EXHIBIT 10(i)
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EXCHANGE AGREEMENT
This Exchange Agreement dated as of April 30, 1997 by and among AFG
Hato Arrow Limited Partnership, AFG Dove Arrow Limited Partnership and
AIP/Larkfield Limited Partnership, each of which is a Massachusetts limited
partnership (the "Partnerships"), Equis Exchange LLC, a Massachusetts
limited liability company ("NEWCO"), Equis Financial Group Limited
Partnership, a Massachusetts limited partnership ("EFG"), and Banyan
Strategic Land Fund II, a Delaware corporation ("Banyan"),
WITNESSETH:
WHEREAS, the Partnerships are the owners of the Vessels described in
Section 3.4 hereof, which Vessels are expected to be sold to Gearbulk
Shipowning Limited (the "Lessee") prior to May 15, 1997;
WHEREAS, EFG and Xxxxx X. Xxxxx ("Xxxxx") are parties to an Operating
Agreement dated April 16, 1997, which provides in part that EFG is the
owner of a 1% voting membership interest in NEWCO and Xxxxx is the owner of
a 99% non-voting membership interest in NEWCO;
WHEREAS, the parties have agreed that, at the Closing provided for
herein, (i) Xxxxx will withdraw as a Member of NEWCO and Banyan will
acquire a 99% membership interest in NEWCO and will contribute to NEWCO
1,987,000 shares of Common Stock of Banyan (the "Banyan Shares") and
(ii) the Partnerships will transfer to NEWCO a 100% beneficial ownership
interest in the Vessels in exchange for the Banyan Shares and a Promissory
Note to be issued by NEWCO to EFG as Agent for the Partnerships, all upon
the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
THE EXCHANGE
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The closing (the "Closing") of the transactions contemplated hereby
shall take place at 10:00 a.m. at the offices of Xxxxxxx & Xxxxxxxx Ltd.,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx on the date when the
conditions to the obligations of the parties hereto set forth in Article 1
shall have been satisfied or waived (the "Closing Date") but no later than
May 15, 1997. At the Closing, the parties shall consummate the following
transactions:
1.1. RESTATED NEWCO OPERATING AGREEMENT. EFG, Xxxxx and Banyan will
enter into an Amended and Restated Operating Agreement for NEWCO (the
"NEWCO Operating Agreement") in the form attached hereto as EXHIBIT A,
pursuant to which Xxxxx will withdraw as a member of NEWCO for no
consideration other than the return of his nominal capital contribution,
Banyan will be admitted as a member of NEWCO and Xxxxx and EFG will
continue to serve as Managers of NEWCO.
1.2. CONTRIBUTION OF BANYAN SHARES. Banyan will issue and deliver
to NEWCO, as its capital contribution to NEWCO, 1,987,000 shares of Common
Stock of Banyan, par value $.01 per share (the "Banyan Shares").
1.3. TRANSFER OF VESSELS. Each of the Partnerships will transfer to
NEWCO its entire beneficial interest in the Vessel owned by each
Partnership and any equipment, contract rights and other benefits
associated with such Vessel and NEWCO will assume any liabilities of the
Partnerships relating to the Vessels, by executing and delivering an
Instrument of Transfer in the relevant form attached hereto as EXHIBITS B-
1, B-2 OR B-3 (the "Instruments of Transfer"). The Partnerships shall
retain record title to the Vessels but shall thereafter hold such title and
exercise any related rights solely as nominee for NEWCO, upon the terms set
forth in the Instrument of Transfer.
1.4. ISSUANCE OF NOTE; TRANSFER OF BANYAN SHARES. In exchange for
the transfer by the Partnerships to NEWCO of the Vessels, NEWCO shall:
(a) Transfer to the Partnerships the Banyan Shares by
executing and delivering to each Partnership a Stock Assignment, in form
reasonably acceptable to counsel to the Partnerships, assigning to each
Partnership the number of Banyan Shares set forth below opposite the name
of such Partnership:
AFG Hato Arrow Limited Partnership 635,437 shares
AFG Dove Arrow Limited Partnership 616,734 shares
AIP/Larkfield Limited Partnership 734,829 shares
TOTAL 1,987,000 shares
(b) Issue to EFG, as Agent for the Partnerships, its
Promissory Note (the "Exchange Note") in the form attached hereto as
EXHIBIT C, in the aggregate principal amount of $8,219,500. The beneficial
ownership of the Exchange Note shall be allocated among the Partnerships in
accordance with the percentages set forth below.
AFG Hato Arrow Limited Partnership 31.98%
AFG Dove Arrow Limited Partnership 31.04%
AIP/Larkfield Limited Partnership 36.98%
1.5. ESCROW OF FUNDS. The Partnerships shall cause EFG as their
agent to deposit $350,000 with State Street Bank and Trust Company as
Escrow Agent as partial security for the payment by the Partnerships of
amounts, if any, owed to Banyan pursuant to Section 6.2 or Section 7.1
hereof, and EFG and Banyan shall execute and deliver to the Escrow Agent
the Escrow Agreement (the "Escrow Agreement") in the form attached hereto
as EXHIBIT D.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BANYAN
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As a material inducement to the Partnerships, NEWCO and EFG to enter
into this Agreement and to consummate the transactions contemplated hereby,
Banyan makes the following representations and warranties to the
Partnerships, NEWCO and EFG:
2.1. CORPORATE STATUS. Banyan is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
is qualified to do business as a foreign corporation, and is in good
standing in the State of Illinois which is the only state in which
qualification is necessary in order for Banyan to own or lease its property
and conduct its business. Banyan has all requisite power and authority to
conduct its business and to own its property.
2.2. CORPORATE POWER AND AUTHORITY. Banyan has, or will have at the
time of Closing, the corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. Banyan has taken, or will have taken at
the time of Closing, all action necessary to authorize the execution and
delivery of this Agreement, the performance of its obligations hereunder
and the consummation of the transactions contemplated hereby.
2.3. ENFORCEABILITY. This Agreement has been, or will have been at
the time of Closing, duly executed and delivered by Banyan and constitutes
a legal, valid and binding obligation of Banyan, enforceable against it in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general
equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
2.4. CAPITALIZATION. The authorized capital stock of Banyan
immediately prior to the Closing consists of 50,000,000 shares of Common
Stock, $.01 par value per share (the "Common Stock"), of which 9,936,421
shares are issued and outstanding. All of the issued and outstanding
shares of capital stock of Banyan have been duly authorized and validly
issued and are fully paid and non-assessable. Except as set forth on
SCHEDULE 2.4 and as provided in this Agreement, (i) no subscription,
warrant, option, convertible security or other right (contingent or
otherwise) to purchase or acquire any shares of capital stock of Banyan is
authorized or outstanding, (ii) there is not any commitment of Banyan to
issue any subscription, warrant, option, convertible security or other such
right or to issue or distribute to holders of any shares of its capital
stock any evidences of indebtedness or assets of Banyan and (iii) Banyan
has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any shares of its capital stock or any interest therein
or to pay any dividend or make any other distribution in respect hereof.
Except as provided in this Agreement, no person or entity is entitled to
(i) any preemptive or similar right with respect to the issuance or sale of
any capital stock of Banyan, or (ii) any rights with respect to the
registration of any capital stock of Banyan under state or federal
securities laws.
2.5. ISSUANCE OF BANYAN SHARES. The issuance, sale and delivery of
the Banyan Shares in accordance with this Agreement has been authorized by
all necessary corporate action on the part of Banyan, and the Banyan Shares
when so issued and delivered to NEWCO in accordance with the provisions of
this Agreement, will be duly and validly issued, fully paid and non-
assessable.
2.6. NO VIOLATION. The performance by Banyan of its obligations
hereunder and the consummation by it of the transactions contemplated by
this Agreement will not: (i) contravene any provision of Banyan's
Certificate of Incorporation or Bylaws; or (ii) violate or conflict with
any law, statute, ordinance, rule, regulation, decree, writ, injunction,
judgment or order of any Governmental Authority or of any arbitration award
which is either applicable to, binding upon or enforceable against Banyan
or any of its assets.
2.7. GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration
or filing with, any governmental authority is required on the part of
Banyan in connection with the execution and delivery of the Agreements, the
offer, issue, sale and delivery of the Banyan Shares, or the other
transactions to be consummated at the Closing, except requisite filings
with the National Association of Securities Dealers, Inc. ("NASD") and
appropriate state securities authorities, if any, which Banyan hereby
covenants to use its best efforts to make on a timely basis.
2.8. FINANCIAL INFORMATION. Banyan has furnished to NEWCO a
complete and correct copy of its form 10-K for the year ended December 31,
1996 as filed with the Securities Exchange Commission (the "10-K") The
financial statements set forth in the 10-K are complete and correct, are in
accordance with the books and records of Banyan and present fairly the
financial condition and results of operations of Banyan, as at the dates
and for the periods indicated.
2.9. ABSENCE OF LIABILITIES. Except as disclosed on SCHEDULE 2.9
and in the 10-K Banyan does not have any liabilities of any type which in
the aggregate exceed $25,000, whether absolute or contingent, and, since
December 31, 1996, Banyan has not incurred or otherwise become subject to
any such liabilities or obligations other than liabilities incurred in the
ordinary course of its business and pursuant to this Agreement.
2.10. ABSENCE OF CHANGES. Since December 31, 1996, there has been no
material adverse change in the financial condition of Banyan, other than
changes occurring in the ordinary course of business which changes have
not, individually or in the aggregate, had a material adverse effect on the
business, prospects, properties or condition, financial or otherwise, of
Banyan.
2.11. TAXES. Banyan has filed or has obtained currently effective
extensions with respect to all Federal, state, county, local and foreign
tax returns which are required to be filed by it, such returns are true and
correct and all taxes shown thereon to be due have been timely paid with
exceptions not material to Banyan. Federal income tax returns of Banyan
have not been audited by the Internal Revenue Service (the "IRS"), and no
controversy with respect to taxes of any type is pending or, to Banyan's
knowledge, threatened against Banyan by the IRS. To the knowledge of
Banyan there have been no 5 percent shareholders of Banyan, as defined in
Section 382 of the Internal Revenue Code, within the last three years
except for Magten Asset Management Corp. and Xxxxxxxxx & Co. L.P., each of
whose shares Banyan purchased pursuant to a self-tender offer completed in
June 1995.
2.12. LITIGATION. Except as disclosed in SCHEDULE 2.12, or in the
10-K there is no action, suit, proceeding or investigation pending, or, to
Banyan's knowledge, threatened in writing, against Banyan which questions
the validity of this Agreement or the right of Banyan to enter into this
Agreement, or which might have, either individually or in the aggregate, a
material adverse effect on the assets, condition (financial or otherwise),
business or prospects of Banyan.
2.13. PROPERTY AND ASSETS. Banyan has good title or valid leases to
all of its material properties and assets, including all properties and
assets reflected or described in the 10-K and those described in the 10-K,
except those disposed of since the date thereof in the ordinary course of
business, and none of such properties or assets which are owned is subject
to any mortgage, pledge, lien, security interest, lease, charge or
encumbrance, except as described in the 10-K, and except liens and
encumbrances which would not either individually or in the aggregate, have
a material adverse effect on such properties and assets.
2.14. MATERIAL CONTRACTS AND OBLIGATIONS. Except as described on
SCHEDULE 2.14 or disclosed in the Balance Sheet or the 10-K, there are no
(i) agreements which require future expenditures by Banyan in excess of
$25,000, (ii) leases or rental agreements for real property or office
space, (iii) employment or consulting agreements, employee benefit, bonus,
pension, profit-sharing, stock option, stock purchase or similar plans or
arrangements, or (iv) any material agreements between Banyan and any
stockholder, officer or director or Affiliate of Banyan including without
limitation any agreement or other arrangement providing for the furnishing
of services by, rental of real or personal property from, or otherwise
requiring payments to, any such Person in excess of $25,000. Banyan has
delivered to EFG true and complete copies of the foregoing agreements. All
of such agreements and contracts are valid, binding and in full force and
effect.
2.15. COMPLIANCE. Banyan has, in all material respects, complied
with all laws, regulations and orders applicable to its present and
proposed business and has all material permits and licenses required
thereby.
2.16. BROKERS OR FINDERS. No person has or will have, as a result of
the transactions contemplated by this Agreement, any right, interest or
valid claim against or upon Banyan for any commission, fee or other
compensation as a finder or broker because of any act or omission by Banyan
or any of their respective agents, with the exception of fees payable to
Xxxxxxxxxx Xxxx & Xxxx Incorporated ("JLR") pursuant to the Agreement dated
March 5, 1997, between JLR and Banyan, a copy of which has been delivered
to EFG by Banyan, which shall not exceed in the aggregate $500,000 (the
"JLR Fee").
2.17. NORTHOLME PARTNERS TRANSACTION. Northolme Partners, a
California limited partnership, has obtained, in its capacity of assignee
of the Anden Group, Full Entitlement Rights, as that term is defined in the
Development Agreement dated August 1, 1991, by and among Xxxxxxxxx
Corporation, Xxxxxxxxx Bermite Corporation and the Anden Group.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EFG, NEWCO AND THE PARTNERSHIPS
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As a material inducement to Banyan to enter into this Agreement and
to consummate the transactions contemplated hereby, each of EFG, NEWCO and
the Partnerships makes the following representations and warranties to
Banyan:
3.1. CORPORATE STATUS. Each of EFG, NEWCO and the Partnerships is
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Each of EFG, NEWCO and the Partnerships has
all requisite power and authority to conduct its business and to own it
property.
3.2. POWER AND AUTHORITY. Each of EFG, NEWCO and the Partnerships
has the power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the
transactions contemplated hereby. Each of EFG, NEWCO and the Partnerships
has taken all action necessary to authorize the execution and delivery of
this Agreement, the performance of its respective obligations hereunder and
the consummation of the transactions contemplated hereby.
3.3. ENFORCEABILITY. This Agreement has been duly executed and
delivered by each of EFG, NEWCO and the Partnerships and constitutes a
legal, valid and binding obligation upon such party, enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
3.4. THE VESSELS. Each of the Partnerships is a special purpose
limited partnership whose assets consist solely of the shipping vessel (the
"Vessel") set forth opposite its name below, together with equipment and
related tangible and intangible property acquired or held by the
Partnership in connection with the Vessel.
NAME OF PARTNERSHIP VESSEL
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AIP/Larkfield Limited Partnership "Larkfield", registered in the
Bahamas
AFG Dove Arrow Limited Partnership "Dove Arrow" (formerly Egda"),
registered in the Bahamas
AFG Hato Arrow Limited Partnership "Hato Arrow (formerly "Grena"),
registered in the Bahamas
Except as described below, each Partnership owns the Vessel set forth
opposite its name above free from any mortgage, lien, security interest,
encumbrance or other right, title or interest of any Person, and each
Vessel is subject to a bareboat charter between the Partnership owning such
Vessel and the Lessee. The Partnerships and NEWCO entered into Termination
and Purchase Agreements with the Lessees, dated as of April 25, 1997,
pursuant to which the Lessees will purchase the Vessels from the
Partnerships and NEWCO prior to May 15, 1997 for an aggregate purchase
price of $6,936,586, and make payments of prepaid rent to the Partnerships
in the aggregate amount of $4,628,789, true and correct copies of which
NEWCO will provide to Banyan (the "Gearbulk Purchase"). The "Larkfield" is
subject to a mortgage which will have a net balance due as of May 1, 1997
of approximately $74,000. Under the terms of the NEWCO Operating
Agreement, EFG is entitled to a management fee equal to 5 percent of the
prepaid rent received by NEWCO.
3.5. NO VIOLATION. The performance by EFG, NEWCO and each
Partnership of its respective obligations hereunder and the consummation by
them of the transactions contemplated by this Agreement will not:
(i) contravene any provision of the Partnership Agreement, Operating
Agreement or other organization document of such party; (ii) violate or
conflict with any law, statute, ordinance, rule, regulation, decree, writ,
injunction, judgment or order of any Governmental Authority or of any
arbitration award which is either applicable to, binding upon or
enforceable against such party; or (iii) require the consent, approval,
authorization or permit of, the filing with or notification to, any
Governmental Authority, any court or tribunal or any other Person, except
the filing by NEWCO and the Partnerships of a Form 13D with the Securities
Exchange Commission.
3.6. LITIGATION. There is no action, suit, or other legal or
administrative proceeding or governmental investigation pending or, to the
knowledge of the Partnerships, NEWCO or EFG, threatened, anticipated or
contemplated against, by or affecting EFG, any Partnership, NEWCO or the
Vessels or which questions the validity or enforceability of this Agreement
or the transactions contemplated hereby, or which might prevent the
Gearbulk Purchase.
3.7. TRANSACTIONS WITH AFFILIATES; OWNERSHIP OF BANYAN STOCK. None
of EFG, any Partnership, NEWCO or the Lessee nor any of their respective
Affiliates (i) is a party to or bound by any agreement with, does business
with or has any obligations or liabilities to Banyan, or (ii) holds any
shares of Common Stock of Banyan, beneficially or otherwise, except as
contemplated hereby.
3.8. NO COMMISSIONS. None of EFG, any Partnership, NEWCO or the
Lessee has incurred any obligation for any finder's or broker's or agent's
fees or commissions or similar compensation in connection with the
transactions contemplated hereby.
3.9. CERTAIN SECURITIES REPRESENTATIONS. IN MAKING AN INVESTMENT
DECISION, EACH OF NEWCO AND THE PARTNERSHIPS HAS RELIED ON ITS OWN
EXAMINATION OF BANYAN AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THE BANYAN SHARES HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE BANYAN SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. EACH OF NEWCO AND THE PARTNERSHIPS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
(a) Each of NEWCO and the Partnerships is an entity in which
all of the equity owners are "Accredited Investors" as defined in and as
required by Rule 501 of Regulation D under the Securities Act.
(b) Except as set forth in Section 1.4 of this Agreement, the
Banyan Shares subscribed for herein will be acquired solely by and for the
account of each of NEWCO and the Partnerships, for investment, and are not
being purchased for subdivision, fractionalization, resale or distribution;
neither NEWCO nor any Partnership has any contract, undertaking, agreement
or arrangement with any person to sell, transfer or pledge all or any part
of the Banyan Shares for which such party hereby subscribes, and neither
NEWCO nor any Partnership has any present plans or intentions to enter into
any such contract, undertaking or arrangement. None of the Partnerships
was formed for the specific purpose of acquiring the Banyan Shares. In
order to induce Banyan to issue and sell the Banyan Shares subscribed for
hereby to each of NEWCO and the Partnerships, each of NEWCO and the
Partnerships agrees that, following the transactions set forth in
Section 1.4 of this Agreement, Banyan will have no obligation to recognize
the ownership, beneficial or otherwise, of the Banyan Shares by any party
except the Partnerships.
(c) Each of NEWCO and the Partnerships agrees that it will
not sell, transfer, pledge or otherwise dispose of the Banyan Shares
without registration under the Securities Act unless an exemption from
registration is available as confirmed in an opinion of counsel
satisfactory to Banyan, and in accordance with the applicable securities
laws of any State of the United States or other jurisdiction.
(d) The Banyan Shares have not been and, except as set forth
in Article VIII of this Agreement, will not be registered under the
Securities Act and cannot be sold or transferred without compliance with
the registration provisions of the Securities Act or compliance with
exemptions, if any, available thereunder.
(e) Each of NEWCO and the Partnerships expressly represents
that: (i) it has such knowledge and experience in financial and business
matters in general and in investments such as an investment in the Banyan
Shares in particular, and that it is capable of evaluating the merits,
risks and other facets of an investment in the Banyan Shares; (ii) its
financial condition is such that it has no need for liquidity with respect
to its investment in the Banyan Shares to satisfy any existing or
contemplated undertaking or indebtedness; (iii) it is able to bear the
economic risk of its investment in the Banyan Shares for an indefinite
period of time, including the risk of losing all of its investment; (iv) it
has secured independent tax advice with respect to its investment in the
Banyan Shares, upon which it is relying; and (v) it has participated in
other privately placed investments and/or has such knowledge and experience
in business and financial matters, has the capacity to protect its own
interest in investments like the subject investment, and is capable of
evaluating the risks, merits and other facets of the investment in the
Banyan Shares.
(f) Each of NEWCO and the Partnerships acknowledges that
Banyan has made all available documents pertaining to the opportunity to
invest in the Banyan Shares available to each of NEWCO and the Partnerships
and has provided answers to all of its questions concerning the offering of
the Banyan Shares.
(g) In evaluating the suitability of an investment in the
Banyan Shares, each of NEWCO and the Partnerships acknowledges that it has
relied solely upon independent investigations made by each of NEWCO and the
Partnerships in making the decision to purchase the Banyan Shares, and
acknowledges that no representations or agreements (oral or written), other
than those set forth in this Agreement and the 10-K have been made to each
of NEWCO and the Partnerships with respect thereto. Except for written
materials provided by Banyan to NEWCO and the Partnerships referred to in
Article II hereof, each of NEWCO and the Partnerships is subscribing for
the Banyan Shares without being offered any offering literature or
prospectus.
(h) NEWCO and the Partnerships were not induced to invest in
the Banyan Shares by any form of general solicitation or general
advertising including, but not limited to, the following: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over the television or
radio; and (ii) any seminar or meeting whose attendees had been invited by
any general solicitation or general advertising.
(i) Each of NEWCO and the Partnerships expressly acknowledges
that: (i) no federal or state agency has reviewed or passed upon the
adequacy or accuracy of the information set forth herein, or made any
finding or determination as to the fairness for investment, or any
recommendation or endorsement of the Banyan Shares as an investment;
(ii) there are restrictions on the transferability of the Banyan Shares;
there will be no public market for the Banyan Shares and, accordingly, it
may not be possible for each of NEWCO and the Partnerships to liquidate its
investment in the Banyan Shares; (iii) the stock certificates (which shall
solely evidence and represent the Banyan Shares) shall bear a legend
describing the restrictions on transfer, and stop transfer instructions
shall be noted in the appropriate records of Banyan or its agents; and
(iv) any anticipated federal and/or state income tax benefits applicable to
the Banyan Shares may be lost through changes in, or adverse
interpretations of, existing laws and regulations.
(j) All information that each of NEWCO and the Partnerships
has provided concerning itself is correct and complete as of the date of
this Agreement, and if there should be any material change in such
information before the Banyan Shares are issued, such party will
immediately provide such information to Banyan.
ARTICLE IV
ADDITIONAL AGREEMENTS
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4.1. FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take further actions
as may be necessary or appropriate to effectuate, carry out and comply with
all of the terms of this Agreement and the transactions contemplated
hereby.
4.2. COOPERATION. Each of the parties agrees to cooperate with the
other in the preparation and filing of all forms, notifications, reports
and information, if any. in connection with the transactions contemplated
by this Agreement and to use their respective best efforts to agree jointly
on a method to overcome any objections by any Governmental Authority or
other Person to any such transactions.
4.3. NOTIFICATION OF CERTAIN MATTERS. Banyan and EFG shall give
prompt notice to the other of the occurrence or non-occurrence of any event
which would likely cause any representation or warranty contained herein to
be untrue or inaccurate in any material respect, or any covenant,
condition, or agreement contained herein not to be complied with or
satisfied in any material respect.
4.4. CONFIDENTIALITY; PUBLICITY. Except as may be required by law or
as otherwise permitted or expressly contemplated herein, no party hereto or
their respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement or the subject matter or terms
hereof without the prior consent of the other parties hereto. No press
release or other public announcement related to this Agreement or the
transactions contemplated hereby shall be issued by any party hereto
without the prior approval of the other parties, except that any party may
make such public disclosure which it believes in good faith to be required
by law provided that the other parties shall be entitled to review such
disclosure before it is made public.
4.5. NO OTHER DISCUSSIONS. From the date hereof until the earlier
of the Closing or the time when this Agreement shall have been terminated
in accordance with its terms, whether under Article VI, Article VII or
otherwise, Banyan and the officers, directors, employees or other agents of
Banyan will not, directly or indirectly, (i) take any action to solicit,
initiate or encourage the making of any Acquisition Proposal (as defined
below) or (ii) engage in negotiations with any person or entity that has
made an Acquisition Proposal, or (iii) except as required by applicable
law, disclose any nonpublic information relating to Banyan or afford access
to the properties, books or records of Banyan. Banyan will promptly notify
EFG after Banyan receives any Acquisition Proposal or any request for
nonpublic information relating to Banyan or for access to the properties,
books or records of Banyan by any person or entity.
The term "Acquisition Proposal" as used in this Agreement means any
offer or proposal for, or any indication of interest in, a merger or other
business combination involving Banyan or the acquisition of a ten percent
(10%) or greater equity interest in, or a ten percent (10%) or greater
portion of the assets of Banyan, other than the transactions contemplated
by this Agreement; provided, however, that nothing contained in this
Section 4.5 shall prohibit the Board of Directors of Banyan from:
(i) furnishing information to or entering into discussions or negotiations
with, any person or entity that makes an unsolicited bona fide Acquisition
Proposal, if, and only to the extent that (A) the Board of Directors of
Banyan, after consultation with and based upon the advice of Xxxxxxx &
Xxxxxxxx or other counsel selected by the Banyan Board of Directors,
determines in good faith that such action is required for the Board of
Directors to comply with its fiduciary duties to stockholders under
applicable law and (B) prior to furnishing the information to, or entering
into discussions or negotiations with, the person or entity, Banyan
provides written notice to EFG to the effect that it is furnishing to, or
entering into discussions or negotiations with, the person or entity; and
(ii) to the extent applicable, complying with Rule 14e-2 and Rule 14a-9
promulgated under the Securities Exchange Act of 1934, as amended, with
regard to an Acquisition Proposal.
4.6. TRADING IN BANYAN'S COMMON STOCK. Except as otherwise
expressly consented to by Banyan, from the date of this Agreement until
four business days following public disclosure by Banyan of the Closing,
none of EFG, NEWCO, the Partnerships nor their respective Affiliates will
directly or indirectly purchase or sell (including short sales) any shares
of the Common Stock of Banyan in any transactions effected on the NASDAQ
Stock Market or otherwise. EFG, NEWCO and the Partnerships acknowledge
that their ability to purchase or sell shares of Common Stock of Banyan may
continue to be subject to legal and regulatory restrictions following the
conclusion of such four-day period.
4.7. DISTRIBUTION TO BANYAN. On the earlier of June 30, 1997, or
five (5) business days following the Gearbulk Purchase, NEWCO shall
distribute to Banyan, as a distribution pursuant to applicable provisions
of the NEWCO Operating Agreement, the sum of $2,980,500 (the "Banyan
Distribution").
4.8. PAYMENT OF FEES AND SEVERANCE COSTS. Following the Banyan
Distribution, Banyan shall
(a) Enter into an amendment to the Administrative Services
Agreement with Banyan Management Corp. ("BMC") in the form attached hereto
as Exhibit E, pay $251,823 to BMC as a termination fee, and assign to such
Person as BMC shall designate all of Banyan's shares of Common Stock of
BMC;
(b) enter into a new services agreement with EFG or an
Affiliate of EFG on substantially the same terms and conditions as the BMC
Agreement;
(c) pay the JLR Fee to JLR in accordance with its agreement
with JLR;
(d) immediately cause the election of Xxxxx X. Xxxxx as chief
operating officer of Banyan and cause him to be named as an insured party
under Banyan's directors and officers liability insurance policy.
(e) enter into an employment agreement with Xxxxx containing
substantially the same terms and conditions as the existing employment
agreement between Banyan and Xxxxxxx X. Xxxxxx.
4.9. OTHER TRANSACTIONS FOLLOWING SALE OF VESSELS. Within five (5)
business days following the Gearbulk Purchase, the parties shall, provided
the Gearbulk Purchase occurs prior to June 30, 1997, enter into the
following transactions:
(a) LOAN TO BANYAN. NEWCO shall lend to Banyan the sum of
$4,419,500 and Banyan shall execute and deliver to NEWCO its Promissory
Note (the "Banyan Note") in the form attached hereto as EXHIBIT F, and
Banyan shall grant to NEWCO a perfected security interest in the proceeds
of such loan to secure the obligation of Banyan to repay such loan if the
Stockholder's Consent, as defined in Section 4.10 hereof, is not obtained
by October 31, 1997.
(b) SATISFACTION OF EXCHANGE NOTE. NEWCO shall satisfy all
of its outstanding obligations to EFG as agent for the Partnerships
pursuant to the Exchange Note in accordance with its terms.
4.10. CONSENT OF BANYAN STOCKHOLDERS; DIVIDEND. Following the Banyan
Distribution, Banyan shall take such actions within its power and authority
and shall use reasonable efforts to obtain the consent of its Stockholders
(the "Stockholders' Consent") in order to effect the following:
(a) elect a new Board of Directors nominated by EFG for terms
of up to three (3) years or increase the Board by up to four additional
members (from five currently), provided that in any event the majority of
the Board will continue to consist of directors independent of EFG or its
Affiliates;
(b) amend the Certificate of Incorporation of Banyan to
provide for perpetual life and to change Banyan's name;
(c) amend the By-Laws of Banyan in such manner as EFG shall
reasonably request so as to restrict or deter, to the extent legally
permissible, the acquisition of more than 4.9% of the Common Stock of
Banyan by any Person or Persons in such manner as would cause such Person
or Persons to become a "5 percent shareholder" within the meaning of
Section 382(g) of the Internal Revenue Code and to make such other changes
in the By-Laws as would protect, to the degree practicable, the existing
net operating loss carry forwards of Banyan; and
(d) amend the Certificate of Incorporation and By Laws of
Banyan in such manner as EFG shall reasonably request.
If the Stockholders' Consent is obtained by October 31, 1997, Banyan
shall declare and pay a dividend to its stockholders of $.20 per share out
of legally available funds.
4.11. REFINANCING OF VESSELS. In the event the Gearbulk Purchase
shall not occur on or before May 15, 1997, the Partnerships, EFG and NEWCO
shall use reasonable efforts to refinance the Vessels in such a manner as
to obtain for NEWCO a minimum of $4,400,000 in cash (the "Refinancing
Proceeds") on or before June 30, 1997. In the event such financing is
obtained, the parties shall take the following actions:
(a) NEWCO shall make the distribution to Banyan provided in
Section 4.7 hereof.
(b) NEWCO shall lend to Banyan an amount equal to the
difference between the Refinancing Proceeds and $2,980,500, up to a maximum
amount of $4,419,500 and Banyan and shall deliver to NEWCO its Promissory
Note in such principal amount (the "Alternative Banyan Note") in the form
attached hereto as Exhibit F, and Banyan shall grant to NEWCO a security
interest in the proceeds of such loan to secure the obligation of Banyan to
repay such loan if the Stockholder's Consent, as defined in Section 4.10
hereof, is not obtained by October 31, 1997.
(c) NEWCO shall assign the Alternative Banyan Note to EFG as
agent for the Partnerships as a partial payment of the Exchange Note.
(d) EFG, the Partnerships and NEWCO shall continue to use
reasonable efforts to consummate the sale of the Vessels to the Lessee or
to effect such other transaction or transactions as EFG shall deem
commercially reasonable in order to realize the cash value of the Vessels
for NEWCO
4.12. RANCHO MALIBU DEBT. Banyan shall not, while the Banyan Note or
Alternative Banyan Note is outstanding, permit the aggregate outstanding
indebtedness secured by the Rancho Malibu Property, as defined in EXHIBIT F
hereto, to increase by more than $2,500,000.
ARTICLE V
CLOSING CONDITIONS
------------------
5.1. CONDITIONS TO THE OBLIGATIONS OF THE PARTNERSHIPS. The
obligations of the Partnerships, NEWCO and EFG under Article I are subject
to the fulfillment or waiver on or before the Closing Date of each of the
following conditions:
(a) The representations and warranties contained in
Article II shall be true and accurate on and as of the Closing Date with
the same force and effect as if such representations and warranties had
been made on and as of the Closing Date; Banyan shall have performed and
complied with all of its obligations required by this Agreement to be
performed or complied with at or prior to the Closing Date; and Banyan
shall have delivered to EFG a certificate as of the Closing Date certifying
the same;
(b) Between the date hereof and the Closing Date: (i) there
shall have been no material adverse change to the assets, business or
financial condition of Banyan; (ii) there shall have been no adverse
federal, state or local legislative or regulatory change affecting in any
material respect this Agreement; (iii) none of the properties and assets of
Banyan shall have been materially damaged by fire, flood, casualty, act of
God or the public enemy or other cause (regardless of insurance coverage
for such damage); and (iv) Banyan shall have received no report that a
Person other than the Partnerships shall have become a "5 percent
shareholder" of Banyan within the meaning of Section 382(g) of the Internal
Revenue Code;
(c) There shall not be pending or threatened any action or
proceeding by or before any court or other Governmental Authority which
shall seek to restrain, prohibit, invalidate or collect damages arising out
of the Agreement or any other transaction contemplated hereby, and which,
in the reasonable judgment of EFG, makes it inadvisable to proceed with the
Agreement and the transactions contemplated hereby;
(d) All corporate and other proceedings in connection with
the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to Peabody &
Xxxxx, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request;
(e) The Partnerships, EFG and NEWCO shall have received from
Xxxxxxx & Xxxxxxxx Ltd., counsel to Banyan, an opinion, dated as of the
Closing Date in form and substance reasonably acceptable to their counsel;
and
(f) Xxxx X. Xxxxx shall have been duly elected to the Board
of Directors of Banyan and shall have been named as additional insured
party under Banyan's directors and officers liability insurance policy.
5.2. CONDITIONS TO THE OBLIGATIONS OF BANYAN. The obligations of
Banyan under Article I are subject to the fulfillment on or before the
Closing Date of each of the following conditions:
(a) The representations and warranties contained in
Article III shall be true and accurate on and as of the Closing Date with
the same force and effect as if such representations and warranties had
been made on and as of the Closing Date; each of EFG, NEWCO and the
Partnerships shall have performed and complied with all of its respective
obligations required by this Agreement to be performed or complied with at
or prior to the Closing, and each of EFG, NEWCO and the Partnerships shall
have delivered to Banyan a certificate dated as of the Closing certifying
the same;
(b) Between the date hereof and the Closing Date; (i) there
shall have been no material adverse change in the business, assets or
financial condition of EFG, NEWCO or any Partnership, (ii) there shall have
been no adverse federal, state or local legislative or regulatory change
affecting in any material respect this Agreement; and (iii) none of the
properties and assets of EFG, NEWCO or any Partnership shall have been
materially damaged by fire, flood, casualty, act of God or the public enemy
or other cause (regardless of insurance coverage for such damage);
(c) There shall not be pending or threatened any action or
proceeding by or before any court or other Governmental Authority which
shall seek to restrain, prohibit, invalidate or collect damages arising out
of the Agreement or any other transaction contemplated hereby, and which,
in the reasonable judgment of Banyan, makes it inadvisable to proceed with
the Agreement and the transactions contemplated hereby.
(d) All corporate and other proceedings in connection with
the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory to Xxxxxxx & Xxxxxxxx Ltd. and
they shall have received all such counterpart original and certified or
other copies of such documents as they may reasonably request;
(e) Banyan shall have received from Peabody & Xxxxx, counsel
to the Partnerships, NEWCO and EFG, an opinion, dated as of the Closing
Date, in form and substance reasonably acceptable to Banyan's counsel; and
(f) Banyan shall have received an opinion from JLR that the
transactions contemplated herein are fair from a financial point of view to
shareholders of Banyan.
ARTICLE VI
CONDITION SUBSEQUENT
--------------------
6.1. CONDITION SUBSEQUENT. In the event the Gearbulk Purchase shall
not have occurred on or before May 15, 1997, the obligations of Banyan
hereunder are subject to the additional condition subsequent that the
Partnerships and NEWCO shall have, on or before June 30, 1997, refinanced
the Vessels so as to provide NEWCO with cash in the amount of $4,400,000.
In the event the foregoing condition shall not be satisfied, this Agreement
shall automatically terminate and be of no further force or effect at the
close of business on June 30, 1997, and the transactions consummated
pursuant to Article I hereof shall be deemed rescinded ab initio. Without
limiting the foregoing, NEWCO and the Partnerships shall cause the return
to Banyan for cancellation of the certificate or certificates representing
the Banyan Shares, and Banyan's Membership interest in NEWCO shall be
canceled and of no further force or effect.
6.2. BREAK UP FEE. In the event this Agreement is terminated
pursuant to Section 6.1, the Partnerships shall cause to be paid to Banyan
the sum of (i) $350,000, plus (ii) an amount equal to the reasonable
out-of-pocket expenses incurred by Banyan in connection with this
transaction not to exceed $100,000, subject, with respect to clause (ii)
only, to the delivery by Banyan to EFG of documentation of such expenses in
reasonable detail.
6.3. ADDITIONAL COVENANTS. In the event of the termination of this
Agreement pursuant to Section 6.1 hereof, the parties shall take all
actions, including, without limitation, the execution and delivery of all
agreements reasonably requested by any party, to effect the rescission of
the transactions entered into at the Closing. Each party agrees that, for
federal income tax purposes, it shall take the position that the
transactions were rescinded ab initio and are without effect, in accordance
with IRS Revenue Ruling 80-58.
ARTICLE VII
REMEDY FOR BREACH
-----------------
7.1. REMEDY FOR BREACH. The representations and warranties of the
parties hereunder shall survive the Closing and shall remain in full force
and effect until the earlier of (i) the closing of the Gearbulk Purchase or
(ii) June 30, 1997 (the "Expiration Date"), provided that no party shall
have any rights with respect to any such breach in the event this Agreement
is rescinded pursuant to Section 6.1 and the payments required under 6.2
are made. In the event of any material breach by any party of any
representation, warranty, covenant or agreement made by any party hereto,
EFG, in the case of a breach by Banyan, or Banyan, in the case of a breach
by any of the Partnerships, EFG or NEWCO, may rescind this Agreement by
giving written notice to the other parties prior to the Expiration Date.
In such event, this Agreement shall be rescinded in the manner contemplated
by Section 6.1 and 6.3 hereof and the breaching party shall pay to the
non-breaching party or parties liquidated damages in the amount of
$350,000, and neither party shall have any further obligation hereunder
except to take such actions as either EFG or Banyan shall reasonably
request to rescind the transactions entered into at the Closing.
Notwithstanding the foregoing, the representations and warranties set forth
in Section 3.9 hereof and the indemnification provided for in Article VIII
of this Agreement shall survive the Expiration Date and the termination of
this Agreement under Article VI or otherwise.
ARTICLE VIII
REGISTRATION RIGHTS
-------------------
8.1. REGISTRATION RIGHTS.
(a) CERTAIN DEFINITIONS. As used in this Section 8.1 and
elsewhere in this Agreement, the following terms shall have the following
respective meanings:
"COMMISSION" means the Securities and Exchange
Commission, or any other Federal agency at the time administering the
Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, or any similar Federal statute, and the rules and regulations
of the Commission issued under such Act, as they each may, from time to
time, be in effect.
"OTHER HOLDERS" shall mean persons other than the
Stockholders who, by virtue of agreements with Banyan, are entitled to
include their securities in certain registrations of Banyan.
"REGISTRATION STATEMENT" means a registration statement
filed by Banyan with the Commission for a public offering and sale of
securities of Banyan (other than a registration statement on Form S-8 or
Form S-4, or their successors, or any other form for a limited purpose, or
any registration statement covering only securities proposed to be issued
in exchange for securities or assets of another corporation).
"REGISTRATION EXPENSES" means the expenses described in
subsection 8.1(f).
"REGISTRABLE SHARES" means (i) any shares of Common Stock
of Banyan acquired by a Partnership pursuant to Section 1.4(a) hereof, and
(ii) any other shares of Common Stock of Banyan issued in respect of such
shares (because of stock splits, stock dividends, reclassifications,
recapitalizations or similar events); PROVIDED, HOWEVER, that shares of
Common Stock which are Registrable Shares shall cease to be Registrable
Shares upon any sale pursuant to a Registration Statement, Section 4(1) of
the Securities Act or Rule 144 under the Securities Act (or any similar
rule promulgated by the Commissioner permitting the resale of restricted
securities without the necessity of a registration statement under the
Securities Act) ("Rule 144"), or any sale in any manner to a person or
entity which, by virtue of Section 8.2 of this Agreement, is not entitled
to the rights provided by this Section 8.1; and PROVIDED FURTHER, HOWEVER,
that Registrable Shares shall not include any shares which are available
for sale and can be sold (whether or not sold) pursuant to Rule 144.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission issued under such Act, as they each may, from time to time,
be in effect.
"SHARES" shall have the meaning specified in
subsection 1(b).
"STOCKHOLDERS" means any Partnership and any persons or
entities to whom the rights granted under this Section 8 are transferred by
the Partnership or its respective successors or assigns pursuant to
Section 8.2 hereof.
(b) SALE OR TRANSFER OF SHARES; LEGEND.
(i) The Registrable Shares shall not be sold or
transferred unless either (A) they first shall have been registered under
the Securities Act, or (B) Banyan first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to Banyan, to the effect
that such sale or transfer is exempt from the registration requirements of
the Securities Act.
(ii) Each certificate or other instrument representing
the Registrable Shares shall bear a legend substantially in the following
form:
The securities represented by this instrument have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless and
until such shares are registered under such Act or an opinion of counsel
satisfactory to Banyan is obtained to the effect that such registration is
not required.
The foregoing legend shall be removed from the certificates
representing any Registrable Shares, at the request of the holder thereof,
at such time as they become eligible for resale pursuant to Rule 144(k)
under the Securities Act.
(c) REQUIRED REGISTRATIONS.
(i) At any time after June 30, 1997, a Stockholder or
Stockholders holding Registrable Shares may request Banyan, in writing, to
effect the registration on Form S-3 (or any successor or other form
relating to secondary offerings) of Registrable Shares having an aggregate
offering price of at least $1,000,000 (based on the current public market
price). Upon receipt of any such request, Banyan shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to Banyan
within 30 days after Banyan provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders
may request in such notice of election. Thereupon, Banyan shall, as
expeditiously as possible, use its best efforts to effect the registration
on Form S-3, or such other form, of all Registrable Shares which Banyan has
been requested to register.
(ii) Banyan shall not be required to effect more than
two registrations pursuant to paragraph (i) above.
(iii) If at the time of any request to register
Registrable Shares pursuant to this Section 8.1(c), Banyan is engaged or
has fixed plans to engage within 30 days of the time of the request in a
registered public offering as to which the Stockholders may include
Registrable Shares pursuant to subsection 8.1(d) or is engaged in any other
activity which, in the good faith determination of Banyan's Board of
Directors, would be adversely affected by the requested registration to the
material detriment of Banyan, then Banyan may at its option direct that
such request be delayed for a period not in excess of 90 days from the
effective date of such offering or the date of commencement of such other
material activity, as the case may be.
(iv) Banyan shall not be obligated to effect, or to take
any action to effect, any such registration pursuant to this Section 8(c):
(A) In any particular jurisdiction in which
Banyan would be required to execute a general consent to qualify as a
foreign corporation or to service of process in effecting such
registration, qualification, or compliance; or
(B) During the period starting with the date
sixty (60) days prior to Banyan's good faith estimate of the date of filing
of, and ending on a date one hundred twenty (120) days after the effective
date of, a Banyan-initiated registration; provided that Banyan is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective.
(d) INCIDENTAL REGISTRATION.
(i) Whenever Banyan proposes to file a Registration
Statement (other than pursuant to Section 8.1(c)) at any time and from time
to time other than a registration relating solely to employee benefit
plans, or a registration relating solely to a Rule 145 transaction, or a
registration on any registration form that does not permit secondary sales,
it will, prior to such filing, give written notice to all Stockholders of
its intention to do so and, upon the written notice of a Stockholder or
Stockholders given within 20 days after Banyan provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), Banyan shall, subject to clause d(ii) below, use its best efforts
to cause all Registrable Shares which Banyan has been requested by such
Stockholder or Stockholders to be registered under the Securities Act to
the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the
request of such Stockholder or Stockholders; provided that Banyan shall
have the right to postpone or withdraw any registration effected pursuant
to this subsection 8.1(d) without obligation to any Stockholder.
(ii) In connection with any offering involving an
underwriting of shares of Common Stock (the "Offered Shares") by Banyan or
by persons exercising demand registration rights, Banyan shall not be
required to include any Registrable Shares in such underwriting unless the
holders thereof accept the terms of the underwriting as agreed upon between
Banyan and the underwriters selected by it, and then only in such quantity
as will not, in the opinion of the underwriters, jeopardize the success of
the offering of the Offered Shares. If in the opinion of the managing
underwriter the registration of all, or part of, the Registrable Shares
which the holders have requested to be included, together with any other
shares which Banyan is obligated to register pursuant to incidental or
"piggyback" registration rights granted to other shareholders ("Other
Registrable Shares"), would materially and adversely affect the Offering of
the Offered Shares, then Banyan shall not include in such underwriting
shares of Common Stock (other than the Offered Shares) owned by persons
other than holders of Registrable Shares and Other Registrable Shares and
shall be required to include in the underwriting not less than 75% of the
Registrable Shares so requested to be included before including any Other
Registrable Shares. If the number of Registrable Shares and Other
Registrable Shares to be included in the underwriting in accordance with
the foregoing is less than the total number of shares which the holders of
Registrable Shares and Other Registrable Shares have requested to be
included, and there is first excluded from such underwriting all shares of
Common Stock sought to be included therein by any other holder thereof
other than persons exercising demand registration rights, then the holders
of Registrable Shares and Other Registrable Shares who have requested
registration shall participate in the underwriting pro rata based upon
their total ownership of Registrable Shares and Other Registrable Shares.
If any holder would thus be entitled to include more shares than such
holder requested to be registered, the excess shall be allocated among
other requesting holders pro rata based upon their total ownership of
Registrable Shares and Other Registrable Shares.
(e) REGISTRATION PROCEDURES. If and whenever Banyan is
required by the provisions of this Agreement to use its best efforts to
effect the registration of any of the Registrable Shares under the
Securities Act, Banyan shall:
(i) file with the Commission a Registration Statement
with respect to such Registrable Shares and use its best efforts to cause
that Registration Statement to become and remain effective for a period of
not less than 120 days from the effective date;
(ii) as expeditiously as possible prepare and file with
the Commission any amendments and supplements to the Registration Statement
and the prospectus included in the Registration Statement as may be
necessary to keep the Registration Statement effective for a period of not
less than 120 days from the effective date;
(iii) as expeditiously as possible furnish to each
selling Stockholder such reasonable number of copies of the prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents as the selling Stockholder may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the selling Stockholder; and
(iv) as expeditiously as possible use its best efforts
to register or qualify the Registrable Shares covered by the Registration
Statement under the securities or Blue Sky laws of such states as the
selling Stockholders shall reasonably request, and do any and all other
acts and things that may be necessary or desirable to enable the selling
Stockholders to consummate the public sale or other disposition in such
states of the Registrable Shares owned by the selling Stockholder;
PROVIDED, HOWEVER, that Banyan shall not be required in connection with
this paragraph (iv) to qualify as a foreign corporation or execute a
general consent to service of process in any jurisdiction.
If Banyan has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, Banyan will promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to Banyan. Banyan shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the
revised prospectuses, the selling Stockholders shall be free to resume
making offers of the Registrable Shares.
(f) ALLOCATION OF EXPENSES. Banyan will pay all Registration
Expenses of all registrations under this Agreement; provided however, that
if a registration is withdrawn at the request of the Stockholders
requesting such registration, other than as a result of material adverse
information concerning the business or financial condition of Banyan which
is different from the information relating to Banyan known or available
(upon request from Banyan or otherwise) to the Stockholders at the date on
which such registration was requested, and if the requesting Stockholders
elect not to have such registration counted as a registration requested
under Section 8.1(c), the requesting Stockholders shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For
purposes of this Section, the term "Registration Expenses" shall mean all
expenses incurred by or on behalf of Banyan in complying with this
Section 8.1, including, without limitation, all registration and filing
fees, exchange listing fees, printing expenses, fees and disbursements of
counsel for Banyan and the fees and expenses of one counsel selected by the
selling Stockholders to represent the selling Stockholders in connection
with any registration pursuant to Section 8.1(c), state Blue Sky fees and
expenses, and the expense of any regular or special audits incident to or
required by any such registration, but excluding underwriting discounts,
selling commissions and the fees and expenses of selling Stockholders' own
counsel (other than the counsel selected to represent all selling
Stockholders).
(g) INDEMNIFICATION. In the event of any registration of any
of the Registrable Shares under the Securities Act pursuant to this
Agreement, Banyan will indemnify and hold harmless the seller of such
Registrable Shares, each underwriter of such Registrable Shares, and each
other person, if any, who controls such seller or underwriter within the
meaning of Section 15 of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which such seller, underwriter
or controlling person may become subject under the Securities Act, the
Exchange Act, state securities or Blue Sky laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities
Act, any preliminary prospectus or final prospectus contained in the
Registration Statement or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and each such
controlling person for any legal or any other expenses reasonably incurred
by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that Banyan will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or omission made in such Registration
Statement, preliminary prospectus or prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished
to Banyan, in writing, by or on behalf of such seller, underwriter or
controlling person specifically for use in the preparation thereof.
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and jointly, will indemnify and hold harmless Banyan,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls Banyan or any such underwriter within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which Banyan, such directors
and officers, underwriter or controlling person may become subject under
the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to
the Registration Statement, or arise out of or are based upon any omission
or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to Banyan by or on behalf of such seller,
specifically for use in connection with the preparation of such
Registration Statement, amendment or supplement; PROVIDED, HOWEVER, that
the obligations of such Stockholders hereunder shall be limited to an
amount equal to the proceeds to each Stockholder of Registrable Shares sold
as contemplated herein.
Each party entitled to indemnification under this subsection 8.1(g)
(the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; PROVIDED,
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld); and PROVIDED, FURTHER, that
the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Section 8. The Indemnified Party may participate in such defense at such
party's expense; PROVIDED, HOWEVER, that the Indemnifying Party shall pay
such expense if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with
the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect of such claim or litigation, and
no Indemnified Party shall consent to entry of any judgment or settle such
claim or litigation without the prior written consent of the Indemnifying
Party.
If the indemnification provided for in this Section 8.1(g) is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, liability, claim,
damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information, and the opportunity to correct or prevent such statement or
omission.
(h) INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING.
In the event that Registrable Shares are sold pursuant to a Registration
Statement in an underwritten offering pursuant to subsection 8.1(c)(i),
Banyan and each Selling Shareholder agrees to enter into an underwriting
agreement containing customary representations and warranties with respect
to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by Banyan of the underwriters of such offering.
(i) INFORMATION BY HOLDER. Each holder of Registrable Shares
included in any registration shall furnish to Banyan such information
regarding such holder and the distribution proposed by such holder as
Banyan may request in writing and as shall be required in connection with
any registration, qualification or compliance referred to in this
Section 8.1
(j) "STAND-OFF" AGREEMENT. Each Stockholder, if requested by
Banyan and an underwriter of Common Stock or other securities of Banyan,
will not sell or otherwise transfer or dispose of any Registrable Shares or
other securities of Banyan held by such Stockholder for a specified period
of time, not to exceed 120 days, following the effective date of a
Registration Statement PROVIDED, that all Stockholders holding not less
than the number of shares of Common Stock held by such Stockholder,
including shares of Common Stock issuable upon the conversion of Shares, or
other convertible securities, or upon the exercise of options, warrants or
rights, and all executive officers and directors of Banyan enter into
similar agreements. In addition, each Stockholder will enter into a
written agreement, in a form reasonably satisfactory to Banyan and such
underwriter, reflecting such stand-off agreement. Banyan may impose stop-
transfer instructions with respect to the Registrable Shares or other
securities subject to the foregoing restriction until the end of the
stand-off period.
(k) LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. Banyan
shall not, without the prior written consent of Stockholders holding at
least a majority of the Registrable Shares, enter into any agreement, other
than this Agreement, with any holder or prospective holder of any
securities of Banyan which would grant registration rights to such holder
or prospective holder, that are inconsistent with the rights of the
Stockholders set forth herein.
(l) RULE 144 REQUIREMENTS. Banyan agrees to:
(i) Make and keep public information available, as
those terms are understood and defined in Rule 144;
(ii) Use its best efforts to file with the Commission in
a timely manner all reports and other documents required of Banyan under
the Securities Act and the Exchange Act; and
(iii) Furnish to any holder of Registrable Shares upon
request a written statement by Banyan as to its compliance with the
reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of
Banyan, and such other reports and documents of Banyan as such holder may
reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any such securities without registration.
(m) SELECTION OF UNDERWRITER. In the case of any
underwritten registration effected pursuant to subsection 8.1(c), the Board
of Directors of Banyan shall designate the managing underwriters in the
underwritten offering, subject to the approval of the requesting
Stockholders, which approval shall not be unreasonably withheld.
(n) TERMINATION OF REGISTRATION RIGHTS. The rights of any
Stockholder to request registration or inclusion in any registration
pursuant to Section 8.1 shall terminate on such date as all shares of
Registrable Securities held by such Stockholder may immediately be sold
under Rule 144 during any 90-day period.
8.2. TRANSFERS OF CERTAIN RIGHTS.
(a) TRANSFER. The rights granted to each Partnership under
Section 8.1 may be transferred by such Partnership to any person or persons
acquiring at least 50,000 Registrable Shares (as presently constituted and
subject to subsequent adjustments for stock splits, stock dividends,
reverse stock splits and the like); PROVIDED, HOWEVER, that Banyan is given
written notice by the transferee at the time of such transfer stating the
name and address of the transferee and identifying the securities with
respect to which such rights are being assigned.
(b) TRANSFEREES. Any transferee to whom rights Section 8.1
are transferred shall, as a condition to such transfer, deliver to Banyan a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon the Partnerships under Section 8.1, to the same
extent as if such transferee were the Partnership hereunder.
(c) SUBSEQUENT TRANSFEREES. A transferee to whom rights are
transferred pursuant to this Section 8.2 may again transfer such rights to
any other person or persons, subject to subparagraphs (a) or (b) above.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings:
"AFFILIATE" shall have the meaning ascribed to it in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on the date hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental Authority or other
entity, of whatever nature.
9.2. EFG AS AGENT. For purposes of this Agreement and any agreement
entered into in connection with this Agreement, EFG shall act as agent for
NEWCO and the Partnerships and any Stockholder and shall receive and
provide all notices and enforce any rights of NEWCO and the Partnerships
and any Stockholder. Banyan shall have no obligation to deliver any notice
or consent to, or acknowledge receipt of any notice or consent from, any
party other than EFG under this Agreement. EFG may assign its obligations
under this Section 9.2 by giving Banyan five business days prior written
notice of such assignment.
9.3. WAIVER. Banyan irrevocably waives any rights which it may have
to declare the Banyan Shares Excess Shares as that term is described in
Section 7.8 of the By-Laws of Banyan.
9.4. NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage prepaid), guaranteed
overnight delivery, or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage
pre-paid) or guarantee overnight delivery, to the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers which such
party shall designate in writing to the other party):
(a) IF TO BANYAN TO:
Banyan Strategic Land Fund II
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
Telecopy No.: (000) 000-0000
WITH A COPY TO:
Xxxxxxx & Xxxxxxxx Ltd.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) IF TO EFG, THE PARTNERSHIPS OR NEWCO TO:
Equis Financial Group Limited Partnership
c/o Equis Corporation
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Senior Vice President
Telecopy No.: (000) 000-0000
WITH A COPY TO:
Peabody & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Xx., Esq.
Telecopy No. (000) 000-0000
9.5. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) and other documents delivered at the Closing
pursuant hereto, contains the entire understanding of the parties in
respect of its subject matter and supersedes all prior agreements and
understandings (oral or written) between or among the parties with respect
to such subject matter. Without limiting the foregoing, the letter
agreement dated February 26, 1997 between Banyan and EFG shall be
terminated and of no further force or effect simultaneously with the Banyan
Distribution. The Exhibits and Schedules constitute a part hereof as
though set forth in full above.
9.6. EXPENSES. Except as otherwise provided in Section 6.2, each
party shall pay its own fees and expenses, including its own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby.
9.7. AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Agreement shall
operate as a waiver, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude the exercise of any other right,
power or privilege. No waiver of any breach of any provision shall be
deemed to be a waiver of any preceding or succeeding breach of the same or
any other provision, nor shall nay waiver be implied from any course of
dealing between the parties. No extension of time for performance of any
obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other
obligations or any other acts. The rights and remedies of the parties
under this Agreement are in addition to all other rights and remedies, at
law or equity, that they may have against each other.
9.8. BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein
shall be construed to give any other person any legal or equitable rights
hereunder.
9.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
9.10. INTERPRETATION. When a reference is made in this Agreement to
an Article, Section, Schedule or Exhibit, such reference shall be deemed to
be to this Agreement unless otherwise indicated. The headings contained
herein and on the Schedules and Exhibits are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement, the Schedules or the Exhibits. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation." Time shall be of the
essence of this Agreement.
9.11. GOVERNING LAW; INTERPRETATION. This Agreement shall be
construed in accordance with and governed for all purposes by the laws of
the State of Illinois applicable to contracts executed and to be wholly
performed within such State.
9.12. ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to all other parties hereto that (a) before
executing this Agreement, said party has fully informed itself of the
terms, contents, conditions and effects of this Agreement; (b) said party
has relied solely and completely upon its own judgment in executing this
Agreement; (c) said party has had the opportunity to seek and has obtained
the advice of counsel before executing this Agreement; (d) said party has
acted voluntarily and of its own free will in executing this Agreement;
(c) said party is not acting under duress, whether economic or physical, in
executing this Agreement; and (f) this Agreement is the result of arm's
length negotiations conducted by and among the parties and their respective
counsel.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
BANYAN STRATEGIC LAND FUND II
By: /s/Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx, President
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP
By: Equis Corporation, its General Partner
By: /s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Senior Vice President
AFG HATO ARROW LIMITED PARTNERSHIP
By: AFG Leasing VI Incorporated, its General
Partner
By: /s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice President
AFG DOVE ARROW LIMITED PARTNERSHIP
By: AFG Leasing VI Incorporated, its General
Partner
By: /s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice President
AIP/LARKFIELD LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, its General
Partner
By: /s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice President
EQUIS EXCHANGE LLC
By: /s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Manager
EXHIBIT A
---------
EQUIS EXCHANGE LLC
AMENDED AND RESTATED Operating Agreement
This Amended and Restated Operating Agreement of EQUIS
EXCHANGE LLC (the "Company") is made as of April 17, 1997, by and among
Xxxxx X. Xxxxx ("Xxxxx"), Equis Financial Group Limited Partnership ("EFG")
and Banyan Strategic Land Fund II, a Delaware corporation ("Banyan").
WITNESSETH,
WHEREAS, the Company was formed as a limited liability
company under the Massachusetts Limited Liability Company Act (as amended
from time to time, the "Act") on April 16, 1997 and is presently governed
by an Operating Agreement of the same date between Xxxxx and EFG; and
WHEREAS, Xxxxx and EFG are the Managers of the Company (such
persons and their respective successors in office being hereinafter
referred individually as "Manager" or collectively as "Managers");
WHEREAS, EFG and Xxxxx were the original Members of the
Company and Banyan is, upon the execution of this agreement, being admitted
as an additional Member of the Company and Xxxxx is withdrawing as a Member
(EFG and Banyan and their respective successors in interest being hereunder
referred to individually as "Member" or collectively as "Members");
WHEREAS, the Managers and the Members wish to set forth their
respective rights, obligations and duties regarding the Company and its
assets and liabilities;
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein, the parties hereby agree as follows:
ARTICLE I - ORGANIZATION AND POWERS
1.1. ORGANIZATION. The Company has been formed by the filing of
its Certificate of Organization with the Massachusetts Secretary of State
pursuant to the Act. The Certificate of Organization may be restated by
the Managers as provided in the Act or amended by the Managers to change
the address of the office of the Company in Massachusetts and the name and
address of its resident agent in Massachusetts or to make corrections
required by the Act. Other additions to or amendments of the Certificate
of Organization shall be authorized by the Members as provided in Article
II. The Certificate of Organization as so amended from time to time, is
referred to herein as the "Certificate." The Managers shall deliver a copy
of the Certificate and any amendment thereto to any Member who so requests.
1.2. PURPOSES AND POWERS. The principal business activity and
purpose of the Company shall initially be to manage, acquire and dispose of
three shipping vessels and related equipment, and to engage in any business
related thereto or useful in connection therewith. However, the business
and purposes of the Company shall not be limited to its initial principal
business activity and, unless the Members otherwise determine, the Company
shall have authority to engage in any other lawful business, trade, purpose
or activity permitted by the Act, and it shall possess and may exercise all
of the powers and privileges granted by the Act or together with any powers
incidental thereto, so far as such powers or privileges are necessary or
convenient to the conduct, promotion or attainment of the business,
purposes or activities of the Company, including without limitation the
following powers:
(a) to conduct its business and operations in any
state, territory or possession of the United States or in any foreign
country or jurisdiction;
(b) to purchase, receive, take, lease or otherwise
acquire, own, hold, improve, maintain, use or otherwise deal in and with,
sell, convey, lease, exchange, transfer or otherwise dispose of, mortgage,
pledge, encumber or create a security interest in all or any of its real or
personal property, or any interest therein, wherever situated;
(c) to borrow or lend money or obtain or extend credit
and other financial accommodations, to invest and reinvest its funds in any
type of security or obligation of or interest in any public, private or
governmental entity, and to give and receive interests in real and personal
property as security for the payment of funds so borrowed, loaned or
invested;
(d) to make contracts, including contracts of
insurance, incur liabilities and give guaranties, whether or not such
guaranties are in furtherance of the business and purposes of the Company,
including without limitation, guaranties of obligations of other persons
who are interested in the Company or in whom the Company has an interest;
(e) to have one or more Managers, to employ officers,
employees, agents and other persons, to fix the compensation and define the
duties and obligations of such personnel, to establish and carry out
retirement, incentive and benefit plans for such personnel, and to
indemnify such personnel to the extent permitted by this Agreement and the
Act;
(f) to make donations irrespective of benefit to the
Company for the public welfare or for community, charitable, religious,
educational, scientific, civic or similar purposes;
(g) to institute, prosecute, and defend any legal
action or arbitration proceeding involving the Company, and to pay, adjust,
compromise, settle, or refer to arbitration any claim by or against the
Company or any of its assets;
(h) to act as the voting trustee in one or more voting
trusts; and
(i) to be a partner in one or more partnerships.
1.3. PRINCIPAL PLACE OF BUSINESS. The principal office and place
of business of the Company shall initially be 00 Xxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000. After giving notice to the Members, the
Managers may change the principal office or place of business of the
Company at any time and may cause the Company to establish other offices or
places of business.
1.4. FISCAL YEAR. The fiscal year of the Company shall end on
December 31 in each year.
1.5. QUALIFICATION IN OTHER JURISDICTIONS. The Managers shall
cause the Company to be qualified or registered under applicable laws of
any jurisdiction in which the Company transacts business and shall be
authorized to execute, deliver and file any certificates and documents
necessary to effect such qualification or registration, including without
limitation the appointment of agents for service of process in such
jurisdictions.
ARTICLE II - MEMBERS
2.1. MEMBERS. The Members of the Company and their addresses
shall be listed on Schedule A and said Schedule shall be amended from time
to time by the Managers to reflect the withdrawal of Members or the
admission of additional Members pursuant to this Agreement. Schedule A
shall set forth for the percentage interest which each Member holds in the
profits of the Company (the "Membership Interests"), and the Contribution
(as defined in Section 6.2), if any, of each Member. The Members shall
constitute a single class or group of Members of the Company for all
purposes of the Act, unless otherwise explicitly provided herein. The
Managers shall notify the Members of changes in Schedule A, which shall
constitute the record list of the Members for all purposes of this
Agreement.
2.2. ADMISSION OF NEW MEMBERS. Additional persons may be admitted
by the Managers to the Company as Members and may participate in the
profits, losses, distributions, allocations and capital contributions of
the Company upon such terms as are established by the Managers by amendment
of this Agreement in accordance with Section 10.5, which may include the
establishment of classes or groups of one or more Members having different
relative rights (including voting rights), powers and duties, provided that
no person, other than an assignee of a Class A Membership Interest, may be
admitted to the Company without the prior written consent of the holders of
majority of the Class B Membership Interests. Existing Members shall have
no preemptive or similar right to subscribe to the purchase of new
Membership Interests in the Company.
2.3. CLASSES OF MEMBERS. Until such time as additional classes
are established by the Managers pursuant to Section 2.1, the Company shall
have two (2) classes of Members, Class A Members and Class B Members. The
Class A and Class B Members shall have the respective rights with respect
to profits, losses and distributions set forth in Article VII. Class A
Members shall have voting rights and Class B Members shall have no voting
rights.
2.4. MEETINGS OF MEMBERS
(a) Meetings of Members may be called for any proper
purpose at any time by the Managers or the holders of a majority of the
Membership Interests having voting rights ("Voting Membership Interests";
Members holding such Interests are referred to herein as "Voting Members").
The Managers or the Members calling the meeting shall determine the date,
time and place of each meeting of Members, and written notice thereof shall
be given by the Managers to each Voting Member not less than five days or
more than 60 days prior to the date of the meeting. The business of each
meeting of Members shall be limited to the purposes described in the
notice. A written waiver of notice, executed before or after a meeting by
a Member or his authorized attorney and delivered to the Managers shall be
deemed equivalent to notice of the meeting.
(b) Persons holding a majority of the Voting Membership
Interests shall constitute a quorum for the transaction of any business at
a meeting of Members. Members may attend a meeting in person or by proxy.
Members may also participate in a meeting by means of conference telephone
or similar communications equipment that permits all Members present to
hear each other. If less than a quorum of the Members is present, the
meeting may be adjourned by the chairman to a later date, time and place,
and the meeting may be held as adjourned without further notice. When an
adjourned meeting is reconvened, any business may be transacted that might
have been transacted at the original meeting.
(c) A chairman selected by the Managers shall preside
at all meetings of the Members unless the Members elect from the Membership
a chairman of the meeting. The chairman shall determine the order of
business and the procedures to be followed at each meeting of Members. An
action shall be deemed approved when approved by holders of a majority of
the Voting Membership Interests present in person or by proxy at any
meeting of the Members.
2.5. ACTION WITHOUT A MEETING. There is no requirement that the
Members hold a meeting in order to take action on any matter. Any action
required or permitted to be taken by the Members may be taken without a
meeting if one or more written consents to such action shall be signed by
Members holding a majority of the Voting Membership Interests. Such
written consents shall be delivered to the Managers at the principal office
of the Company and unless otherwise specified shall be effective on the
date when the first consent is so delivered. The Managers shall give
prompt notice to all Voting Members who did not consent to any action taken
by written consent of Members without a meeting.
2.6. LIMITATION OF LIABILITY OF MEMBERS. Except as otherwise
provided in the Act, no Member of the Company shall be obligated personally
for any debt, obligation or liability of the Company or of any other
Member, whether arising in contract, tort or otherwise, solely by reason of
being a Member of the Company. Except as otherwise provided in the Act, by
law or expressly in this Agreement, no Member shall have any fiduciary or
other duty to another Member with respect to the business and affairs of
the Company, and no Member shall be liable to the Company or any other
Member for acting in good faith reliance upon the provisions of this
Agreement. Subject to Section 7.2, no Member shall have any responsibility
to restore any negative balance in his Capital Account (as defined in
Section 6.1) or to contribute to or in respect of the liabilities or
obligations of the Company or return distributions made by the Company
except as required by the Act or other applicable law; provided, however,
that Members are responsible for their failure to make required
Contributions under Section 6.2. The failure of the Company to observe any
formalities or requirements relating to the exercise of its powers or the
management of its business or affairs under this Agreement or the Act shall
not be grounds for making its Members or Managers responsible for the
liabilities of the Company.
2.7. AUTHORITY. Unless specifically authorized by the Managers,
no Member that is not a Manager or an Officer of the Company shall be an
agent of the Company or have any right, power or authority to act for or to
bind the Company or to undertake or assume any obligation or responsibility
of the Company or of any other Member.
2.8. NO RIGHT TO WITHDRAW. No Member shall have any right to
resign or withdraw from the Company without the consent of the other
Members or to receive any distribution or the repayment of his capital
contribution except as provided in Section 7.2 and Article IX upon
dissolution and liquidation of the Company. No Member shall have any right
to have the fair value of his interest in the Company appraised and paid
out upon the resignation or withdrawal of such Member or any other
circumstances.
2.9. RIGHTS TO INFORMATION. Members shall have the right to
receive from the Managers upon request a copy of the Certificate and of
this Agreement, as amended from time to time, and such other information
regarding the Company as is required by the Act, subject to reasonable
conditions and standards established by the Managers, as permitted by the
Act, which may include, without limitation, withholding or restrictions on
the use of confidential information.
ARTICLE III - MANAGEMENT
3.1. MANAGERS. The names and addresses of the initial Managers of
the Company are set forth on SCHEDULE A. Said schedule shall be amended
from time to time by the Managers to reflect the resignation or removal of
the Managers or the appointment of new or additional Managers pursuant to
this Agreement.
3.2. ELECTION AND QUALIFICATION. The Members shall from time to
time fix the number of Managers and elect the number of Managers so fixed.
Managers may, but are not required to, be Members, and shall hold office at
the pleasure of the Members. Each Manager shall devote such time to the
business and affairs of the Company as is reasonably necessary for the
performance of the Manager's duties, but shall not be required to devote
full time to the performance of such duties and may delegate his
responsibilities as provided in Section 3.3.
3.3. POWERS AND DUTIES OF THE MANAGERS. The business and affairs
of the Company shall be managed under the direction of the Managers, who
shall have and may exercise on behalf of the Company all of its rights,
powers, duties and responsibilities under Section 1.2 or as provided by
law, including without limitation the right and authority:
(a) to manage the business and affairs of the Company
and for this purpose to employ, retain or appoint any officers, employees,
consultants, agents, brokers, professionals or other persons in any
capacity for such compensation and on such terms as the Managers deem
necessary or desirable and to delegate to such persons such of their duties
and responsibilities as the Managers shall determine;
(b) to enter into, execute, deliver, acknowledge, make,
modify, supplement or amend any documents or instruments in the name of the
Company;
(c) to borrow money or otherwise obtain credit and
other financial accommodations on behalf of the Company on a secured or
unsecured basis as provided in Section 1.2(c), and to perform or cause to
be performed all of the Company's obligations in respect of its
indebtedness and any mortgage, lien or security interest securing such
indebtedness; and
(d) to make elections and prepare and file returns
regarding any federal, state or local tax obligations of the Company.
Unless otherwise provided in this Agreement, any action taken by a Manager,
and the signature of a Manager on any agreement, contract, instrument or
other document on behalf of the Company, shall be sufficient to bind the
Company and shall conclusively evidence the authority of that Manager and
the Company with respect thereto.
3.4. TAX MATTERS PARTNER. The Manager designated by the Managers
from time to time shall serve as the "Tax Matters Partner" of the Company
for purposes of Section 6231(a)(7) of the Internal Revenue Code of 1986 as
amended (the "Code"), with power to manage and represent the Company in any
administrative proceeding of the Internal Revenue Service. The initial Tax
Matters Partner of the Company shall be Xxxxx X. Xxxxx.
3.5. RESIGNATION AND REMOVAL OF MANAGERS. Any Manager may resign
upon at least 60 days' notice to the Members and the other Managers (unless
notice is waived by them). Any Manager may be removed at any time with or
without cause by the Voting Members.
3.6. RELIANCE BY THIRD PARTIES. Any person dealing with the
Company, the Managers or any Member may rely upon a certificate signed by
any Manager as to (i) the identity of any Managers, Officers or Members of
the Company; (ii) any factual matters relevant to the affairs of the
Company; (iii) the persons who are authorized to execute and deliver any
document on behalf of the Company; or (iv) any action taken or omitted by
the Company, the Managers or any Member.
3.7. MEETINGS AND ACTION OF MANAGERS. Unless otherwise determined
by the Members or Managers, all action to be taken by the Managers of the
Company shall be taken by vote or written consent of a majority of the
Managers then in office. There is no requirement that the Managers hold a
meeting in order to take action on any matter. Meetings of the Managers
may be called by any Manager. If action is to be taken at a meeting of the
Managers, notice of the time, date and place of the meeting shall be given
to each Manager by an Officer or the Manager calling the meeting by
personal delivery, telephone or fax sent to the business or home address of
each Manager at least 24 hours in advance of the meeting, or by written
notice mailed to each Manager at either such address at least 72 hours in
advance of the meeting; however, no notice need be given to a Manager who
waives notice before or after the meeting, or who attends the meeting
without protesting at or before its commencement the inadequacy of notice
to him. Managers may also attend a meeting in person or by proxy, and they
may also participate in a meeting by means of conference telephone or
similar communications equipment that permits all Managers present to hear
each other. A chairman selected by the Managers shall preside at all
meetings of the Managers. The chairman shall determine the order of
business and the procedures to be followed at each meeting of the Managers.
3.8. OFFICERS OF THE COMPANY
(a) The Managers shall designate such officers of the
Company (individually, an "Officer" and collectively, the "Officers")
having such titles, powers and responsibilities as the Managers shall in
their discretion determine.
(b) All Officers shall hold office at the pleasure of
the Managers and may be removed by a vote of the Managers with or without
cause. Any Officer may resign by delivering his written resignation to the
Company at its principal office and such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or
upon the happening of some other event.
3.9. LIMITATION OF LIABILITY OF MANAGER AND OFFICERS. No Manager
or Officer shall be obligated personally for any debt, obligation or
liability of the Company or of any Member, whether arising in contract,
tort or otherwise, solely by reason of being or acting as Manager or
Officer of the Company. No Manager or Officer shall be personally liable
to the Company or to its Members for breach of any fiduciary or other duty
that does not involve (i) a breach of the duty of loyalty to the Company or
its Members, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; or (iii) a
transaction from which the Manager or officer derived an improper personal
benefit.
3.10. Immediately following the Closing, Banyan shall into an
employment agreement with Xxxxx X. Xxxxx containing substantially the same
terms and conditions as existing employment agreement between the Company
and Xxxxxxx X. Xxxxxx.
Management Fee
ARTICLE IV - INDEMNIFICATION
4.1. DEFINITIONS. For purposes of this Article IV:
"Manager" includes (i) a person serving as a Manager or an
Officer of the Company or in a similar executive capacity appointed by the
Managers and exercising rights and duties delegated by the Managers, (ii) a
person serving at the request of the Company as a director, Manager,
officer, employee or other agent of another organization, and (iii) any
person who formerly served in any of the foregoing capacities;
"expenses" means all expenses, including attorneys' fees and
disbursements, actually and reasonably incurred in defense of a proceeding
or in seeking indemnification under this Article, and except for
proceedings by or in the right of the Company or alleging that a Manager
received an improper personal benefit, any judgments, awards, fines,
penalties and reasonable amounts paid in settlement of a proceeding; and
"proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, and any claim which could be the subject of a proceeding.
4.2. RIGHT TO INDEMNIFICATION. Except as limited by law and
subject to the provisions of this Article, the Company shall indemnify each
of its Managers against all expenses incurred by them in connection with
any proceeding in which a Manager is involved as a result of serving in
such capacity, except that no indemnification shall be provided for a
Manager regarding any matter as to which it shall be finally determined
that said Manager did not act in good faith and in the reasonable belief
that his action was in the best interests of the Company. Subject to the
foregoing limitations, such indemnification may be provided by the Company
with respect to a proceeding in which it is claimed that a Manager received
an improper personal benefit by reason of his position, regardless of
whether the claim arises out of the Manager's service in such capacity,
except for matters as to which it is finally determined that an improper
personal benefit was received by the Manager.
4.3. AWARD OF INDEMNIFICATION. The determination of whether the
Company is authorized to indemnify a Manager hereunder and any award of
indemnification shall be made in each instance (a) by a majority of the
Managers who are not parties to the proceeding in question, (b) by
independent legal counsel appointed by the Managers or the Members, or
(c) by the holders of a majority of the Membership Interests of the Members
who are not parties to the proceeding in question. The Company shall be
obliged to pay indemnification applied for by a Manager unless there is an
adverse determination (as provided above) within forty-five (45) days after
the application. If indemnification is denied, the applicant may seek an
independent determination of his right to indemnification by a court, and
in such event, the Company shall have the burden of proving that the
applicant was ineligible for indemnification under this Article.
Notwithstanding the foregoing, in the case of a proceeding by or in the
right of the Company in which a Manager is adjudged liable to the Company,
indemnification hereunder shall be provided to said Manager only upon a
determination by a court having jurisdiction that in view of all the
circumstances of the case, said Manager is fairly and reasonably entitled
to indemnification for such expenses as the court shall deem proper.
4.4. SUCCESSFUL DEFENSE. Notwithstanding any contrary provisions
of this Article, if a Manager has been wholly successful on the merits in
the defense of any proceeding in which he was involved by reason of his
position as Manager or as a result of serving in such capacity (including
termination of investigative or other proceedings without a finding of
fault on the part of the Manager), the Manager shall be indemnified by the
Company against all expenses incurred by the Manager in connection
therewith.
4.5. ADVANCE PAYMENTS. Except as limited by law, expenses
incurred by a Manager in defending any proceeding, including a proceeding
by or in the right of the Company, shall be paid by the Company to the
Manager in advance of final disposition of the proceeding upon receipt of
his written undertaking to repay such amount if the Manager is determined
pursuant to this Article or adjudicated to be ineligible for
indemnification, which undertaking shall be an unlimited general obligation
but need not be secured and may be accepted without regard to the financial
ability of the Manager to make repayment; provided, however, that no such
advance payment of expenses shall be made if it is determined pursuant to
Section 4.3 of this Article on the basis of the circumstances known at the
time (without further investigation) that the Manager is ineligible for
indemnification.
4.6. INSURANCE. The Company shall have power to purchase and
maintain insurance on behalf of any Manager, officer, agent or employee
against any liability or cost incurred by such person in any such capacity
or arising out of his status as such, whether or not the Company would have
power to indemnify against such liability or cost.
4.7. HEIRS AND PERSONAL REPRESENTATIVES. The indemnification
provided by this Article shall inure to the benefit of the heirs and
personal representatives of each Manager.
4.8. NON-EXCLUSIVITY. The provisions of this Article shall not be
construed to limit the power of the Company to indemnify its Managers,
Members, officers, employees or agents to the full extent permitted by law
or to enter into specific agreements, commitments or arrangements for
indemnification permitted by law. The absence of any express provision for
indemnification herein shall not limit any right of indemnification
existing independently of this Article.
4.9. AMENDMENT. The provisions of this Article may be amended or
repealed in accordance with Section 10.5; however, no amendment or repeal
of such provisions that adversely affects the rights of a Manager under
this Article with respect to his acts or omissions at any time prior to
such amendment or repeal shall apply to said Manager without his consent.
ARTICLE V - CONFLICTS OF INTEREST
5.1. TRANSACTIONS WITH INTERESTED PERSONS. Unless entered into in
bad faith, no contract or transaction between the Company and one or more
of its Managers, Officers or Members, or between the Company and any other
corporation, partnership, association or other organization in which one or
more of its Managers, Officers or Members have a financial interest or are
directors, partners, Managers or officers, shall be voidable solely for
this reason or solely because said Manager or Member was present or
participated in the authorization of such contract or transaction if:
(a) the material facts as to the relationship or
interest of said Manager, Officer or Member and as to the contract or
transaction were disclosed or known to the other Managers (if any) or
Members and the contract or transaction was authorized by the disinterested
Managers (if any) or Members; or
(b) the contract or transaction was fair to the Company
as of the time it was authorized, approved or ratified by the disinterested
Managers (if any) or Members;
and no Manager, Officer or Member interested in such contract or
transaction, because of such interest, shall be considered to be in breach
of this Agreement or liable to the Company, any Manager or Member, or any
other person or organization for any loss or expense incurred by reason of
such contract or transaction or shall be accountable for any gain or profit
realized from such contract or transaction.
ARTICLE VI - CAPITAL ACCOUNTS AND CONTRIBUTIONS
6.1. CAPITAL ACCOUNTS.
(a) There shall be established on the books of the
Company a separate capital account (a "CAPITAL ACCOUNT") for each Member.
(b) The Capital Account of each Member (regardless of
the time or manner in which such Member's interest was acquired) shall be
maintained in accordance with the rules of Section 704(b) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code") (together
with Section 1.704-1(b) of the Treasury Regulations). Adjustments shall be
made to the Capital Accounts for distributions and allocations as required
by the rules of Section 704(b) of the Code and the Treasury Regulations
thereunder.
(c) If there is a transfer of all or a part of an
interest in the Company by a Member, the Capital Account of the transferor
that is attributable to the transferred interest shall carry over to the
transferee of such Member.
(d) Subject to Section 7.2, notwithstanding any
provision contained herein to the contrary, no Member shall be required to
restore any negative balance in his Capital Account.
6.2. CONTRIBUTIONS. Each Member shall make the contributions to
the capital of the Company (herein "Contributions") specified on
Schedule A. All Contributions shall be paid in cash unless otherwise
specified on Schedule A or agreed to by the Members. Except as set forth
on Schedule A, no Member or Manager shall be entitled or required to make
any contribution to the capital of the Company; however, the Company may
borrow from its Members as well as from banks or other lending institutions
to finance its working capital or the acquisition of assets upon such terms
and conditions as shall be approved by the Managers, and any such borrowing
from Members shall not be considered Contributions or reflected in their
Capital Accounts. The value of all non-cash Contributions made by Members
shall be set forth on Schedule A. No Member shall be entitled to any
interest or compensation with respect to his Contribution or any services
rendered on behalf of the Company except as specifically provided in this
Agreement or approved by the Managers. No Member shall have any liability
for the repayment of the Contribution of any other Member and each Member
shall look only to the assets of the Company for return of his
Contribution.
ARTICLE VII - PROFITS, LOSSES AND DISTRIBUTIONS
7.1. PROFITS, LOSSES AND DISTRIBUTIONS.
(a) All profits from the normal course of business
operations or otherwise from whatever source, commencing with the date of
this Agreement, shall be allocated to the Members on the following basis:
(i) First, to the extent any losses have been
allocated to Members pursuant to Section 7.1(b)(iii), in excess of the
amount of profits allocated to such Members pursuant to this clause (i),
profits shall be allocated to such Members pro rata based on their
respective cumulative losses until the cumulative profits allocated to such
Members shall equal the cumulative losses allocated to such Members;
(ii) Thereafter profits shall be allocated to
the Members pro rata in accordance with their respective Membership
Interests.
(b) All losses arising from the normal course of
business operations or otherwise, commencing with the date of this
Agreement, shall be allocated to the Members on the following basis:
(i) First, losses shall be allocated to the
Class B Members pro rata based on their respective Class B Membership
Interests, until the aggregate amount of losses allocated to such Members
under this clause (ii) shall equal the aggregate Contributions of such
Partners less the cumulative losses (net of cumulative profits) previously
allocated to such Members; and
(ii) Thereafter, losses shall be allocated to
the Members pro rata based on their respective Membership Interests.
(c) All distributions to the Members of cash or other
property shall made in the following order of priority:
(i) First, to the extent cumulative profits
allocated to any Members exceed cumulative losses allocated to such Members
("Cumulative Net Profits"), distributions shall be made to such Members
pro rata based on their respective Cumulative Net Profits until, on a
cumulative basis, each such member has received distributions under this
clause (i) equal to 40% of such excess;
(ii) Second, distributions shall be made to the
Class B Members pro rata based on their respective Contributions until all
Class B Members have received cumulative distributions under this clause
(ii) equal to their respective Contributions; and
(iii) Thereafter, distributions shall be made to
all Members in accordance with their respective Membership Interests.
(d) All profits and losses allocated to the Members shall be
credited or charged, as the case may be, to their Capital Accounts. The
terms "profits" and "losses" as used in this Agreement shall mean income
and losses, and each item of income, gain, loss, deduction or credit
entering into the computation thereof, as determined in accordance with the
accounting methods followed by the Company and computed in a manner
consistent with Treasury Regulation Section 1.704-1(b)(2)(iv). Profits and
losses for Federal income tax purposes shall be allocated in the same
manner as profits and losses for purposes of this Section 7.1, except as
provided in Section 7.3(a).
7.2. DISTRIBUTIONS UPON DISSOLUTION
(a) Upon dissolution and termination, after payment of,
or adequate provision for, the debts and obligations of the Company, the
remaining assets of the Company (or the proceeds of sales or other
dispositions in liquidation of the Company assets, as may be determined by
the remaining or surviving Manager(s)) shall be distributed to the Members
in accordance with the positive balances in their Capital Accounts after
taking into account all Capital Account adjustments for the Company taxable
year.
(b) With respect to assets distributed in kind to the
Members in liquidation or otherwise, (i) any unrealized appreciation or
unrealized depreciation in the values of such assets shall be deemed to be
profits and losses realized by the Company immediately prior to the
liquidation or other distribution event; and (ii) such profits and losses
shall be allocated to the Members and credited or charged to their Capital
Accounts, and any property so distributed shall be treated as a
distribution of an amount in cash equal to the excess of such fair market
value over the outstanding principal balance of and accrued interest on any
debt by which the property is encumbered. For the purposes of this Section
7.2(b), "unrealized appreciation" or "unrealized depreciation" shall mean
the difference between the fair market value of such assets, taking into
account the fair market value of the associated financing but subject to
Section 7701(g) of the Code, and the Company's basis in such assets as
determined under Treasury Regulation Section 1.704-1(b). This
Section 7.2(b) is merely intended to provide a rule for allocating
unrealized gains and losses upon liquidation or other distribution event,
and nothing contained in this Section 7.2(b) or elsewhere in this Agreement
is intended to treat or cause such distributions to be treated as sales for
value. The fair market value of such assets shall be determined by the
Managers or by an appraiser to be selected by the Managers.
7.3. SPECIAL PROVISIONS. Notwithstanding the foregoing provisions
in this Article VII:
(a) Income, gain, loss and deduction with respect to
Company property which has a variation between its basis computed in
accordance with Treasury Regulation Section 1.704-(b) and its basis
computed for Federal income tax purposes shall be shared among Members so
as to take account of the variation in a manner consistent with the
principles of Section 704(c) of the Code and Treasury Regulation
Section 1.704-3.
(b) Section 704 of the Code and the Regulations issued
thereunder, including but not limited to the provisions of such regulations
addressing qualified income offset provisions, minimum gain chargeback
requirements and allocations of deductions attributable to nonrecourse debt
and partner nonrecourse debt, are hereby incorporated by reference into
this Agreement.
7.4. DISTRIBUTION OF ASSETS IN KIND. No Member shall have the
right to require any distribution of any assets of the Company to be made
in cash or in kind. If the Managers determine to distribute assets of the
Company in kind, such assets shall be distributed on the basis of their
fair market value as determined by the Managers. Any Member entitled to
any interest in such assets shall, unless otherwise determined by the
Managers, receive separate assets of the Company, and not an interest as
tenant-in-common with other Members so entitled in each asset being
distributed. Distributions in kind need not be made on a pro-rata basis
but may be made on any basis which the Managers determine to be reasonable
under the circumstances.
ARTICLE VIII - TRANSFERS OF INTERESTS
8.1. ADMISSION OF MEMBERS; EFFECT OF TRANSFER.
(a) In no event may any person obtaining an interest in
the Company by assignment, transfer, pledge or other means from an existing
Member be admitted as a successor Member without the affirmative vote or
written consent of the Managers who hold a majority of the Voting
Membership Interests and capital interests in the Company held by Managers
exclusive of the Membership Interest being transferred.
(b) If the transferee is admitted as a Member or is
already a Member, the Member transferring his interest shall be relieved of
liability with respect to the transferred interest arising or accruing
under this Agreement on or after the effective date of the transfer, unless
the transferor affirmatively assumes such liability; provided, however,
that the transferor shall not be relieved of any liability for prior
distributions and Unpaid Contributions unless the transferee affirmatively
assumes such liabilities
(c) Any person who acquires in any manner an interest
or any part thereof in the Company, whether or not such person has accepted
and assumed in writing the terms and provisions of this Agreement or been
admitted as a Member, shall be deemed by the acquisition of such interests
to have agreed to be subject to and bound by all of the provisions of this
Agreement with respect to such interest, including without limitation, the
provisions hereof with respect to any subsequent transfer of such interest.
8.2. PROHIBITED TRANSFERS. Any transfer in violation of any
provisions of this Agreement shall be null and void and ineffective to
transfer any interest in the Company and shall not be binding upon or be
recognized by the Company, and any such transferee shall not be treated as
or deemed to be a Member for any purpose. In the event that any Member
shall at any time transfer his interest in violation of any of the
provisions of this Agreement, the Company and the other Members, in
addition to all rights and remedies at law and equity, shall have and be
entitled to an order restraining or enjoining such transaction, it being
expressly acknowledged and agreed that damages at law would be an
inadequate remedy for a transfer in violation of this Agreement.
ARTICLE IX - DISSOLUTION, LIQUIDATION AND TERMINATION
9.1. DISSOLUTION. The Company shall dissolve and its affairs
shall be wound up upon the first to occur of the following:
(a) the written consent of all of the Voting Members;
(b) the death of a Manager; the determination by a
court of competent jurisdiction that a Manager is legally insane; the
bankruptcy of a Manager as defined in Section 2(1) of the Act; or the
occurrence of any other event resulting in the termination of the
membership of a Manager or withdrawal of a Manager under the Act; PROVIDED,
HOWEVER, that the Company may be continued by the affirmative vote or
written consent of Members who hold a majority of the profits, interests
and capital interests in the Company held by the remaining Members, such
vote or consent to be held or given within ninety (90) days following such
event;
(c) the entry of a decree of judicial dissolution under
Section 44 of the Act; or
(d) the consolidation or merger of the Company in which
it is not the resulting or surviving entity.
9.2. LIQUIDATION. Upon dissolution of the Company, the Managers
shall act as its liquidating trustees or the Managers may appoint one or
more Managers or Members as liquidating trustees. The liquidating trustees
shall proceed diligently to liquidate the Company and wind up its affairs
and shall dispose of the assets of the Company as provided in Section 7.2
hereof. Until final distribution, the liquidating trustees may continue to
operate the business and properties of the Company with all of the power
and authority of the Managers. As promptly as possible after dissolution
and again after final liquidation, the liquidating trustees shall cause an
accounting by the accounting firm then serving the Company of the Company's
assets, liabilities, operations and liquidating distributions to be given
to the Members.
9.3. CERTIFICATE OF CANCELLATION. Upon completion of the
distribution of Company assets as provided herein, the Company shall be
terminated, and the Managers (or such other person or persons as the Act
may require or permit) shall file a Certificate of Cancellation with the
Secretary of State of Massachusetts under the Act, cancel any other filings
made pursuant to Sections 1.1, 1.3 and 1.5, and take such other actions as
may be necessary to terminate the existence of the Company.
ARTICLE X - GENERAL PROVISIONS
10.1. OFFSET. Whenever the Company is obligated to make a
distribution or payment to any Member, any amounts that such Member owes
the Company may be deducted from said distribution or payment by the
Managers.
10.2. NOTICES. Except as expressly set forth to the contrary in
this Agreement, all notices, requests, or consents required or permitted to
be given under this Agreement must be in writing and shall be deemed to
have been properly given if sent by registered or certified mail, postage
prepaid, by commercial overnight carrier or by facsimile or if delivered in
hand to Members at their addresses on SCHEDULE A, or such other address as
a Member may specify by notice to the Managers and to the Company or the
Managers at the address of the principal office of the Company specified in
Section 1.3. Whenever any notice is required to be given by law, the
Certificate or this Agreement, a written waiver thereof, signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
10.3. ENTIRE AGREEMENT. Agreement constitutes the entire agreement
of the Members and the Managers relating to the Company and supersedes all
prior contracts or agreements with respect to the Company, whether oral or
written.
10.4. LIMITATION OF LITIGATION: CONSENT TO JURISDICTION. No
Member shall be entitled to initiate or participate in a class action on
behalf of all or any part of the Members against the Company, its Managers
or any Member, and no Member shall be entitled to initiate or participate
in a derivative suit on behalf of the Company against its Managers or any
Member, unless in each case such action or suit has received prior approval
of a majority of the Managers and Members holding a majority of the
Membership Interests who are not defendant parties to the proposed action
or suit, or unless otherwise required by law. No Manager shall be entitled
to initiate or participate in any class action or derivative suit against
the Company, its Managers or any Member unless such action or suit has
received the prior approval of a majority of the Managers who are not
defendant parties to the proposed action or suit, unless otherwise required
by law. A Member or Manager who initiates an action or suit in violation
of this Agreement shall be liable to the Company and its Managers and any
Members who are defendant parties for all damages and expenses which they
incur as a result, including without limitation reasonable fees and
expenses of legal counsel and expert witnesses and court costs. The
parties to this Agreement hereby consent to the non-exclusive jurisdiction
of the courts of Massachusetts in connection with any matter or dispute
arising under this Agreement or between them regarding the affairs of the
Company.
10.5. AMENDMENT OR MODIFICATION. Except as specifically provided
herein, this Agreement may be amended or modified from time to time only by
a written instrument signed by Members holding a majority of the Voting
Membership Interests, provided that the Managers shall have the power to
amend this Agreement for the purposes described in Section 2.2. No
amendment which would adversely affect the rights or privileges of any
Class of Members shall be effective unless approved in writing by Members
holding a majority of the Membership Interests of such Class.
10.6. BINDING EFFECT. Subject to the restrictions on transfers set
forth in this Agreement, this Agreement is binding on and inures to the
benefit of the parties and their respective successors, assigns and legal
representatives.
10.7. GOVERNING LAW; SEVERABILITY. This Agreement is governed by
and shall be construed in accordance with the law of the Commonwealth of
Massachusetts, exclusive of its conflict-of-laws principles. In the event
of a conflict between the provisions of this Agreement and any provision of
the Certificate or the Act, the applicable provision of this Agreement
shall control, to the extent permitted by law. If any provision of this
Agreement or the application thereof to any person or circumstance is held
invalid or unenforceable to any extent, the remainder of this Agreement and
the application of that provision shall be enforced to the fullest extent
permitted by law.
10.8. FURTHER ASSURANCES. In connection with this Agreement and
the transactions contemplated hereby, each Member shall execute and deliver
any additional documents and instruments and perform any additional acts
that may be necessary or appropriate to effectuate and perform the provisions
of this Agreement and those transactions, as requested by the Managers.
10.9. WAIVER OF CERTAIN RIGHTS. Each Member irrevocably waives any
right it may have to maintain any action for dissolution of the Company or
for partition of the property of the Company. The failure of any Member to
insist upon strict performance of a covenant hereunder or of any obligation
hereunder, irrespective of the length of time for which such failure
continues, shall not be a waiver of such Member's right to demand strict
compliance herewith in the future. No consent or waiver, express or
implied, to or of any breach or default in the performance of any
obligation hereunder shall constitute a consent or waiver to or of any
other breach or default in the performance of the same or any other
obligation hereunder.
10.10. NOTICE TO MEMBERS OF PROVISIONS OF THIS AGREEMENT. By
executing this Agreement, each Member acknowledges that such Member has
actual notice of all of the provisions of this Agreement and the
Certificate. Each Member hereby agrees that this Agreement constitutes
adequate notice of all such provisions, and each Member hereby waives any
requirement that any further notice thereunder be given.
10.11. THIRD-PARTY BENEFICIARIES. The provisions of this Agreement
are not intended to be for the benefit of any creditor or other person to
whom any debts or obligations are owed by, or who may have any claim
against, the Company or any of its Members or Managers, except for Members
or Managers in their capacities as such. Notwithstanding any contrary
provision of this Agreement, no such creditor or person shall obtain any
rights under this Agreement or shall, by reason of this Agreement, be
permitted to make any claim against the Company or any Member or Manager.
10.12. INTERPRETATION. For the purposes of this Agreement, terms
not defined in this Agreement shall be defined as provided in the Act; and
all nouns, pronouns, and verbs used in this Agreement shall be construed as
masculine, feminine, neuter, singular, or plural, whichever shall be
applicable. Titles or captions of Articles and Sections contained in this
Agreement are inserted as a matter of convenience and for reference, and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof.
10.13. COUNTERPARTS. This Agreement may be executed in any number
of counterparts with the same effect as if all parties had signed the same
document, and all counterparts shall be construed together and shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date set forth above.
MANAGERS
------------------------------
Xxxxx X. Xxxxx
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP
By: Equis Corporation, General Partner
By: ------------------------------
Xxxxx X. Xxxxx, Vice President
MEMBERS
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP
By: Equis Corporation, General Partner
By: ------------------------------
Xxxxx X. Xxxxx, Vice President
BANYAN STRATEGIC LAND FUND II
By: ------------------------------
EQUIS EXCHANGE LLC
SCHEDULE A
MANAGERS
Xxxxx X. Xxxxx
c/o Equis Financial Group
Limited Partnership
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Equis Financial Group
Limited Partnership
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
MEMBERS
CLASS A MEMBER
Name and Address Membership
of Member Interest
---------------- ----------
Equis Financial Group $100 1%
Limited Partnership
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
CLASS B MEMBER
Name and Address Membership
of Member Capital Contribution Interest
---------------- -------------------- ----------
Banyan Strategic Land Fund II 1,987,000 Shares of 99%
000 Xxxxx Xxxxxx Xxxxx Xxxxxx Stock of
Suite 2900 Banyan Strategic Land
Xxxxxxx, Xxxxxxxx 00000 Fund II
EXHIBIT B-1
-----------
INSTRUMENT OF TRANSFER
----------------------
The undersigned AFG Dove Arrow Limited Partnership, a Massachusetts
limited partnership (the "Partnership"), hereby sells, assigns and
transfers unto Equis Exchange LLC, a Massachusetts limited liability
company ("NEWCO"), its entire beneficial interest in the motor vessel Dove
Arrow (the "Vessel") and all assets, tangible and intangible, of whatever
name and nature and wherever located relating in any way to the Vessel,
together with the beneficial interest of the Partnership in and to any
agreements or contract rights relating in any way to the Vessel. The
foregoing assignment shall not apply to any rent payments with respect to
the Vessel due prior to May 1, 1997. In connection to such transfer, NEWCO
hereby assumes all obligations and liabilities of the Partnership relating
in any way to the Vessel.
The foregoing transfer constitutes a transfer of the beneficial
interest only of the Partnership in the transferred assets and rights.
Such transfer does not include the transfer of legal title to such assets.
The Partnership confirms that, to the extent it has retained title to
any asset of the Partnership or control over any contractual right of the
Partnership, the Partnership has retained such title or control solely in
the capacity of nominee for NEWCO and agrees that the Partnership shall
have no power to deal in or with any such assets or contract rights except
as directed by NEWCO. The Partnership, at the request of NEWCO, shall pay
over to NEWCO the proceeds of the sale of the Vessel and any prepaid rent
due after May 1, 1997 or cause such amounts to be paid directly to NEWCO
and shall execute and deliver to NEWCO such additional instruments of
transfer, assignments or other documents as NEWCO shall from time to time
request confirming NEWCO's beneficial ownership in the assets of the
Partnership and transferring title to such assets to NEWCO.
This Instrument is being entered into by the parties pursuant to an
Exchange Agreement dated April __, 1997, to which the undersigned are
parties ("Exchange Agreement"), and in the event of any ambiguity or
question regarding the interpretation of this instrument, the relevant
provisions of Exchange Agreement shall govern.
This Instrument shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns, and may be amended only by a written agreement executed by the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
April __, 1997.
AFG DOVE ARROW LIMITED PARTNERSHIP
By: AFG Leasing VI Incorporated, its
General Partner
By: ________________________________
Xxxxx X. Xxxxx, Vice President
EQUIS EXCHANGE LLC
By: ____________________________
Xxxxx X. Xxxxx, Manager
EXHIBIT B-2
-----------
INSTRUMENT OF TRANSFER
The undersigned AIP/Larkfield Limited Partnership, a Massachusetts
limited partnership (the "Partnership"), hereby sells, assigns and
transfers unto Equis Exchange LLC, a Massachusetts limited liability
company ("NEWCO"), its entire beneficial interest in the motor vessel
Larkfield (the "Vessel") and all assets, tangible and intangible, of
whatever name and nature and wherever located relating in any way to the
Vessel, together with the beneficial interest of the Partnership in and to
any agreements or contract rights relating in any way to the Vessel. The
foregoing assignment shall not apply to any rent payments with respect to
the Vessel due prior to May 1, 1997. In connection to such transfer, NEWCO
hereby assumes all obligations and liabilities of the Partnership relating
in any way to the Vessel.
The foregoing transfer constitutes a transfer of the beneficial
interest only of the Partnership in the transferred assets and rights.
Such transfer does not include the transfer of legal title to such assets.
The Partnership confirms that, to the extent it has retained title to
any asset of the Partnership or control over any contractual right of the
Partnership, the Partnership has retained such title or control solely in
the capacity of nominee for NEWCO and agrees that the Partnership shall
have no power to deal in or with any such assets or contract rights except
as directed by NEWCO. The Partnership, at the request of NEWCO, shall pay
over to NEWCO the proceeds of the sale of the Vessel and any prepaid rent
due after May 1, 1997 or cause such amounts to be paid directly to NEWCO
and shall execute and deliver to NEWCO such additional instruments of
transfer, assignments or other documents as NEWCO shall from time to time
request confirming NEWCO's beneficial ownership in the assets of the
Partnership and transferring title to such assets to NEWCO.
This Instrument is being entered into by the parties pursuant to an
Exchange Agreement dated April __, 1997, to which the undersigned are
parties ("Exchange Agreement"), and in the event of any ambiguity or
question regarding the interpretation of this instrument, the relevant
provisions of Exchange Agreement shall govern.
This Instrument shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns, and may be amended only by a written agreement executed by the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
April __, 1997.
AIP/LARKFIELD LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, its
General Partner
By: ________________________________
Xxxxx X. Xxxxx, Vice President
EQUIS EXCHANGE LLC
By: _______________________________
Xxxxx X. Xxxxx, Manager
EXHIBIT B-3
-----------
INSTRUMENT OF TRANSFER
The undersigned AFG Hato Arrow Limited Partnership, a Massachusetts
limited partnership (the "Partnership"), hereby sells, assigns and
transfers unto Equis Exchange LLC, a Massachusetts limited liability
company ("NEWCO"), its entire beneficial interest in the motor vessel Hato
Arrow (the "Vessel") and all assets, tangible and intangible, of whatever
name and nature and wherever located relating in any way to the Vessel,
together with the beneficial interest of the Partnership in and to any
agreements or contract rights relating in any way to the Vessel. The
foregoing assignment shall not apply to any rent payments with respect to
the Vessel due prior to May 1, 1997. In connection to such transfer, NEWCO
hereby assumes all obligations and liabilities of the Partnership relating
in any way to the Vessel.
The foregoing transfer constitutes a transfer of the beneficial
interest only of the Partnership in the transferred assets and rights.
Such transfer does not include the transfer of legal title to such assets.
The Partnership confirms that, to the extent it has retained title to
any asset of the Partnership or control over any contractual right of the
Partnership, the Partnership has retained such title or control solely in
the capacity of nominee for NEWCO and agrees that the Partnership shall
have no power to deal in or with any such assets or contract rights except
as directed by NEWCO. The Partnership, at the request of NEWCO, shall pay
over to NEWCO the proceeds of the sale of the Vessel and any prepaid rent
due after May 1, 1997 or cause such amounts to be paid directly to NEWCO
and shall execute and deliver to NEWCO such additional instruments of
transfer, assignments or other documents as NEWCO shall from time to time
request confirming NEWCO's beneficial ownership in the assets of the
Partnership and transferring title to such assets to NEWCO.
This Instrument is being entered into by the parties pursuant to an
Exchange Agreement dated April __, 1997, to which the undersigned are
parties ("Exchange Agreement"), and in the event of any ambiguity or
question regarding the interpretation of this instrument, the relevant
provisions of Exchange Agreement shall govern.
This Instrument shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns, and may be amended only by a written agreement executed by the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
April __, 1997.
AFG HATO ARROW LIMITED PARTNERSHIP
By: AFG Leasing VI Incorporated, its
General Partner
By: ________________________________
Xxxxx X. Xxxxx, Vice President
EQUIS EXCHANGE LLC
By: _______________________________
Xxxxx X. Xxxxx, Manager
EXHIBIT C
---------
PROMISSORY NOTE
$8,219,500 April__, 1997
For value received, Equis Exchange LLC, a Massachusetts Limited
Liability Company (the "Maker"), having a place of business at 00 Xxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000 promises to pay to the
order of EFG Financial Group Limited Partnership (the "Payee"), as agent
for AFG Hato Arrow Limited Partnership, AFG Dove Arrow Limited Partnership
and AIP/Larkfield Limited Partnership (collectively, the "Partnerships"),
at the office of the Payee at 00 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, the principal sum of
EIGHT MILLION TWO HUNDRED NINETEEN THOUSAND FIVE HUNDRED DOLLARS
($8,219,500) together with interest on the outstanding principal balance
hereof which shall accrue and be compounded on December 31 of each year, at
the rate of ten percent (10%) PER ANNUM, and the Additional Interest, as
defined below, on or before December 31, 1997, or earlier in accordance
with the provisions of this Note.
This Note is being issued by the Maker to the Payee pursuant to the
terms of an Exchange Agreement dated as of April __, 1997, by and among the
Maker, the Payee the Partnerships and Banyan Strategic Land Fund II
("Banyan"). Capitalized terms used herein and not defined herein shall
have the definitions set forth in the Exchange Agreement.
This Note may be prepaid at any time without premium or penalty.
The outstanding principal balance under this Note and all interest
accrued thereon, shall be due and payable five business days following the
date on which the Maker shall have realized cash proceeds from the sale or
refinancing of the Vessels sufficient to enable it to complete the
transactions described in Section 4.9 or Section 4.11 of the Exchange
Agreement. At such time, the Maker shall satisfy its obligations hereunder
by (i) assigning to the Payee the Banyan Note or the Alternative Banyan
Note and (ii) paying to the Payee an amount equal to the unpaid principal
balance of this Note less the outstanding principal balance on the Banyan
Note or the Alternative Banyan Note. At the same time, or as soon as
practicable thereafter the Maker shall satisfy its obligation to pay
interest hereunder by paying to the Payee an amount equal to the sum of
(i) all accrued and unpaid interest hereunder less the amount of all
accrued and unpaid interest, if any, under the Banyan Note or the
Alternative Banyan Note as the case may be, plus (ii) "Additional Interest"
which shall be an amount equal to all cash held by the Maker following the
Banyan Distribution, the sale of the Vessels, the payment of all
liabilities relating to the Vessels and all management fees due to the
Manager of the Maker and the payment of all other amounts due hereunder.
All amounts payable under this Note shall immediately become due and
payable in cash at the option of Payee without notice or demand if any one
or more of the following events shall occur:
a. The Stockholders Consent as that term is defined in
Section 4.10 of the Exchange Agreement shall not have been obtained on or
before October 31, 1997.
b. Maker shall admit in writing its inability to pay its
debts as they mature or shall make an assignment for the benefit of
creditors.
c. Maker shall apply for or consent to the appointment of a
trustee or receiver for all or a major part of its property.
d. A trustee or receiver shall be appointed for Maker or for
all or a major part of its property and such trustee or receiver shall not
be discharged within sixty (60) days after such appointment.
e. Bankruptcy, reorganization, arrangement or insolvency
proceedings or other proceedings for relief under any bankruptcy or similar
law or laws for the relief of debtors shall be instituted by or against
Maker and, if instituted against it, shall be consented to or shall not be
dismissed within sixty (60) days after being instituted.
f. An order, judgment or decree declaring Maker to be
bankrupt or insolvent shall be entered and shall not be vacated, set aside
or stayed within sixty (60) days after the entry thereof.
Maker hereby waives presentment, demand, notice, protest, dishonor
and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of the obligations of Maker
under this Note, and the exercise of and enforcement of any rights
hereunder by Payee, and assents without notice to any extension or
postponement of the time of payment, to the addition or release of any
party or person in any way liable hereunder, and to the compromise or
settlement of the liability of any such party or person hereunder, which
may from time to time be agreed to by Payee.
All notices required or permitted hereunder shall be in writing and
shall be delivered in hand or by facsimile, overnight courier or certified
or registered mail, return receipt requested, postage prepaid, to the Maker
or the Payee, as the case may be, at its respective address set forth
above, or such other address or addresses as Maker or Payee may designate
from time to time by notice given in accordance with the foregoing.
All of the provisions of this Note shall be binding upon and inure to
the benefit of Maker and Payee and their respective successors, assigns and
legal representatives. This Note shall be governed by and construed in
accordance with the laws of the State of Illinois without regard to
conflict or choice of law principles.
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
date first above written.
EQUIS EXCHANGE LLC
By:
----------------------------------------
Xxxxx X. Xxxxx, Manager
EXHIBIT D
---------
ESCROW AGREEMENT
THIS ESCROW AGREEMENT made this ___ day of April, 1997, by and among
Equis Financial Group Limited Partnership, a Massachusetts limited
partnership ("EFG"), Banyan Strategic Land Fund II, a Delaware corporation
("Banyan") and State Street Bank and Trust Company, a Massachusetts trust
company, as Escrow Agent (the "Escrow Agent"),
WITNESSETH:
WHEREAS, EFG is an affiliate of AFG Hato Arrow Limited Partnership,
AFG Dove Arrow Limited Partnership and AFG/Larkfield Limited Partnership,
all of which are Massachusetts limited partnerships (the "Partnerships"),
and Equis Exchange LLC, a Massachusetts limited liability company
("NEWCO");
WHEREAS, EFG, NEWCO and Banyan are parties to an Exchange Agreement
dated April __, 1997 (the "Agreement");
WHEREAS, pursuant to the Agreement, NEWCO, the Partnerships and EFG
may be obligated, under certain circumstances, to pay to Banyan the sum of
Three Hundred Fifty Thousand Dollars ($350,000), and have agreed to cause
such funds to be placed in escrow in accordance with the terms hereof;
WHEREAS, the Escrow Agent has consented to act as Escrow Agent and to
receive and hold funds to be deposited in escrow upon the terms here in
after set forth;
NOW THEREFORE, the parties hereby agree as follows:
1. DEPOSIT OF FUNDS. The Partnerships herewith deposit with the
Escrow Agent the sum of Three Hundred Fifty Thousand Dollars ($350,000)
(the "Escrow Deposit"). The Escrow Agent agrees to hold such Escrow
Deposit in an account designated as "Equis Financial Group Limited
Partnership Escrow Account" or in an account having such other similar
designation in accordance with the terms of this Escrow Agreement.
2. DISPOSITION OF ESCROW.
(a) The Escrow Agent shall invest or reinvest all funds now or
hereafter held by it pursuant to the terms of this Escrow Agreement at the
written direction of EFG in (i) short-term direct obligations of, or
obligations fully guaranteed by, the United States of America or any agency
thereof, (ii) certificates of deposit issued by any bank, trust company or
national banking association (including the Escrow Agent) having total
capital and surplus in excess of $100,000,000 or which are fully insured by
the Federal Deposit Insurance Corporation (iii) commercial paper rated in
the highest grade by Standard & Poor's Corporation and Xxxxx'x Investors
Services, Inc., in each case having maturities of not more than ninety (90)
days, or (iv) a money market fund limited to U.S. government obligations,
U.S. agency, obligations, or repurchase agreements backed by such
obligations. All such investments shall have maturity dates which do not
restrict, prohibit or interfere with the payment scheduled pursuant to
subsection 2(b) hereof. The Escrow Agent shall not be liable for any
losses resulting from the investments made in accordance with this Escrow
Agreement. All interest or other income on the Escrow Deposit shall accrue
to the Escrow Agent for the sole benefit of EFG as Agent for the
Partnerships (the "Interest Income"). It shall be the sole responsibility
of the EFG to file appropriate information returns and/or tax returns in
connection with any Interest Income so received.
(b) In the event, prior to the close of business on July 15, 1997,
EFG presents the Escrow Agent with written confirmation issued by American
National Bank, 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX ("Banyan's Bank"),
confirming the deposit of $4,400,000 in account No. 00000000 at Banyan's
Bank, to the reasonable satisfaction of the Escrow Agent, the Escrow Agent
shall immediately pay the Escrow Deposit to EFG in accordance with the wire
transfer instructions of EFG set forth on Schedule A hereto. In the event
that the Escrow Agent shall not have received such evidence of payment
prior to the close of business July 15, 1997, the Escrow Agent shall,
subject to paragraph (c) below, pay the Escrow Deposit to Banyan on
July 16, 1997 in accordance with the wire transfer instructions of Banyan
set forth on Schedule A hereto.
(c) The Escrow Agent shall not make the payment to Banyan referred
to in paragraph (b) if, prior to the close of business on July 15, 1997,
the Escrow Agent is presented with a copy of a legal complaint filed by EFG
against Banyan alleging fraud or breach of the agreement by Banyan alleging
fraud or breach of the Agreement by Banyan indicating, by a stamp, signed
receipt or other notation, that such complaint has been filed in a court (a
"Lawsuit Notice"). Upon receipt of a Lawsuit Notice, the Escrow Agent
shall promptly deliver a copy of the notice to Banyan. If the Escrow Agent
receives a Lawsuit Notice prior to the close of business on July 15, 1997,
the Escrow Deposit shall be retained by the Escrow Agent until it receives
a notice signed by EFG and Banyan, or is presented with a final court or
arbitration order not subject to further appeal disposing of the matter.
Upon receipt of such notice or order, the Escrow Agent shall promptly
comply with its terms.
3. TERM. Notwithstanding anything to the contrary contained in
this Escrow Agreement, this Escrow Agreement shall continue in force until
the entire Escrow Deposit shall have been distributed pursuant to the terms
hereof or until termination by a written instrument signed by the parties
hereto.
4. AGENT'S FEES. EFG shall pay all reasonable fees, expenses, and
other customary charges including without limitation legal fees for the
negotiation of this agreement made by the Escrow Agent in connection with
this Escrow Agreement including the reasonable fees and expenses of its
outside counsel as set forth on Schedule A hereto. Banyan hereby agrees
with EFG to reimburse EFG for one-half of all such fees, expenses and other
charges upon receipt of appropriate documentation from EFG.
5. ACTIONS OF AGENT.
(a) EFG and Banyan acknowledge and agree that the Escrow Agent
(i) shall not be responsible for any of the agreements referred to herein,
including the Exchange Agreement, but shall be obligated only for the
performance of such duties as are specifically set forth in this Escrow
Agreement; (ii) shall not be obligated to take any legal or other action
hereunder which might in its judgment involve any expense or liability
unless it shall have been furnished with acceptable indemnification;
(iii) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request
or document furnished to it hereunder and believed by it to be genuine and
to have been signed or presented by the proper person, and shall have no
responsibility for determining the accuracy thereof; and (iv) may consult
counsel satisfactory to it, including house counsel, and the opinion of
such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion of such counsel.
(b) Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to be
taken by it or any of its directors, officers of employees hereunder except
in the case of gross negligence or willful misconduct. EFG and Banyan
jointly and severally, covenant and agree to indemnify the Escrow Agent and
hold it harmless without limitation from and against any loss, liability or
expense of any nature incurred by the Escrow Agent arising out of or in
connection with this Agreement or with the administration of its duties
hereunder, including but not limited to legal fees and other costs and
expenses of defending or preparing to defend against any claim or liability
in the premises, unless such loss, liability or expense shall be caused by
the Escrow Agent's willful misconduct or gross negligence. In no event
shall the Escrow Agent be liable for indirect, punitive, special or
consequential damages.
(c) EFG and Banyan, jointly and severally, agree to assume any and
all obligations imposed now or hereafter by any applicable tax law with
respect to the payment of Escrow Funds under this Agreement, and to
indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses, that
may be assessed against the Escrow Agent on any such payment or other
activities under this Agreement. EFG and Banyan undertake to instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility
for withholding and other taxes, assessments or other governmental charges,
certifications an governmental reporting in connection with its acting as
Escrow Agent under this Agreement. EFG and Banyan, jointly and severally,
agree to indemnify and hold the Escrow Agent harmless from any liability on
account of taxes, assessments or other governmental charges, including
without limitation the withholding or deduction or the failure to withhold
or deduct same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which
the Escrow Agent may be or become subject in connection with or which
arises out of this Agreement, including costs and expenses (including
reasonable legal fees), interest and penalties. Notwithstanding the
foregoing, no distributions will be made unless the Escrow Agent is
supplied with an original, signed W-9 form or its equivalent prior to
distribution.
(d) The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry depository
or subescrow agent employed by the Escrow Agent than any such book-entry
depository or subescrow agent has to the Escrow Agent, except to the extent
that such action or omission of any book-entry depository or subescrow
agent was caused by the Escrow Agent's own gross negligence or bad faith.
(e) EFG and Banyan jointly and severally agree to pay or reimburse
the Escrow Agent for any legal fees incurred in connection with the
negotiation of this Agreement and to pay the Escrow Agent's reasonable
compensation for its normal services hereunder in accordance with the
attached fee schedule, which may be subject to change on an annual basis.
The Escrow Agent shall be entitled to reimbursement on demand for all
expenses incurred in connection with the administration of the escrow
created hereby which are in excess of its compensation for normal services
hereunder, including without limitation, payment of any legal fees incurred
by the Escrow Agent in connection with resolution of any claim by any party
hereunder. EFG and Banyan each agree to reimburse the other in accordance
with the principle that EFG and Banyan shall each pay one-half of the fees,
costs and expenses of the Escrow Agent.
(f) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving thirty (30) days' prior written notice of resignation
to EFG and Banyan. Prior to the effective date of the resignation as
specified in such notice, Banyan will issue to the Escrow Agent a written
instruction authorizing redelivery of the Escrow Funds to a bank or trust
company that it selects subject to the reasonable consent of EFG. Such
bank or trust company shall have a principal office in Boston,
Massachusetts, and shall have capital, surplus and undivided profits in
excess of $50,000,000. If, however, Banyan shall fail to name such a
successor escrow agent within twenty (20) days after the notice of
resignation from the Escrow Agent, EFG shall be entitled to name such
successor escrow agent. If no successor escrow agent is named by EFG and
Banyan, the Escrow agent may apply to a court competent jurisdiction for
appointment of a successor escrow agent. The provisions of paragraph (b)
and (c) shall survive the termination of this Agreement.
6. DISPUTE RESOLUTION. It is understood and agreed that should
any dispute arise with respect to the delivery, ownership, right of
possession, and/or disposition of the Escrow Fund, or should any claim be
made upon such Fund by a third party, the Escrow Agent upon receipt of
written notice of such dispute or claim by the parties hereto or by a third
party, is authorized and directed to retain in its possession without
liability to anyone, all or any of said Fund until such dispute shall have
been settled either by the mutual agreement of the parties involved or by a
final order, decree or judgment having expired. The Escrow Agent may, but
shall be under no duty whatsoever to, institute or defend any legal
proceedings which relate to the Escrow Fund.
7. CONSENT TO JURISDICTION AND SERVICE. EFG and Banyan hereby
absolutely and irrevocably consent and submit to the jurisdiction of the
courts of the Commonwealth of Massachusetts and of any Federal court
located in said Commonwealth in connection with any actions or proceedings
brought against EFG and Banyan by the Escrow Agent arising out of or
relating to this Escrow Agreement. In any such action or proceeding, EFG
and Banyan hereby absolutely and irrevocably waive personal service of any
summons, complaint, declaration or other process and hereby absolutely and
irrevocably agree that the service thereof may be made by certified or
registered first-class mail directed to EFG and Banyan, as the case may be,
at their respective addresses in accordance with Section 12 hereof.
8. FORCE MAJEURE. Neither Banyan nor EFG nor Escrow Agent shall
be responsible for delays or failures in performance resulting from acts
beyond its control. Such acts shall include but not be limited to acts of
God, strikes, lockouts, riots, acts of war, epidemics, governmental
regulations superimposed after the fact, fire, communication line failures,
computer viruses, power failures, earthquakes or other disasters.
9. AMENDMENTS. No amendment, supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing
by the parties hereto.
10. COUNTERPARTS. For the convenience of the parties hereto, this
Escrow Agreement may be executed simultaneously in one or more
counterparts, each of which together shall constitute one and the same
Escrow Agreement.
11. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
12. NOTICES. All notices, requests, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered or mailed, certified or registered, first-
class postage paid, return receipt requested and confirmed, or by a
reputable overnight courier service, receipt confirmed, or by facsimile
transmission followed by one of the foregoing means of delivery or mailing
but no such notice, instruction nor communication shall be deemed to have
been delivered unless and until it is actually received or refused by the
party to whom it was sent:
1. IF TO THE ESCROW AGENT:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxx
Corporate Trust Department
Reference: EFG-Banyan Escrow
Fax: (000) 000-0000
2. IF TO BANYAN :
Banyan Strategic Land Fund II
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
Telecopy No.: (000) 000-0000
WITH A COPY TO:
Xxxxxxx & Xxxxxxxx Ltd.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
3. IF TO EFG, THE PARTNERSHIPS OR NEWCO TO:
Equis Financial Group Limited Partnership
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Senior Vice President
Telecopy No.: (000) 000-0000
WITH A COPY TO:
Peabody & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Xx., Esq.
Telecopy No.: (000) 000-0000
13. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the respective parties hereto and their heirs, executors,
successors and assigns.
14. MODIFICATIONS. This Agreement may not be altered or modified
without the express written consent of the parties hereto. No course of
conduct shall constitute a waiver of any of the terms and conditions of
this Escrow Agreement, unless such waiver is specified in writing, and then
only to the extent so specified. A waiver of any of the terms and
conditions of this Escrow Agreement on one occasion shall not constitute a
waiver of the other terms of this Escrow Agreement, or of such terms and
conditions on any other occasion.
15. REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and
other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, optical disk, micro-card,
miniature photographic or other similar process. The parties agree that
any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
IN WITNESS WHEREOF, the undersigned have duly executed this Escrow
Agreement as of the date first written above.
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP
By: Equis Corporation, its General Partner
By:
----------------------------------------
Xxxxx X. Xxxxx, Senior Vice President
STATE STREET BANK AND TRUST COMPANY
By:
----------------------------------------
Authorized Representative
BANYAN STRATEGIC LAND FUND II
By:
----------------------------------------
Xxxxxxx X. Xxxxxx, President
EXHIBIT E
---------
FIRST AMENDMENT TO
ADMINISTRATIVE SERVICES AGREEMENT
BANYAN STRATEGIC LAND FUND II
Banyan Management Corp. (the "Corporation") and Banyan Strategic Land
Fund II (the "Fund") hereby agree as follows:
1. RECITALS
(a) The Corporation and the Fund executed and delivered a certain
Administrative Services Agreement dated as of February 27, 1994 (the
"ASA").
(b) The Corporation and the Fund desire to amend the ASA on the
terms and conditions herein set forth.
(c) Capitalized terms used herein and not otherwise defined shall
have the same meanings as ascribed to such terms in the ASA.
2. PAYMENT OF TERMINATION FEE.
(a) Contemporaneously with the execution of this First Amendment,
the Fund shall pay to the Corporation a Termination Fee in accordance with
Paragraph 11 of the ASA in the amount of $251,823 (the "Termination Fee").
Such payment shall be in complete discharge of the Fund's obligation under
Paragraph 11 of the ASA, and no further termination payments or employee
severance payments (except pursuant to an Employee Agreement between the
Fund and Xxxxxxx X. Xxxxxx), shall be required.
(b) From and after the payment of the Termination Fee, the
Corporation shall be required at all times to comply with the provisions of
Paragraph 12 of the ASA upon the request, and at the expense of the Fund.
(c) Together with the payment of the Termination Fee, the Fund
shall deliver to the Corporation:
(i) the immediate resignations from the
Board of Directors of the Corporation of Messrs. Xxxxxx Xxxx and Xxxxxx
Xxxxxxxxxxx, and
(ii) an Assignment Separate from Certificate
assigning all of the stock in the Corporation now owned by the Fund to such
entity as is designated by the Corporation.
3. UTILIZATION OF CERTAIN EMPLOYEES/PERFORMANCE OF SERVICES.
(a) From and after the date here and until the ASA shall be
terminated (the "Transition Period"), the Fund shall reimburse the
Corporation, at the rates set forth on Schedule A attached hereto, for
services performed on behalf of and at the request of the Fund, by
employees of the Corporation.
(b) Except as modified hereby, the Corporation shall continue to
render services to and incur expenses on behalf of the Fund, as requested,
pursuant to the ASA, and the Fund shall reimburse the Corporation for the
cost of such services and expenses at the Corporation's customary rate for
such services in effect at such time, in accordance with the provisions of
the ASA. The Corporation shall invoice the Fund for such services and
expenses and the Fund shall discharge such invoices promptly, and in any
event, not later than thirty days after delivery.
4. RETAINER. Upon request of the Corporation, the Fund shall deposit
with the Corporation on the first day of each month a sum reasonably
estimated by the Corporation to equal the amount of charges expected to be
incurred during the immediately forthcoming month by the Corporation on
behalf of the Fund, as an advance payment (the "Retainer") against the
Fund's financial obligations to the Corporation pursuant to the ASA as
amended hereby. Failure to timely deposit the Retainer shall be a material
default hereunder. The Corporation, upon written notice to the Fund, may
adjust the amount of the Retainer in the reasonable discretion of the
Corporation. Any unused portion of the Retainer shall be refunded to the
Fund within ten days of the termination of the ASA. The Corporation has
elected not to request any Retainer as of the date hereof.
5. NOTICES. The address for Notices to the Fund is hereby changed as
follows:
Banyan Strategic Land Fund II
c/o The Equis Financial Group
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
With a copy to: Peabody & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
6. TERMINATION. Notwithstanding the provisions of the ASA, the Fund may
terminate the ASA, without cost, upon ten days' written notice to the
Corporation and the Corporation may terminate the ASA, without cost, upon
thirty days' written notice to the Fund, provided, however, that despite
any such termination, the unfulfilled obligations of either party hereunder
or pursuant to Paragraph 12 of the ASA shall survive such termination.
7. ACKNOWLEDGMENT OF PERFORMANCE. As additional consideration for the
execution and delivery by the Corporation of this Amendment, the Fund
hereby acknowledges full satisfaction of performance of the ASA by the
Corporation to the date hereof, and waives any right it may have pursuant
to the ASA to an accounting through the date hereof.
8. REAFFIRMATION. Except as specifically amended by the terms and
conditions hereof, each of the Corporation and the Fund hereby reaffirms,
readopts and ratifies the ASA.
Executed this ____________ day of ___________________, 1997.
THE FUND: THE CORPORATION:
Banyan Strategic Land Fund II Banyan Management Corp.
By:___________________________ By:______________________
Title:__________________ Title:______________
EXHIBIT F
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PROMISSORY NOTE
$________ ___________, 1997
For value received, Banyan Strategic Land Fund II, a Delaware
corporation (the "Maker"), having an address at 00 Xxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxx, XX 00000, promises to pay to the order of Equis Exchange LLC, a
Massachusetts Limited Liability Company (the "Payee"), having a place of
business at 00 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, the
principal sum of
_______________________________ DOLLARS
($__________) together with interest on the outstanding principal balance
hereof on or before April __, 2000. Until the Stockholders Consent
referred to in clause a below has been obtained, interest shall accrue on
the outstanding principal balance hereof at a rate per annum equal to the
rate at which interest is earned by the Payee on the Payee's investment of
the proceeds of the funds loaned to the Payee hereunder. From and after
the date on which the Stockholders Consent is obtained, interest shall
accrue on the outstanding principal balance hereof at the rate of ten
percent (10%) PER ANNUM and shall be paid quarterly in arrears on the last
business day of each calendar quarter and at the maturity of this Note.
Unpaid interest shall be compounded annually on December 31 of each year.
When and as Banyan or any of its subsidiaries shall receive any
proceeds from the sale or refinancing of all or part of that certain 274
acre property in Los Angeles County, California known as the Rancho Malibu
property (the "Rancho Malibu Property"), prior to the maturity hereof, the
Maker shall immediately apply such funds, net of any identifiable costs
directly associated with such sale, to the prepayment of this Note, to the
extent of any outstanding principal or interest hereunder.
This Note may be prepaid in whole or in part without premium or
penalty .
This Note is being issued by the Maker to the Payee pursuant to the
terms of an Exchange Agreement dated as of April __, 1997, by and among the
Maker, the Payee, AFG Hato Arrow Limited Partnership, AFG Dove Arrow
Limited Partnership and AIP/Larkfield Limited Partnership (the
"Partnerships") and Equis Financial Group Limited Partnership ("EFG") and
is being assigned to EFG Financial Group Limited Partnership, having the
same address as the Payee, as agent for the Partnerships and their
respective assignees. Capitalized terms used herein and not defined herein
shall have the definitions set forth in the Exchange Agreement.
All amounts payable under this Note shall immediately become due and
payable in full at the option of the holder of this note ("Holder") without
notice or demand if any one or more of the following events shall occur:
a. The Stockholders Consent as that term is defined in
Section 4.10 of the Exchange Agreement (the "Stockholders Consent") shall
not have been obtained by October 31, 1997.
b. Additional outstanding indebtedness secured by the Rancho
Malibu Property in excess of $2,500,000 shall be incurred by the Maker or
any other person.
c. The Board of Directors of the Maker shall at any time fail to
include at least two persons nominated by the Holder of this Note and the
Maker shall fail to fill any such vacancy by causing the election of a
person or persons nominated by the Holder to the Board of Directors within
twenty (20) days after
the Holder shall have given written notice to Maker of such
failure and the name or names of the nominee or nominees.
d. Maker shall fail to make any payment hereunder when and as the
same shall become due and payable, and such failure shall not be cured
within ten (10) days after Holder shall have given written notice to Maker
of such failure.
e. Maker shall admit in writing its inability to pay its debts as
they mature or shall make an assignment for the benefit of creditors.
f. Maker shall apply for or consent to the appointment of a
trustee or receiver for all or a major part of its property.
g. A trustee or receiver shall be appointed for Maker or for all
or a major part of its property and such trustee or receiver shall not be
discharged within sixty (60) days after such appointment.
h. Bankruptcy, reorganization, arrangement or insolvency
proceedings or other proceedings for relief under any bankruptcy or similar
law or laws for the relief of debtors shall be instituted by or against
Maker and, if instituted against it, shall be consented to or shall not be
dismissed within sixty (60) days after being instituted.
i. An order, judgment or decree declaring Maker to be bankrupt or
insolvent shall be entered and shall not be vacated, set aside or stayed
within sixty (60) days after the entry thereof.
Maker hereby waives presentment, demand, notice, protest, dishonor
and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of the obligations of Maker
under this Note, and the exercise of and enforcement of any rights
hereunder by Holder, and assents without notice to any extension or
postponement of the time of payment, to the addition or release of any
party or person in any way liable hereunder, and to the compromise or
settlement of the liability of any such party or person hereunder, which
may from time to time be agreed to by Holder.
All notices required or permitted hereunder shall be in writing and
shall be delivered in hand or by facsimile, overnight courier or certified
or registered mail, return receipt requested, postage prepaid, to the Maker
or the Payee, as the case may be, at its respective address set forth
above, or such other address or addresses as Maker or Holder may designate
from time to time by notice given in accordance with the foregoing.
All of the provisions of this Note shall be binding upon and inure to
the benefit of Maker and Payee and their respective successors, assigns and
legal representatives. This Note shall be governed by and construed in
accordance with the laws of the State of Illinois without regard to
conflict or choice of law principles.
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
date first above written.
BANYAN STRATEGIC LAND FUND II
By:
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Xxxxxxx X. Xxxxxx, President
