's net equity investment in such New Investments plus an annualized return thereon of 7.5%. f. In the event that an Operating Partnership has acquired New Investments pursuant to Section 4.1(i)(a) through (d) above, and the Exchange is not consummated, the General Partner(s) shall (i) use its (their) best efforts to divest all such New Investments in an orderly and timely fashion, and (ii) cancel or return to each Operating Partnership any accumulated or deferred fees on such New Investments. 12. Any Member of the Settlement Class -- i.e., any member of the Class who has not requested exclusion in the manner provided above -- may appear at the Settlement 65 Hearings and object to (a) the approval of the proposed Settlement of the Action as fair, reasonable and adequate, (b) the entrance of a final judgment, and/or (c) the application(s) for attorneys' fees and expenses; provided, however, that no Class Member or any other person shall be heard or entitled to contest the approval of the terms and conditions of the proposed Settlement, or, if approved, the judgment to be entered thereto approving the same, or the attorneys' fees and expenses to Class Counsel, unless on or before fourteen (14) days prior to the First or Second Hearing, that person has served, by hand or by first-class mail, written objections and copies of any papers and briefs desired to be considered by the Court, together with proof of membership in the Settlement Class, upon both Plaintiffs' Lead Counsel: Andrew D. Friedman, Esq., Wechsler Harwood Halebian & Feffer, LLP, 488 Madison Avenue, New York, N.Y. 10022; and Defendants' Counsel: Deborah L. Thaxter, P.C., Peabody & Brown, 101 Federal Street, Boston, Massachusetts 02110, and filed said objections, papers and briefs with the Clerk of the United States District Court for the Southern District of Florida. Any Member of the Settlement Class who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection, including the right to appeal, and shall forever be foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as incorporated in the Amended Stipulation and the award of attorneys' fees and expenses to Class Counsel, unless otherwise ordered by the Court. 13. The Court reserves the right to continue the date of the First or Second Hearing and any continuation thereof without further notice to the members of the Settlement Class, and retains jurisdiction to consider all further applications arising out of or connected with the proposed Settlement. 66 Case No. 98-8030-CIV Rosenblum v. Equis Financial DONE and SIGNED in Chambers at West Palm Beach, Florida, this 22nd day of March, 1999. /s/ Daniel T.K. Hurley ---------------------------------------- Daniel T.K. Hurley United States District Judge Copies To All Counsel Of Record: See attached List 67 Case No. 98-8030-CIV-HURLEY SERVICE LIST: PEABODY & BROWN RICHMAN GREER WEIL BRUMBAUGH Deborah L. Thaxter, P.C. MIRABITO & CHRISTENSEN, P.A. Gregory P. Deschenes Co-Counsel for Defendants 101 Federal Street Phillips Point East Tower Boston, MA 02110-1832 777 South Flagler Drive, Suite 1100 (617) 345-1000 West Palm Beach, Florida 33401 Telephone: (561) 803-3500 WECHSLER HARWOOD HALEBIAN & Facsimile: (561) 820-1608 FEFFER, LLP Andrew D. Friedman 488 Madison Avenue, 8th Floor New York, NY 10022 (212) 935-7400 LAW OFFICE OF VINCENT T. GRESHAM Vincent T. Gresham 6065 Roswell Road, Suite 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 LAW OFFICES OF LIONEL Z. GLANCY Lionel Z. Glancy 1801 Avenue of the Stars, Suite 306 Los Angeles, CA 90067 (310) 201-9150 LERNER & PEARCE Allan Lerner 2888 East Oakland Park Boulevard Fort Lauderdale, FL 33306 (954) 563-8111 LAW OFFICES OF JAMES V. BASHIAN 500 Fifth Avenue, Suite 2700 New York, NY 10110 THOMAS A. HOADLEY, P.A. 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, Suite 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 68 -----END PRIVACY-ENHANCED MESSAGE-----