EXHIBIT 2.15
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ACCOUNT AGENCY AGREEMENT
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Account Agency Agreement made as of this 11 day of April, 2002, (the
"Account Agency Agreement"), by and between EQUIS FINANCIAL GROUP LIMITED
PARTNERSHIP, a Massachusetts Limited Partnership (the "Company"), and Wilmington
Trust Company, a Delaware banking corporation (the "Account Agent").
The parties hereto are entering into this Account Agency Agreement pursuant
to the Revised Stipulation of Settlement, dated as of April __, 2002 (the
"Settlement Agreement"), among the Company and certain of its affiliates, and
LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS,
BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES,
BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD
HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of
themselves and all others similarly situated and derivatively on behalf of the
Nominal Defendants, (the "Plaintiffs").
Capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to them in the Settlement Agreement.
This Account Agency Agreement is designed to implement the provisions of
Section 2.2(g) of the Settlement Agreement pursuant to which (i) the Company
will deposit an aggregate amount of $8 million cash in a Cash Collateral Account
with the Account Agent; and (ii) the Company, upon receipt from the General
Partners of cash distributions from the Operating Partnerships, shall promptly
deposit 50% of such distributions in the Cash Collateral Account which sums
shall be distributed in accordance with the terms hereof.
Accordingly, in consideration of the mutual agreements herein contained, the
parties hereto hereby agree as follows:
1. APPOINTMENT OF ACCOUNT AGENT. The Account Agent is hereby appointed to
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act as Account Agent hereunder and the Account Agent agrees to act as such,
pursuant to the terms set forth herein.
2. CASH COLLATERAL FUND. The Company shall deliver funds to the Account
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Agent as follows: (i) on the date hereof, in accordance with Section 2.2(g) of
the Settlement Agreement, the Company is delivering to the Account Agent by wire
transfer to the Cash Collateral Account, the sum of $8,000,000, and (ii) upon
receipt from the General Partners of cash distributions from the Operating
Partnerships, the Company shall promptly deposit 50% of such distributions with
the Account Agent (such sums, together with all investments made therewith and
earnings thereon, being collectively referred to herein as the "Cash Collateral
Fund"). The Account Agent shall deposit the Cash Collateral Fund in an account
or accounts specified by the Account Agent and the Account Agent is accepting
such sum for deposit in escrow pursuant to the provisions of this Account Agency
Agreement.
3. PERMITTED INVESTMENTS. The Account Agent shall invest and reinvest the
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Cash Collateral Fund in any or all of the following: (i) short-term direct
obligations of, or obligations fully guaranteed by, the United States of America
or any agency thereof; (ii) certificates of deposit issued by any bank trust
company or national banking association having total capital and surplus in
excess of Fifty Million Dollars ($50,000,000); (iii) Bank repurchase
agreements covering securities issued or guaranteed by the United States
government or any agency or instrumentality thereof; (iv) money market funds
having a net worth of at least $100,000,000 or similar highly liquid investments
(other than tax-exempt securities or obligations) including, the Wilmington
Fund, an AAA rated money market fund managed by Rodney Square, and an affiliate
of the Account Agent (such investments being collectively referred to herein as
the "Permitted Investments"). Any loss incurred from an investment in or sale
of Permitted Investments will be borne solely by the Cash Collateral Fund.
Investment and reinvestment of the Cash Collateral Fund shall be made only in
Permitted Investments, but the Account Agent may in its sole and absolute
discretion select which Permitted Investments to reinvest the Cash Collateral
Fund. It is hereby acknowledged that the Account Agent shall not be required to
maximize the investment return on the Cash Collateral Fund during the term of
this Account Agency Agreement. The Account Agent shall be and hereby is
relieved of all liability with respect to the purchasing, holding or selling of
Permitted Investments in accordance with the terms hereof. The Account Agent is
not responsible for any losses to the Cash Collateral Fund which may occur,
including, without limitation, by reason of bank failure or the amount of the
Cash Collateral Fund exceeding the Federal Deposit Insurance Corporation limits.
4. DISPOSITION OF SECURITIES. At the time the Account Agent shall be
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required to make any payment of principal under this Account Agency Agreement,
the Account Agent shall liquidate the Permitted Investments held hereunder to
make such payment.
5. RIGHTS TO CASH COLLATERAL FUND. Except as provided herein, the Cash
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Collateral Fund shall be for the exclusive benefit of the Company its successors
and assigns, and no other person or entity shall have any right, title or
interest therein.
6. COMPANY REPRESENTATIONS. The Company represents and warrants to the
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Account Agent that (i) it has irrevocable right, power and authority to enter
into and perform this Agreement, (ii) it has irrevocable right, power and
authority to give and receive directions and notices hereunder; (iii) it has
irrevocable right, power and authority to make all determinations that may be
required or that it deems appropriate under this Agreement; and (iv) it has
given the Nixon Peabody Partners (as defined in Section 7) the right, power and
authority to give and receive direction and notices hereunder and to make
required determinations that may be required or appropriate on behalf of the
Company as contemplated herein.
7. DISTRIBUTIONS FROM THE CASH COLLATERAL FUND. The Account Agent shall
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continue to hold the principal of the Cash Collateral Fund in its possession
until authorized hereunder to distribute the principal of and income from the
Cash Collateral Fund as follows:
(a) upon receipt by the Account Agent of written Instructions from two of
Alexander J. Jordan, Jr., Deborah L. Thaxter and Gregory P. Deschenes, or such
other individuals as may be designated by the Managing Partner of Nixon Peabody,
LP in the event that any of the foregoing shall, for any reason, cease to be
partners of Nixon Peabody LP or cease to be able to serve in the capacity
contemplated herein (the "Nixon Peabody Partners") before the Note Payment Date
(as defined below) , including notice of entry of an order by the United States
District Court for the Southern District of Florida that (i) rejects the
Settlement Agreement or (ii) in the opinion of such Nixon Peabody Partners,
makes it unlikely that the Settlement Agreement will be approved, the Account
Agent will, at the direction of such Nixon Peabody Partners, return the entire
Cash Collateral Fund to the Company; or
(b) Within seven (7) business days after receipt by the Account Agent of
written Instructions, including notice from any of the Nixon Peabody Partners of
the day on which the Note Payment Date has occurred or will occur, or, if later,
on the Note Payment Date, to the extent that any Echelon Notes (as defined in
the Settlement Agreement) remain outstanding, the Account Agent shall pay the
Cash Collateral Fund as follows:
(i) Two of the Nixon Peabody Partners shall give the Account Agent Instructions
in writing of the extent that any Echelon Notes remain outstanding, and, to that
extent and in accordance with such Instructions, the Account Agent shall pay the
Echelon Notes out of the funds on deposit in the Cash Collateral Account plus
any interest earned on them net of the Account Agent's reasonable fees and
expenses to the Liquidating Trustee as payments reducing, first, the principal
amount due on the Echelon Notes and, second, any interest accrued at 7.5%. If,
for any reason, the Liquidating Trustee has not been appointed by the Note
Payment Date (and assuming that Cash Collateral Fund has not been returned to
the Company pursuant to Section 7(a), above), the cash
distributions shall be made to each of the Operating Partnerships in the
following proportions:
AMERICAN INCOME PARTNERS V-A 6.75%
AMERICAN INCOME PARTNERS V-B 17.81%
AMERICAN INCOME PARTNERS V-C 7.47%
AMERICAN INCOME PARTNERS V-D 8.53%
AMERICAN INCOME FUND 1-A 5.16%
AMERICAN INCOME FUND 1-B 4.09%
AMERICAN INCOME FUND 1-C 8.69%
AMERICAN INCOME FUND 1-D 9.53%
AMERICAN INCOME FUND 1-E 14.97%
AIRFUND 5.63%
AIRFUND II 11.38%
(ii) Upon the payment of all of the outstanding aggregate principal amount and
interest accrued at 7.5% on the Echelon Notes, the Account Agent, in accordance
with such Instructions, shall promptly release any remaining funds in the Cash
Collateral Account to the Defendants and terminate the Cash Collateral Account
(c) The "Note Payment Date" shall mean the last day of the first calendar
quarter after the first date on which the Final Judgment and Order with respect
to the Operating Partnership Sub Class entered by the Court, as described in
Section 4.4 of the Settlement Agreement, becomes final, binding and
nonappealable.
(d) The Instructions shall contain the following:
(i) the party or parties to whom, or the account or accounts to which, the
Account Agent is thereby directed to pay such amounts; and
(ii) the date upon which the Account Agent is directed to pay such amount.
The Account Agent may rely fully on the provisions set forth in the Instructions
without any responsibility to determine whether such Instructions comply with
this Section 7, or the Settlement Agreement. The Company agrees to promptly
issue the Account Agent instructions to distribute the Cash Collateral Fund.
(e) In the event transfer Instructions are given, whether in writing, by
telecopier or otherwise, the Account Agent is authorized (but not required) to
seek confirmation of such Instructions by telephone call-back and the Account
Agent may rely upon the confirmations of anyone purporting to be the person or
persons so designated. The persons and telephone numbers for callbacks may be
changed only in a writing actually received and acknowledged by the Account
Agent. The parties to this Agreement acknowledge that such security procedure
is commercially reasonable. The Account Agent may disburse the Cash Collateral
Funds pursuant to Paragraph 7 hereof, either by wire transfer or certified or
bank check, at the sole discretion of the Account Agent. It is understood,
however, that the Account Agent may disburse any funds in the Cash Collateral
Fund without any Instructions, if such distributions are pursuant to Section 7.
(f) It is understood that the Account Agent in any funds transfer may rely
solely upon any account numbers or similar identifying number provided by the
Nixon Peabody Partners hereto to identify (i) each transferee, (ii) its bank, or
(iii) an intermediary bank. The Account Agent may apply any of the Cash
Collateral Funds for any payment order it executes using any such identifying
number, even where its use may result in a person other than the transferee
being paid, or the transfer of funds to a bank other than the transferee's bank,
or an intermediary bank designated.
8. TERMINATION OF AGENCY. In the event that a dispute arises in connection
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with the release of the Cash Collateral Fund, the Account Agent shall have the
sole and absolute right to resign in accordance with the provisions of Section
10 hereof. This Account Agency Agreement shall automatically terminate if and
when all amounts in the Cash Collateral Account (including all the cash,
securities or other instruments in which any of the funds deposited in the Cash
Collateral Account shall have been invested) shall have been distributed by the
Account Agent in accordance with the terms of this Account Agency Agreement.
9. THE ACCOUNT AGENT'S OBLIGATIONS. (a) The obligations of the Account
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Agent are those specifically provided in this Agreement and no other, and the
Account Agent shall have no liability under, and no duty to inquire into the
terms and provisions, of any agreement between the Company and the Plaintiffs.
The Account Agent is acting hereunder as an accommodation to the Company hereto.
The duties of the Account Agent are purely ministerial in nature, and it shall
not incur any liability whatsoever, except for willful misconduct or gross
negligence. The Account Agent may consult with counsel of its choice and shall
not be liable for following the advice of such counsel.
(b) The Account Agent shall not have any responsibility for the genuineness
or validity of any document or other item deposited with it or of any signature
thereon or for the identity, authority or right of any person executing or
depositing the same and shall not have any liability for acting in accordance
with any written instructions or certificates given to it hereunder signed by
the proper parties.
10. RESIGNATION AND REMOVAL. The Account Agent may resign and be fully
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discharged from its duties hereunder at any time by giving at least thirty (30)
days' prior written notice of such resignation to the Company and specifying a
date upon which such resignation shall take effect; provided, however, that the
Account Agent shall continue to serve until its successor accepts the Cash
Collateral Fund. Notwithstanding the foregoing, however, the Account Agent
shall, in the alternative have the right, at any time, to deposit the Cash
Collateral Fund with a court of competent jurisdiction and the Account Agent
shall have no further obligation with respect thereto. Upon receipt of such
notice, a successor Account Agent shall be appointed by the Company, such
successor Account Agent to become the Account Agent hereunder on the resignation
date specified in such notice. If an instrument of acceptance by a successor
Account Agent shall not have been delivered to the Account Agent within
forty-five (45) days after the giving of such notice of resignation, the
resigning Account Agent may petition any court of competent jurisdiction for the
appointment of a successor Account Agent. The Company may at any time
substitute a new Account Agent by giving ten (10) days' notice thereof to the
Account Agent then acting and paying all fees and expenses of such Account
Agent. In the alternative, in the event of a dispute in relation to the release
of the Cash Collateral Fund, the Account Agent may resign fifteen (15) days
after giving written notice of such resignation to the parties hereto and
depositing the Cash Collateral Fund with an appropriate court and the Account
Agent shall have no further obligation with respect hereto or under this
Agreement, in any manner.
11. INDEMNIFICATION. The Company shall hold the Account Agent harmless from
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and against and indemnify the Account Agent for any loss, liability, expense
(including reasonable attorneys' fees, costs of investigation, and expenses
either paid to retained attorneys or amounts representing the fair value of
legal services rendered to itself), claim or demand arising out of or in
connection with the performance of its obligations in accordance with the
provisions of this Account Agency Agreement or relating to the Settlement
Agreement, except for any of the foregoing to the extent it arises out of the
gross negligence or willful misconduct of the Account Agent. In connection
therewith, the parties agree as follows:
(a) As security for the timely and full payment and satisfaction of all
of the present and future obligations of the parties to the Account Agent under
this Agreement, whether joint or several, the Company hereby grants to the
Account Agent a continuing security interest in and to any and all of the Cash
Collateral Funds under this Agreement, whether now existing or hereafter
acquired or created, together with the products and proceeds thereof, all
payments and other distributions with respect thereto, and any and all
investments, renewals, substitutions, modifications and extensions of any and
all of the foregoing. The Account Agent shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code.
(b) In addition, in the event the Account Agent has not received any
payment, indemnity, reimbursement or other amount due it under this Agreement,
then, notwithstanding any other term or provision of this Agreement, the Account
Agent may in its discretion: (i) retain any and all of the Cash Collateral Fund
until such time as those obligations have been satisfied; and/or (ii) set off
and apply any and all of the Cash Collateral Fund towards the payment and
satisfaction of those obligations. The Account Agent shall have a lien for the
amount of any such expense or loss on the Cash Collateral Fund held by it
hereunder and shall be entitled to reimburse itself from the Cash Collateral
Fund for the amount of any such expense or loss. Promptly after the receipt by
the Account Agent of notice of any demand or claim or the commencement of any
action, suit or proceeding, the Account Agent shall, if a claim in respect
thereof is to be made against the Company, notify the Company thereof in
writing; but the failure by the Account Agent to give such notice shall not
relieve the Company from any liability which it may have to the Account Agent
hereunder. Notwithstanding any obligation to make payments and deliveries
hereunder, the Account Agent may retain and hold for such time as it deems
necessary such amount of the Cash Collateral Fund as it shall from time to time
in its sole discretion deem sufficient to indemnify itself for any such loss or
expense and for any amounts due it under Paragraph 11. For the purposes hereof,
the term "expense or loss" shall include all amounts paid or payable to satisfy
any claim, demand or liability, or in settlement of any claim, demand, action,
suit or proceeding settled with the express written consent of the Account
Agent, and all costs and expenses, including, but not limited to, reasonable
counsel fees and disbursements paid or incurred in investigating or defending
against any such claim, demand, action, suit or proceeding.
(c) The Account Agent shall be under no duty to institute any suit, or to take
any remedial procedures under this Account Agency Agreement, or to enter any
appearance or in any way defend any suit in which it may be made a defendant
hereunder until it shall be indemnified as provided above.
12. CONTRIBUTION BACK. The Company, and by signing below, each of the
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Operating Partnerships agrees that in the event any amount of Cash Collateral
Fund released to the Company or any other person under this Agreement is
invalidated, declared to be fraudulent or preferential or must otherwise be
restored or returned by the Account Agent in connection with the insolvency,
bankruptcy or reorganization of the Company or other person, whether by order of
or settlement before any court or other authority or otherwise, the Company and
such other person shall contribute back to the Account Agent an amount such that
each will be affected by that invalidation, declaration, restoration or return
ratably in proportion to the distributions it received under this Agreement,
together with any related assignment, release or other instrument or document
the Account Agent may request to restore the status quo ante.
13. TAXES. To the extent that the Account Agent becomes liable for the
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payment of taxes, including withholding taxes, in respect of income derived from
the investment of funds held hereunder or any payment made hereunder
(collectively, the "Taxes"), the Account Agent may pay such Taxes. The Account
Agent may (but shall not be required to) withhold from any payment of the Cash
Collateral Fund such amount as the Account Agent estimates to be sufficient to
provide for the payment of such Taxes not yet paid, and may use the sum withheld
for that purpose. The Account Agent shall be indemnified and held harmless
against any liability for Taxes and for any penalties or interest in respect of
Taxes on such investment income or payments in the manner provided in Paragraph
13.
14. FEES. The Account Agent shall be paid by the Company in accordance with
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the Schedule of Fees annexed hereto as Exhibit "A" and shall be reimbursed for
the fees and disbursements of its attorneys, or, at the request of the Account
Agent, shall pay such fees and disbursements directly to its attorneys promptly
following execution of this Account Agency Agreement. All fees and payments
shall be paid in United States currency and payable in the United States at the
office of the Account Agent.
15. DISPUTES. (a) If any dispute should arise with respect to the payment
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and/or ownership or right of possession of the Cash Collateral Fund, the Account
Agent is authorized and directed to retain in its possession, without liability
to anyone, all or any portion of the Cash Collateral Fund until such dispute
shall have been settled either by agreement of the parties concerned or by a
Final Decree, but the Account Agent shall be under no duty whatsoever to
institute or defend any such proceedings.
(b) The Company shall bear all of its and the Account Agent's fees and
expenses incurred by them in resolving any dispute arising under this Account
Agency Agreement, except that the Account Agent shall bear its own fees and
expenses in the event of a final Judgment and Order determining that the dispute
arises out of the gross negligence or willful misconduct of the Account Agent.
16. NOTICES. All notices or other communications which are required or
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permitted to be given hereunder shall be in writing and shall personally be
delivered, sent by certified mail, return receipt requested, or facsimile, or
sent by a nationally-recognized overnight courier, to the other parties as
follows:
To the Company:
Equis Financial Group Limited Partnership
200 Nyala Farms
Westport, CT 0880
Attn: Gary D. Engle
Telephone: (__) ________
Facsimile: (___) ________
with a copy to:
Nixon Peabody LLP
101 Federal Street
Boston, MA 02110-1832
Attn: Alexander J. Jordan, Esq.
Telephone: (617) 345-1000
Facsimile: (617) 345-1300
If to the Account Agent, to:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19891-0001
Attn: Lloyd Martin Corporate Trust Administration
Telephone: (302) 636-6438
Facsimile: (302) 636-4149
with a copy to:
Putney Twombly Hall & Hirson, LLP
521 Fifth Avenue
New York, New York, 10175
Attn: William M. Pollak, Esq.
Telephone: (212) 682-0020
Facsimile: (212) 682-9380
or to such other addresses as the party to whom notice is to be given may have
furnished to the other parties in writing. Any such communication shall be
deemed to have been given when (i) delivered, if personally delivered, (ii) on
receipt, if sent by mail, and (iii) on the business day after dispatch, if sent
by nationally-recognized overnight courier.
16. COUNTERPARTS. This Account Agency Agreement may be executed in any
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number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
17. GOVERNING LAW AND JURISDICTION. This Account Agency Agreement shall be
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governed by and construed in accordance with the laws of the State of Delaware
without giving effect to the principles of conflicts of laws thereunder. This
Account Agency Agreement shall be subject to the exclusive jurisdiction of the
courts located in New York County, New York. The parties to this Account Agency
Agreement agree that any breach of any term or condition of this Account Agency
Agreement shall be deemed to be a breach occurring in the State of Delaware by
virtue of a failure to perform an act required to be performed in the State of
New York and the parties irrevocably and expressly agree to submit to the
jurisdiction of the courts of the State of New York for the purpose of resolving
any disputes among the parties relating to this Account Agency Agreement or the
transactions contemplated hereby. The parties hereto irrevocably waive, to the
fullest extent permitted by law, any objection which they may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement, or any judgment entered by any court in respect
hereof brought in New York County, New York, and further irrevocably waive any
claim that any suit, action or proceeding brought in New York County, New York
has been brought in an inconvenient forum.
18. BENEFITS OF AGREEMENT. All the terms and provisions of this Account
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Agency Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; and nothing in this Account
Agency Agreement, express or implied, is intended to confer on any person,
corporation, group or other entity other than the parities hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Account Agency Agreement. Anything
contained herein to the contrary notwithstanding, this Account Agency Agreement
shall not be assignable by any party hereto without the consent of the other
parties hereto.
19. FULL FORCE AND EFFECT. This Account Agency Agreement shall remain in
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full force and effect until the Account Agent has delivered all amounts in the
Cash Collateral Fund in accordance with the terms hereof.
20. MODIFICATION. This Account Agency Agreement shall not be altered or
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otherwise amended, except pursuant to an instrument in writing signed by each of
the parties hereto.
21. DESCRIPTIVE HEADINGS. The descriptive headings in this Account Agency
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Agreement are for convenience only and shall not control or affect the meaning
or constructing of any provision of this Account Agency Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date and year
first above written.
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP
By: Equis Corp., General Partner
____________________________________
Gary D. Engle, President
Wilmington Trust Company
By:____________________________
Name:
Title:
The undersigned agree to be bound by
the terms of Section 12:
AMERICAN INCOME PARTNERS V-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, General Partner
By: _________________________________
Gary D. Engle, President
AMERICAN INCOME FUND I-A LIMITED PARTNERSHIP
AMERICAN INCOME FUND I-B LIMITED PARTNERSHIP
AMERICAN INCOME FUND I-C LIMITED PARTNERSHIP
AMERICAN INCOME FUND I-D LIMITED PARTNERSHIP
AMERICAN INCOME FUND I-E LIMITED PARTNERSHIP
By: AFG Leasing VI Incorporated, General Partner
By: _________________________________
Gary D. Engle, President
AIRFUND INTERNATIONAL LIMITED PARTNERSHIP
AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP
By: AFG Aircraft Management Corp., General Partner
By: _________________________________
Gary D. Engle, President