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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) September 30, 1996
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American Income Partners IV-C Limited Partnership
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(Exact name of registrant as specified in its charter)
Massachusetts 0-18394 04-3036127
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
98 North Washington Street, Boston, MA 02114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 854-5800
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(Former name or former address, if changed since last report.)
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American Income Partners IV-C Limited Partnership
Form 8-K
Page 2 of 6
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ITEM 2. Acquisition or Disposition of Assets.
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This report on Form 8-K provides information concerning the sale of all of the
tangible equipment assets, lease receivables, and lease contracts of American
Income Partners IV-C Limited Partnership (the "Registrant") and the expected
wind-up of the Registrant's business operations on or before December 31, 1996.
Background
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The Registrant was organized in 1989 as a direct-participation equipment leasing
program to acquire a diversified portfolio of capital equipment subject to lease
agreements with third parties. The Registrant's stated investment objectives
and policies contemplated that the Registrant would wind-up its business
operations within approximately seven years of its inception. During the second
quarter of 1996, AFG Leasing IV Incorporated (the "Managing General Partner" of
the Registrant) engaged (i) an investment adviser (the "Adviser") to solicit
interested third-party buyers for all of the Registrant's equipment assets and
associated lease contracts and (ii) an independent appraisal firm (the
"Appraiser") to provide an estimate of the amount that a third party might be
willing to pay for such assets.
The entire remarketing effort was undertaken jointly by 15 individual equipment
leasing programs, consisting of the Registrant and 14 affiliates (the "Other
Affected Partnerships"). Collectively, the Registrant and the Other Affected
Partnerships offered for sale all or a portion of their equipment assets (the
"Sale Assets"). Thirteen of the programs, including the Registrant, offered to
sell all of their equipment assets and are expected to wind-up business
operations in 1996; the remaining two programs, which will continue their
business operations beyond 1996, offered to sell only their interests in certain
assets owned jointly with one or more of the 13 programs anticipating wind-up.
Substantially all of the Registrant's equipment assets of material value
represented partial ownership interests, whereby the Registrant owned less than
a 100% interest in the equipment it offered for sale. The remaining interests
in such assets were owned by one or more of the Other Affected Partnerships.
Equis Financial Group ("Equis", which serves as the Equipment Manager of the
Registrant and the Other Affected Partnerships) and the Adviser believed the
joint approach to remarketing the Sale Assets would maximize the disposition
prices of the Sale Assets and facilitate an efficient wind-up of the
Registrant's business operations.
The Sale Process
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To start the process of soliciting bids, the Adviser and Equis assembled a list
of 48 prospective purchasers, some of whom had conducted prior business with the
Registrant, Equis, the Other Affected Partnerships, or their affiliates. Each
recipient was provided abbreviated information concerning the remarketing effort
and asked to request, if interested in bidding, an Information Memorandum
containing, among other information, a listing of the equipment rental schedules
being offered for sale, a description of the assets and their original cost, and
a summary of the remaining lease payments expected to be collected from each
rental schedule, assuming no future
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American Income Partners IV-C Limited Partnership
Form 8-K
Page 3 of 6
ITEM 2. Acquisition or Disposition of Assets (Continued).
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The Sale Process (Continued)
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default events. Additional background was provided about the business
operations and credit ratings of significant lessees. All financial information
assumed an August 1, 1996 sale date. Fourteen of the 48 prospective purchasers
requested and received an Information Memorandum. After the Information
Memoranda were distributed, and prior to submitting a bid, the recipients were
given the opportunity to request additional information or ask questions. In
addition, the recipients were offered the opportunity, but were not required, to
engage the equipment management services of Equis subject to agreed-upon terms.
Bidders were encouraged to make all-cash bids.
On September 30, 1996, the Registrant and the Other Affected Partnerships
executed individual purchase and sale agreements with RSL Finance Limited
Partnership II (the "Buyer") for all Sale Assets, except one McDonnell Douglas
MD-82 aircraft leased to Northwest Airlines, Inc. (the "NWA Aircraft"),
hereafter the "Sale Assets, as Revised," for total cash consideration of $35
million. The Appraiser had estimated the potential sale value of the Sale
Assets, as Revised to be between $33 million and $38 million, assuming an August
1, 1996 sale date. Accordingly, the Buyer's purchase price was established as
of August 1, 1996 and any remarketing proceeds or contracted lease rents earned
after July 31, 1996 accrue to the benefit of the Buyer. The Buyer's cash
remuneration to the Registrant and the Other Affected Partnerships was increased
by an interest factor, at the annualized rate of 8%, which was applied to the
sales price for the period commencing August 1, 1996 and ending , on the date of
closing.
In a separate negotiation, Equis, on behalf of the Registrant and the Other
Affected Partnerships owning an interest in the NWA Aircraft, arranged to sell
the NWA Aircraft to the lessee for $13,200,000. A purchase and sale agreement
for the NWA Aircraft was executed and the closing concluded on September 30,
1996.
As a result of both sale events, the Registrant and the Other Affected
Partnerships will receive aggregate sale proceeds of $48,200,000 for all Sale
Assets. Four other parties submitted bids to purchase the Sale Assets for
prices ranging from $34 million to $44 million, including the NWA Aircraft.
Pursuant to terms of their respective purchase and sale agreements, the Buyer
and Northwest Airlines, Inc. agreed to purchase the Sale Assets on a non-
recourse basis to the Registrant, the Other Affected Partnerships, and the
general and limited partners of each. In addition, the Registrant, together
with all of the Other Affected Partnerships, engaged the Adviser to provide a
fairness opinion with respect to whether the sale consideration, taken as a
whole, is fair from a financial standpoint. Equis believes the sale to be in
the best interests of the Registrant and the Other Affected Partnerships.
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American Income Partners IV-C Limited Partnership
Form 8-K
Page 4 of 6
ITEM 2. Acquisition or Disposition of Assets (Continued).
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Relationship with the Buyer
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The Buyer is a limited partnership established to acquire the Sale Assets, as
Revised and has no direct affiliation with the Registrant, the Other Affected
Partnerships, the Managing General Partner, Equis, or its predecessor, American
Finance Group ("AFG"). The sole general partner of the Buyer is RSL Holdings,
Inc. An affiliate of the Buyer purchased a significant limited partner interest
in a direct-participation equipment leasing program co-sponsored by AFG in 1992.
AFG acquired this interest in 1993 for cash and assumption of indebtedness.
There have been no other business dealings between the Buyer and Equis (or AFG)
and their affiliates.
The Buyer paid cash for its acquisition of the Sale Assets, as Revised, a
significant portion of which was borrowed from three third-party institutional
lenders (the "Lenders"). Equis explored financing options and negotiated
certain terms of the financings on behalf of the Buyer. In addition, Equis and
the Buyer agreed to terms of a management contract whereby Equis will provide
equipment management services to the Buyer following the sale. Pursuant to the
terms of the management contract, Equis will earn a remarketing fee equal to 3%
of the gross disposition proceeds realized by the Buyer upon any subsequent re-
sale of the Sale Assets, as Revised and has agreed to subordinate, in favor of
the Lenders, its right to collect (i) an equipment management fee equal to 5% of
lease revenues and (ii) an initial documentation and set-up fee equal to 3% of
the Buyer's base purchase price for the Sale Assets, as Revised, until such time
as the Lenders' loans are fully repaid. Equis will accrue, but also has agreed
to subordinate in favor of the Lenders, interest on all subordinated fees at the
rate of 15% per annum until collected.
Relationship with Northwest Airlines, Inc.
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Equis (and AFG) and its affiliates, including the Registrant and certain of the
Other Affected Partnerships, have had a long-standing relationship with
Northwest Airlines, Inc. ("NWA"). NWA has leased commercial jet aircraft from
one or more of the parties in the ordinary course of business and has purchased
certain leased aircraft from the parties on prior occasions.
Terms of Sale
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The Registrant and the Other Affected Partnerships received aggregate cash
consideration of $48,200,000 for the Sale Assets, of which $13,200,000 was
allocated to the owners of the NWA Aircraft according to their respective
percentage ownership interests. The remaining $35 million, after closing
adjustments, was allocated proportionately among the Registrant and the
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American Income Partners IV-C Limited Partnership
Form 8-K
Page 5 of 6
ITEM 2. Acquisition or Disposition of Assets (Continued).
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Terms of Sale (Continued)
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Other Affected Partnerships based upon the Appraiser's estimated sale prices for
each partnership's respective share of the Sale Assets, as Revised. This
calculation resulted in the Registrant receiving $6,178,839 as its proportionate
share of the net sale proceeds, including $2,640,000 from its ownership interest
in the NWA Aircraft. The appraised value of the Registrant's equipment assets
was estimated by the Appraiser to range between $3.4 million and $4 million,
excluding the NWA Aircraft, and between $2 million and $2.2 million for the NWA
Aircraft.
All expenses directly associated with the sale will be allocated first, to the
extent that such expenses pertain to the NWA Aircraft, to each of the respective
owners of the NWA Aircraft, and second, for all other costs, proportionately
among the Registrant and the Other Affected Partnerships according to the
Appraiser's estimated sale prices for each partnership's respective share of the
Sale Assets, as Revised. The Registrant's share of all such expenses is
expected to be approximately $123,000. In addition, the Managing General
Partner will reserve approximately $775,000 to cover any unforeseen liabilities.
See "Dissolution of the Registrant" herein.
Dissolution of the Registrant
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The Managing General Partner anticipates that the Registrant will be dissolved
on or before December 31, 1996 in accordance with the Registrant's Restated
Agreement and Certificate of Limited Partnership, as amended. During the period
between the closing of the Sale Assets and December 31, 1996, the Managing
General Partner will wind-up the operations of the Registrant and make one or
more cash distributions to the partners of the Registrant. The amount of cash
distributed prior to the Registrant's dissolution will be net of reserves,
currently expected to be approximately $775,000, which the Managing General
Partner will deposit in a separate account to cover any unforeseen liabilities
which may arise in future periods. At such time as the Managing General Partner
considers appropriate, any balance in the reserve account will be distributed to
the partners of the Registrant according to their respective ownership interests
in the Registrant at the date of its dissolution.
Future Filings with the United States Securities and Exchange Commission
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The Registrant expects to file Form 10-Q, "Quarterly Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934" for the quarter ending
September 30, 1996. Upon its dissolution, the Registrant expects to file Form
15, "Certification and Notice of Termination of Registration Under Section 12(g)
of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports
Under Sections 13 and 15(d) of the Securities Exchange Act of 1934."
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American Income Partners IV-C Limited Partnership
Form 8-K
Page 6 of 6
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ITEM 7. Financial Statements and Exhibits.
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Exhibits filed herewith pursuant to Item 601 of Regulation S-K:
Exhibit
Number
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99.1(d) Purchase and Sale Agreement by and between American Income
Partners IV-C Limited Partnership and RSL Finance Limited
Partnership II.
99.1(e) Aircraft Purchase Agreement by and between Investors Asset
Holding Corp., not in its individual capacity but solely as
trustee under the Third Lease Agreement (N931MC) dated as of July
29, 1994, and Northwest Airlines, Inc.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
(Registrant)
By: AFG Leasing IV Incorporated,
a Massachusetts corporation and the Managing
General Partner of the Registrant.
By: /s/ Gary M. Romano Date: October 3, 1996
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Gary M. Romano
Clerk
(Principal Financial Officer)
By: /s/ Michael J. Butterfield Date: October 3, 1996
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Michael J. Butterfield
Treasurer
(Principal Accounting Officer)
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EXHIBIT 99.1 (D)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of this 30th day of September,
1996 by and between RSL Finance Limited Partnership II, a Florida limited
partnership with its principal place of business at 2300 Miami Center, 201 South
Biscayne Boulevard, Miami, FL 33131-4329 ("Purchaser") and the undersigned, a
Massachusetts limited partnership, with its principal place of business at 98
North Washington Street, Boston, MA 02114 ("Seller").
Seller, directly as lessor or indirectly through limited partnership or
trust title holding vehicles, has entered into various rental schedules (in each
case, a "Rental Schedule" or a "Lease" and collectively the "Rental Schedules"
or the "Leases") to master lease agreements (in each case a "Master Lease" and
collectively, the "Master Leases") or various single purpose leases (also
hereinafter referred to individually as a "Lease" and collectively as "Leases")
with various parties as lessees (in each case a "Lessee"), with respect to the
leasing by each Lessee of various types of equipment, including some or all of
the following: aircraft, shipping vessels, motor vehicles, construction and
mining equipment, communications equipment, computer equipment and other like
equipment, as more fully described in each Lease (individually and collectively,
the "Equipment"), all as further described on Schedule A hereto.
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Seller desires to sell and assign, and Purchaser desires to purchase and
assume, all of Seller's right, title, interest, duties and obligations in, to
and under the Equipment and the Leases (collectively, the "Transferred Assets")
all on the terms and conditions as hereinafter set forth.
In consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and
Purchaser hereby agree as follows:
ARTICLE I
SUBJECT MATTER
Subject to the terms and provisions of this Agreement, Seller agrees to
sell and Purchaser agrees to purchase all of Seller's right, title and interest
in and to the Equipment, and Seller hereby further agrees to assign, and
Purchaser agrees to assume, all of Seller's right, title, interest, duties and
obligations in, to and under the Leases, including all receivables relating to
Seller, from and after the closing (the "Closing"), except that Seller hereby
reserves and does not agree to transfer its right, title and interest in and to
the Reserved Rights. As used herein, "Reserved Rights" shall mean all
indemnities, including tax indemnities, liability insurance and the like to the
extent that such right, title and interest in such indemnities or liability
insurance proceeds have accrued in favor of Seller or the Owner Trustee (as
defined below) prior to the Closing. Seller shall and does hereby also agree to
assign to Purchaser, to the extent permitted by the terms thereof and by
applicable law, all of Seller's rights, whether express or implied, under any
vendor's or manufacturer's warranties, relating to the Equipment. Purchaser
acknowledges and agrees that title to certain Equipment ("Trust Equipment" or
"SPLP Equipment", as applicable) is held in, and the lessor of such Equipment
is, one or more equipment trusts (in each case, an "Equipment Trust" or
"Equipment Trusts") or special purpose limited partnerships (in each case, an
"SPLP" or "SPLPs"), beneficial interests ("Beneficial Interests") in which
trusts or limited partnerships are owned by Seller and legal title to which is
held by an owner trustee (in each case, the "Owner Trustee") or the SPLP, as
applicable.
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ARTICLE II
PRICE AND PAYMENT
The purchase price (the "Purchase Price") of the Transferred Assets shall
be as set forth on Schedule B hereto and shall be payable in full in cash at the
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Closing by wire or other transfer of immediately available funds to Seller's
account as follows:
Fleet Bank, N.A.
New York, NY
ABA no. 021-200-339
AFG Rent Escrow Account
Account no. 2181-01-7572
or to such other bank account or accounts as may be designated in writing by
Seller at least one (1) business day prior to the Closing Date The Purchase
Price shall be determined as of the Closing as if the Closing had occurred on
August 1, 1996 and shall be adjusted by deducting therefrom (i) the net sales
proceeds or casualty payments in respect of any equipment described for sale in
that certain Dabney/Resnick Inc. memorandum previously delivered to Purchaser
(excluding the MD-82 Aircraft on lease to Northwest Airlines, Inc.) to the
extent that such proceeds are received by Seller prior to closing, and (ii) all
base and month to month rents attributable to the period beginning August 1,
1996 and received by Seller prior to Closing. The Purchase Price shall be
increased by (i) the face value of all base rents receivable (unless such rent
receivable is attributable to a lessee in bankruptcy) attributable to the period
ending July 31, 1996, and (ii) an amount equal to interest at an annualized rate
of 8% for the period August 1, 1996 through the Closing Date.
ARTICLE III
TAXES
Seller shall be responsible for all Taxes (as hereinafter defined), and for
the submission of all filings required by the applicable taxing authorities,
relating to (i) the acquisition, ownership, use or leasing of the Equipment by
Seller, and (ii) the payment of periodic rentals or other sums due under each
Lease, including without limitation all sales, use and property taxes, including
interest and penalties thereon ("Taxes"), for all periods through but not
including the Closing. Purchaser shall be responsible for all Taxes and for the
submission of all filings required by the applicable taxing authorities from and
after the Closing. All taxes of any nature whatsoever, including without
limitation all sales or transfer taxes arising out of or in connection with the
assignment of the Leases or the sale of the Equipment contemplated herein, shall
be solely for the account of Purchaser.
ARTICLE IV
TITLE AND RISK OF LOSS
Title and risk of loss or damage to the Equipment shall pass to Purchaser
at the Closing.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser on and as of the date
hereof and the Closing Date as follows:
5.1 Authority. Seller is a limited partnership duly organized and validly
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existing under the laws of the jurisdiction of its organization with adequate
power to enter into this Agreement and each instrument and document executed by
Seller in connection with the transactions contemplated hereby (the "Transaction
Documents") to which Seller is a party and to consummate the transactions
contemplated hereby and thereby, and is duly qualified to do business in every
jurisdiction in which its failure to so qualify would have a material adverse
effect upon the transactions contemplated by this Agreement and the Transaction
Documents.
5.2 Execution, Delivery and Effect of Documents. Each of this
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Agreement and the Transaction Documents to which Seller is a party has been duly
authorized, executed and delivered by Seller and, assuming their due
authorization, execution and delivery by each of the other parties thereto,
constitutes a valid, legal and binding agreement of Seller enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors' rights.
5.3 Inconsistent Agreements. The entering into and performance of this
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Agreement and each of the Transaction Documents by Seller do not and will not
violate any provision of law, or any rule, regulation, order, decree or judgment
("Applicable Law") applicable to Seller and do not conflict with any provision
of Seller's organizational documents or result in any breach of, or constitute a
default under, any indenture, mortgage, deed of trust, contract, agreement or
instrument to which Seller is a party or by which it or its assets may be bound.
5.4 Legal Proceedings. There are no pending or, to the actual knowledge
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of Seller, threatened actions or proceedings to which Seller is a party, or
otherwise affecting Seller or the Transferred Assets, before any court or public
board or body ("Governmental Body"), which if determined adversely against
Seller, either individually or in the aggregate, would adversely affect the
ability of Seller to perform its obligations under, or comply with the terms of,
this Agreement and the Transaction Documents.
5.5 No Consents Required. No consent, approval or other authorization of
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or by any Governmental Authority is required in connection with the execution,
delivery or performance by Seller of, or the consummation by Seller of the
transactions contemplated by, this Agreement and the Transaction Documents,
except that no representation or warranty is made hereby in respect to the
applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Pub.
L. No.94-435, 90 Stat. 1383 (1976) (the "Hart-Scott-Rodino Act") or the
necessity to make the filings required thereunder to the transactions
contemplated by this Agreement or the Transaction Documents.
5.6 Securities Laws. Seller has not, directly or indirectly, offered the
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Transferred Assets or any interest in the Transferred Assets or any interest or
security (as defined in Section 2(1) of the Securities Act of 1933, as amended)
relating to an interest in the Transferred Assets for sale to, or solicited any
offer to acquire any such interest or security from, or has sold any such
interest or security to, any person in violation of the federal or any
applicable state securities laws, and Seller will not, directly or indirectly,
make any such offer, solicitation or sale in violation of the federal or
applicable state securities laws.
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5.7 No Brokers, Etc. No agent, broker, person or firm acting on behalf of
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Seller or any Owner Trustee or any SPLP, or under the authority of Seller or any
Owner Trustee or any SPLP, is or shall be entitled to any commission or broker's
fee from Purchaser in connection with the transactions contemplated hereby.
5.8 Operative Documents. Not later than five (5) business days prior to
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the Closing, Seller will furnish or make available to Purchaser a true, correct
and complete copy of each and every operative document delivered to Seller in
connection with the purchase of the Equipment by Seller.
5.9 Good Title, Etc. On and as of the Closing, Seller will convey to
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Purchaser good title to the Equipment, free and clear of all liens and
encumbrances created or arising by reason of the action or inaction of Seller
other than (i) the leasehold estate of each Lessee under each Lease, (ii) any
liens created by any Owner Trustee and SPLP disclosed to Purchaser, and (iii)
liens created by such Lessees under and pursuant to such Leases or otherwise
(collectively, the "Permitted Liens").
5.10 Disclaimer of Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY
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PROVIDED HEREIN, THE SALE OF THE EQUIPMENT IS HEREBY MADE ON AN "AS-IS WHERE-IS"
BASIS. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED,
WITH RESPECT TO (i) THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION OF THE
FOREGOING, ITS SELECTION, QUALITY, DESIGN, CAPACITY, CONDITION, MERCHANTABILITY
OR ITS FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE AND FREEDOM FROM CLAIMS OF
COPYRIGHT OR PATENT INFRINGEMENT OR ABSENCE OF OBLIGATIONS BASED ON STRICT
LIABILITY IN TORT OR NEGLIGENCE, (ii) THE FREEDOM OF THE EQUIPMENT (OR ANY PART
OR PORTION THEREOF) FROM ANY LATENT OR OTHER DEFECT (WHETHER OR NOT
DISCOVERABLE), (iii)THE COMPLIANCE OF ANY OF THE EQUIPMENT (OR ANY PART OR
PORTION THEREOF) WITH ANY APPLICABLE LAWS OR REGULATIONS, (iv) THE
CREDITWORTHINESS OF EACH LESSEE OR ANY OTHER PERSON UNDER THE LEASES AND THE
TRANSACTION DOCUMENTS, (v) THE COLLECTIBILITY OF ANY AMOUNT UNDER THE LEASES AND
ANY OF THE TRANSACTION DOCUMENTS, (vi) THE TAX CHARACTERIZATION OF THE LEASES,
OR (vii) THE DUE AUTHORIZATION, EXECUTION AND DELIVERY BY, OR THE ENFORCEABILITY
AGAINST, ANY PERSON WHO IS OR HAS BEEN A PARTY TO THE LEASES AND ANY OF THE
TRANSACTION DOCUMENTS (WITH THE EXCEPTION OF THE SELLER) AND SELLER HEREBY
DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller on and as of the date
hereof and the Closing Date as follows:
6.1 Authority. Purchaser is a Florida limited partnership duly organized
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and validly existing under the laws of the jurisdiction of its organization with
adequate power to enter into this Agreement and the Transaction Documents to
which Purchaser is a party and to consummate the transactions contemplated
hereby and thereby and is duly qualified to do business in every jurisdiction in
which its failure to so qualify would have a material adverse effect upon the
transactions contemplated by this Agreement and the Transaction Documents.
4
<PAGE>
6.2 Execution, Delivery and Effect of Documents. Each of this Agreement
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and the Transaction Documents to which Purchaser is a party has been duly
authorized, executed and delivered by Purchaser and, assuming their due
authorization, execution and delivery by each of the other parties thereto,
constitutes a valid, legal and binding agreement of Purchaser enforceable in
accordance with its terms except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights.
6.3 Inconsistent Agreements. The entering into and performance of this
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Agreement and each of the Transaction Documents by Purchaser do not and will not
violate any provision of Applicable Law applicable to Purchaser and do not
conflict with any provision of Purchaser's organizational documents or result in
any breach of, or constitute a default under, any indenture, mortgage, deed of
trust, contract, agreement or instrument to which Purchaser is a party or by
which it or its assets may be bound.
6.4 Legal Proceedings. There are no pending or, to the actual knowledge of
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Purchaser, threatened actions or proceedings to which Purchaser is a party, or
otherwise affecting Purchaser, before any Governmental Body, which if determined
adversely against Purchaser, either individually or in the aggregate, would
adversely affect the ability of Purchaser to perform its obligations under, or
comply with the terms of, this Agreement and the Transaction Documents.
6.5 No Consents Required. No consent, approval or other authorization of
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or by any Governmental Authority is required in connection with the execution,
delivery or performance by Purchaser of, or the consummation by Purchaser of the
transactions contemplated by, this Agreement and the Transaction Documents.
Neither Seller nor Purchaser is required to make the filings required by the
Hart-Scott-Rodino Act and such statute is not applicable to the transactions
contemplated by this Agreement or the Transaction Documents.
6.6 No Brokers, Etc. No agent, broker, person or firm acting on behalf of
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Purchaser or under the authority of Purchaser is or shall be entitled to any
commission or broker's fees in connection with the transactions contemplated
hereby.
6.7 Securities Laws. Purchaser is acquiring the Transferred Assets for its
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own account for investment and not with a view to, or for sale in connection
with, any distribution thereof except as otherwise permitted by Rule 144A or
another exemption from registration under the Securities Act of 1933, as
amended. Neither it nor anyone authorized to act on its behalf has directly or
indirectly offered any interest in the Transferred Assets for sale to, or
solicited any offer to acquire any such interest or security from, or has sold
any such interest or security to, any person, and it will not directly or
indirectly make any such offer, solicitation or sale in violation of the
Securities Act of 1933, as amended, or applicable state laws.
6.8 ERISA. No part of the funds to be used by Purchaser to acquire the
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Transferred Assets under this Agreement constitutes assets of an employee
benefit plan within the meaning of Section 3(3) of ERISA or any trust created
under any such plan, or assets of a plan as defined in Section 4975(e)(1) of the
Code, or any trust created under any such plan. Purchaser will take no action
with respect to its participation in the transactions contemplated hereby which
would cause such participation to be a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code or any applicable regulation
under such sections.
ARTICLE VII
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<PAGE>
CLOSING; CONDITIONS PRECEDENT; SURVIVAL
7.1 Closing. The closing of the transactions contemplated hereby shall
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take place at the offices of Seller or Seller's counsel or such other place as
determined by Seller on September 30, 1996 or such later date which shall not be
later than October 15, 1996, as the parties hereto shall mutually agree (the
"Closing Date"). If the Closing has not occurred by the Closing Date for any
reason, this Agreement shall terminate.
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<PAGE>
7.2 Conditions Precedent.
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(a) The obligations of Seller hereunder are subject to satisfaction of
the following conditions at or prior to the Closing:
(i) Purchaser shall have performed all of its obligations specified
herein, to the reasonable satisfaction of Seller.
(ii) Each Lessee shall have consented to the sale of the Equipment and
the transfer of the Transferred Assets to Purchaser.
(iii) The representations and warranties of Purchaser contained in this
Agreement shall be true and correct on and as of the Closing Date.
(iv) Purchaser shall have delivered to Seller documentation reasonably
supporting the validity and enforceability of Purchaser's obligations under this
Agreement, which may include, without limitation, a clerk's or secretary's or
assistant clerk's or assistant secretary's certificate regarding incumbency and
authorizing resolutions and an opinion of counsel reasonably acceptable to
Seller.
(v) Purchaser shall have delivered to Seller a resale certificate for
each taxing jurisdiction in which the Equipment is located.
(vi) No action or proceeding shall have been instituted nor shall any
action or proceeding be threatened before any Governmental Body at the time of
the Closing to set aside, restrain, enjoin or prevent the execution and delivery
of this Agreement or any Transaction Document or the completion and consummation
of the transactions contemplated hereby and thereby.
(vii) Seller shall have received such other documents, instruments,
certificates and assurances as are reasonably requested by Seller or Seller's
counsel.
(viii) Seller shall have received the Purchase Price in accordance with
Article II of this Agreement.
(b) Purchaser's obligations hereunder are subject to the satisfaction
of the following conditions at or prior to the Closing:
(i) Seller shall have executed and delivered to Purchaser and Purchaser
shall have received an Assignment and Assumption Agreement, Bill of Sale and
Assignment of Interests in substantially the form of Exhibit A hereto.
(ii) Seller shall have delivered or made available to Purchaser an
originally duly executed copy of each Lease, and a certified true and complete
copy of each Master Lease, if applicable, all as may have been amended from time
to time up to and including the Closing Date.
(iii) Seller shall have delivered to Purchaser documentation reasonably
supporting the validity and enforceability of Seller's obligations under this
Agreement, which may include, without limitation a clerk's or assistant clerk's
certificate regarding incumbency and authorizing resolutions and an opinion of
counsel reasonably acceptable to Purchaser.
7
<PAGE>
(iv) Seller shall have delivered appropriate precautionary UCC-1
Financing Statements against each Lessee, assigned to Purchaser and
terminations, as requested, with respect thereto, except with respect to Trust
Equipment and SPLP Equipment.
(v) Seller shall have delivered to Purchaser a Release of Lien/UCC-3
Termination Statements (if applicable) executed by each institution (a "Lender")
which financed the acquisition or purchase of the Equipment by Seller except
with respect to liens constituting Permitted Liens.
(vi) Seller shall have provided or made available to Purchaser with
original, or certified copies of, invoices or other appropriate purchase
documentation establishing Seller's title in and to the Equipment, or that of
the Owner Trustee or SPLP, as appropriate.
(vii) Purchaser shall have received all documents and assurances,
including evidence of insurance coverage satisfactory to it, as required by each
Lease.
(viii) Seller shall have delivered to Purchaser a notice and
acknowledgment of assignment in form and substance reasonably acceptable to
Purchaser executed by Lessees leasing Equipment having an original equipment
cost equal to at least 25% of the original equipment cost of all of the
Equipment (provided that Equipment held in Equipment Trusts or SPLPs and for
which no assignment of lease is being made shall count toward such percentage).
(ix) Seller shall have performed all of its obligations specified
herein, to the reasonable satisfaction of Purchaser.
(x) The representations and warranties of Seller contained in this
Agreement shall be true and correct on and as of the Closing.
(xi) Purchaser shall have received such other documents, instruments,
certificates and assurances from Seller as are reasonably requested by Purchaser
or Purchaser's counsel.
7.3 Survival; Recourse. PURCHASER ACKNOWLEDGES THAT THE PRINCIPAL
------------------
PURPOSE OF SELLER IN SELLING THE TRANSFERRED ASSETS IS TO LIQUIDATE SUCH ASSETS
AND DISTRIBUTE THE CASH TO ITS INVESTORS. THEREAFTER, SELLER AND ITS GENERAL
PARTNER INTEND TO TERMINATE THEIR RESPECTIVE BUSINESSES AND WINDUP OR DISSOLVE
THEIR AFFAIRS. ACCORDINGLY, PURCHASER ACKNOWLEDGES AND AGREES THAT ALL OF
SELLER'S REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS CONTAINED HEREIN
SHALL TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT AND SHALL NOT SURVIVE ON
AND AFTER THE CLOSING. IN ADDITION, PURCHASER'S SOLE AND EXCLUSIVE REMEDY FOR A
BREACH BY SELLER OF ANY REPRESENTATION OR WARRANTY CONTAINED HEREIN OR IN ANY
TRANSACTION DOCUMENT OR A FAILURE TO PERFORM ANY OBLIGATION CONTAINED HEREIN OR
IN ANY TRANSACTION DOCUMENT SHALL BE TO NOT CLOSE THE TRANSACTIONS CONTEMPLATED
HEREBY. ACCORDINGLY, NEITHER SELLER NOR SELLER'S GENERAL PARTNER NOR ANY OF
THEIR PARTNERS, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, AND
ATTORNEYS, TOGETHER WITH THEIR PERSONAL REPRESENTATIVES, HEIRS, SUCCESSORS AND
ASSIGNS AND THE AFFILIATES OF ANY OF THE FOREGOING (THE "INDIRECT PARTIES")
SHALL, AT ANY TIME, HAVE ANY PERSONAL LIABILITY FOR ANY OBLIGATIONS HEREUNDER.
IN FURTHERANCE OF THE FOREGOING, PURCHASER HEREBY AGREES NOT TO SEEK A PERSONAL
JUDGMENT AGAINST SELLER OR SELLER'S GENERAL PARTNER OR ANY OF THE INDIRECT
PARTIES AT ANY TIME,
8
<PAGE>
WHETHER BEFORE OR AFTER THE CLOSING OR ANY SUCH WINDING UP OR DISSOLUTION OF
SELLER OR SELLER'S GENERAL PARTNER AND NOT TO SEEK TO OVERTURN OR RESCIND ANY
SUCH WINDING UP OR DISSOLUTION IN ORDER TO ASSERT ANY PERSONAL LIABILITY AGAINST
SELLER OR SELLER'S GENERAL PARTNER OR ANY OF THE INDIRECT PARTIES. PURCHASER
ACKNOWLEDGES AND AGREES THAT IT FULLY UNDERSTANDS THE FOREGOING LIMITATIONS ON
RECOURSE, THAT IT PERFORMED ITS DUE DILIGENCE IN RESPECT OF THE TRANSFERRED
ASSETS WITH SUCH LIMITATION IN MIND AND THAT THE PURCHASE PRICE REFLECTS THE
RISKS ASSOCIATED WITH SUCH LIMITATION.
ARTICLE VIII
DELIVERY
At the Closing, concurrently with Seller's performance of the conditions
set forth in Article VII, each of Purchaser shall accept delivery of the
Equipment and Seller shall acknowledge receipt of the Purchase Price by
executing and delivering to the other party a cross receipt in the form of
Exhibit B hereto.
ARTICLE IX
RECORDS
Contemporaneous with the Closing hereunder, Seller shall provide or make
available to Purchaser or its designee originals or copies of all log books,
service manuals, maintenance records and other similar documents in its
possession relating to the Equipment, including such documentation stored or
imaged on computer media.
ARTICLE X
INDEMNITY
10.01 Indemnity. Seller hereby agrees to indemnify, defend and hold
----------
Purchaser, together with its officers, directors, shareholders, partners,
employees, agents, and other similar parties, together with their successors and
assigns ("Indemnities") harmless from and against any and all claims, losses,
costs, damages, liabilities, injuries or expenses (including court costs and
reasonable attorneys' fees) wheresoever and howsoever arising which Purchaser
may incur by reason of any breach, violation or untruth of any of the terms,
conditions, representations, warranties, covenants and agreements set forth
herein or in any other Transaction Document to which Seller is a party, except
any of the foregoing resulting from Purchaser's gross negligence or willful
misconduct. Purchaser hereby agrees to indemnify, defend and hold Seller and
each Owner Trustee and each SPLP, their Indemnities and Equis Financial Group
("EFG") and its and Seller's Affiliates, harmless from and against any and all
claims, losses, costs, damages, liabilities, injuries or expenses (including
court costs and reasonable attorneys' fees) wheresoever and howsoever arising
which any of the foregoing parties may incur by reason of (i) any breach,
violation or untruth of any of the terms, conditions, representations,
warranties, covenants and agreements set forth herein or in any other
Transaction Document to which Purchaser is a party, or (ii) any interference
with the contractual or other relationships between any of the foregoing parties
and the Lessees under and pursuant to other leases between any of the foregoing
parties and such Lessees
9
<PAGE>
relating to other equipment, whether in the context of returning, re-leasing,
purchasing or otherwise; except any of the foregoing resulting from Seller's
gross negligence or willful misconduct, provided, however, that notwithstanding
the foregoing, Purchaser shall have the right at all times to strictly enforce
its legal rights and remedies under the Leases, irrespective of any purely
coincidental impact on such relationship. EFG and its and Seller's Affiliates
shall be third party beneficiaries of this Article X. As used herein,
"Affiliates" shall mean, with respect to any Person, any other Person which is
directly or indirectly controlling, controlled by or under common control with
such Person. The term "control" means the possession, directly or indirectly, of
the power, whether or not exercised, to direct or cause the direction of the
management or policies of any Person, whether through ownership of voting
securities, by contract or otherwise.
10.02 Indemnification Procedure.
-------------------------
(i) The party seeking indemnification under this Article X (the
"Indemnified Party") shall, promptly after the Indemnified Party has notice or
knowledge of any proposed settlement, agreement, claim, action or proceeding
giving rise to such claim for indemnification, give to the party obliged to
provide indemnification hereunder (the "Indemnitor") a notice (a "Claim Notice")
describing in reasonable detail the facts giving rise to its claim for
indemnification hereunder, and shall include in such Claim Notice (if then
known) the amount or method of computation of the amount of the claim, and a
reference to the clause of Section 10.01 hereof upon which such claim is based;
provided, however, that the failure to so notify the Indemnitor shall not affect
the indemnity made hereunder or relieve the Indemnitor of its obligation to
indemnify such Indemnified Party, except and only to the extent that such
Indemnitor shall be unable to exercise its rights under clause (ii) below or
shall otherwise be materially prejudiced by such failure.
(ii) The Indemnitor, upon presentation of a Claim Notice, shall
retain counsel reasonably satisfactory to the Indemnified Party to participate
in and, to the extent the Indemnitor desires, to assume and control the defense
of any matter giving rise to a claim for indemnification, and shall pay the fees
and disbursements of such counsel relating to such claim for indemnification.
Any Indemnified Party shall be entitled, at its own expense, to participate in
any action, suit, claim or proceeding, the defense of which has been assumed by
the Indemnitor.
(iii) No Indemnified Party shall enter into any settlement or other
compromise with respect to any action, suit, claim or proceeding without the
prior written consent of the Indemnitor, which consent will not be unreasonably
withheld or delayed unless such Indemnified Party waives its right to be
indemnified under this Section. Without the prior written consent of the
Indemnified Party, the Indemnitor shall not effect any settlement of any claim
or pending or threatened proceeding in respect of which the Indemnified Party is
a party and indemnity could have been sought hereunder by the Indemnified Party,
unless such settlement includes an unconditional release of the Indemnified
Party from all liability or claims that are the subject matter of such
proceeding. Provided that an Indemnified Party has complied with this Section
10.02 in all material respects, if such Indemnified Party shall be required
under any order, writ or judgment of any applicable court or administrative
agency or authority to pay any amounts subject to the indemnity set forth
herein, the Indemnified Party shall be entitled to a prompt reimbursement of
such amount from the Indemnitor, and the provisions of this Section 10.02 shall
otherwise apply.
10.03 Tax Gross Up. With respect to any indemnity payment made pursuant to
------------
this Article, such indemnity payment shall include any amount necessary to hold
the Indemnified Party harmless on an after-tax basis from all federal and state
income taxes required to be paid by the Indemnified Party with respect to such
indemnity payment; provided, however, that if the Indemnified Party realizes a
tax
10
<PAGE>
benefit by reason of such indemnity payment, the Indemnified Party shall pay the
Indemnitor an amount equal to the net value to the Indemnified Party of such tax
benefit when, and to the extent, realized (such payments by the Indemnified
Party not to exceed in the aggregate the amount of related indemnity paid by the
Indemnitor), but not before the Indemnitor shall have made all indemnity
payments to or on behalf of the Indemnified Party required pursuant to this
Article X; provided, further, however, that if the Indemnified Party loses such
tax benefit subsequent to any payment to the Indemnitor with respect thereto,
the Indemnitor shall indemnify the Indemnified Party with respect to such loss
pursuant to the provisions of Section 10.02 hereof.
11
<PAGE>
ARTICLE XI
RESERVED RIGHTS; MISTAKEN PAYMENTS
11.1 Reserved Rights, Etc. If Purchaser shall collect any amount under any
---------------------
Lease or any Transaction Document or otherwise relating to the Reserved Rights
it shall, upon it being known to Purchaser to be an amount to which Seller or an
Owner Trustee or SPLP is entitled, promptly remit such amount to Seller or the
appropriate Owner Trustee or SPLP, as appropriate, and, until so delivered, any
such amount collected by Purchaser shall be held in trust by Purchaser for the
benefit of Seller or the Owner Trustee or SPLP, as applicable. Purchaser agrees
that, in matters relating to the Reserved Rights, it shall act in a manner
consistent with the rights of Seller as the predecessor owner and lessor of the
Equipment or as the predecessor beneficial owner under the Equipment Trust(s) or
SPLPs, and the Owner Trustee and the SPLP. If Seller shall receive any amount
under any Lease or any Transaction Document or otherwise relating to the period
from and after the Closing (other than any amounts in respect of Reserved Rights
and other than rent attributable to periods prior to the Closing), it shall
promptly remit such amount to Purchaser and, until so delivered, any such amount
collected by Seller shall be held in trust by Seller for the benefit of
Purchaser. Seller agrees that, in matters relating to amounts received by it
relating to any Lease or Transaction Document and pertaining to periods
subsequent to the Closing (other than any amounts in respect of Reserved Rights
and other than rent attributable to periods prior to the Closing), it shall act
in a manner consistent with the rights of Purchaser herein.
11.2 Mistaken Payments. Purchaser acknowledges that many of the Lessees
-----------------
will continue to lease equipment not being sold to Purchaser hereunder from one
or more Affiliates of Seller or EFG. It is likely that, notwithstanding the
efforts of Seller and Purchaser, certain of such Lessees may from time to time
mistakenly make a payment to Purchaser due to Seller under one or more such
other leases. Purchaser agrees to promptly remit any such amount to Seller and,
until so delivered, hold such payment in trust for Seller.
ARTICLE XII
CONFIDENTIALITY
Purchaser covenants and agrees to keep the terms of this Agreement and the
other Transaction Documents confidential and agrees not to disclose the same to
any person without the prior written consent of Seller or Seller's Affiliates,
provided that Purchaser shall have the right to disclose the same
(i) to its directors, officers, employees, auditors or counsel to whom
it is necessary to disclose such information, each of which shall be informed of
the confidential nature of the information;
(ii) to Fleet Bank, N.A. in connection with its financing of the
purchase of the Transferred Assets by Purchaser;
(iii) in any statement or testimony pursuant to a subpoena or order of
any Governmental Body or as otherwise required by law (provided that Purchaser
shall use its best efforts to give Seller prior written notice of such intended
disclosure unless such notice shall be prohibited by law); and
12
<PAGE>
(iv) to the extent required in its financial statements.
ARTICLE XIII
MISCELLANEOUS
13.1 Expenses. Whether or not the transactions contemplated hereby shall
--------
be consummated, each of Seller and Purchaser shall be obligated in respect of
all of its own costs and expenses, including reasonable attorneys' fees, in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the Transaction Documents.
13.2 Notices. Any communication to be given hereunder shall be given in
-------
writing and shall be sufficiently given when mailed prepaid, first class,
registered or certified mail return receipt requested or sent by facsimile
transmission to the party to which said notice is to be given at its address in
the preamble hereof unless such address is changed by notice given to the other
party. Notices to Seller shall be sent to the attention of Gary D. Engle, and
notices to Purchaser shall be sent to the attention of Roland St. Louis,
President, RSL Holdings, Inc., General Partner.
13.3 Successors and Assigns. Neither party to this Agreement may assign
----------------------
its rights or obligations hereunder to any person or entity other than an
Affiliate, except that Purchaser shall have the right to collaterally assign its
rights hereunder to an institution financing Purchaser's obligations hereunder.
This Agreement shall inure to the benefit of and be binding upon each of the
parties hereto and their respective successors and permitted assigns.
13.4 Headings and Gender. Section headings are not to be considered part
-------------------
of this Agreement. They are included solely for convenience, and are not
intended to be full or accurate descriptions of the contents thereof. As used in
this Agreement, the masculine, feminine or neuter gender and the singular and
plural number shall each be deemed to include the others whenever the context so
indicates.
13.5 Documents. All schedules, documents or exhibits referred to in this
---------
Agreement are integral parts of this Agreement and are incorporated herein by
this reference.
13.6 Entire Agreement. This Agreement and the other Transaction Documents
----------------
and all other documents and instruments referred to herein and appended hereto
as exhibits and/or schedules constitute the entire Agreement between the parties
and supersede and cancel all prior representations, negotiations, undertakings,
letters, acceptances, agreements, understandings, contracts and communications,
whether verbal or written, between the parties hereto or their agents, with
respect to or in connection with the subject matter of this Agreement and no
agreement or understanding varying the terms and conditions hereof shall be
binding on either party hereto unless in writing and duly signed by authorized
representatives of both parties.
13.7 Further Assurances. The parties hereto agree to execute and deliver,
------------------
or cause to be executed and delivered, such further instruments or documents and
take such other action as may be reasonably required effectively to carry out
the transactions contemplated herein.
13.8 Laws. This Agreement shall be governed by and interpreted in
----
accordance with the internal laws of The Commonwealth of Massachusetts.
13
<PAGE>
13.9 Jurisdiction and Venue. The parties hereto hereby irrevocably submit
-----------------------
and consent to the non-exclusive personal jurisdiction of the appropriate state
or federal court located in Boston, Massachusetts, in any action or proceeding
relating in any way to this Agreement or the other Transaction Documents. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to venue in any of such
courts, and any claim that any such action or proceeding has been brought in an
inconvenient forum.
13.10 Counterparts. This Agreement may be executed by the parties hereto
------------
in separate counterparts, each of which when so executed and delivered shall be
an original but all such counterparts shall together constitute but one and the
same instrument.
14
<PAGE>
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this instrument.
SELLER:
AMERICAN INCOME PARTNERS IV-C
LIMITED PARTNERSHIP
Witness:
By: AFG Leasing IV Incorporated,
- ------------------------ its sole general partner
By: /s/ James F. Livesey
-------------------------------
Its: Vice President
------------------------------
PURCHASER:
RSL FINANCE LIMITED PARTNERSHIP II
By: RSL Holdings, Inc., its sole general
partner
By: /s/ Roland St. Louis
- ------------------------------ ------------------------------
Its: President
-----------------------------
15
<PAGE>
SCHEDULES: A - Description of Transferred Assets, Etc.
B - Purchase Price Breakdown
EXHIBITS: A - Form of Assignment and Assumption, Bill of Sale and Assignment
of Interests
B - Form of Cross Receipt
16
<PAGE>
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
SCHEDULE A
<TABLE>
<CAPTION>
MASTER RENTAL OWNERSHIP
LEASE NO. SCHEDULE PERCENTAGE
----------------------------------------------------------
<S> <C> <C> <C>
EQUIPMENT
Lessee Name:
American National Can Company 8712ILG331 A-22RN4 100.0000000%
American National Can Company 8712ILG331 A-25RN1 100.0000000%
American National Can Company 8712ILG331 A-26RN3 100.0000000%
ARA Living Centers, Inc. 8803PAG343 A-4A 100.0000000%
Baxter Healthcare Corporation 8209ILG122 G-10RN1 100.0000000%
Coca-Cola Foods 8606TXG240 B-6RN1 100.0000000%
Corning Glass Works 02/01/89 880361001RN1 100.0000000%
ARMCO, Inc. 8410PAG180 A&R E-4RN3 100.0000000%
ARMCO, Inc. 8410PAG180 A&R E-8RN1 100.0000000%
Dow Chemical Company USA 8608MIG816 D-7-32BRN1 100.0000000%
Federal Paper Board Company, Inc. 8504NJG193 A-41-67RN2 100.0000000%
Federal Paper Board Company, Inc. 8504NJG193 A-61-65RN2 100.0000000%
Federal Paper Board Company, Inc. 8504NJG193 A-61-65RN2A 100.0000000%
GAF Building Material Corporation 9312NJG484R F-1ARL1 100.0000000%
GAF Building Material Corporation 9312NJG484R H-1RL1 100.0000000%
The Kendall Company 8903MAG366 A-1RN2A 100.0000000%
The Kendall Company 8903MAG366 A-1RN2B 100.0000000%
Mobil Oil Corporation 8507NYG200 A-32RN2A 100.0000000%
Ford Motor Company 04/05/88 315435-8 100.0000000%
Ford Motor Company 04/05/88 411937 100.0000000%
Occidental Chemical Corporation 8806TXG353 A-2RN1 100.0000000%
LIMITED PARTNERSHIP INTERESTS
Partnership Name:
AIP/Tsuru Arrow Limited Partnership 12/30/88 TSURU-RN1 39.0000000%
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Tsuru Arrow Limited Partnership 12/30/88 TSURU-UPGRDE 39.0000000%
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Eagle Arrow Limited Partnership 06/01/89 EAGLE-RN1 60.0000000%
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Eagle Arrow Limited Partnership 06/01/89 EAGLE-UPGRDE 60.0000000%
[KGJS/Gearbulk Holding Limited, lessee]
</TABLE>
<TABLE>
<CAPTION>
ASSET DESCRIPTION
----------------------------------------------------------
<S> <C>
EQUIPMENT
Lessee Name:
American National Can Company (2) KONICA COPIERS
American National Can Company TENNANT SWEEPER
American National Can Company HYSTER FORKLIFT
ARA Living Centers, Inc. VARIOUS SECURITY SYSTEMS
Baxter Healthcare Corporation INT'L TRACTORS
Coca-Cola Foods BEVERAGE DISPENSERS
Corning Glass Works OKUMA LATHE
ARMCO, Inc. ERW AMALOG INSPECTION SYSTEM
ARMCO, Inc. ERW ULTRASONIC INSPECTION SYSTEM
Dow Chemical Company USA INTECOM TELEPHONE SYSTEM
Federal Paper Board Company, Inc. CLARK PALLET TRUCK W/ ACCESS
Federal Paper Board Company, Inc. CLARK CLAMP TRUCK
Federal Paper Board Company, Inc. MASSEY FERGUSON TRACTOR & UPGRADE
GAF Building Material Corporation TESTING EQUIPMENT / MANUFACTURING
GAF Building Material Corporation TESTING EQUIPMENT / MANUFACTURING
The Kendall Company UPGRADE PHONE EQUIPMENT
The Kendall Company UPGRADE PHONE EQUIPMENT
Mobil Oil Corporation PRINTER
Ford Motor Company SCHAEFF E-4000-B FORKLIFTS
Ford Motor Company SCHAEFF SAFETY DOORS
Occidental Chemical Corporation FINNIGAN MAT PRINTERS & SOFTWARE
LIMITED PARTNERSHIP INTERESTS
Partnership Name:
AIP/Tsuru Arrow Limited Partnership SHIPPING VESSEL
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Tsuru Arrow Limited Partnership SHIPPING VESSEL UPGRADE
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Eagle Arrow Limited Partnership SHIPPING VESSEL
[KGJS/Gearbulk Holding Limited, lessee]
AIP/Eagle Arrow Limited Partnership SHIPPING VESSEL UPGRADE
[KGJS/Gearbulk Holding Limited, lessee]
</TABLE>
<PAGE>
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
SCHEDULE B
<TABLE>
<CAPTION>
================================================================================
ADJUSTED PURCHASE PRICE BREAKDOWN
<S> <C>
PURCHASE PRICE $35,000,000.00
PLUS: RECEIVABLES PURCHASED $344,961.62
LESS: ADJUSTMENTS ($2,003,128.27)
==============
ADJUSTED PURCHASE PRICE $33,341,833.35
================================================================================
PROGRAM'S SHARE OF TOTAL PROCEEDS FROM SALE $3,538,838.70
</TABLE>
<PAGE>
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT,
BILL OF SALE AND ASSIGNMENT OF BENEFICIAL INTERESTS
THIS ASSIGNMENT AND ASSUMPTION, BILL OF SALE AND ASSIGNMENT OF BENEFICIAL
INTERESTS (this "AGREEMENT") dated as of September 30, 1996, by and between the
undersigned, a Massachusetts limited partnership having its principal place of
business at 98 North Washington Street, Boston, Massachusetts 02114 ("Seller"),
and RSL Finance Limited Partnership II, a Florida limited partnership, having a
principal place of business at 2300 Miami Center, 201 South Biscayne Boulevard,
Miami, FL 33131-4329 ("Purchaser"). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in that certain Purchase
and Sale Agreement between Seller and Purchaser dated as of September 30, 1996
(the "P&S Agreement").
1. ASSIGNMENT OF LEASE.
Seller hereby sells, assigns, transfers and conveys to Purchaser all of
Seller's right, title, interest, duties and obligations (whether direct or
indirect, known or unknown, contingent or otherwise) in and to each Lease as set
forth on Schedule A hereto between Seller, as lessor and each lessee described
----------
therein (in each case a "Lessee"), with respect to the leasing by each Lessee of
certain equipment (as further described in each Lease, individually and
collectively, the "Equipment"), except that Seller hereby reserves and does not
transfer its right, title and interest in and to the Reserved Rights.
2. SALE OF THE EQUIPMENT.
Seller hereby sells and transfers to Purchaser all of its right, title and
interest in and to the Equipment, together with all warranties, express or
implied, received from the manufacturer or vendor thereof. Seller hereby
represents and warrants to Purchaser that subject to Section 3 hereof, Seller is
conveying good title to the Equipment, free and clear of all liens and
encumbrances other than Permitted Liens.
3. ASSIGNMENT OF BENEFICIAL INTERESTS.
Seller hereby sells, assigns, transfers and conveys to Purchaser all of
Seller's right, title, interest, duties and obligations in and to the Beneficial
Interests owned by Seller in each Equipment Trust and SPLP holding title to the
Equipment, all as further set forth on Schedule A hereto. Seller hereby
-----------------
represents and warrants to Purchaser that each such Beneficial Interest is free
and clear of all liens and encumbrances except Permitted Liens.
4. TAXES
All taxes in any way arising out of this transaction, including without
limitation transfer taxes arising out of the assignment of each Lease, the
assignment of the Beneficial Interests, and the sale of the Equipment shall be
solely for the account of the Purchaser.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
19
<PAGE>
(a) Seller, in order to induce Purchaser to enter into this Agreement,
hereby ratifies and confirms each of its representations and warranties as
contained in the P&S Agreement, which provisions are incorporated herein by
reference.
(b) Seller has delivered or made available to Purchaser a complete and
correct original counterpart of each Lease, and no other agreements, instruments
or documents exist between Seller or each Owner Trustee or each SPLP and each
Lessee relating to the Equipment and the Lease that are in force and effect.
Each Lease constitutes the entire agreement between the Lessee and Seller with
respect to the Equipment and no other assignments, amendments, modifications,
waivers or consents have been entered into with respect to each Lease. Each
Lease is in full force and effect and, to Seller's actual knowledge, (i) no
event of default has occurred and is continuing thereunder; (ii) the rents
payable under each Lease are not subject to any defenses, setoffs, or
counterclaims; and (iii) Seller has not made any assignment of any Lease except
to a Lender.
(c) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE SALE OF THE
EQUIPMENT IS HEREBY MADE ON AN "AS-IS WHERE-IS" BASIS. SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO (i) THE
EQUIPMENT, INCLUDING, WITHOUT LIMITATION OF THE FOREGOING, ITS SELECTION,
QUALITY, DESIGN, CAPACITY, CONDITION, MERCHANTABILITY OR ITS FITNESS FOR USE OR
FOR ANY PARTICULAR PURPOSE AND FREEDOM FROM CLAIMS OF COPYRIGHT OR PATENT
INFRINGEMENT OR ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR
NEGLIGENCE, (ii) THE FREEDOM OF THE EQUIPMENT (OR ANY PART OR PORTION THEREOF)
FROM ANY LATENT OR OTHER DEFECT (WHETHER OR NOT DISCOVERABLE), (iii)THE
COMPLIANCE OF ANY OF THE EQUIPMENT (OR ANY PART OR PORTION THEREOF) WITH ANY
APPLICABLE LAWS OR REGULATIONS, (iv) THE CREDITWORTHINESS OF EACH LESSEE OR ANY
OTHER PERSON UNDER THE LEASES OR THE TRANSACTION DOCUMENTS, (v) THE
COLLECTIBILITY OF ANY AMOUNT UNDER THE LEASES OR ANY OF THE TRANSACTION
DOCUMENTS, (vi) THE TAX CHARACTERIZATION OF THE LEASES, OR (vii) THE DUE
AUTHORIZATION, EXECUTION AND DELIVERY BY, OR THE ENFORCEABILITY AGAINST, ANY
PERSON WHO IS OR HAS BEEN A PARTY TO THE LEASES OR ANY OF THE TRANSACTION
DOCUMENTS (WITH THE EXCEPTION OF THE SELLER) AND SELLER HEREBY DISCLAIMS ALL
SUCH REPRESENTATIONS AND WARRANTIES.
(d) PURCHASER ACKNOWLEDGES THAT THE PRINCIPAL PURPOSE OF SELLER IN SELLING
THE TRANSFERRED ASSETS IS TO LIQUIDATE SUCH ASSETS AND DISTRIBUTE THE CASH TO
ITS INVESTORS. THEREAFTER, SELLER AND ITS GENERAL PARTNER INTEND TO TERMINATE
THEIR RESPECTIVE BUSINESSES AND WINDUP OR DISSOLVE THEIR AFFAIRS. ACCORDINGLY,
PURCHASER ACKNOWLEDGES AND AGREES THAT ALL OF SELLER'S REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS CONTAINED HEREIN AND IN THE P&S AGREEMENT
SHALL TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT AND SHALL NOT SURVIVE ON
AND AFTER THE CLOSING. ACCORDINGLY, NEITHER SELLER NOR SELLER'S GENERAL PARTNER
NOR ANY OF THEIR PARTNERS, OFFICERS, DIRECTORS, SHAREHOLDERS, INVESTORS,
EMPLOYEES, AGENTS, AND ATTORNEYS, TOGETHER WITH THEIR PERSONAL REPRESENTATIVES,
HEIRS, SUCCESSORS AND ASSIGNS AND THE AFFILIATES OF ANY OF THE FOREGOING (THE
"INDIRECT PARTIES") SHALL, AT ANY TIME, HAVE ANY PERSONAL LIABILITY FOR ANY
OBLIGATIONS HEREUNDER. IN FURTHERANCE OF THE FOREGOING, PURCHASER HEREBY AGREES
NOT TO SEEK A PERSONAL JUDGMENT AGAINST SELLER OR SELLER'S GENERAL PARTNER OR
ANY OF THE INDIRECT PARTIES AT ANY TIME, AND NOT TO SEEK
20
<PAGE>
TO OVERTURN OR RESCIND ANY SUCH WINDING UP OR DISSOLUTION IN ORDER TO ASSERT ANY
PERSONAL LIABILITY AGAINST SELLER OR SELLER'S GENERAL PARTNER OR ANY OF THE
INDIRECT PARTIES. PURCHASER ACKNOWLEDGES AND AGREES THAT IT FULLY UNDERSTANDS
THE FOREGOING LIMITATIONS ON RECOURSE, THAT IT PERFORMED ITS DUE DILIGENCE IN
RESPECT OF THE TRANSFERRED ASSETS WITH SUCH LIMITATION IN MIND AND THAT THE
PURCHASE PRICE REFLECTS THE RISKS ASSOCIATED WITH SUCH LIMITATION.
6. REPRESENTATIONS AND WARRANTIES.
Each of Purchaser, in order to induce Seller to enter into this Agreement,
and Seller, in order to induce Purchaser to enter into this Agreement, hereby
ratifies and confirms each of its respective representations and warranties as
contained in the P&S Agreement, which provisions are incorporated herein by
reference.
7. ASSUMPTION OF OBLIGATIONS, ETC..
Purchaser hereby accepts the foregoing sale, assignment, transfer and
conveyance of all of Seller's right, title and interest, duties and obligations
under each Lease and each Beneficial Interest assigned to Purchaser hereby, and
agrees to assume and be bound by all the terms of, and to undertake all of the
obligations of Seller contained in each Lease, including the covenant of quiet
enjoyment contained therein, and in each Equipment Trust and SPLP and to accept
the status of a substitute beneficiary of each Equipment Trust and substitute
limited partner in each SPLP. Purchaser (i) adopts and confirms the powers of
attorney, if any, granted by the agreements of limited partnership and trust
agreements, to the general partner and Owner Trustee, respectively, of such
entities, (ii) agrees to amendments to the organizational documents of the SPLPs
and the Equipment Trusts naming Purchaser as a substitute or additional limited
partner or beneficiary, as applicable, with the capital contribution as so
required, and (iii) confirms the aforesaid power of attorney may be exercised by
the general partner or Owner Trustee in the name of and on behalf of Purchaser
to accomplish the foregoing.
21
<PAGE>
8. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
internal laws of The Commonwealth of Massachusetts.
9. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which,
taken together, shall constitute one and the same instruments.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
this instrument .
AMERICAN INCOME PARTNERS IV-C LIMITED RSL FINANCE LIMITED PARTNERSHIP II
PARTNERSHIP
By: AFG Leasing IV Incorporated, By: RSL Holdings, Inc., its sole
a Massachusetts corporation and the general partner
Managing General Partner of the
Registrant.
By: /s/ James F. Livesey By: /s/ Roland St. Louis
---------------------------- ---------------------
Its: Vice President Its: President
--------------------------- --------------------
22
<PAGE>
EXHIBIT B
Cross Receipt
Reference is hereby made to that certain Purchase and Sale Agreement dated
as of September 30, 1996 (the "P&S Agreement") between the person designated
as "Seller" below and RSL Finance Limited Partnership II, as purchaser.
Purchaser hereby accepts delivery of the Equipment (as defined in the P&S
Agreement) as more fully described on Exhibit A attached hereto and Seller
acknowledges receipt of the Purchase Price (as defined in the P&S Agreement) all
on and as of the date set forth below.
RSL FINANCE LIMITED PARTNERSHIP II
By: RSL Holdings, Inc., its sole
general partner
Dated: September 30, 1996 By: /s/ Roland St. Louis
------------------ --------------------------
Its: President
-------------------------
AMERICAN INCOME PARTNERS IV-C LIMITED
PARTNERSHIP
By: AFG Leasing IV Incorporated,
a Massachusetts corporation and
the Managing General Partner of
the Registrant
By: /s/ James F. Livesey
-----------------------
Its: Vice President
----------------------
23
<PAGE>
EXHIBIT 99.2(E)
AIRCRAFT PURCHASE AGREEMENT (N931MC)
DATED AS OF SEPTEMBER 30, 1996
By and Between
INVESTORS ASSETS HOLDING CORP.,
not individually but solely as Trustee
and
NORTHWEST AIRLINES, INC., as Buyer
For One (1) MD-82 Aircraft
"This document contains trade secrets and commercial, financial, and proprietary
information which is privileged and confidential and which shall not be
disclosed to any person, governmental agency, company, corporation or other
party except as such disclosure is required by law."
<PAGE>
AIRCRAFT PURCHASE AGREEMENT
---------------------------
INDEX
-----
Section Page
------- ----
1. Subject Matter of Sale..................................1
2. Purchase Price and Method of Payment....................2
3. Inspection and Acceptance...............................2
4. Condition of Aircraft...................................3
5. Opinion of FAA Counsel..................................3
6. Closing, Conditions Precedent...........................4
7. Defaults by Seller; Force Majeure.......................6
8. Destruction.............................................7
9. Default of Buyer........................................7
10. Warranties; Representations.............................7
11. Taxes...................................................9
12. Assignment.............................................10
13. Duty to Cooperate and Approvals........................11
14. Public Announcements...................................11
15. Headings...............................................11
16. Termination for Insolvency.............................11
17. Commissions and Brokers, Fees and Expenses.............12
18. Disclaimer of Consequential Damages....................12
19. Notices and Requests...................................12
20. Entire Agreement.......................................13
21. Governing Law; Severability; Timing....................13
22. Counterparts...........................................14
23. Facsimile Signatures...................................14
24. Insurance..............................................14
EXHIBITS
--------
Exhibit A....... The Aircraft
Exhibit B....... The Data
Exhibit C....... Delivery Receipt
Exhibit D....... Lease Termination Form
Exhibit E....... Warranty Bill of Sale
Exhibit F....... Assignment of Warranties
Exhibit G-1..... Seller Officer's Certificate
Exhibit G-2..... Buyer Officer's Certificate
<PAGE>
AIRCRAFT PURCHASE AGREEMENT
---------------------------
This Agreement, made and entered into as of this 30th day of September,
1996, is by and between Investors Assets Holding Corp., not in its individual
capacity but solely as trustee ("Seller") under Third Lease Agreement (N931MC)
dated as of July 29, 1994, (the "Lease") concerning McDonnell Douglas MD-82
Aircraft U.S. Reg. No. N93IMC between Seller and Northwest Airlines, Inc., a
Minnesota corporation ("Buyer").
Witnesseth:
----------
WHEREAS, Buyer currently leases on (1) used MD-82 aircraft, Federal
Aviation Administration ("FAA") Registration No. N931MC as more fully described
in exhibit A hereto from Seller pursuant to a lease agreement described in
Exhibit D, the Lease Termination; and
WHEREAS, Buyer desires to purchase such used aircraft, engines, parts
and accessories and related records and manuals from Seller and Seller desires
to sell such used aircraft, engines, parts and accessories and related records
and manuals to Buyer; and
WHEREAS, contemporaneously with the sale and purchase of the aircraft,
(i) the Lease will be terminated,
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and upon the terms and
conditions herein specified, Seller and Buyer agree as follows:
1. Subject Matter of Sale.
----------------------
1.01. Under and pursuant to the terms and conditions hereinafter set
forth, Seller shall sell and deliver to Buyer, and Buyer shall purchase and
accept delivery from Seller, the following:
(a) One (1) used McDonnell Douglas MD-82 aircraft with two (2)
Pratt & Whitney JT8D-217 aircraft engines consisting of an airframe, including
any and all avionics, appliances, parts, furnishings, instruments, accessories
and other equipment installed therin or thereon, and the above described
engines, all of which constitute the "Aircraft". The Aircraft is more fully
described in Exhibit A hereto.
(b) The flight, engineering and maintenance manuals, drawings,
documents and other data pertaining to the Aircraft and in Seller's or Buyer's
possession (the "Manuals"), and the operational and maintenance records
pertaining to the Aircraft required by the FAA and in Seller's possession (the
"Records"). (The Manuals and the
1
<PAGE>
Records are sometimes hereinafter collectively referred to as the ("Data)). The
Data will be furnished to Buyer by Seller at no additional charge to Buyer as a
part of the consideration for the payment of the purchase price set forth in
Section 2.01 herein.
2. Purchase Price and Method of Payment.
------------------------------------
2.01. The purchase price ("Purchase Price") for the Aircraft and Data
is Thirteen Million Two Hundred Thousand dollars ($13,200,000).
N931MC $13,200,000
2.02. Upon delivery of the Aircraft and Data, Buyer shall pay to Seller
the Purchase Price.
2.03. All payments hereunder shall be made by wire transfer of
immediately available funds to:
Equis Financial Group
Fleet Bank, N.A.
80 Pine Street
New York, NY 10005
ABA #021-200-339
Account # 2181-01-7572
3. Inspection and Acceptance
-------------------------
3.01 Because the Aircraft is currently in Buyer's possession pursuant
to the Lease, the Aircraft shall be delivered to Buyer at Buyer's expense and
risk of loss or damage at such point in the continental United States as Buyer
shall select, on the date specified for delivery for the Aircraft in Exhibit A
hereto.
3.02 Seller shall transfer title to the Data to Buyer concurrently with
the delivery of the Aircraft hereunder. Any such Data not already in Buyer's
possession shall be located at Buyer's Minneapolis, Minnesota facility.
3.03 DISCLAIMER OF OTHER WARRANTIES. EXCEPT FOR THE LIMITED WARRANTY
PROVIDED IN SECTION 10 AND EXHIBIT E, BUYER AGREES THAT THE AIRCRAFT IS
BEING SOLD "AS IS' WITHOUT WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED. BUYER ACKNOWLEDGES THAT SELLER IS NOT THE MANUFACTURER OF THE
AIRCRAFT AND DATA NOR A DEALER IN SIMILAR EQUIPMENT AND HEREBY DISCLAIMS
ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE DESIGN OR CONDITION
OF THE AIRCRAFT
2
<PAGE>
AND DATA, ITS MERCHANTABILITY OR ITS FITNESS FOR USE OR FOR ANY
PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE
AIRCRAFT AND DATA. IN NO EVENT SHALL THE SELLER BE LIABLE FOR INCIDENTAL
OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN TORT.
BUYER AGREES TO INDEMNIFY AND HOLD SELLER HARMLESS FROM AND AGAINST ANY
AND ALL LIABILITIES, CLAIMS, JUDGMENTS, OR DEMANDS FOR DAMAGES TO
PROPERTY OR INJURIES OR DEATH TO PERSONS ARISING FROM OR ATTRIBUTABLE TO
THE AIRCRAFT AND DATA OR PART THEREOF, AND FOR ANY CLAIM OR AWARD FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES. BUYER SHALL USE ITS BEST EFFORTS TO
RECEIVE A DISCLAIMER OF WARRANTY WITH RESPECT TO SELLER SIMILAR TO THAT
GIVEN TO SELLER BY BUYER IN THE FIRST PARAGRAPH OF THIS SECTION 3.03
FROM ANY PURCHASER TO WHOM BUYER MAY SELL THE AIRCRAFT.
3.04 [Intentionally Left Blank]
3.05 Upon delivery of the Aircraft hereunder, the parties shall execute
and deliver to each other duplicate originals of Delivery Receipts,
substantially in the form of Exhibit C.
3.05 Contemporaneously with delivery of the Aircraft to Buyer
hereunder, Lessor shall terminate the Lease of such Aircraft to Lessor and shall
execute and deliver to Buyer at the closing a termination of each Lease in the
form of Exhibit D attached hereto.
Following the termination of the Lease, Buyer shall have no obligation under the
Lease and the Lease shall be terminated and of no further force or effect
provided, however, that those provisions of the Lease stated to survive the
termination of the Lease shall remain in effect. Buyer and Seller agree that
Seller shall have no obligations under Section 7.1(c) of the Lease which survive
the transfer of title to the Aircraft from Seller to Buyer.
3.07 The parties shall deliver to each other such documents and other
items as is required herein.
4. Condition of Aircraft.
---------------------
4.01. Until delivery and transfer of title to the Aircraft to Buyer
hereunder, such Aircraft shall be maintained and repaired by Buyer in Accordance
with the Lease.
5. Opinion of FAA Counsel.
----------------------
5.01. On the date of closing the purchase of the Aircraft hereunder,
Buyer shall have received an opinion of Crowe & Dunlevy, P.C., Oklahoma City,
Oklahoma, as to matters
3
<PAGE>
related to the filing and recordation system of the FAA, including Seller's
title to the airframe, the absence of liens on the airframe and engines, (except
for any and all liens or encumbrances created by Buyer or as the result of Buyer
operating the Aircraft) certain documents being in proper form for filing and
having been filed for recordation with the FAA and such other matters as are
appropriate and customary for the transactions contemplated hereby. Such opinion
shall be dated as of the date of closing.
6. Closing, Conditions Precedent.
-----------------------------
The transactions and acts set forth in this Section 6 shall be per-
formed at the time of delivery to Buyer of the Aircraft in the order set forth
below but shall be deemed to have occurred simultaneously.
6.01. At delivery of the title to the Aircraft to Buyer, Seller shall
deliver to Buyer or Buyer's designee the following documents (fully executed and
in proper form for filing), the delivery of which are conditions precedent to
Buyer's obligation to pay the Purchase Price pursuant to this Agreement:
(a) A duly executed FAA form Bill of Sale (AC Form 8050-2 or its
equivalent) conveying to Buyer all of Seller's right, title and interest
in and to the Aircraft as set forth in the Bill of Sale, and a duly
executed long form Warranty Bill of Sale for the Aircraft, substantially
in the form of Exhibit E hereto, the Data and the Certificate of
Airworthiness;
(b) True and correct copies of releases of any and all mortgages,
liens, charges, claims, security interests, leases and encumbrances of
any nature whatsoever against the Aircraft and the original copies of
such releases available for immediate filing with the FAA;
(c) The Data related to the Aircraft in Seller's possession (if any);
(d) A duly executed Assignment of Warranties for the Aircraft in the
form attached hereto as Exhibit F;
(e) A certificate of Seller in the form of Exhibit G-1 hereto,
certifying that the representations and warranties of Seller set forth
herein are true and correct (and such representations and warranties
shall be true and correct) on such delivery date;
(f) The Lease Termination provided for in Section 3.06 hereof; and
4
<PAGE>
(g) Such other documents required by this Agreement.
6.02 At delivery of title to the Aircraft to Buyer, Buyer shall
deliver to Seller or Seller's designee the following items and documents (fully
executed and in proper form for filing), the delivery of which are conditions
precedent to Seller's obligation to deliver title pursuant to this Agreement:
(a) The Purchase Price for the Aircraft and Data as listed in Section
2.01;
(b) A Delivery Receipt, substantially in the form of Exhibit C
hereto, pertaining to the Aircraft;
(c) Evidence that application for registration of such Aircraft in
the name of Buyer has been duly made with the FAA;
(d) A certificate of Buyer in the form of Exhibit G-2 hereto,
certifying that the representations and warranties of Buyer set forth
herein are true and correct (and such representations shall be true and
correct) on such delivery date; and
(e) the Lease Termination provided for in Section 3.06 hereof.
6.03 [Intentionally left blank.]
6.04 No action or proceeding or governmental action shall have been
instituted or threatened before any court or governmental agency, nor shall any
order, judgement, or decree have been issued or proposed to be issued by any
court or governmental agency at the time of the Delivery Date to set aside,
restrain, enjoin, or prevent the completion and consummation of this Agreement
or the transactions contemplates hereby.
6.05 No change shall have occurred after the date of the execution and
delivery of this Agreement in applicable law or regulations thereunder or
interpretations thereof by appropriate regulatory authorities or any court that,
in the reasonable opinion of Seller, Buyer or their counsel, would make it a
violation of law or regulation for Seller or Buyer to enter into or perform any
transaction contemplated by this Agreement.
6.06 The FAA shall have confirmed to the Buyer in writing that the
Aircraft is eligible to be registered in the name of Buyer as set forth in the
FAA application for registration for
5
<PAGE>
such Aircraft and application for registration of such Aircraft shall have been
duly made with the FAA as contemplated by Section 6.02 (c) of this Agreement.
6.07 Both Seller and Buyer shall deliver to Crowe & Dunlevy, P.C. in
Oklahoma City, Oklahoma in advance of closing of the Aircraft all documents that
are required to be filed with the FAA with respect to such Aircraft. Upon
delivery of the Aircraft and the filing of the Lease Termination, FAA Bill of
Sale, releases of any liens on the Aircraft, and such other documents as Buyer
or Seller reasonably deem necessary to effectuate the intents and purposes of
this Agreement, with the FAA Registration Office in Oklahoma City, Oklahoma,
title the Aircraft shall irrevocably vest in Buyer.
6.08 Seller's obligations to sell the Aircraft hereunder are
conditional upon the Aircraft remaining subject to the Lease until the closing
of the sale and purchase of such Aircraft in accordance with this Agreement.
7. Defaults by Seller; Force Majeure.
---------------------------------
7.01 The occurrence of one or more of the following events shall
constitute a default by Seller hereunder:
(a) Failure by Seller to timely tender delivery of any closing
document pursuant to the terms and in the condition required by this
Agreement; or
(b) Failure by Seller to observe or perform any material
obligation of Seller under this Agreement.
7.02 If any such default should occur and Seller does not cure such
default within ten (10) days after written request from Buyer to do so, it shall
constitute a "Seller's Event of Default" hereunder. Upon the occurrence of a
Seller's Event of Default, Buyer, without prejudice to any other remedy Buyer
may have against Seller for Buyer's damages resulting from Seller's Event of
Default, may, by written notice to Seller, terminate this Agreement in whole or
in part.
7.03 Subject to Section 8 below, Seller shall not be responsible nor
shall it be deemed a Seller's Event of Default, in whole or in part, hereunder
on account of its inability to perform this Agreement, or on account of delays
in Seller's performance of this Agreement, for any of the following reasons
(herein called "force majeure"):
-------------
(a) Loss of or damage to the Aircraft for any reason; or
(b) Any other cause occurring beyond the reasonable control of Seller
and not due to Seller's fault or neglect, including, but not limited to,
war, acts or government, insurrections, strikes, labor troubles, riots,
fires, floods, explosions, earthquakes, accidents, mechanical failures,
inability for any reason (after use of due diligence) to obtain
materials or parts for overhaul, or any act of God or of the public
enemy;
6
<PAGE>
provided, however, that in the event of any force majeure, Seller agrees
-------------
to promptly notify Buyer thereof and of Seller's estimate of the
expected duration of delay resulting therefrom, and to use its
reasonable efforts to remedy such inability or delay so as to permit it
to perform hereunder.
7.04. If the delivery of the Aircraft shall be delayed by reason of
force majeure beyond one hundred eighty (180) days, Buyer shall have the option
- -------------
to terminate this Agreement with respect to the Aircraft, provided notice of
such termination shall be given by telex, telecopier or letter, delivered within
(30) days after such 180-day period.
8. Destruction.
-----------
8.01. If, prior to delivery, the Aircraft is destroyed or damaged
beyond repair, this Agreement shall terminate.
9. Default of Buyer.
----------------
9.01. The occurrence of one or more of the following events shall
constitute a default by Buyer hereunder:
(a) Buyer's failure to accept delivery of the Aircraft upon tender
thereof in the condition and at the time required by and otherwise in
accordance with this Agreement; or
(b) Buyer's failure to observe or perform any material obligation of
Buyer under this Agreement.
9.02. If any such default should occur and Buyer does not cure default
within ten (10) days after written request from Seller to do so, it shall
constitute a "Buyer's Event of Default" hereunder. Upon the occurrence of a
Buyer's Event of Default, Seller, without prejudice to any other remedy Seller
may have against Buyer for damages to Seller resulting from Buyer's Event of
Default, may, by written notice to Buyer, terminate this Agreement.
10. Warranties; Representations.
---------------------------
10.01. Buyer represents and warrants to Seller that at the time of
execution of this Agreement and at the time of delivery of the Aircraft
hereunder:
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota;
(b) Buyer has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
7
<PAGE>
(c) The execution, delivery and performance of this Agreement
by Buyer has been duly authorized by all necessary corporate action and
will not violate, breach or contravene any provision of law or the
certificate of incorporation or the by-laws of Buyer, or any license or
permit under which Buyer conducts its business and will not result in
the breach of, or constitute a default under, any indenture, credit or
loan agreement, mortgage or other instrument to which Buyer is a party
or by which Buyer is bound; and this Agreement constitutes a valid,
legal and binding obligation of Buyer, enforceable in accordance with
its terms, subject to bankruptcy, insolvency or other laws affecting the
rights of creditors generallly and subject to general equitable
principles;
(d) There are no suits, actions or proceedings (including, but
not limited to, counter or cross-claims) pending, or to the knowledge of
Buyer, threatened, against Buyer before or by any United States,
federal, state, municipal or other governmental agency, department,
commission, board, bureau or instrumentality, which, if adversely
determined, would have a material adverse effect on Buyer's ability to
enter into, consummate, or carry out this Agreement or any obligation
hereunder; and
(e) No consent or approval of, filing with or notice to any
governmental autority, court or other party or person is rquired in
connection with the execution, delivery or performance by Buyer of this
Agreement or the transactions contemplated hereby other than those
obtained on or prior to the delivery date for the first Aircraft
delivered hereunder.
10.02. Seller shall assign to Buyer any and all assignable warranties
of manufacturers and maintenance and overhaul agencies, of and for the Aircraft
delivered by Seller to Buyer under the provisions of this Agreement, by delivery
to Buyer concurrently with the sale and delivery of the Aircraft, of an
Assignment of Warranties for the Aircraft, substantialy in the form of Exhibit F
hereto; and upon the request of Buyer, Seller shall give Buyer aid and
assistance in enforcing the rights of Buyer arising under such warranties, but
Buyer shall reimburse Seller for any expenses incurred by Seller in rendering
such assistance; and from time to time, upon the written request of Buyer,
Seller shall give notice to any such manufacturers and maintenance and overhaul
agencies of the assignment of such warranties to Buyer.
10.03 Seller represents and warrants to Buyer that at the time of
execution of this Agreement and at the time of the delivery of the Aircraft
hereunder:
(a) Seller is a corporation, duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts;
8
<PAGE>
(b) Seller, as Trustee, has the corporate power to execute,
deliver and perform its obligations under this Agreement;
(c) No consent or approval of, filing with or notice to any
Massachusetts or federal governmental authority, court or other party or
person governing Seller's trust powers is required in connection with the
execution, delivery or performance by Seller of this Agreement or the
transactions contemplated hereby other than those obtained on or prior to
the delivery date for the Aircraft delivered hereunder;
(d) The execution, delivery and performance of this Agreement by
Seller, as Trustee, has been duly authorized by all necessary corporate
action and will not violate, breach or contravene any provision of law or
the certificate of incorporation or the by-laws of Seller or any license
or permit under which Seller conducts its business and will not result in
a breach of, or constitute a default under, any indenture, credit or loan
agreement, mortgage or other instrument to which Seller is a party or by
which Seller may be bound; and this Agreement constitutes, and each Bill
of Sale and Assignment of Warranties will constitute when delivered, a
valid, legal and binding obligation of Seller, enforceable in accordance
with its terms, subject to bankruptcy, insolvency or other laws affecting
the rights of creditors generally and subject to general equitable
principles; and
(e) There are not suits, actions or procedings (including, but
not limited to, counter or cross-claims) pending, or to the knowledge of
Seller, threatened against Seller before or by any federal, state,
municipal or other governmental agency, department, commission, board,
bureau or instrumentality, which, if adversely determined, would have a
material adverse effect on Seller's ability to enter into, consummate or
carry out this Agreement or any obligation hereunder.
10.05. Seller further represents and warrants that at the time of the
delivery of the Aircraft:
(a) Seller will have such title to the Aircraft and Data as set
forth in the Bill or Sale attached hereto as Exhibit E; and
(b) Seller will have full power and lawful authority to transfer
such title for the Data and Aircraft to Buyer and to assign all warranties
of the manufacturer of such Aircraft to Buyer pursuant to an Assignment of
Warranties in the form of Exhibit F (except to the extent that they are
non-assignable by their terms).
11. Taxes.
-----
11.01. The Purchase Price does not include any sales, use, excise or value
added tax, assessment, duty, or similar governmental charge or fee on the sale
of the Aircraft together with any related interest or penalties ("Taxes").
Subject to the following paragraph and
9
<PAGE>
Section 11.02, Buyer agrees to assume and pay all Taxes, including penalties,
fines or interest thereon incurred in connection with the sale of the Aircraft
and to indemnify and hold Seller harmless from and against the payment of any
and all such Taxes. The parties agree to furnish each other with such documents
and certificates as they may reasonably request in connection with any claims
for exemption from the payment of the Taxes. Seller agrees to notify Buyer in
writing immediately of any claim for Taxes which might affect Buyer and of which
Seller becomes aware. Buyer shall have the right, at its sole cost and expense,
to contest the imposition, validity, applicability, or amount of any Taxes which
it is to pay under this Section 11.01, and to the extent permitted by law,
withhold payment during pendency of such contest and Seller agrees to contest
the validity, applicability or amount of any Taxes or to assist Buyer in such
protest on Buyer's request and at Buyer's sole cost and expense.
Buyer and Seller agree to cooperate in closing the sale of the Aircraft in a
jurisdiction within the United States that will render the purchase and sale
transaction free of any local, city, state, county, province, country, or
governmental transfer charges or taxes whatsoever to the Buyer and Seller.
Therefore, closing with funds and documents held in escrow may be a requirement
of the Buyer and/or Seller until the Aircraft is positioned in tax exempt
location.
11.02. Excluded from the coverage of Section 11.01 are (a) Taxes on, based
upon or measured by gross or net income or gross or net receipts (in each case,
other than taxes in the nature of sales or use taxes) (including, without
limitation, any capital gains taxes, minimum taxes or value-added taxes not in
the nature of sales or use taxes) or that are franchise Taxes, Taxes on doing
business or Taxes on, based on or measured by capital or net worth of Seller (in
each case, other than taxes in the nature of sales or use taxes), (b) Taxes
imposed by any taxing authority or governmental subdivision of a country other
than the United States, or (c) Taxes imposed prior and unrelated to delivery of
the Aircraft, and Buyer shall not be liable for any such taxes (except as may
otherwise be provided in the Lease).
12. Assignment.
----------
12.01. The rights and obligations created hereunder, shall not be
assignable or delegatable by either party hereto without the prior written
consent of the other party; but, subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties hereto, their respective
successors and assigns, except that Buyer may, without such consent, assign this
Agreement, provided that Buyer shall remain primarily liable for the
performance of its obligations hereunder and shall not be released from any
obligations by virtue of such assignment. No action taken under this assignment
provision by Buyer, any assignee of Buyer, or Seller, shall subject Seller to
any liability or expense to which it would not otherwise be subject under this
Agreement or modify in any way Seller's contract rights under this Agreement.
10
<PAGE>
13. Duty to Cooperate and Approvals.
-------------------------------
13.01. Buyer and Seller shall cooperate in obtaining any necessary
government approvals or authorizations for this transaction, and each party will
provide copies thereof the other party.
14. Public Announcements.
--------------------
14.01. Without the prior express written consent of the other party, Buyer
and Seller agree, except as required by law, not to disclose, advertise or
publicize the contents of this Agreement, except that Buyer and Seller will
coordinate the public announcement of the purchase of the Aircraft hereunder. In
any instance in which a filing or recording of this Agreement, or any part
hereof, is required by law, Seller and Buyer shall request that this Agreement,
or any such part hereof, be afforded confidential treatment. It is expressly
understood and agreed that the parties' obligation under this provision shall
survive performance of the terms of this Agreement, its rescission or other
termination and that this provision shall remain in full force and effect and
shall be deemed severable from and independent of the other provisions of this
Agreement. Notwithstanding the foregoing, to the extent that Seller's
beneficiaries are obligated to disclose the transactions contemplated by this
Agreement to any limited partner of any such beneficiary or to any regulatory
body of competent jurisdiction, Seller shall have no liability hereunder for
making any such disclosure.
15. Headings.
--------
15.01. The headings used herein are for convenience only and shall not be
considered part of any Section for purposes of construing provisions hereof.
16. Termination for Insolvency.
--------------------------
16.01. Either party hereto may, at its option, immediately terminate this
Agreement by giving the other party written notice, as hereinafter provided, at
any time after:
(a) Such other party files a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization, an arrangement with its
creditors or to take advantage of any insolvency or similar laws;
(b) Proceedings in bankruptcy are instituted against such other party
and the same are not dismissed within sixty (60) days;
11
<PAGE>
(c) A court takes and retains for a period of at least sixty (60)
days jurisdiction of such other party and its assets pursuant to
proceedings under the provisions of any federal reorganization act;
(d) A receiver of such other party's assets is appointed on account
of insolvency and is not discharged within a period of sixty (60) days
thereafter;
(e) Such other party is otherwise divested of its assets for a period
of at least sixty (60) days by operation of law; or
(f) Such other party makes a general assignment for the benefit of
its creditors or admits in writing its inability to pay its debts as they
mature.
16.02. The effective date of such termination shall be the date such notice
is given.
17. Commissions and Brokers. Fees and Expenses.
-------------------------------------------
17.01. Both parties acknowledge that there are no brokerage commissions to
be paid with respect to the arrangement of the sale and purchase pursuant to
this Agreement, and each party agrees to indemnify and hold the other harmless
from and against any and all claims, suits, damages, costs and expenses
(including, but not limited to, reasonable attorneys' fees) asserted by agents,
brokers or other third parties for any commission or compensation of any nature
whatsoever based upon the sale of the Aircraft, if such claim, damage, cost or
expense arises out of any action or alleged action by the indemnifying party,
its employees or agents.
17.02. Seller and Buyer shall each bear their own expenses, including,
without limitation, fees of legal counsel, accountants or other representatives,
incurred in connection with the transactions contemplated hereby, whether or not
such transactions are consummated.
18. Disclaimer of Consequential Damages.
-----------------------------------
18.01. BUYER AND SELLER EACH HEREBY AGREE THAT IT SHALL NOT BE ENTITLED TO
RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO
RECOVER, CONSEQUENTIAL DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY
THE OTHER PARTY OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF THE
OTHER PARTY CONTAINED IN THIS AGREEMENT.
19. Notices and Requests.
--------------------
19.01. All notices and other communications authorized hereunder shall,
except where specifically provided otherwise, be given in writing to the person
listed below either by
12
<PAGE>
personal delivery to said person, or by registered or certified mail, return
receipt requested, or by telegram or telex or telecopier; and the date upon
which any such notice is so personally delivered (or if the notice is given by
registered or certified mail, or by telecopier, the date upon which it is
received by the addressee) shall be deemed to be the date of such notice,
irrespective of the date appearing therein.
Buyer shall be addressed:
Northwest Airlines, Inc.
2700 Lone Oak Parkway (A5000)
Eagan, MN 55121
Attention: Vice President, Northwest Aircraft Inc.
Telefacsimile No.: (612) 726-2488
Seller shall be addressed:
Investors Assets Holding Corp.
c/o Equis Financial Group
98 North Washington Street
Boston, MA 02114
Attention: Vice President, Aircraft Management
Telefacsimile No.: 617-523-1410
Buyer and Seller may each change, from time to time, their named representative
and respective addresses for the purpose of this Section by written notice each
to the other as herein provided.
20. Entire Agreement.
----------------
20.01. This agreement and the Exhibits hereto supersede all previous
discussions, negotiations and communications and constitute the entire Agreement
between the parties hereto with respect to the purchase and sale of the Aircraft
and Data and shall not in any manner be supplemented, amended or modified except
by a written instrument executed on behalf of the parties hereto by their duly
authorized representatives.
21. Governing Law; Severability; Timing.
-----------------------------------
21.01. This Agreement shall in all respects be governed by, and construed
and enforced in accordance with, the laws of the United States of America and
the Commonwealth of Massachusetts, including all matters of construction,
validity and performance. The parties agree that any litigation relating
directly or indirectly to this agreement must be brought before and determined
by a court of competent jurisdiction within the State of Minnesota or
13
<PAGE>
the Commonwealth of Massachusetts, and Buyer and Seller hereby agree to waive
any rights to object to the (i) jurisdiction of such courts, and (ii) a jury
trial.
21.02. If any provision of this Agreement shall be determined to be
illegal, invalid or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
21.03. Time is of the essence in the performance of the terms and
conditions set forth in this Agreement.
22. Counterparts.
------------
22.01. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and which together shall constitute one instrument.
23. Facsimile Signatures.
--------------------
23.01. Transmission by telecopier of a facsimile of the signature page
hereof, or any other document to be delivered by one party to the other
pursuant to this Agreement, signed by an authorized representative of a party,
shall be conclusive evidence of the due execution by such party of this
Agreement or such other document. The parties expressly agree to provide
originally executed documents promptly following any facsimile transmission
pursuant to this provision.
24. Insurance.
---------
24.01. Buyer agrees to name Seller as additional insured in a liability
insurance policy as set forth in the Lease for a period of two (2) years from
the date of the sale.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives as of the day and year first above
written.
SELLER:
INVESTORS ASSET HOLDING CORP.,
not in its individual capacity but solely
as Trustee
By: /S/ James F. Livesey
---------------------------
Its: Vice President
--------------------------
BUYER:
NORTHWEST AIRLINES, INC.
By: /s/ Joseph E. Francht, Jr.
---------------------------
Its: Senior Vice President
Finance and Treasurer
--------------------------
The undersigned, being the sole beneficiaries of the "AFG/Northwest Airlines
Trust" and the beneficial owners of the Aircraft hereby authorize and direct the
above named Trustee to execute and deliver this Agreement and, when required as
provided in this Agreement, the documents which have been attached as Exhibits
to this Agreement.
AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP
By: AFG Leasing Incorporated, Managing General Partner
By: /s/ James F. Livesey
---------------------------
Its: Vice President
--------------------------
15
<PAGE>
AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, Managing General Partner
By: /s/ James F. Livesey
---------------------------
ITS: Vice President
---------------------------
16
<PAGE>
EXHIBIT A
THE AIRCRAFT
------------
Manufacturer Model Registration No. Manufacturer's Serial
------------ ----- ---------------- ---------------------
No.
---
McDonnell Douglas MD-82 N931MC 48057
Engines
Manufacturer Model Serial No.
------------ ----- ----------
Pratt & Whitney JT8D-217 708425
708426
Each of the Engines has 750 or more rated take-off horsepower or the equivalent
of such horsepower.
<PAGE>
EXHIBIT B
DATA
----
Any and all Data in the possession of Seller or Northwest Airlines, Inc., its
subsidiaries and affiliates, relating to the Aircraft.
<PAGE>
EXHIBIT C
DELIVERY RECEIPT
----------------
ACKNOWLEDGMENT OF
RECEIPT AND ACCEPTANCE OF AIRCRAFT
THE UNDERSIGNED hereby acknowledges that on September 30, 1996, at
12:54 o'clock p.m., (CDT) at Minneapolis, MN, Seller (as defined below)
did deliver to Buyer (as defined below) the following, in accordance with the
provisions of that certain Aircraft Purchase Agreement, dated as of
September 30, 1996, between the undersigned (the "Agreement").
(i) MD-82 jet airframe, FAA Registration No. N931MC and Manufacturer's
Serial No. 48057 equipped as described in the Agreement
(ii) Two (2) Pratt & Whitney JT8D-217 engines installed on the airframe, and
more particularly described as follows:
Engine Manufacturer's
Number Serial Number
---------------------------------------------------
1 708425
2 708426
Each of the engines listed above has 750 or more rated take-off
horsepower or the equivalent of such horsepower.
(iii) All other instruments, accessories and other equipment installed on or
in such Aircraft.
(iv) Data determined by Buyer to be acceptable.
Except as set forth on Schedule I hereto (if any), acknowledges that the
foregoing conforms to the requirements of the Agreement.
<PAGE>
BUYER:
NORTHWEST AIRLINES, INC.
By: /s/ Rolf S. Andresen
--------------------------------
Its: Vice President and Controller
-------------------------------
SELLER:
INVESTORS ASSET HOLDING CORP.,
not individually but solely as Trustee, Seller
By: /s/ James F. Livesey
--------------------------------
Its: Vice President
-------------------------------
<PAGE>
EXHIBIT D
N931MC LEASE TERMINATION
The undersigned hereby certify and acknowledge that the Conveyances,
each as more fully described on the attached Appendix A, are hereby terminated
with respect to all the collateral covered thereby, and that said collateral are
no longer subject to the terms and provisions thereof.
This Termination may be executed in any number of counterparts, each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Dated this 30th day of September, 1996.
INVESTORS ASSET HOLDING CORP., NORTHWEST AIRLINES, INC.
as Trustee
By: /s/ James F. Livesey By: /s/ Joseph E. Francht, Jr.
---------------------------- -----------------------------
Title: Vice President Title: Senior Vice President
------------------------- --------------------------
Finance and Treasurer
--------------------------
The undersigned, being the sole beneficiaries of the "AFG/Northwest Airlines
Trust" and the beneficial owners of the Aircraft hereby authorize and direct the
above named Trustee to execute and deliver this Lease Termination.
AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP
By: AFG Leasing Incorporated, Managing General Partner
By: /s/ James F. Livesey
----------------------------
James F. Livesey
Title: Vice President
-------------------------
AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, Managing General Partner
By: /s/ James F. Livesey
----------------------------
James F. Livesey
Title: Vice President
-------------------------
<PAGE>
APPENDIX A
TO
N931MC LEASE TERMINATION
Aircraft Lease Agreement dated as of June 1, 1990, between Investors
Asset Holding Corp. as Trustee, lessor (the "Lessor"), and Northwest Airlines,
Inc. as lessee (the "Lessee"), recorded by the Federal Aviation Administration
(the "FAA") on June 13, 1990, as Conveyance No. M23498, as amended by the Lease
Extension Agreement (N931MC) dated as of May 26, 1994, which was not filed with
the FAA, the Letter Agreement dated as of June 27, 1994, which was not filed
with the FAA, and the Third Lease Agreement dated as of July 31, 1994, between
the Lessor and the Lessee, recorded by the FAA on September 2, 1994, as
Conveyance No. HHOO7265.
<PAGE>
EXHIBIT E
BILL OF SALE
------------
KNOW ALL MEN BY THESE PRESENTS that:
INVESTORS ASSET HOLDING CORP. not in its individual capacity, but solely as
Trustee, (the "Seller") in consideration of Ten Dollars and other good and
valuable consideration, receipt of which is hereby acknowledged, does hereby
grant, bargain, sell and assign to Northwest Airlines, Inc., a Minnesota
corporation ("Buyer"), its successors and assigns, all of Seller's right, title
and interest in and to the following:
Airframe FAA Registra-
Manufacturer Model tion Number Serial Number
- --------------------------------------------------------------------------------
McDonnell Douglas MD-82 N931MC 48057
Engine
Manufacturer Model Serial Numbers
- --------------------------------------------------------------------------------
Pratt & Whitney JT8D-217 708425
Pratt & Whitney JT8D-217 708426
together with all equipment, components and accessories installed thereon and
used in connection therewith (collectively, the "Aircraft") and the flight,
engineering and maintenance manuals, drawings, documents and airworthiness
certificate and other data pertaining to the Aircraft and the operational and
maintenance records pertaining to the Aircraft (collectively, the "Data")
listed on Exhibit B to that certain Aircraft Purchase Agreement between Buyer
and Seller dated as of September 30, 1996 (the "Aircraft Purchase Agreement").
TO HAVE AND TO HOLD said Aircraft and Data unto Buyer, its successors and
assigns, for its and their own use forever.
<PAGE>
Seller hereby warrants that on the date hereof it is the owner of full
and marketable legal title to the Aircraft and Data and Seller has the legal
right to sell the same as aforesaid and that this Bill of Sale conveys to Buyer
good, legal and marketable title to the Aircraft and Data on the date hereof,
free and clear of all leases, mortgages, security interests, claims, charges,
liens and encumbrances of any nature whatsoever, except whose created by or
through Buyer, and Seller shall warrant and defend such title forever against
all claims and demands. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO SUPPLEMENT
OR MODIFY THE REPRESENTATIONS AND WARRANTIES OF SELLER, CONTAINED IN THE
AIRCRAFT PURCHASE AGREEMENT.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed for
the purpose hereinabove shown by its duly authorized representatives on
September 30, 1996.
INVESTORS ASSET HOLDING CORP.
not in its individual capacity but
solely as Trustee, Seller
By: /s/ James F. Livesey
--------------------------
Its: Vice President
-------------------------
The undersigned, being the sole beneficiaries of the "AFG/Northwest Airlines
Trust" and the beneficial owners of the Aircraft hereby authorize and direct the
above named Trustee to execute and deliver this Bill of Sale.
BENEFICIAL OWNER:
AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-C LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS III-D LIMITED PARTNERSHIP
By: AFG Leasing Incorporated, Managing General Partner
By: /s/ James F. Livesey
--------------------------
Its: Vice President
-------------------------
<PAGE>
BENEFICIAL OWNER:
AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP
AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, Managing General Partner
By: /s/ James F. Livesey
----------------------
Its: Vice President
----------------------
<PAGE>
EXHIBIT F
ASSIGNMENT OF WARRANTIES
------------------------
INVESTORS ASSET HOLDING CORP., not in its individual capacity, but solely
as Trustee, (the "Seller") in consideration of the sale of a McDonnell Douglas
Model MD-82 aircraft, Manufacturer's Serial No. 48057, including two (2) Pratt &
Whitney JT8D-217 engines, serial numbers 708425 and 708426 to Northwest
Airlines, Inc., ("Buyer"), its successors, assigns and legal representatives,
does hereby assign, transfer and set over to Buyer any and all warranties of
manufacturers and maintenance and overhaul agencies pertaining to the
above-described Aircraft other than warranties which by their terms are not
assignable.
IN WITNESS WHEROF, this Assignment is hereby executed by Seller on
September 30, 1996.
Seller:
INVESTORS ASSET HOLDING CORP.,
not in its individual capacity, but
solely as Trustee, Seller
By: /s/ James F. Livesey
------------------------
Its: Vice President
------------------------
<PAGE>
EXHIBIT G-1
INVESTORS ASSET HOLDING CORP., AS TRUSTEE
Officer's Certificate pursuant to Section 6.01 (e) of the Aircraft Purchase
Agreement between Investors Asset Holding Corp. and Northwest Airlines, Inc.
dated as of September 30, 1996 (the "Agreement").
The undersigned, James F. Livesey, Vice President of Investors Asset
Holding Corp., not in its individual capacity, but solely as Trustee (the
"Seller"), on behalf of Seller, does hereby certify that:
1. The representation and warranties made by the Seller, in the Agreement are
true and correct in all material respects as though such representations
and warranties were made at and as of the date hereof.
2. The Seller has performed and complied in all material respects with all
agreements, covenants, obligations, and conditions applicable to the
Aircraft required by the Agreement to be so performed or complied with
by it prior to or upon delivery of such Aircraft.
All capitalized terms used herein, but not defined herein, shall have those
meanings as are provided in the Agreement.
IN WITNESS WHEREOF, I have signed this Officer's Certificate this 30th day
of September, 1996.
INVESTORS ASSET HOLDING CORP.
not in its individual capacity, but
solely as Trustee, Seller
By: /s/ James F. Livesey
------------------------------
Its: Vice President
-----------------------------
<PAGE>
EXHIBIT G-2
NORTHWEST AIRLINES, INC.
Officer's Certificate pursuant to Section 6.02(d) of the Aircraft Purchase
Agreement between Investors Asset Holding Corp., not in its individual capacity,
but solely as Trustee under a Trust Agreement and Northwest Airlines, Inc.,
dated September 30, 1996 (the "Agreement").
The undersigned, Rolf S. Andresen, Vice President and Controller of
Northwest Airlines, Inc., a Minnesota Corporation, (the "Buyer"), on behalf of
Buyer, does hereby certify that:
1. The representations and warranties made by the Buyer, in the Agreement are
true and correct in all material respects as though such representations
and warranties were made at and as of the date hereof.
2. The Buyer has performed and complied in all material respects with all
agreements, covenants, obligations, and conditions applicable to the
Aircraft required by the Agreement to be so performed or complied with by it
prior to or at delivery of such Aircraft.
All capitalized terms used herein, but not defined herein, shall have those
meanings as are provided in the Agreement.
IN WITNESS WHEREOF, I have signed this Officer's Certicate this 30th day of
September, 1996.
NORTHWEST AIRLINES, INC.
By: /s/ Rolf S. Andresen
-------------------------------
Its: Vice President and Controller
------------------------------
