SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
North East Insurance Company
(Name of issuer)
Common Stock, par value $1.00 per share
(Title of class of securities)
659164107
(CUSIP number)
Murry N. Gunty
Ballantrae Partners, L.L.C.
75 West End Avenue
R-12E
New York, New York 10023
(212) 957-1337
with copy to
Lawrence T. Yanowitch, Esq.
Tucker, Flyer & Lewis
a professional corporation
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036-5612
(202) 429-3254
(Name, address and telephone number of person
authorized to receive notices and communications)
May 14, 1996
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [x]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
Note. Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page __ of __ Pages)
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
CUSIP No. 659164107 13D Page __ of __ Pages
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ballantrae Partners, L.L.C.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER 7. SOLE VOTING POWER
OF - 0 -
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED - 0 -
BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING - 0 -
PERSON
WITH 10. SHARED DISPOSITIVE POWER
- 0 -
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 0 -
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[x]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
- 0 -
14. TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
This Schedule 13D ("Schedule 13D") relates to the
Common Stock, par value $1.00 per share (the "Common Stock"), of
North East Insurance Company, a Maine corporation (the
"Company"). The principal executive offices of the Company are
located at 482 Payne Road, Scarborough, Maine 04074.
Item 2. Identity and Background.
(a), (b), (c), (f) This statement is filed on behalf
of Ballantrae Partners, L.L.C., a Delaware limited liability
company ("Ballantrae"). Ballantrae is a recently formed limited
liability company that has not conducted business other than in
connection with the transactions described herein. The address
of Ballantrae's principal business and offices is 75 West End
Avenue, R-12E, New York, New York 10023.
The name, business address, occupational information,
and citizenship of each of the Members, Managing Directors and
the Manager of Ballantrae are as follows:
Murry N. Gunty is a Vice President with Lazard Freres &
Co., L.L.C., of 30 Rockefeller Plaza, 63rd Floor, New York, New
York 10020. Mr. Gunty's business address is the same. Mr. Gunty
is a citizen of the United States. Mr. Gunty is a Member and
Managing Director of Ballantrae.
Deborah L. Harmon is an Executive Vice President with
J.E. Robert Company, Inc. of 1650 Tysons Boulevard, Suite 1600,
McLean, Virginia 22102. Ms. Harmon's business address is the
same. Ms. Harmon is a citizen of the United States. Ms. Harmon
is a Member and Managing Director of Ballantrae.
Jonathan S. Kern is an Executive Vice President with
J.E. Robert Company, Inc. of 1650 Tysons Boulevard, Suite 1600,
McLean, Virginia 22102. Mr. Kern's business address is the same.
Mr. Kern is a citizen of the United States. Mr. Kern is a Member
and Managing Director of Ballantrae.
Reginald Strickland is Executive Vice President of
Strickland General Agency, Inc. of P.O. Box 129, Norcross,
Georgia 30091. Mr. Strickland's business address is the same.
Mr. Strickland is a citizen of the United States. Mr. Strickland
is a non-voting Managing Director of Ballantrae.
The Manager of Ballantrae is Gunty & Co., a Delaware
corporation (the "Manager"). The principal business of the
Manager is investment advisory services. The address of the
Manager's principal business and offices is 75 West End Avenue,
R-12E, New York, New York 10023. Mr. Gunty is the sole
stockholder, the sole director and the President of the Manager.
(d), (e) During the last five years, none of
Ballantrae, the Manager or any of the above persons has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), nor has any of such persons been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, United States federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the Purchase Agreement dated as of May 14,
1996 (the "Purchase Agreement"), by and among Ballantrae,
Bernhard Gershuny (the "Seller") and Stephen F. Dubord, as
Trustee (the "Trustee"), Ballantrae has agreed to purchase
subject to the terms and conditions thereof (i) a Trust
Certificate for Capital Stock relating to 810,000 shares of
Company Common Stock (the "Trust Certificate"), and (ii) shares
of Common Stock subject to the Trust Certificate (the "Trust
Shares"). See Item 6 hereof.
The source of funds for the purchase of the Trust
Certificate and the Trust Shares will be working capital of
Ballantrae contributed from the personal funds of each of the
Members in accordance with each of their percentage interest in
Ballantrae. The aggregate amount of funds required to purchase
the Trust Certificate and the Trust Shares will be approximately
$860,500 consisting of: (i) $500,000 plus certain fees and
expenses of Seller (not to exceed $30,000) upon delivery of the
Trust Certificate to Ballantrae, and (ii) $330,500 less
reasonable expenses of Ballantrae (not to exceed $70,000) upon
delivery of the Trust Shares to Ballantrae. It is anticipated
that the Trust Certificate and the Trust Shares will be delivered
substantially simultaneously to Ballantrae pursuant to the
Purchase Agreement. In connection the Purchase Agreement,
Ballantrae deposited $500,000 into an escrow account.
Item 4. Purpose of Transaction.
Ballantrae intends to acquire the Trust Certificate and
the Trust Shares because it believes that they represent an
attractive investment opportunity.
Ballantrae will continue to evaluate its potential
investment in the Company on the basis of various factors,
including the Company's business, financial condition, results of
operations and prospects, general economic and industry
conditions, the securities markets in general and those for the
Company's securities in particular, as well as other developments
and investment opportunities. Based upon such evaluation,
Ballantrae will take such actions in the future as Ballantrae may
deem appropriate in light of the circumstances existing from time
to time. If Ballantrae believes that further investment in the
Company is warranted, whether because of the market prices of the
Company's securities or otherwise, it may acquire shares of
Common Stock or other securities of the Company, either in the
open market or in privately negotiated transactions. Similarly,
depending on market and other factors, Ballantrae may determine
to dispose of some or all of its potential investment, either in
the open market or in privately negotiated transactions.
Representatives of Ballantrae have from time to time
held discussions with representatives of the Official Committee
of Unsecured Creditors of American Motor Club, Inc. concerning
the possible sale to Ballantrae of an additional approximate
215,000 shares of Common Stock of the Company. Ballantrae has
not entered into any definitive agreement with respect to such
shares, however, Ballantrae may continue such discussions from
time to time.
On May 7, 1996, a letter from Murry N. Gunty, Managing
Director of Ballantrae, was sent to Robert Schatz, Chief
Executive Officer of the Company. The letter is attached hereto
as Exhibit 0.3 and is incorporated herein by reference.
Ballantrae intends to review its potential investment
in the Company and consider possible strategies for enhancing
value. Ballantrae intends to explore a variety of strategies for
enhancing the value of its potential investment, including,
without limitation, (i) transactions that would increase the
Company's working capital and access to capital, and (ii) the
possibility of representatives of Ballantrae serving on the Board
of Directors of the Company. Ballantrae anticipates that it will
continue to discuss its potential investment in the Company with
the management of the Company.
Except as set forth above, Ballantrae has no plans or
proposals which relate to or would result in any of paragraphs
(a) through (j) enumerated on Schedule 13D Item 4.
Item 5. Interest in Securities of the Issuer.
(a), (b), (c) Pursuant to the Purchase Agreement,
Ballantrae has agreed to purchase subject to the terms and
conditions thereof the Trust Certificate and the Trust Shares.
The Trust Shares constitute 810,000 shares of Common Stock of the
Company, representing approximately 27.1% of the 2,992,314 shares
of Common Stock of the Company outstanding as of March 8, 1996.
As provided in the Purchase Agreement, the purchase of the Trust
Certificate and the Trust Shares is subject to a number of
conditions precedent (as described in Item 6 hereof). Pursuant
to the L.L.C. Agreement (as defined below), the Members and the
Manager may be deemed to have shared power to vote or direct the
vote and shared power to dispose or direct the disposition of the
Trust Certificate and the Trust Shares. Ballantrae, the Manager
and the Members expressly disclaim beneficial ownership of the
Trust Certificate or the Trust Shares, and this Schedule 13D
shall not be deemed an admission that Ballantrae, the Manager or
the Members are the beneficial owners of the Trust Certificate or
the Trust Shares for purposes of Section 13 or for any other
purpose. See Item 6 hereof.
Representatives of Ballantrae have from time to time
held discussions with representatives of the Official Committee
of Unsecured Creditors of American Motor Club, Inc. concerning
the possible sale to Ballantrae of an additional approximate
215,000 shares of Common Stock of the Company. Ballantrae has
not entered into any definitive agreement with respect to such
shares, however, Ballantrae may continue such discussions from
time to time.
(d), (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
Purchase Agreement
Set forth below is a summary description of selected
provisions of the Purchase Agreement. Such description is
qualified in its entirety by reference to the Purchase Agreement,
a copy of which has been included as Exhibit 0.1 hereto and is
incorporated by reference herein.
The Purchase Agreement provides for the purchase of the
Trust Certificate and the Trust Shares by Ballantrae from the
Seller for an aggregate initial purchase price of $500,000 plus
certain fees and expenses of Seller (not to exceed $30,000) upon
delivery of the Trust Certificate. Upon the transfer of the
Trust Shares from the Seller to Ballantrae, an additional
$330,500 less reasonable expenses of Ballantrae (not to exceed
$70,000) will be delivered by Ballantrae to the Seller. In
connection with the Purchase Agreement, $500,000 was deposited by
Ballantrae into an escrow account.
The Purchase Agreement provides that the closing of the
purchase and sale of the Trust Certificate shall take place on
the date after all of the conditions to the obligations of the
parties under the Purchase Agreement have been satisfied or
waived (the "Closing Date").
The Purchase Agreement provides, as conditions to the
obligations of Ballantrae under the Purchase Agreement with
respect to the acquisition of the Trust Certificate, that (i) the
representations and warranties of the Seller and the Trustee are
materially true and correct as of the Closing Date, (ii) the
Seller and Trustee shall have performed and complied with all
agreements, covenants, obligations and conditions required to be
performed or complied with under the Purchase Agreement prior to
the closing, (iii) no action or proceeding against the Company,
the Trust, the Seller or Ballantrae relating to the transactions
under the Purchase Agreement is pending, (iv) Ballantrae and the
Seller shall have received all consents, licenses and approvals
(including, without limitation, any approvals required under the
rules and regulations of the Bureau of Insurance of the State of
Maine, the New York State Insurance Department and any other
applicable regulatory authority) required in connection with the
Purchase Agreement, (v) Ballantrae has determined (in its sole
discretion) that Sections 611-A and 910 of the Maine Business
Corporations Act are inapplicable to Ballantrae and Ballantrae's
acquisition of the Trust Certificate and the Trust Shares, (vi)
the United States Bankruptcy Court for the Eastern District of
New York shall have approved the transactions contemplated under
the Purchase Agreement, and (vii) the Seller has furnished to
Ballantrae with such certificates of compliance with these
enumerated conditions as reasonably requested by Ballantrae.
The Purchase Agreement provides, as conditions to the
obligations of the Seller under the Purchase Agreement with
respect to the sale of the Trust Certificate, that (i) the
representations and warranties of Ballantrae are materially true
and correct as of the Closing Date, (ii) Ballantrae shall have
performed and complied with all agreements, covenants,
obligations and conditions required to be performed or complied
with under the Purchase Agreement prior to the closing, (iii) the
United States Bankruptcy Court for the Eastern District of New
York shall have approved the transactions contemplated under the
Purchase Agreement, (iv) no action or proceeding against the
Company, the Trust, the Seller or Ballantrae relating to the
transactions under the Purchase Agreement is pending, and (v)
Ballantrae has furnished the Seller with such certificates of
compliance with these enumerated conditions as reasonably
requested by the Seller.
The Purchase Agreement provides that the acquisition of
the Trust Shares and the payment therefor by Ballantrae is
subject to the following additional conditions: (i) approval of
the Bureau of Insurance of the State of Maine, the New York State
Insurance Department and any other applicable regulatory
authorities of transfer of the Trust Shares from the Seller to
Ballantrae; (ii) delivery of the Trust Shares to Ballantrae free
and clear of any liens or encumbrances in accordance with the
terms the Trust; and (iii) reasonable assurances from the Company
to Ballantrae that the Trust Shares will be registered in
Ballantrae's name upon presentation to the Company's transfer
agent. It is anticipated that the Trust Certificate and the
Trust Shares will be delivered substantially simultaneously to
Ballantrae pursuant to the Purchase Agreement.
The Purchase Agreement provides that the Purchase
Agreement may be terminated prior to the Closing Date (i) by
mutual consent of the Seller and Ballantrae, (ii) by either the
Seller or Ballantrae in the event that the Closing has not
occurred by December 31, 1996, (iii) by the Seller, if Ballantrae
materially violates or breaches any agreement, covenant,
representation or warranty contained in the Purchase Agreement,
(iv) by Ballantrae, if the Seller materially violates or breaches
any agreement, covenant, representation or warranty contained in
the Purchase Agreement, or (v) by Ballantrae if acquisition of
the Trust Certificate or the Trust Shares is disapproved by any
applicable regulatory authority.
The Purchase Agreement provides that the Purchase
Agreement may be terminated prior to the Approval Date (as
defined in the Purchase Agreement) (i) by Ballantrae in the event
that the Approval Date has not occurred by December 31, 1996,
(ii) by the Seller, if Ballantrae materially violates or breaches
any agreement, covenant, representation or warranty contained in
the Purchase Agreement, (iii) by Ballantrae, if the Seller
materially violates or breaches any agreement, covenant,
representation or warranty contained in the Purchase Agreement,
or (iv) by Ballantrae, if acquisition of the Trust Certificate or
the Trust Shares is disapproved by any applicable regulatory
authority.
Limited Liability Company Agreement
Set forth below is a summary description of selected
provisions of the Limited Liability Company Agreement (the
"L.L.C. Agreement") for Ballantrae. Such description is
qualified in its entirety by reference to the L.L.C. Agreement, a
copy of which has been included as Exhibit 0.2 hereto and is
incorporated by reference herein.
The L.L.C. Agreement provides that each of Mr. Gunty,
Ms. Harmon and Mr. Kern have a 33.33% percentage interest in
Ballantrae.
The L.L.C. Agreement provides that consent of Members
owning one hundred percent (100%) of the total percentage
interests in Ballantrae is required for (i) the sale, exchange or
other disposition of Ballantrae property or any portion thereof,
(ii) the acquisition of any additional Ballantrae property, or
(iii) the voting of any securities that constitute Company
property.
Item 7. Material to be Filed as Exhibits.
Exhibit 0.1. Purchase Agreement between Ballantrae
Partners, L.L.C., Bernhard Gershuny, and Stephen F. Dubord as
Trustee.
Exhibit 0.2. Limited Liability Company Agreement for
Ballantrae Partners, L.L.C.
Exhibit 0.3. Letter from Murry N. Gunty to Robert
Schatz, dated May 7, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
May 24, 1996
(Date)
/s/ Murry N. Gunty
(Signature)
Murry N. Gunty
Managing Director
(Name/Title)
Exhibit Index
Exhibit Page
0.1. Purchase Agreement between Ballantrae
Partners, L.L.C.,Bernhard Gershuny, and
Stephen F. Dubord as Trustee. 11
0.2. Limited Liability Company Agreement for
Ballantrae Partners, L.L.C. 38
0.3. Letter from Murry N. Gunty to Robert
Schatz, dated May 7, 1996. 62
Exhibit 0.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of May 14, 1996 (the
"Agreement"), by and among Bernhard D. Gershuny (the "Seller"),
and Ballantrae Partners, L.L.C., a Delaware Limited Liability
Company (the "Purchaser") and Stephen F. Dubord, as Trustee (the
"Trustee") under the Non-Voting Trust Indenture dated February 3,
1987 (the "Trust").
W I T N E S S E T H:
WHEREAS, the Trust owns of record 810,000 shares (the
"Trust Shares") of Common Stock, par value $1.00 per share of
North East Insurance Company, a Maine corporation (the
"Corporation");
WHEREAS, the Seller owns of record a Trust Certificate
for Capital Stock (the "Trust Certificate") relating to the Trust
Shares held by the Trust;
WHEREAS, simultaneously herewith the Purchaser is
entering into a Purchase Agreement with the Official Committee of
Unsecured Creditors of American Motor Club, Inc. to acquire
approximately 215,000 shares of Common Stock of the Corporation;
and
WHEREAS, the Seller desires to sell, and the Purchaser
desires to acquire, the Trust Certificate and the underlying
Trust Shares upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Closing. Upon the terms and subject to the
conditions hereof, the closing of the purchase and sale of the
Trust Certificate as set forth herein (herein referred to as the
"Closing") shall take place at the offices of Drummond, Woodsum &
Macmahon, 245 Commercial Street, Portland, Maine 04104 on the
date after all of the conditions to the obligations of the
parties hereunder have been satisfied or waived or at such other
time or place as the parties hereto shall agree (the "Closing
Date").
1.2 Purchase Price.
(a) Subject to the terms and conditions of this
Agreement, the Seller shall sell, assign, transfer and convey to
the Purchaser, and the Purchaser shall purchase from the Seller,
(i) the Trust Certificate and (ii) the Seller's interest in the
Trust and the Trust Shares, free and clear of all liens, charges,
pledges, security interests, encumbrances, restrictions and
claims of any kind whatsoever, for an aggregate initial purchase
price of $500,000 (the "Initial Purchase Price") plus the Seller
fees of (x) Marden, Dubord and Stevens ("MDS"), (y) Rochman,
Platzer and Fallick ("RPF"), and (z) Preti, Flaherty, Beliveau &
Pachios ("PFBP") not to exceed $30,000 in the aggregate
(collectively, the "Seller Fees"). No later than three business
days after the execution of this Agreement, Purchaser shall
deposit in escrow its certified check or wire transfer in the
amount of $500,000 (the "Escrow Deposit") pursuant to an
agreement substantially similar to the Form of Escrow Agreement
attached as Exhibit A hereto and Purchaser shall pay $7,500 of
Seller Fees to RPF. The Escrow Deposit shall be credited against
the Initial Purchase Price at the Closing and in the event the
Closing does not occur shall be returned to the Purchaser
together with any interest thereon. Any interest on the Escrow
Deposit shall be paid to the Purchaser on a monthly basis.
(b) After the Closing and subject to the
conditions set forth in Section 6.1, upon (i) the approval of the
Bureau of Insurance of the State of Maine, the New York State
Insurance Department and any other applicable regulatory
authority of the transfer of the Trust Shares to the Purchaser
and (ii) the delivery of the Trust Shares to the Purchaser, free
and clear of all liens, charges, pledges, security interests,
encumbrances, restrictions and claims of any kind whatsoever in
accordance with the terms of the Trust and (iii) reasonable
assurances from the Corporation to the Purchaser that the Trust
Shares will be registered in the Purchaser's name upon
presentation to the Corporation's transfer agent, the Purchaser
shall deliver to the Seller an additional $330,500 less
reasonable expenses (including legal and accounting fees)
incurred by the Purchaser in connection with the transactions
contemplated hereunder, but not to exceed $70,000 (which $70,000
shall include amounts paid to Jonathan Rosner in connection
herewith) (the "Contingent Purchase Price"). The date that the
events set forth in clauses (i), (ii) and (iii) of the previous
sentence shall have occurred shall be referred to herein as the
"Approval Date."
1.3 Deliveries on the Closing Date.
(a) Delivery of the Trust Certificate shall be
made by the Seller at the Closing by delivering to the Purchaser
the Trust Certificate endorsed for transfer in blank or
accompanied by a stock power duly endorsed in blank and with any
requisite documentary or stock transfer tax stamps affixed
thereto.
(b) The Purchaser (through the Escrow Agent for
the Escrow Deposit) shall deliver the Initial Purchase Price to
the Seller at the Closing by wire transfer to an account
designated by the Seller in immediately available funds in an
amount equal to $500,000. The Purchaser shall make payment of
the Seller Fees directly to MDS and PFBP by wire transfer at the
Closing.
(c) Upon presentation of the Trust Certificate to
the Trustee by the Purchaser, the Trustee shall issue a new trust
certificate to the Purchaser registered in the name of the
Purchaser.
1.4 Deliveries on the Approval Date.
(a) Delivery of the Trust Shares shall be made
by the Trustee on the Approval Date by delivering to the
Purchaser the certificates representing the Trust Shares duly
endorsed for transfer in blank or accompanied by a stock power
duly endorsed in blank and with any requisite documentary or
stock transfer tax stamps affixed thereto.
(b) The Purchaser shall deliver the Contingent
Purchase Price to the Seller's designees (as set forth in Exhibit
B hereto) on the Approval Date in immediately available funds.
1.5 Escrow Deposit
(a) Upon the Closing, Escrow Deposit shall be
delivered to the Purchaser and credited against the amount of the
Initial Purchase Price.
(b) In the event that the Closing shall not have
occurred by December 31, 1996 or this Agreement is terminated for
any reason, the amount of the Escrow Deposit shall be returned to
the Purchaser together with any accrued but unpaid interest
thereon.
1.6 Further Documentation. Each of the Seller, the
Purchaser and the Trustee shall deliver all other documents,
instruments and writings reasonably required to be delivered by
either of them at or prior to the Closing Date or the Approval
Date pursuant to this Agreement or as otherwise required herein.
ARTICLE 2
REPRESENTATIONS OF THE SELLER
The Seller hereby represents and warrants to the
Purchaser as follows:
2.1 Authorization. The Seller has the power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby. No other action on the part of
the Seller is necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Seller and constitutes a legal,
valid and binding obligation of the Seller enforceable against
the Seller in accordance with its terms, except that: (a) such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights; and (b) the remedies of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.2 No Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated hereby will: (a) violate, or constitute a default
under, any license, permit or agreement to which the Seller is a
party, or by which the Seller is bound; or (b) violate any
statute or law or any judgment, decree, order, regulation or rule
of any court or governmental agency or body by which the Seller
is bound.
2.3 Litigation. Except as set forth on Schedule 2.3
hereto, there are no actions, suits or other proceedings pending
or, to the best of the Seller's knowledge, threatened against the
Seller or the Corporation in any court or before any governmental
commission, board or authority, nor is the Seller or the
Corporation a named subject of any order or decree of any court
or judicial body, which in either case with respect to the
Seller, would have a material adverse effect on the Seller's
ability to perform its obligations under this Agreement.
2.4 Consents. Except for the items as set forth in
Schedule 2.4 hereto, no consent, approval, authorization or order
of, or registration or filing with, any court or governmental
agency or body (U.S. or foreign) or other third party is required
in connection with the execution, delivery or performance by the
Seller or the Corporation of this Agreement.
2.5 Capitalization. The authorized capital stock of
the Corporation consists of 6,000,000 shares of Common Stock, of
which 2,992,314 shares have been issued and are outstanding on
the date hereof. The Trust Certificate and the Trust Shares are
free and clear of all liens, charges, security interests, pledges
or encumbrances of any kind. The Trust Shares have been duly and
validly issued and are fully paid and nonassessable. There are
no subscriptions, warrants, options, calls, commitments or
agreements to which the Corporation or the Seller are bound
related to the Trust Certificate or the Trust Shares.
2.6 Compliance. Except as set forth in Schedule 2.6
hereto, to the best of the Seller's knowledge after due inquiry,
the Seller is in compliance with all statutes, ordinances,
regulations and orders relating to the ownership of the Trust
Certificate and the Trust Shares.
2.7 Broker's and Finder's Fees. The Seller is not
obligated to pay, nor has he retained any broker or finder or
other person who is entitled to, any broker's or finder's fee or
any other commission or financial advisory fee based on any
agreement or undertaking made by the Seller in connection with
the transactions contemplated by this Agreement.
ARTICLE 3
REPRESENTATIONS OF THE PURCHASER
The Purchaser hereby represents and warrants to the
Seller as follows:
3.1 Corporate Organization. The Purchaser is a
Limited Liability Company duly organized and validly existing
under the laws of the State of Delaware.
3.2 Authorization. The Purchaser has the power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby. The Board of Directors or the
Manager of the Purchaser has approved this Agreement and the
transactions contemplated hereby, has authorized the execution
and delivery of this Agreement and no other proceedings on the
part of the Purchaser are necessary to consummate the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Purchaser and
constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with
its terms, except that: (a) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights; and (b) the remedies of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3.3 No Violation. Subject to the receipt of the
consents referenced in Section 3.4 of this Agreement, neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will: (a) violate any
provisions of the organizational documents of the Purchaser; (b)
violate, or constitute a default under, any agreement to which
the Purchaser is a party, or by which the Purchaser is bound,
except such violations or defaults as would not have a material
adverse effect on the Purchaser; or (c) violate any statute or
law or any judgment, decree, order, regulation or rule of any
court or governmental agency or body by which the Purchaser is
bound, except such violations as would not have a material ad-
verse effect on the Purchaser.
3.4 Consents. Except as set forth in Schedule 2.4
hereto, no consent, approval, authorization or order of or
registration or filing with, any court or governmental agency or
body or other third party is required in connection with the
execution, delivery or performance by the Purchaser of this
Agreement.
3.5 Broker's and Finder's Fees. The Purchaser is not
obligated to pay, and has not retained any broker or finder or
other person who is entitled to, any broker's or finder's fee or
any other commission or financial advisory fee based on any
agreement or undertaking made by the Purchaser in connection with
the transactions contemplated by this Agreement.
3.6 Restrictions on Transfer. The Purchaser
understands and agrees that the Trust Certificate and the Trust
Shares have not been registered under the Securities Act of 1933,
as amended, or the securities laws of any state (collectively,
"Securities Acts"), and may not be resold unless permitted under
applicable exemptions contained in such Securities Acts or upon
satisfaction of the registration or qualification requirements of
such Securities Acts. The Purchaser acknowledges that it must
bear the economic risk of its investment in the Shares for an
indefinite period of time since the Shares have not been
registered or qualified under such Securities Acts and,
therefore, cannot be sold unless they are subsequently registered
or exemptions from registration or qualification are available.
3.7 Qualification of the Purchaser.
(a) The Purchaser is acquiring the Trust
Certificate and the Trust Shares for investment purposes only,
for its own account, not as nominee or agent for any other
person, firm or corporation, and not with a view to, or for
resale in connection with, a distribution or public offering
thereof within the meaning of such Securities Acts.
(b) The Purchaser has no agreement, understanding
or arrangement with any other person, and has no intention of
entering into any such agreement, understanding or arrangement,
to sell, transfer or assign, in violation of any state or federal
securities law, any or all of the Trust Shares which would permit
any person, in violation of any state or federal securities law,
to participate in or otherwise be entitled to any rights or
interests as owner of any of the Trust Shares.
(c) The Purchaser has knowledge and experience in
financial and business matters, is capable of evaluating the
merits and risks of its investment in Trust Certificate and the
Trust Shares, and is able to bear the economic risks inherent in
its investment in the Trust Shares.
ARTICLE 4
REPRESENTATIONS OF THE TRUST
The Trust hereby represents and warrants to the
Purchaser and the Seller as follows:
4.1 No Representations. The Trust and the Trustee
make no representations whatsoever to the Purchaser or the Seller
with regard to the transaction contemplated herein. The
Purchaser and the Seller hereby acknowledge that they have not
relied upon any representation of the Trust or the Trustee and
have satisfied themselves with regard to all aspects of the
transaction contemplated hereby as a result of their own due
diligence investigations and are completely relying upon their
respective counsels with regard to the legality of all of the
actions and transactions contemplated hereby.
ARTICLE 5
COVENANTS AND AGREEMENTS
5.1 Approval of Corporation. The Seller and the
Purchaser will each take all steps required to seek the approval
of this Agreement and the transactions contemplated hereby by the
Board of Directors of the Corporation.
5.2 Filings and Consents. After the execution hereof,
each of the Seller, the Trustee and the Purchaser: (i) shall
promptly prepare and make any required filings with, and shall
thereafter promptly make any required submissions to the Bureau
of Insurance of the State of Maine, the New York State Insurance
Department, the United States Bankruptcy Court for the Eastern
District of New York and any other applicable regulatory
authority; and (ii) shall use its best efforts to obtain and to
cooperate in obtaining any consent, approval, authorization or
order of, or in making any registration or filing with, any
governmental agency or body or other third party required in
connection with the execution, delivery or performance of this
Agreement.
5.3 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its best efforts to satisfy the conditions set forth in
Article 6 hereof insofar as such matters are within its control,
and to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by
this Agreement.
ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of the Purchaser. The
obligation of the Purchaser to deliver the Initial Purchase Price
at the Closing (and the Contingent Purchase Price on the Approval
Date) is subject to satisfaction of the following conditions
precedent, any or all of which may be waived in writing by the
Purchaser at its sole discretion:
(a) The representations and warranties of the
Seller and the Trustee contained herein shall be true and correct
in all material respects at and as of the Closing Date with the
same effect as though such representations and warranties were
made at and as of the Closing Date (except for changes therein
contemplated or permitted by this Agreement);
(b) The Seller and the Trustee shall have
performed and complied with all agreements, covenants,
obligations and conditions required by this Agreement to be
performed or complied with by them on or prior to the Closing;
(c) No action, suit or proceeding against the
Corporation, Trust, the Seller or the Purchaser relating to the
consummation of any of the transactions contemplated in this
Agreement or any governmental action seeking to delay or enjoin
any such transaction shall be pending;
(d) The Purchaser and the Seller shall have
received all consents, licenses and approvals required in
connection with the execution, delivery, performance, validity
and enforceability of this Agreement (including, without
limitation, any approvals required under the rules and
regulations of the Bureau of Insurance of the State of Maine, the
New York State Insurance Department and any other applicable
regulatory authority relating to the transfer of the Trust
Certificate and the Trust Shares);
(e) The Purchaser shall have determined (in its
sole discretion) that the provisions of Sections 910 and 611-A of
the Maine Business Corporation Act (including, without
limitation, that the Purchaser shall not be subject to any
restrictions thereunder) and any other anti-takeover statute are
inapplicable to the Purchaser or the acquisition of the Trust
Certificate and the Trust Shares;
(f) The United States Bankruptcy Court for the
Eastern District of New York shall have approved this Agreement
and the transactions contemplated hereunder and such approval
shall be final and nonappealable; and
(g) The Seller shall have furnished the Purchaser
with such certificates to evidence compliance with the terms of
this Section 6.1 as may be reasonably requested by the Purchaser.
6.2 Conditions to Obligations of the Seller. The
obligation of the Seller to deliver the Trust Certificate at the
Closing is subject to the satisfaction of the following
conditions precedent, any or all of which may be waived in
writing by the Seller at its sole discretion:
(a) The representations and warranties of the
Purchaser contained herein shall be true and correct in all
material respects at and as of the Closing Date with the same
effect as though such representations and warranties were made at
and as of the Closing Date (except for changes therein
contemplated or permitted by this Agreement);
(b) The Purchaser shall have performed and
complied with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied
with by the Purchaser on or prior to the Closing;
(c) The United States Bankruptcy Court for the
Eastern District of New York shall have approved this Agreement
and the transactions contemplated hereunder and such approval
shall be final and non-appealable.
(d) No action, suit or proceeding against the
Corporation, the Trustee, the Seller or the Purchaser relating to
the consummation of any of the transactions contemplated in this
Agreement, or any governmental action seeking to delay or enjoin
any such transaction, shall be pending; and
(e) The Purchaser shall have furnished the Seller
with such certificates of its officers and others to evidence
compliance with the conditions of this Section 6.2 as may be
reasonably requested by the Seller.
ARTICLE 7
INDEMNIFICATION AND ASSUMPTION OF CERTAIN LIABILITIES
7.1 Indemnification.
(a) The Seller hereby agrees to indemnify and
hold the Purchaser harmless from any costs, including reasonable
attorneys' fees, demands, claims, actions or causes of action,
assessments, deficiencies, losses, damages, liabilities, ex-
penses, judgments or amounts paid in settlement, imposed upon or
incurred by the Purchaser as a result of (i) any breach by the
Seller of any representation or warranty contained in Article 2
of this Agreement or in any agreement made pursuant to this
Agreement; (ii) a failure by the Seller to perform in any
material respect any covenant or agreement required to be
performed by it under this Agreement; or (iii) the transactions
contemplated hereunder;
(b) The Purchaser hereby agrees to indemnify and
hold the Seller harmless from any costs, including reasonable
attorneys' fees, demands, claims, actions or causes of action,
assessments, deficiencies, losses, damages, liabilities,
expenses, judgments or amounts paid in settlement, imposed upon
or incurred by the Seller as a result of (i) any breach by the
Purchaser of any representation or warranty contained in Article
3 of this Agreement or in any agreement made pursuant to this
Agreement; or (ii) a failure by the Purchaser to perform in any
material respect a covenant or agreement required to be performed
by it under this Agreement;
(c) In either the case of paragraphs (a) or (b)
of this Section 7.1, the indemnifying party shall be entitled to
participate at its own expense in or undertake the defense of any
litigation arising out of any third party claim for which it may
be obligated to indemnify the Purchaser or the Seller (as the
case may be) pursuant to this Section 7.1 and such indemnifying
party's written consent shall be required before entering into
any settlement or compromise or consenting to the entry of any
judgment with respect to any matter for which such indemnifying
party would be liable pursuant to this Section 7.1.
7.2 Subrogation. Following indemnification as
provided in Section 7.1, the indemnifying party shall be
subrogated to all rights of the indemnified party with respect to
all third parties, firms or corporations relating to the matter
for which indemnification has been made.
7.3 Trustee Indemnification. (a) The Seller hereby
agrees to indemnify and hold the Trust and Trustee harmless from
any costs, including reasonable attorneys' fees, demands, claims,
actions or causes of action, assessments, deficiencies, losses,
damages, liabilities, expenses, judgments or amounts paid in
settlement, imposed upon or incurred by the Trust and or Trustee
as a result of the transfer of the Trust Certificate from the
Seller to the Purchaser.
(b) To the extent that the Trustee is not
otherwise entitled to indemnification (x) from the Corporation or
the Seller under the Trust or (y) from the Seller hereunder as a
result of the transfer of the Trust Certificate from the Seller
to the Purchaser, the Purchaser agrees to indemnify and hold the
Trustee harmless from any costs, including reasonable attorneys'
fees, demands, claims, actions or causes of actions, assessments,
deficiencies, losses, damages, liabilities, expenses, judgment or
amounts paid in settlement, imposed upon or incurred by the
Trustee as a result of the transfer of the Trust Certificate from
the Seller to the Purchaser, excepting only for fraud and/or
willful, wanton or reckless conduct.
ARTICLE 8
TERMINATION
8.1 Termination Prior to the Closing Date. This
Agreement may be terminated and abandoned at any time prior to
the Closing Date:
(a) by the mutual consent of the Seller and the
Purchaser;
(b) by the Seller or the Purchaser in the event
the Closing has not occurred by December 31, 1996;
(c) by the Seller, if there has been a material
violation or breach by the Purchaser of any agreement, covenant,
representation or warranty contained in this Agreement which has
rendered the satisfaction of any condition to the obligations of
the Seller impossible and such violation or breach has not been
waived in writing by the Seller;
(d) by Purchaser, if there has been a material
violation or breach by the Seller or the Trust of any agreement,
covenant, representation or warranty contained in this Agreement
which has rendered the satisfaction of any condition to the
obligations of the Purchaser impossible and such violation or
breach has not been waived in writing by the Purchaser; or
(e) by Purchaser, if the acquisition of the Trust
Certificate or the Trust Shares is disapproved by the Bureau of
Insurance of the State of Maine, the New York State Insurance
Department, the United States Bankruptcy Court for the Eastern
District of New York or any other applicable regulatory
authority.
8.2 Termination Prior to the Approval Date. This
Agreement may be terminated at any time prior to the Approval
Date:
(a) by the Purchaser in the event that the
Approval Date has not occurred by December 31, 1996;
(b) by the Seller, if there has been a material
violation or breach by the Purchaser of any agreement, covenant,
representation or warranty contained in this Agreement which has
rendered the satisfaction of any condition to the obligations of
the Seller impossible and such violation or breach has not been
waived in writing by the Seller;
(c) by Purchaser, if there has been a material
violation or breach by the Seller or the Trust of any agreement,
covenant, representation or warranty contained in this Agreement
which has rendered the satisfaction of any condition to the
obligations of the Purchaser impossible and such violation or
breach has not been waived in writing by the Purchaser; or
(d) by Purchaser, if the acquisition of the Trust
Shares is disapproved by the Bureau of Insurance of the State of
Maine, the New York State Insurance Department, the United States
Bankruptcy Court for the Eastern District of New York and any
other applicable regulatory authority.
8.3 Effect of Section 8.1 Termination. In the event
of the termination of this Agreement pursuant to Section 8.1
hereof:
(a) each party will redeliver all documents, work
papers and other material, and all copies thereof, of any other
party relating to the transactions contemplated hereby, whether
so obtained before or after the execution hereof, to the party
furnishing the same;
(b) all non-public information received by the
Purchaser with respect to the Seller or the Corporation shall be
treated as confidential and shall not be used in any way by the
Purchaser or revealed to any third party without the prior
written consent of the Seller;
(c) this Agreement shall thereafter become void
and have no effect, except that nothing herein shall relieve any
party from liability from any breach of its obligations under
this Agreement which occurs prior to the termination of this
Agreement.
8.4 Effect of Section 8.2 Termination. In the event
of the termination of this Agreement pursuant to Section 8.2
hereof, this Agreement shall thereafter become void and have no
effect, except that (i) nothing herein shall relieve any party
from liability from any breach of its obligations under this
Agreement which occurs prior to the termination of this Agreement
and (ii) no such termination shall obligate the Seller to return
all or any portion of the Purchase Price or the Purchaser to
return the Trust Certificate.
ARTICLE 9
MISCELLANEOUS
9.1 Survival. The representations and warranties made
by the parties in this Agreement shall expire with, and be
terminated and extinguished on the fifth anniversary of the
Closing Date, and thereafter neither the Seller nor the
Purchaser, nor any officer, director or principal thereof, shall
have any liability whatsoever with respect to any such
representation or warranty.
9.2 Notices. All notices, requests, instructions or
documents hereunder shall be in writing and delivered personally
or by Federal Express, or sent by United States registered or
certified mail, postage prepaid as follows:
(i) if to the Seller:
Bernhard G. Gershuny
2519 N.W. 10th Street
Delray Beach, Florida 33445
with a copy to:
Severin Beliveau, Esq.
Michael Sheehan, Esq.
Preti, Flaherty, Beliveau & Pachios
443 Congress Street
P.O. Box 11410
Portland, Maine 04104
(ii) if to the Purchaser:
Ballantrae Partners, L.L.C.
75 West End Avenue, Suite R-12E
New York, New York 10023
with a copy to:
Lawrence T. Yanowitch, Esq.
Tucker, Flyer & Lewis
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036
Michael E. High, Esq.
Drummond, Woodsum & Macmahon
245 Commercial Street
P.O. Box 9781
Portland, Maine 04104
(iii) If to the Trustee:
Stephen F. Dubord, Esq.
44 Elm Street
P.O. Box 708
Waterville, Maine 04901
or such other address as any party may designate by written
notice to the other parties.
9.3 Entire Agreement. This Agreement and the Exhibits
and Schedules hereto contain the entire agreement between the
parties hereto with respect to the transaction contemplated here-
in, and no modification hereof shall be effective unless in
writing and signed by the party against which it is sought to be
enforced. This Agreement supersedes all prior understandings,
negotiations and agreements relating to the transactions
contemplated herein.
9.4 Successors and Assigns. The terms, covenants and
conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors
and assigns; provided, however, that neither party may assign its
rights and obligations under this Agreement without the prior
written consent of the other party, except that the Seller's
consent shall not be required for the Purchaser to assign its
rights and obligations under this Agreement to a subsidiary or
affiliated entity if the Purchaser guarantees performance of such
subsidiary's or affiliate's obligations under this Agreement.
9.5 Expenses. Except as otherwise provided under
Article 1 hereof or the Trust Agreement, each of the Seller, the
Trustee and the Purchaser shall bear its own costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby.
9.6 Severability. If any provision of this Agreement
shall be determined by a court of competent jurisdiction to be
void and of no effect, the provisions of this Agreement shall be
deemed amended to delete or modify, as necessary, the offending
provision, and this Agreement as so amended or modified shall not
be rendered unenforceable or impaired but shall remain in force
to the fullest extent possible in keeping with the intention of
the parties hereto.
9.7 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Maine, without regard to its provisions relating to choice of
laws or conflicts of laws.
9.8 Headings. The headings in this Agreement are
included herein for convenience of reference only, and shall not
constitute a part of this Agreement for any other purpose. All
pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the
context shall require.
9.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same
instrument.
9.10 Waiver. Any of the terms or conditions of this
Agreement which may be lawfully waived may be waived in writing
at any time by the party which is entitled to the benefits
thereof. Any waiver of any of the provisions of this Agreement
by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure
to enforce any provision of this Agreement shall be deemed to or
shall constitute a waiver of such provision and no waiver of any
of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
9.11 Specific Performance. The Purchaser and the
Seller agree that the Shares are unique and special, that
monetary damages would not adequately compensate the Purchaser as
a result of the Seller's breach of any of the terms and
conditions of this Agreement and that the Purchaser would be
irreparably harmed by the Seller's failure to consummate the sale
of the Trust Certificate or the Trust Shares. Accordingly, the
parties agree that the Purchaser may enforce its rights under
this Agreement in a court of equity through the remedy of
specific performance and such other injunctive relief as may be
granted in connection therewith.
IN WITNESS WHEREOF, this Agreement has been duly
executed by the parties hereto as of the date first above
written.
BERNHARD G. GERSHUNY
/s/ Bernhard G. Gershuny
BALLANTRAE PARTNERS, L.L.C.
/s/ Murry N. Gunty
Name: Murry N. Gunty
Title: Managing Director
TRUSTEE
/s/ Stephen F. Dubord
Stephen F. Dubord
Exhibit A
FORM OF ESCROW AGREEMENT
Bernhard D. Gershuny ("Seller"), and Ballantrae Partners,
L.L.C., a Delaware Limited Liability Company ("Purchaser"), in
order to designate Franklin National Bank of Washington, D.C.
(the "Escrow Agent") as the escrow agent of the Purchaser and
Seller for the purposes and upon the terms and conditions herein
set forth, do hereby represent and warrant to, and agree with
each other and the Escrow Agent, as follows:
1. Appointment. The Escrow Agent is hereby appointed
escrow agent for the Purchaser and the Seller with respect to the
"Escrow Fund" as that term is herein defined.
2. The Escrow Fund. Concurrently with the execution and
delivery hereof, the Purchaser and the Seller have delivered to
the Escrow Agent in accordance with the terms hereof, the amount
of Five Hundred Thousand Dollars ($500,000) (the "Escrow Fund")
and direct that it be held and disposed of by the Escrow Agent as
herein provided. Any interest on the Escrow Fund shall be paid
by the Escrow Agent to the Purchaser on a monthly basis.
3. Escrow Agent's Duties and Authority to Act.
(a) The Escrow Agent is hereby authorized and directed to
deliver the Escrow Fund, or any portion thereof, only at such
times in such amounts and upon such terms and conditions as
directed in writing by Purchaser in accordance with the Purchase
Agreement dated as of May 14, 1996 by and among Purchaser, Seller
and Stephen F. Dubord, as Trustee.
(b) The Escrow Agent is authorized and directed by the
Purchaser to withhold from the Escrow Fund, prior to distribution
of said funds and prior to termination of this Escrow Agreement,
its unpaid charges for services hereunder and additional
reasonable amounts sufficient to compensate it for additional
services imposed upon it as a result of additional
responsibilities in connection with or arising on account of this
Escrow Agreement or as a result of litigation or threatened
litigation and to reimburse it for reasonable attorney's fees,
disbursements, expenses, costs and damages, if any, suffered or
incurred hereunder.
4. Standards of Care. The Purchaser and the Seller agree
that the following provisions shall control with respect to the
rights, duties, liabilities, privileges and immunities of the
Escrow Agent:
(a) The Escrow Agent is not a party to, and is not
bound by, or charged with notice of, any agreement out of
which this escrow may arise.
(b) The Escrow Agent acts hereunder as a depository
only, and is not responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or
validity of the subject matter of the escrow, or any part
thereof, or for the form or execution thereof, or for the
identity or authority of any person executing or depositing
it.
(c) The Escrow Agent shall be protected in acting upon
any written notice, request, waiver, consent, certificate,
receipt, authorization, power of attorney or other paper or
document which the Escrow Agent in good faith believes to be
genuine and what it purports to be.
(d) The Escrow Agent may consult with legal counsel in
the event of any dispute or question as to the construction
of any of the provisions hereof or its duties hereunder, and
it shall incur no liability and shall be fully protected in
acting in accordance with the opinion and instructions of
such counsel.
(e) The Escrow Agent shall not be liable for anything
it may do or refrain from doing in connection with this
Escrow Agreement unless caused by its own gross negligence,
willful misconduct or omission.
5. Investments. Escrow Agent shall hold the Escrow Fund
separate and apart from any other funds or accounts maintained by
Escrow Agent in one or more accounts maintained in a Federally-
insured depository institution in accordance with the written
instructions of Seller or its designee or designees. Escrow
Agent shall not be liable for failure to invest the Escrow Fund,
or any part thereof, absent sufficient written direction.
6. Scope of Undertaking. Escrow Agent's duties and
responsibilities shall be purely ministerial and shall be limited
to those expressly set forth in this Escrow Agreement. Escrow
Agent is not a principal, participant or beneficiary in any
transaction underlying this Escrow Agreement and shall have no
duty to inquire beyond the terms and provisions hereof. Escrow
Agent shall have no responsibility or obligation of any kind in
connection with this Escrow Agreement or the Escrow Fund, and
shall not be required to deliver the same or any part thereof or
take any action with respect to any matters that might arise in
connection therewith, other than as expressly herein provided.
Escrow Agent shall not be required to exercise any discretion
hereunder. Escrow Agent shall not be liable for any error in
judgment, any act or omission, any mistake or law or fact, or for
anything it may do or refrain from doing in connection herewith,
except for its own willful misconduct or gross negligence. It is
the intention of the parties hereto that Escrow Agent shall never
be required to use, advance or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
or the exercise of any of its rights and powers hereunder.
7. Termination. This Escrow Agreement shall terminate
without further action of any party when all of the terms hereof
have been fully performed, whereupon Escrow Agent's obligations
hereunder shall terminate.
8. Fee. For normal services hereunder, Seller shall pay
to the Escrow Agent a fee of Five Hundred Dollars ($500) for each
one-year period during the term of this Escrow Agreement plus
reasonable out-of-pocket expenses incurred by the Escrow Agent in
the performance of its services hereunder. For services in
addition to normal services, Seller shall pay to the Escrow Agent
a reasonable fee based upon the time spent by the Escrow Agent's
officers, employees or agents in performing such additional
services plus reasonable out-of-pocket expenses.
9. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the District of Columbia
(exclusive of the conflict of law provisions thereof) and any
action arising out of this Escrow Agreement shall be maintained
in any court of competent jurisdiction in the District of
Columbia. Purchaser, Seller and the Escrow Agent each hereby
submit themselves to the jurisdiction of any court of competent
jurisdiction of the District of Columbia for the purpose of
resolving any disputes hereunder.
10. Notice. Any notice required or permitted hereunder
shall be in writing and shall be sufficiently given if personally
delivered or mailed by certified or registered mail, return
receipt requested, addressed as follows:
If to Purchaser:
Ballantrae Partners, L.L.C.
75 West End Avenue
Suite R-12E
New York, New York 10023
with copy to:
Lawrence T. Yanowitch, Esq.
Tucker, Flyer & Lewis
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036
and
Michael E. High, Esq.
Drummond Woodsum & MacMahon
245 Commercial Street
P.O. Box 9781
Portland, Maine 04104
If to Seller:
Bernhard G. Gershuny
2519 N.W. 10th Street
Delray Beach, Florida
with copy to:
Severin Beliveau, Esq.
Michael Sheehan, Esq.
Preti, Flaherty, Beliveau & Pachios
443 Congress Street
P.O. Box 11410
Portland, Maine 04104
If to the Escrow Agent:
Franklin National Bank
1722 I Street, N.W.
Washington, D.C. 20006
Attn: Susan Schumacher
(or to such other address as may be stated in written notice
furnished by any party to the other party), and shall be deemed
to have been delivered as of the date so personally delivered or
mailed.
IN WITNESS WHEREOF, the parties hereto have caused this
Escrow Agreement to be executed this 14th day of May, 1996.
Purchaser:
By:
Print Name:
Title:
Seller:
By:
Print Name:
Title:
The Escrow Agent hereby acknowledges receipt of the Escrow
Fund and accepts the same subject to the terms and conditions of
this Escrow Agreement on this __ day of May, 1996.
ESCROW AGENT:
BY:
Print Name: Susan Schumacher
Title:
SCHEDULE 2.3
1. The Official Committee of Unsecured Creditors of American
Motor Club, Inc. v. Bernhard Gershuny, et al., Dkt. No. 92
CV 2524, United States Bankruptcy Court for the Eastern
District of New York
2. United States v. David Gershuny, 95-CR1053 (SDNY).
SCHEDULE 2.4
1. Any approval required by Bureau of Insurance of the State of
Maine for the transfer of the Trust Certificate or the Trust
Shares
2. Any approval required by New York State Insurance Department
for the transfer of the Trust Certificate or the Trust
Shares
3. Approval of United States Bankruptcy Court for the Eastern
District of New York for the transfer of the Trust
Certificate or the Trust Shares
SCHEDULE 2.6
None
Exhibit 0.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
BALLANTRAE PARTNERS, L.L.C.
THIS LIMITED LIABILITY COMPANY AGREEMENT is made and
effective for all purposes and in all respects as of the 10th day
of May, 1996, by and among the undersigned parties.
WHEREAS, the parties hereto desire to join together in a
limited liability company for the purposes set forth in paragraph
4 hereof, under and pursuant to the Act (as hereafter defined)
and other relevant laws of the State of Delaware; and
WHEREAS, the parties hereto desire to set forth herein their
agreements and understandings.
NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound,
hereby covenant and agree as follows:
1. Definitions.
(a) "Act" shall mean and refer to the Delaware Limited
Liability Company Act Delaware Code Annotated, Title 6, Sections
18-101 et seq. (1992), as the same may be amended from time to
time.
(b) "Agreement" shall mean and refer to this Limited
Liability Company Agreement including all Exhibits hereto, as
originally executed and as amended from time to time in writing.
(c) "Bankruptcy" and "Bankrupt" (and any derivations
thereof) shall mean and refer to an adjudication of bankruptcy
under Title 11 of the United States Code, as amended, an
assignment for the benefit of creditors and/or an adjudication of
insolvency under any state or local insolvency statute or
procedure or the occurrence of any other event of bankruptcy
under the Act, including specifically the provisions of Section
18-304 thereof).
(d) "Bona Fide Offer" shall mean and refer to a good
faith offer in writing to a Member by a person or entity who or
which is not affiliated with such Member, to purchase all (but
not less than all) of the Interest of such Member, which offer
shall, among other things, set forth all other relevant terms and
conditions of the proposed purchase.
(e) "Capital Account" shall, with respect to each
Member, mean and refer to the separate "book" account for such
Member to be established and maintained in all events in the
manner provided under, and in accordance with, Treasury Regula-
tion Section 1.704-1(b)(2)(iv), as amended, and in accordance
with the other provisions of Treasury Regulation Section
1.704-1(b) that must be complied with in order for the Capital
Accounts to be determined and maintained in accordance with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(iv). In
furtherance of and consistent with the foregoing, a Member's
Capital Account shall include generally, without limitation, the
Capital Contributions of such Member (as of any particular date),
(i) increased by such Member's distributive share of profits,
income and gain of the Company (including, if such date is not
the close of the Company Accounting Year, the distributive share
of profits, income and gain of the Company for the period from
the close of the last Company Accounting Year to such date), and
(ii) decreased by such Member's distributive share of losses and
deductions of the Company and distributions by the Company to
such Member (including, if such date is not the close of the
Company Accounting Year, the distributive share of losses and
deductions of the Company and distributions by the Company during
the period from the close of the last Company Accounting Year to
such date). For purposes of the foregoing, distributions of
property shall result in a decrease in a Member's Capital Account
equal to the agreed fair market value of such property
distributed (less the amount of indebtedness, if any, of the
Company which is assumed by such Member and/or the amount of
indebtedness, if any, to which such property is subject, as of
the date of distribution) by the Company to such Member.
(f) "Capital Contribution" or "Capital Contributions"
shall mean and refer to the amount of cash, and/or the agreed
fair market value of property (less the amount of indebtedness,
if any, of such Member which is assumed by the Company and/or the
amount of indebtedness, if any, to which such property is sub-
ject, as of the date of contribution, without regard to the
provisions of I.R.C. Section 7701(g)), actually contributed by a
Member to the capital of the Company, as well as any additional
contributions actually made pursuant to this Agreement,
including, but not limited to, any amounts paid by a Member
(except to the extent indemnification is made by another Member)
in respect of any claims, liabilities or obligations against the
Company and/or pursuant to any guaranty of Company indebtedness
or otherwise by such Member.
(g) "Certificate" shall mean and refer to that certain
Certificate of Formation of the Company filed with the Office of
the Secretary of State of Delaware, as the same may be amended
from time to time.
(h) "Company" shall mean and refer to Ballantrae
Partners, L.L.C.
(i) "Company Accounting Year" shall mean and refer to
the accounting year of the Company, ending December 31 of each
year.
(j) "Company Assets", at any particular time, shall
mean and refer to the Company Property and any other assets or
property (tangible or intangible, choate or inchoate, fixed or
contingent) of the Company.
(k) "Company Property" shall mean and refer to the
Company's entire legal and beneficial right, title and interest
in and to the assets set forth in Exhibit B hereto.
(l) "Exhibit A" shall mean and refer to the original
Exhibit A to this Agreement, relating to the names, addresses and
Percentage Interests of the Members, as the same may be amended
from time to time.
(m) "Exhibit B" shall mean and refer to the original
Exhibit B to this Agreement, relating to the description of the
Company Property, as the same may be amended from time to time.
(n) "Interest" in the Company shall mean and refer to
the entire ownership interest of a Member in the Company at any
particular time, including the right of such Member to any and
all benefits to which a Member may be entitled as provided in
this Agreement and under the Act, together with the obligations
of such Member to comply with all of the terms and provisions of
this Agreement and the Act.
(o) "I.R.C." shall mean and refer to the Internal
Revenue Code of 1986, as amended, or any similar Federal internal
revenue law enacted in substitution of the Internal Revenue Code
of 1986, and the corresponding revenue law (and sections thereof)
of any state or jurisdiction.
(p) "Manager" shall mean and refer initially to Gunty
& Co., a Delaware corporation, or any successor(s) thereto,
subject to the provisions of subparagraph 11(b) hereof.
(q) "Member" or "Members" shall mean and refer to
those persons and/or entities designated as such on Exhibit A
attached hereto, either individually or collectively.
(r) "Net Cash Flow" shall mean and refer to the total
cash receipts of the Company, plus any other funds (including
amounts previously set aside as reserves by the Manager, where
and to the extent the Manager no longer regards such reserves as
reasonably necessary in the efficient conduct of the Company
business) deemed available for distribution and designated as Net
Cash Flow by the Manager, in its reasonable discretion, less the
total cash disbursements of the Company (such as, but not limited
to, operating expenses of the Company and repayments of any loans
made to the Company by any person or entity whatsoever (including
Members)), and less such reserves or other uses of cash as the
Manager, in its reasonable discretion, shall deem to be necessary
for the efficient conduct of the Company business.
(s) "Percentage Interest" of a Member shall mean and
refer to the percentage participation in the Company of such
Member as set forth opposite the name of such Member under the
column "Percentage Interest" in Exhibit A attached hereto, as
such percentage may be adjusted from time to time pursuant to the
terms hereof.
(t) "Term" shall mean and refer to the period of time
that the Company shall continue in existence, commencing as of
the date hereof and ending on December 31, 2036, unless sooner
terminated in accordance with the provisions of paragraph 15
hereof.
2. Name of Company. The name of the Company shall be
"Ballantrae Partners, L.L.C.".
3. Formation of Company. The Members hereby authorize
Tucker, Flyer & Lewis, a professional corporation, to act as
organizer in order to form the Company under and pursuant to the
Act by filing the Certificate on behalf of themselves and any
additional or substituted Members. This Agreement is subject to,
and governed by, the Act and the Certificate of the Company filed
with the Office of the Secretary of State of Delaware. In the
event of a direct conflict between the provisions of this Agree-
ment and either the mandatory provisions of the Act or the
Certificate, such mandatory provisions of the Act or the
Certificate (as the case may be) will be controlling.
4. Company Purposes. The general purposes of the Company
are (i) to acquire, own, hold, manage and/or, if and when
necessary or desirable, to sell or otherwise dispose of the
Company Property (or any portion thereof) for the production of a
profit, and (ii) to engage in any and all activities incidental
or related to the foregoing or to otherwise engage in any lawful
business or activity permitted under the Act.
5. Principal Office; Registered Office and Registered
Agent. The principal office of the Company shall be located at
75 West End Avenue, Suite R12E, New York, New York 10023. The
Manager may change the principal office of the Company and/or
establish additional offices of the Company, either within or
without the State of Delaware, as the Manager may deem advisable.
The registered office of the Company shall be located at c/o The
Corporation Trust Company, The Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801, located in the County
of New Castle. The registered agent (the "Registered Agent") of
the Company in the State of Delaware for service of process shall
be The Corporation Trust Company, which is a Delaware
corporation. The Manager may, in its sole and absolute
discretion, change the Registered Agent to a person or entity who
or which qualifies as a registered agent under the Act.
6. Capital Contributions.
(a) Each Member hereby agrees to contribute to the
capital of the Company that sum set forth after the name of such
Member in Exhibit A attached hereto, for which such Member shall
receive appropriate credit to his or its Capital Account.
(b) In the event that at any time (or from time to
time) additional funds are required by the Company for or in
respect of its business or any of its obligations, expenses,
costs, liabilities or expenditures for any Company Accounting
Year, then the Manager, acting for and on behalf of, and in the
name of, the Company, shall have the right (but not the
obligation) to cause the Company to borrow said additional funds,
with interest payable at then-prevailing rates, from commercial
banks, savings and loan associations and/or other lending
institutions or other persons or entities (including Members).
(c) No Member shall be required to make any Capital
Contribution to the Company beyond the amounts set forth in this
paragraph 6, except as may be agreed to by such Member in writ-
ing.
(d) No interest shall accrue or be payable to any
Member by reason of his or its Capital Contribution or his or its
Capital Account.
(e) The foregoing provisions of this paragraph 6 are
not intended to be for the benefit of any creditor or other
person or entity (other than a Member in his or its capacity as a
member of the Company) to whom or which any debts, liabilities or
obligations are owed by (or who or which otherwise has any claim
against) the Company or any of the Members; and no such creditor
or other person or entity shall obtain any right under any of the
foregoing provision against the Company or any of the Members by
reason of any debt, liability or obligation (or otherwise).
(f) No Member (in his or its capacity as a Member)
shall be personally liable for losses, costs, expenses,
liabilities or obligations of the Company in excess of his or its
Capital Contributions or other obligations required under this
paragraph 6, without such Member's prior written consent.
7. Allocation of Profit and Loss.
(a) "Profit" and "Loss" shall, for purposes of this
paragraph 7, mean, for each fiscal year of the Company or other
period, an amount equal to the Company's taxable income, gain,
loss or deduction for such year or period, determined by the
Company's certified public accountants in accordance with I.R.C.
Section 703(a), with the following adjustments:
(i) All income or gain of the Company that is
exempt from Federal income tax and not otherwise taken into
account in computing Profit and Loss pursuant to this subpara-
graph 7(a) shall be added to such taxable income, gain, loss or
deduction.
(ii) Any expenditure of the Company described in
I.R.C. Section 705(a)(2)(B) or treated as an expenditure de-
scribed in such Section and not otherwise taken into account in
computing Profit and Loss pursuant to this paragraph 7 shall be
subtracted from such taxable income, gain, loss or deduction.
(b) Subject to the provisions of subparagraph 7(c)
hereof, the distributive shares of each item of Profit, Loss,
deduction, credit or basis of the Company for any Company
Accounting Year or other period shall be allocated among all
Members, pro rata, in proportion to their respective Percentage
Interests.
(c) The Company, with the review and concurrence of
the Company's certified public accountants, shall allocate
taxable income, gain, loss, credit and deduction (or items
thereof) arising in any Company Accounting Year in a manner other
than as provided in subparagraph 7(b) hereof if, and to the
extent that, the allocations otherwise provided under this
paragraph 7 would not be permissible under I.R.C. Sections 704(b)
and/or 704(c). Any allocation made pursuant to, and in accor-
dance with, this subparagraph 7(c) shall be deemed to be a
complete substitute for the allocation otherwise provided in
subparagraph 7(b) hereof, and no amendment of this Agreement or
approval of any Member shall be required with respect thereto,
and each Member shall, for all purposes and in all respects, be
deemed to have approved any such reasonable allocation, unless
such allocation under this subparagraph 7(c) would, or could,
have a materially adverse effect on the balance of each Member's
Capital Account relative to the balance of each Member's Capital
Account had the allocation been made as provided for under
subparagraph 7(b) hereof.
(d) If a Company Interest is transferred or assigned
during a Company Accounting Year, that part of any item of
Profit, Loss, income, gain, deduction, credit or basis allocated
pursuant to this paragraph 7 with respect to the Company Interest
so transferred shall, in the reasonable discretion of the
Manager, either (i) be based on segmentization of the Company
Accounting Year between the transferor and the transferee or (ii)
be allocated between the transferor and the transferee in propor-
tion to the number of days in such Company Accounting Year during
which each owned such Company Interest, as disclosed by the
Company books and records.
8. Distributions of Net Cash Flow. Except to the extent
that Net Cash Flow shall be distributed upon the termination of
the Company pursuant to subparagraph 15(b) hereof, the Net Cash
Flow of the Company shall be paid or distributed annually during
each Company Accounting Year (or more or less frequently if the
Manager shall, in its sole discretion, deem advisable) to the
Members, pro rata, in proportion to their respective Percentage
Interests.
9. Resignation; Return of Capital.
(a) Notwithstanding anything expressly or implicitly
to the contrary provided under the Act, including specifically
the provisions of Section 18-603 thereof, no Member shall have
the right, power or authority to resign from the Company and
withdraw his or its Capital Contribution therefrom or to demand
and receive property of the Company or any distribution in return
for his or its Capital Contribution prior to the expiration of
the Term; provided, however, that, following the expiration of
the Term, any Member, upon ninety (90) days' written notice by
such Member to the Manager, shall be entitled to receive a
distribution equal to the "fair value" of his or its Interest as
of the date of resignation, provided that the Company Assets are
then sufficient to cover all of the Company's liabilities, both
fixed and contingent, including liabilities to Members in respect
of their Capital Accounts. For purposes of this paragraph 9, the
term "fair value" shall conclusively be deemed to mean the "Fair
Market Value" of the Interest of the resigning Member, as defined
and determined in accordance with the provisions of paragraph 16
hereof. Other than in dissolution of the Company, upon the
resignation of a Member and the payment of "fair value" to such
Member, the Percentage Interest of such Member shall be allocated
among all other Members, pro rata, in proportion to their respec-
tive Percentage Interests. Neither the Manager nor any of its
directors, officers or stockholders shall under any circumstances
have any personal liability whatsoever with respect to the
payment of "fair value" to any withdrawing Member under this
paragraph 9.
(b) In the event that any Member (the "Withdrawing
Member") resigns or otherwise withdraws from the Company in
breach of this Agreement, including specifically, the provisions
of subparagraph 9(a) above, such resignation or withdrawal shall,
ipso facto, without any further action by the Company or any
Members, constitute a default by the Defaulting Member under this
Agreement, for which the Company and the other Members shall have
all of their rights and remedies, at law or in equity, under this
Agreement or under applicable law, including, without limitation,
the right to recover damages from the Withdrawing Member, which
damages may offset the amount otherwise distributable to the
Withdrawing Member under the provisions of subparagraph 9(a)
above.
10. Legal Title to Company Assets.
(a) Legal title to the Company Assets shall be held in
the name of the Company or in any other manner which the Manager
determines to be in the best interests of the Company. Without
limiting the foregoing grant of authority, the Manager may take
and hold title or arrange to have title taken and held in the
name of others, as trustees or nominees for and on behalf of the
Company.
(b) It is expressly understood and agreed that the
manner of holding title to the Company Property (or any part
thereof) and the other Company Assets (or any part thereof) is
solely for the convenience of the Company. Accordingly, the
spouse, heirs, executors or administrators, distributees,
directors, officers, stockholders, successors or assigns of any
Member shall have no right, title or interest in or to any of the
Company Property and/or the other Company Assets by reason of the
manner in which title is held; rather, the Company Property and
the other Company Assets shall be subject to the terms of this
Agreement. It is further understood and agreed that any Member's
Interest shall be considered personalty and not a real property
interest. Accordingly, no Member shall have the right to request
a partition of the Company Property (or any part thereof) or any
other Company Assets (or any part thereof).
11. Management; Indemnification.
(a) (i) No Member (in his or its capacity as a member
of the Company) shall have or exercise any rights in connection
with the management of the Company business. The Management of
the Company and the Company business shall in every respect be
the full, exclusive and complete responsibility of the Manager,
which, as manager, shall have all rights, powers and authorities
permitted by the laws of the State of Delaware, and all decisions
made for and on behalf of the Company by the Manager shall be
binding upon the Company. The Manager (in its capacity as the
manager of the Company) shall devote to the management of the
business of the Company so much of its time as the Manager, in
its reasonable discretion, deems reasonably necessary to
efficient operation. The Manager (acting for and on behalf of
the Company), in extension and not in limitation of the rights
and powers given it by law or by the other provisions of this
Agreement, shall, in its reasonable discretion, have the full and
entire right, power and authority, in the management of the
Company business, to do any and all acts and things necessary,
proper, convenient or advisable to effectuate the purposes of the
Company.
(ii) In furtherance of the provisions of
subparagraph 11(a)(i) hereof, the Manager shall, in the exercise
of its reasonable discretion, have the right, power and authority
(without regard to the Term), acting for and on behalf of the
Company, to enter into and execute any contract, agreement,
mortgage or other instrument or document required or otherwise
appropriate to sell, pledge or convey the Company Property (or
any substantial portion thereof) and to carry on any and all
other activities related to the business of the Company, to
borrow money and execute promissory notes (including notes which
confess judgment), to secure the same by mortgage (which term
"mortgage" is hereby defined for all purposes of this Agreement
to include deeds of trust, financing statements, chattel
mortgages, pledges, conditional sales contracts and similar
security agreements) upon the Company Property (or any other
Company Assets), to renew or extend any and all such loans or
notes, and to convey the Company Property (or any other Company
Assets) in fee simple by deed, mortgage or otherwise.
(b) The Manager designated hereunder may resign at any
time, in its sole and absolute discretion, by giving written
notice to the Members at least ten (10) days prior to the
effective date of such resignation. In the event of the
resignation, retirement, withdrawal, dissolution, liquidation or
Bankruptcy of the Manager designated hereunder, a successor
Manager may be appointed by a vote of Members owning at least
seventy-five percent (75%) of the Percentage Interests.
(c) Notwithstanding anything to the contrary contained
in this Agreement or set forth under the Act, each Member
acknowledges and agrees, on behalf of itself and its directors,
officers, stockholders, and other affiliates, that it has
fiduciary duties to the Company and the other Members with
respect to the business of the Company and the performance of
such Member's activities in connection therewith.
(d) In furtherance of the provisions of this paragraph
11, (i) the Manager may contract with any person or entity,
including, without limitation, any of the Members, any entity in
which any of the Members may have an interest and/or any
affiliated or related entity, at reasonable and competitive rates
of compensation, commission or remuneration, for the performance
of any and all services which may at any time be necessary,
proper, convenient or advisable to carry on the business of the
Company; and (ii) the Manager may establish a Management
Committee consisting of at least two (2) but no more than seven
(7) persons. The Manager may delegate to the Management
Committee all or any portion of the authority of the Manager.
Each member of the Management Committee shall have the title of
Managing Director of the Company.
(e) (i) The Manager and any Managing Director shall
be indemnified and held harmless by the Company from and against
any and all claims, demands, liabilities, costs, damages and
causes of action, of any nature whatsoever, arising out of or
incidental to the Manager's or the Managing Director's management
of the Company's affairs, or as otherwise permitted under the
Act, except where the claim at issue is based upon the material
and adverse breach by the Manager or the Managing Director of any
material provision of this Agreement.
(ii) The Manager and any Managing Director shall
not be liable, responsible or accountable in damages or otherwise
to the Members or to the Company for any acts performed in good
faith and within the scope of this Agreement; provided, however,
that, as noted in subparagraph 11(e)(i) above, the Manager or the
Managing Director shall be liable for its actions and/or
omissions to the extent the same are attributable to any material
and adverse breach of any material provision of this Agreement by
the Manager or the Managing Director. Neither the Manager nor
the Managing Director shall be personally liable for the return
of the Capital Accounts of the Members.
(iii) The indemnification authorized by this
subparagraph 11(e) shall include, but not be limited to, payment
of (A) reasonable attorneys' fees or other expenses incurred in
connection with settlement or in any finally-adjudicated legal
proceeding, and (B) the removal of any liens affecting any
property of the indemnitee.
(iv) The indemnification rights contained in
this subparagraph 11(e) shall be cumulative of, and in addition
to, any and all rights, remedies and recourses to which the
Manager or any Managing Director shall be entitled, whether
pursuant to the provisions of this Agreement, at law or in
equity. Indemnifications shall be made solely and entirely from
the Company Assets, and no Member shall be personally liable to
the indemnitee under this subparagraph 11(e). Furthermore, the
provisions of this subparagraph 11(e) are not intended to be for
the benefit of any creditor or other person or entity to whom or
which any debts, liabilities or obligations are owed by (or who
or which otherwise has a claim against) the indemnitee; and no
such creditor or other person or entity shall obtain any right
under the provisions of this subparagraph 11(e) against the
Company or any of the Members by reason of any debt, liability or
obligation of (or other claim against) the indemnitee.
(f) The Manager and/or any Member shall be fully and
entirely reimbursed by the Company for any and all reasonable
out-of-pocket costs and expenses incurred by the Manager or any
such Member (as the case may be) in direct connection with the
formation of the Company, the acquisition or disposition of any
of the Company Assets, the financing or refinancing of any
Company indebtedness and/or the management and supervision of the
Company business; provided, however, that, with respect to any
such reimbursement, the Manager or any such Member (as the case
may be) shall present the Company with such invoices, in such
detail and with such receipts, as are reasonably necessary to
substantiate such out-of-pocket costs and expenses.
(g) Notwithstanding anything to contrary contained in
this Agreement, including specifically, the provisions of para-
graph 13 hereof, it is understood and agreed that the prior
written consent of Members owning one hundred percent (100%) of
the total Percentage Interests shall be required for (i) the
sale, exchange, pledge or other disposition of the Company
Property (or any portion thereof); (ii) the acquisition of any
additional Company Property; or (iii) the voting of any
securities that constitute Company Property.
12. Bank Accounts, Accounting and Records.
(a) The funds of the Company shall be deposited in
such separate Company Federally-insured bank account or accounts
as shall be determined by the Manager.
(b) The books and records of the Company shall be
kept, and the financial condition and the results of its
operations recorded, in accordance with the accounting methods
elected to be followed by the Company for Federal income tax
purposes. The books and records of the Company shall reflect all
Company transactions and shall be appropriate and adequate for
the Company's business. The fiscal year of the Company for
financial reporting and for Federal income tax purposes shall be
the Company Accounting Year.
(c) The Company shall keep at its principal office or
at such other or additional offices (either within or without the
State of Delaware) as the Manager shall deem advisable (i) books
and records setting forth a current list of the full name and
last known address of each Member, (ii) a copy of the Certificate
and this Agreement, and all amendments thereto, (iii) copies of
the Company's Federal, state and local income tax returns and
personal property or intangible property tax returns, if any, for
the three (3) most recent Company Accounting Years, (iv) copies
of any financial statements of the Company for the three (3) most
recent Company Accounting Years, which reflect the Company's
state of business and financial condition during such periods and
(v) any other information and/or records required by the Act.
Each Member (and his or its duly authorized representative) shall
have access to the books and records of the Company and the right
to inspect and copy them, provided such request is reasonable, is
done at reasonable hours and is done at such Member's personal
expense.
(d) The Company may make all elections for Federal
income tax purposes upon the decision of the Manager; provided,
however, that, in case of a transfer of all or part of the
Interest of any Member or the distribution to a Member by the
Company of its property, the election pursuant to I.R.C. Sections
734, 743 and 754 to adjust the basis of the Company Assets shall
be timely made.
13. Assignability of Interests.
(a) Subject to the provisions of subparagraph 13(b)
hereof, no Member shall sell, assign, transfer, convey, encumber,
pledge or in any way alienate all or any part of his or its legal
or beneficial Interest in the Company (each, a "Transfer"),
without the prior written consent of the Manager (which consent
may be granted or withheld in the sole and absolute discretion of
the Manager). Notwithstanding the foregoing or anything to the
contrary contained herein, a permitted assignee of a Member shall
not become a Substituted Member unless: (i) the assigning Member
so provides in the instrument of assignment, (ii) the assignee
agrees in writing to be bound by the provisions of this
Agreement, and (iii) the assigning Member, the assignee and any
other required signatory parties execute an amendment to this
Agreement and execute and record an amendment to the Certificate
(if necessary and appropriate), each of which shall reflect,
among other things, the admission of the assignee as a Substitute
Member and the withdrawal of the assigning Member from the
Company.
(b) Notwithstanding anything contained in this Agree-
ment to the contrary, it is expressly understood and agreed that
no Transfer of any Interest in the Company (or any part thereof)
and no substitution of a Member, shall be permitted under any
circumstances whatsoever if such Transfer and/or substitution
would, or could, (i) jeopardize the limited liability status of
the Company for Federal and state income tax purposes; or (ii)
cause a termination of the Company within the meaning of I.R.C.
Section 708(b); or (iii) violate or cause the Company to violate,
any state or Federal securities law or any other applicable law
or governmental rule or regulation.
(c) Notwithstanding anything to the contrary contained
in this Agreement, the Manager shall not have the right to admit
additional Members to the Company without the prior written
consent of all of the Members. Any authorized admission of
additional Members under this subparagraph 13(c) (as opposed to
an assignment of an existing Interest under subparagraph 13(a)
hereof) shall dilute, pro rata, all Interests of the Members
existing at the time of such admission.
(d) Unless named in this Agreement or otherwise
admitted to the Company in accordance with the terms of this
Agreement, no person or entity shall be considered a Member. The
Company, each Member and any other person or entities having
business with the Company need deal only with Members so named or
so admitted; they shall not be required to deal with any other
person or entity by reason of an assignment by a Member or by
reason of the death or termination of a Member, except as other-
wise provided in this Agreement. In the absence of the substitu-
tion (as provided herein) of a Member for an assigning or de-
ceased Member, any payment to a Member or to its legal
representatives shall acquit the Company and the Manager of all
liability to any other persons or entities who or which may be
interested in such payment by reason of an assignment by, or the
death or termination of, such Member. It is understood and
agreed that the Manager shall not admit additional Members (in
contrast to substituted Members pursuant to subparagraph 13(a)
hereof) to the Company without the unanimous written consent of
all of the Members.
(e) Except as otherwise provided herein, no Member
shall dispose of any part or all of his or her Interest without
first giving to the other Members (hereinafter referred to
collectively as the "Offeree Members"), at least fifteen (15)
days in advance of such proposed disposition, written notice of
his or her intention to make such disposition. No such notice
shall be given unless and until the Member desiring to make such
disposition (hereinafter referred to as the "Offering Member")
shall have obtained a Bona Fide Offer to purchase all (but not
less than all) of the Offering Member's Interest. A true copy of
the Bona Fide Offer, setting forth all the terms and conditions
of the proposed purchase, with the names and addresses of the
proposed purchaser(s), shall be attached to such written notice.
For a period of fifteen (15) days from the receipt of such
written notice (the "Exercise Period"), the Offeree Members, pro
rata, in proportion to their respective Percentage Interests
(unless they agree upon another proportion), shall have the
option (but not the obligation) to purchase the Offering Member's
entire Interest at the same price and upon the same terms and
conditions as are set forth in the Bona Fide Offer. Such option
shall be exercised by giving written notice thereof to the
Offering Member. In the event that the Offeree Members (or any
of them) do not give written notice of their (or his or her
intent) to exercise the option prior to the expiration of the
Exercise Period, then the Offering Member shall be free to make
such disposition; provided, however, that such disposition shall
be made within thirty (30) days after the expiration of the
Exercise Period and in strict accordance with the terms and
conditions of such Bona Fide Offer. In the event that the
Offering Member's Interest is not so disposed of within said
thirty (30)-day period, the provisions of this subparagraph 13(e)
shall again be applicable and must be complied with.
14. Bankruptcy of a Member. In the event of the Bankruptcy
of a Member (the "Bankrupt Member"), and in the further event
that the other Members (or the requisite percentage thereof)
elect to continue the Company and the Company business pursuant
to subparagraph 15(a)(i) hereof (the "Continuing Members"), then
the Continuing Members (pro rata, in proportion to their
respective Percentage Interests, unless they agree upon another
proportion) shall have the option (but not the obligation),
exercisable by giving notice thereof to the Bankrupt Member or to
his or its trustee in Bankruptcy, guardian, receiver or other
legal representative, to purchase all (but not less than all) of
the Bankrupt Member's Interest, within sixty (60) days after the
event of such Bankruptcy, at a price equal to the "fair value" of
the Bankrupt Member's Interest as of the date of such Bankruptcy.
For purposes of this paragraph 14, the term "fair value" shall
conclusively be deemed to mean the Fair Market Value of the
Bankrupt Member's Interest, as determined in accordance with the
provisions of paragraph 16 hereof between the Continuing Members
and the legal representative of the Bankrupt Member. Within
sixty (60) days after the determination of the Fair Market Value
of the Bankrupt Member's Interest in accordance with the
procedures set forth in paragraph 16 hereof, the Continuing
Members shall give notice to the legal representative of the
Bankrupt Member of their decision as to the exercise of the
aforesaid option. If such option is exercised by any of the
Continuing Members, settlement shall be held within thirty (30)
days from the date of such exercise. The terms of payment for
the purchase of the Bankrupt Member's Interest shall be all cash,
unless otherwise agreed upon by the respective parties.
15. Dissolution and Termination of Company.
(a) The Company shall be dissolved, the Company Assets
shall be disposed of, and its affairs wound up, upon the earliest
to occur of the following events:
(i) the death, retirement, resignation,
expulsion, Bankruptcy or dissolution of a Member, or any other
event that terminates the continued membership of a Member in the
Company under the Act; provided, however, that, if, within ninety
(90) days after such event, the other Members owning at least
fifty-one percent (51%) of the total Percentage Interests elect
to continue the Company and the Company business, then (A) the
Company shall not be dissolved; (B) the Company and the Company
business shall be continued; and (C) this Agreement shall be
amended to reflect such continuation; provided further, however,
that the Company shall not be continued by fewer than two (2)
Members; or
(ii) the unanimous written consent of the
Members; or
(iii) the expiration of the Term; or
(iv) the entry of a decree of judicial
dissolution under the Act; or
(v) the occurrence of any other event causing
the dissolution of a limited liability company under the laws of
the State of Delaware.
(b) The Company shall terminate when all the Company
Assets have been disposed of (except for any liquid assets not so
disposed of), and the net proceeds therefrom, as well as any
other liquid or illiquid assets of the Company, shall, unless
otherwise required by the Act, be distributed as follows: (i)
first, to the creditors of the Company for the payment or due
provisions for the liabilities of the Company (including loans,
if any, to the Company from Members), and (ii) second, to the
Members, pro rata, in accordance with their respective positive
Capital Account balances (after the allocation of all items of
profit, gain, loss, deduction, credit and deduction (or items
thereof) under and pursuant to paragraph 7 hereof).
16. Valuation of Interest. For purposes of this Agreement,
the "Fair Market Value" of any Interest shall be determined based
on the price which would be paid by a willing buyer to a willing
seller in an arms'-length transaction for the purchase of such
Interest, free and clear of any option, call, contract,
commitment, demand, lien, charge, security interest or
encumbrance of any kind whatsoever other than this Agreement (the
"Subject Interest"), as such price may be mutually determined by
the interested Members (or groups of interested Members), or, if
the interested Members (or groups of interested Members) cannot
mutually agree upon such price within fifteen (15) days after any
event triggering a purchase of the Subject Interest pursuant to
this Agreement, the Fair Market Value of the Subject Interest
shall be determined as follows: each interested Member (or group
of interested Members) shall promptly appoint an appraiser, who
or which shall determine mutually the Fair Market Value of the
Subject Interest, for purposes of an all-cash sale; provided,
however, that, in the event the two (2) appraisers cannot agree
upon the Fair Market Value of the Subject Interest, the two (2)
appraisers shall together appoint a third (3rd) appraiser to
appraise the Subject Interest. All appraisers appointed
hereunder shall be qualified by experience and ability to
appraise the Subject Interest; and the fees and other costs of
each of the first two (2) appraisers shall be borne by the
interested Member(s) (or group(s) of interested Members) appoint-
ing each such appraiser, with the fees and other costs of the
third (3rd) appraiser being shared equally by the interested
Members (or groups of interested Members). The Fair Market Value
determined by the first two (2) appraisers or the third (3rd)
appraiser, as the case may be, shall be used to determine the
purchase price of the Subject Interest; provided, however, that,
if the Fair Market Value determined by the third (3rd) appraiser
is more than the higher of the first two (2) appraisals, the
higher of the first two (2) appraisals shall govern; and
provided, further, that if the Fair Market Value determined by
the third (3rd) appraiser is less than the lower of the first two
(2) appraisals, the lower of the first two (2) appraisals shall
govern.
17. Miscellaneous Provisions.
(a) The Members hereby agree to execute and deliver
all documents (subject to the provisions of subparagraph 17(d)
hereof), provide all information and take or refrain from all
such action as may be reasonably necessary or appropriate to
achieve the purposes of this Agreement and the Certificate.
(b) Except as expressly provided in this Agreement,
nothing contained herein shall be construed to constitute any
Member the agent of any other Member hereof or to limit in any
manner the Members in the carrying on of their own respective
businesses or activities.
(c) (i) All notices provided for herein shall be in
writing, hand delivered, with receipt therefor, or sent by
certified or registered mail, return receipt requested, and
first-class postage prepaid, or by overnight courier, to the
address of the Member as shown in Exhibit A, unless notice of a
change of address is given to the Company pursuant to the
provisions of this subparagraph 17(c). Any notice which is
required to be given within a stated period of time shall be
considered timely if delivered or postmarked before midnight of
the last day of such period. Any notice made hereunder shall be
deemed effective for all purposes and in all respects when sent
(or given) to any Member at the address set forth in Exhibit A
hereof, or at such other address specified by a Member for which
notice has been received by the Company in accordance with this
subparagraph 17(c).
(ii) Where the consent or approval of any Member
is required by this Agreement, the failure of such Member to
respond (either affirmatively or negatively) in writing to any
notice given by the Manager requesting such approval within ten
(10) business days after the date such notice was received shall
be conclusively deemed the consent or approval of such Member.
(d) Each Member hereby irrevocably makes, constitutes
and appoints the Manager as his or its true and lawful attorney-
in-fact and agent with full power and authority in his or its
name, place and stead to make, execute, sign, acknowledge,
deliver, file and record with respect to the Company the
following:
(i) All amendments to this Agreement and/or the
Certificate and all other instruments and documents which the
Manager deems appropriate to qualify or to continue the Company
as a limited liability company in each jurisdiction in which the
Company conducts business;
(ii) All instruments which the Manager deems
appropriate to reflect (A) any change or modification of the
terms and conditions governing the relationship among the Members
and the Company or (B) an amendment of this Agreement and/or the
Certificate, made in accordance with the express terms hereof,
including, without limitation, the approval and substitution of
assignees or transferees as Members;
(iii) All conveyances and other instruments,
certificates or documents which the Manager deems appropriate to
effect, evidence and/or reflect any sales or transfers by, or the
dissolution, termination and/or liquidation of, the Company,
including any sales or Transfer of Interests in the Company
pursuant to this Agreement;
(iv) All such other instruments, documents and
certificates which may from time to time be required by the
Company, its mortgage lenders, the Internal Revenue Service, the
State of Delaware, the United States of America, or any political
subdivision within which the Company conducts its business, to
effectuate, implement, continue and defend the valid and
continuing existence of the Company as a limited liability
company and to carry out the intention and purpose of this
Agreement; and
(v) All amendments to this Agreement and any
other documents, instruments and certificates which may be
required to admit Members. If a Member assigns his or its
Interest in the Company under and pursuant to paragraph 13
hereof, the foregoing power of attorney shall survive the
delivery of the instruments effecting such assignment for the
purpose of enabling the Manager to sign, swear to, execute,
acknowledge and file any amendments to the Certificate and other
instruments and documents in order to effectuate the substitution
of the assignee as a Member. It is expressly intended that the
foregoing power of attorney under this subparagraph 17(d) is a
durable power of attorney which shall not be affected by the
subsequent physical or mental disability or incapacity of a
Member, and such power of attorney is coupled with an interest;
provided, however, that the Manager shall not exercise the same
in any manner which would (i) remove the Manager, (ii) enlarge
any obligation or liability of a Member, or (iii) affect any
Company distributions in a manner materially adverse to the
Members or any of them, except to the extent each Member
adversely affected thereby has previously consented thereto in
writing.
(e) This Agreement and the rights of the parties
hereunder will be governed by, interpreted and enforced in
accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws.
(f) This Agreement shall inure to the benefit of and
bind the parties hereto, their estates, heirs, personal or legal
representatives, successors and, subject to the provisions of
paragraph 13 hereof, assigns.
(g) Unless the context clearly indicates otherwise,
where appropriate the singular shall include the plural and the
masculine shall include the feminine or neuter, and vice versa,
to the extent necessary to give the terms defined herein and/or
the terms otherwise used in this Agreement their proper meanings.
(h) This Agreement and Exhibits A and B attached
hereto and the Certificate set forth all (and are intended by all
parties hereto to be an integration of all) of the promises,
agreements, conditions, understandings, warranties and
representations among the parties hereto with respect to the
Company, the Company's business and the Company Assets, and there
are no promises, agreements, conditions, understandings,
warranties or representations, oral or written, express or
implied, except as set forth herein.
(i) If any provision of this Agreement is held to be
illegal, invalid or unenforceable under the present or future
laws effective during the term of this Agreement, such provision
will be fully severable; this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Agreement; and the remaining
provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement.
(j) This Agreement is made solely and specifically
among and for the benefit of the parties hereto, and their
respective successors and assigns, subject to the express
provisions hereof relating to successors and assigns, and no
other person or entity will have any rights, interest or claims
hereunder or be entitled to any benefits under or on account of
this Agreement as a third party beneficiary or otherwise. In
furtherance of and not in limitation of the foregoing, nothing
contained in this Agreement is intended to be for the benefit of
any creditor or other person or entity (other than a Member in
his or its capacity as a Member) to whom or which any debts,
liabilities or obligations are owed by (or who or which otherwise
has any claim against) the Company or any of the Members; and no
such creditor or other person or entity shall obtain any right
hereunder against the Company or any of the Members by reason of
any debt, liability or obligation (or otherwise).
(k) This Agreement may be executed in several counter-
parts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Limited Liability Company Agreement as of the date first above
written.
MEMBERS:
/s/ Murry N. Gunty
MURRY N. GUNTY
/s/ Jonathan S. Kern
JONATHAN S. KERN
/s/ Deborah L. Harmon
DEBORAH L. HARMON
GUNTY & CO.,
a Delaware corporation
By:/s/ Murry N. Gunty
Murry N. Gunty, President
EXHIBIT A
TO
LIMITED LIABILITY COMPANY AGREEMENT
OF
BALLANTRAE PARTNERS, L.L.C.
Initial Approximate
Capital Percentage
Members Contribution Interest
Murry N. Gunty $187,000 33.33%
Deborah L. Harmon $187,000 33.33%
Jonathan S. Kern $187,000 33.33%
________ ______
TOTAL $561,000 100.0%
EXHIBIT B
TO
LIMITED LIABILITY COMPANY AGREEMENT
OF
BALLANTRAE PARTNERS, L.L.C.
Company Property
All of the Company's legal and beneficial right, title and
interest in and to the following:
[Blank]
Exhibit 0.3
BALLANTRAE PARTNERS, L.L.C.
75 WEST END AVENUE R-12E
NEW YORK, N.Y. 10023
Telephone (212) 957-1337
Murry N. Gunty
CONFIDENTIAL
May 7, 1996
Mr. Robert Schatz
Chief Executive Officer
North East Insurance Company
482 Payne Road
Scarborough, Maine 04074
Dear Bob:
As a follow-up to our discussion yesterday, I am writing to you
to provide you and the Board a brief summary of our intentions
for our proposed investment in North East. As you can see from
the attached biographies, I have joined with two senior
executives from J.E. Robert Company and a seasoned insurance
executive who I have known for a very long time, to form the
group that is attempting to purchase Bernie Gershuny's stock in
North East. All of us are happily entrenched in our careers and
none of us are looking to run an insurance company. Instead, we
believe that there is significant value that can be created by
releasing the stock from the trust, and by raising capital to
allow North East to achieve economies of scale. Debbie, Jonathan
and I have spent our entire careers in the investment advisory
and management business and have collectively been involved in
billions of dollars of investments. Therefore, we are very
confident that we can raise a substantial amount of equity
capital for North East.
As I mentioned to you, we are interested in a consensual
transaction that both you and the Board are comfortable with.
You clearly have done a fantastic job of operating the company
over the past 10 years and we believe that your leadership will
be critical to helping this company grow.
We are structuring the transaction as a purchase of a beneficial
interest in the trust. Though we believe we are not required by
law to receive approval from the Board of North East, given our
intentions to raise capital and to grow the company, we would be
handicapped by Section 611-A of the Maine Business Corporations
Act if we did not have prior approval. Therefore, we would like
the Board to exempt the transaction from the "Interested
Stockholder" provisions of Section 611-A, understanding that this
would require no formal position with respect to our Form A until
a later date.
The timing on this, unfortunately, is immediate, and we are
trying to close the transaction in the next few days. Your
immediate attention to this matter would therefore, be most
appreciated.
I look forward to speaking with you soon.
Sincerely,
/s/ Murry N. Gunty
Murry N. Gunty
Managing Director
cc: Deborah L. Harmon, Managing Director - Ballantrae Partners
Jonathan S. Kern, Managing Director - Ballantrae Partners
Reginald Strickland, Managing Director - Ballantrae Partners
Larry Yanowitch, Partner - Tucker, Flyer & Lewis
Michael High, Partner - Drummond, Woodsum & MacMahon
Biographies of Principals in the NEIC acquisition group:
MURRY N. GUNTY
Mr. Gunty currently is a Vice President at Lazard Freres & Co.,
one of the leading investment banks in the world. Mr. Gunty is
based in New York City, where he is a senior member of a 13
person group managing investment funds totaling $1.7 billion.
Previously, Mr. Gunty worked at J.E. Robert Company, Inc.
("JER"), a leading investment and management firm that manages in
excess of $7 billion of commercial loans and real estate assets.
At JER Mr. Gunty oversaw investments of public companies and
public debt securities, including the acquisition of MIP
Properties, a $70 million publicly trade REIT that had a $23
million equity market capitalization at the time of the
acquisition. Prior to that, Mr. Gunty worked at The Blackstone
Group, a leading private equity investment firm that manages in
excess of $2 billion.
Mr. Gunty has an A.B. from Harvard College and MBA from Harvard
Business School.
JONATHAN S. KERN
Mr. Kern is an Executive Vice President of J.E. Robert Company,
Inc. ("JER"), a leading investment firm that currently manages in
excess of $7 billion of commercial loan and real estate assets.
Mr. Kern is responsible for the daily operations of JER,
including acquisitions, finance & administration, systems and
human resources. Mr. Kern has personally been responsible for in
excess of $1 billion of investments over the past 4 years. Mr.
Kern was formerly a Vice President at Bankers Trust, where he was
involved corporate advisory work and in the troubled loan area
which he oversaw the restructuring of more than $400 million of
troubled loans.
Mr. Kern has an A.B. from Harvard College and an MBA from The
Wharton School at the University of Pennsylvania.
DEBORAH L. HARMON
Ms. Harmon is an Executive Vice President of J.E. Robert Company,
Inc. ("JER"), a leading investment and management firm that
manages in excess of $7 billion of commercial loans and real
estate assets. Ms. Harmon is responsible for capital raising and
the strategic development group which develops and implements all
new business lines for JER. Ms. Harmon is solely responsible for
the development of JER's joint venture with Goldman Sachs,
whereby JER currently manages in excess of $1 billion (equity) on
behalf of Goldman Sachs. Previously, Ms. Harmon was a Managing
Director at Bankers Trust, where she was one of the youngest
Managing Directors in the history of the bank. At Bankers Trust,
Ms. Harmon had varying responsibilities including corporate
advisory work, merchant banking and troubled loans, where she
directed the restructuring of in excess of $1 billion of debt
restructures including the leading role in the Donald Trump
"work-out."
Ms. Harmon has an A.B. from Johns Hopkins University and an MBA
from The Wharton School at the University of Pennsylvania.
REGINALD STRICKLAND
Mr. Strickland has 30 years of insurance experience and currently
is Executive Vice President of Strickland General Agency, Inc.
("Strickland"), where he directs all of the underwriting and
claims operations. Strickland is managing general agency that
has annual premium volume in excess of $60 million, and currently
employs 60 people in two offices in Georgia and Mississippi.
Strickland represents 20 A and A+ Best rated insurance companies,
many of which they have represented in excess of 12 years. Mr.
Strickland began his insurance career as a multiple line trainee
with Crum and Forster. He later worked for Northwestern National
Insurance Group and then Superior Insurance Service, Inc., which
developed into Strickland General Agency, Inc.
Mr. Strickland is President of Georgia Property and Casualty
Insurance Wholesalers, an organization composed of all the
leading P & C wholesalers in Georgia, and President of Georgia
Premium Finance Association, an organization composed of
virtually all of the National premium finance companies in
Georgia.
Mr. Strickland attended Georgia Institute of Technology.
