EXHIBIT 2.1
PLAN OF DISSOLUTION AND LIQUIDATION
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This Plan of Dissolution and Liquidation (this "Plan"), is entered into as
of December 31, 2002, by and among PW Preferred Yield Fund II, L.P., a Delaware
limited partnership (the "Partnership"), Pembroke Financial Limited Partnership,
a Massachusetts limited partnership (the "Managing General Partner"), and
General Equipment Management II, Inc., a Delaware corporation (the
"Administrative General Partner" and together with the Managing General Partner,
the "General Partners.
R E C I T A L S
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WHEREAS, the Partnership and the General Partners among others, are parties to
that certain Amended and Restated Agreement of Limited Partnership, dated as of
September 10, 1992, as amended (the "Partnership Agreement"); and
WHEREAS, the Partnership Agreement provides that the Partnership be
dissolved upon the sale or other disposition of all or substantially all of the
assets of the Partnership; and
WHEREAS, the General Partners have determined that substantially all of the
assets of the Partnership have been sold or otherwise disposed of in accordance
with the terms of the Partnership Agreement and that it is in the best interest
of the Partnership to complete the dissolution and liquidation of the
Partnership; and
WHEREAS, the General Partners have determined that, in accordance with the
objectives of the Partnership as described in its Prospectus relating to the
offering of units in the Partnership, the completion of the dissolution and
liquidation of the Partnership through the escrow of the remaining assets of the
Partnership, including a cash reserve for the contingent liabilities and other
obligations of the Partnership, is in the best interest of all parties to the
Partnership Agreement; and
WHEREAS, in furtherance thereof, the General Partners shall (i) apply and
distribute all cash and proceeds in accordance with the provisions set forth in
the Partnership Agreement; (ii) except for an allocation of reasonable estimates
of cash amounts to be used for contingent or existing liabilities (the "Cash
Reserve"), liquidate the Partnership's assets; (iii) place all undistributed
cash, including the Cash Reserve and any assets that could not be sold for cash
prior to dissolution in an escrow account (the "Escrow") for the benefit of the
unitholders of the Partnership (the "Unitholders") with the Managing General
Partner as its escrow agent (the "Escrow Agent"); and (iv) cause the Escrow
Agent, pursuant to the terms of an Escrow Agreement by and between the
Partnership and the Managing General Partner, of even date herewith
substantially in the form attached as Exhibit A hereto (the "Escrow Agreement"),
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to distribute all of the net cash proceeds from the sale of assets of the Escrow
and cash, less reserves for any contingent liabilities, to the beneficiaries of
the Escrow when the General Partners deem it to be in the best interest of the
unitholders to do so; and
WHEREAS, in furtherance of the dissolution and liquidation of the
Partnership as described herein, the General Partners have adopted and approved
this Plan;
NOW THEREFORE, the General Partners authorize the following on behalf of
the Partnership:
1. The Partnership shall enter into, execute and deliver the Escrow
Agreement with the Escrow Agent.
2. The Partnership shall, after having set aside the Cash Reserve and
reserving additional cash to be escrowed to the Escrow for estimated fees,
expenses and contingent liabilities of the Escrow together with any remaining
unsold assets of the Partnership (the "Retained Assets"), in accordance with the
Partnership Agreement and the instructions of the General Partners, distribute
all available cash to the Partnership's unitholders.
3. The Partnership shall escrow the Retained Assets with the Escrow Agent
pursuant to the terms of the Escrow Agreement.
4. After dissolution and liquidation, in accordance with the Partnership
Agreement and pursuant to Title 6, Chapter 17 of the Revised Uniform Limited
Partnership Act as adopted by and in effect in the State of Delaware, the
General Partners shall cause the Partnership to file with the Secretary of State
of the State of Delaware, a Certificate of Cancellation which cancels the
Partnership's Certificate of Limited Partnership.
5. After filing the Certificate of Cancellation, the General Partners shall
cause to be filed with the United States Securities and Exchange Commission a
Form 15 on behalf of the Partnership certifying the termination of registration
of the Units of Class A Limited Partner Interests under Section 12(g) of the
Securities Exchange Act of 1934.
6. The General Partners shall take any and all other actions deemed
required, necessary or desirable to complete the liquidation and dissolution of
the Partnership, including but not limited to, the execution and delivery of any
and all agreements, certificates, instruments or other documents.
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IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first set forth above.
PW PREFERRED YIELD FUND II, L.P.
By: Pembroke Financial Limited Partnership,
its Managing General Partner
By: PYB Corporation
its General Partner
By: /s/ Xxxxx Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
By: General Equipment Management II, Inc., its Administrative General Partner
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President
PEMBROKE FINANCIAL LIMITED PARTNERSHIP
By: PYB Corporation
GENERAL EQUIPMENT MANAGEMENT II, INC. its General Partner
By: Xxxxxxx Xxxxx By: /s/ Xxxxx Xxxxx
Name: Xxxxxxx Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Chief Financial Officer
EXHIBIT A
ESCROW AGREEMENT
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This Escrow Agreement (this "Agreement") is made as of December 31, 2002,
by and between PW PREFERRED YIELD FUND II, L.P., a Delaware limited partnership
(the "Partnership"), and PEMBROKE FINANCIAL LIMITED PARTNERSHIP, a Massachusetts
limited partnership, as Escrow Agent ("Escrow Agent").
1. Establishment of Escrow Account; Actions of Escrow Agent.
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(a) Pursuant to the terms of a Plan of Dissolution and Liquidation
dated as of December 31, 2002 (the "Plan") by and among the Partnership,
Pembroke Financial Limited Partnership, as Managing General Partner of the
Partnership (the "Managing General Partner"), and General Equipment Management
II, Inc., a Delaware corporation, as Administrative General Partner of the
Partnership (the "Administrative General Partner," and together with the
Managing General Partner, the "General Partners"), the Partnership hereby
deposits with the Escrow Agent the assets more fully described on Schedule A
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hereto to be held in escrow by the Escrow Agent. The Escrow Agent accepts said
assets and agrees to establish and maintain a separate account (the "Escrow
Account") therefor in its capacity as Escrow Agent pursuant to the terms of this
Agreement.
(b) The General Partners shall, from time to time, provide joint
written instructions to the Escrow Agent relating to the sale or other
disposition of Permitted Investments (as hereinafter defined) and distributions
from the Escrow Account, in furtherance of and in accordance with the Plan.
2. Investment.
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(a) The Escrow Agent agrees to hold and distribute assets in accordance
with the instructions of the General Partners referenced in Section 1(b) above
and to invest and reinvest funds in the Escrow Account, but only upon written
instructions signed by the General Partners, in one or more of the following
investments (the "Permitted Investments") from time to time:
(i) Direct obligations of, or obligations the timely payment of
principal and interest on which are unconditionally guaranteed by, the United
States of America;
(ii) Repurchase agreements with a counterparty rated A-1 or better by
Standard & Poors Ratings Service and P-1 by Xxxxx'x Investors Service, and
involving securities of the type described in (i) above; or
(iii) Money market funds rated in the highest applicable category by
Standard & Poors Ratings Service and Xxxxx'x Investors Service.
(b) The parties recognize and agree that the Escrow Agent will not
provide supervision, recommendations or advice relating to either the investment
of the Escrow Account or the purchase, sale, retention or other disposition of
any asset in the Escrow Account or any Permitted Investment.
(c) Interest and other earnings on Permitted Investments shall be added
to the Escrow Account. Any loss or expense incurred as a result of an
investment will be borne by the Escrow Account. In the event that the Escrow
Agent does not receive directions to invest funds held in the Escrow Account,
the Escrow Agent shall invest such funds in the Pegasus U.S. Government
Securities Cash Management Fund or a successor or similar fund which invests in
(i) short-term securities issued or guaranteed by the United States Government,
its agencies or instrumentalities and/or (ii) repurchase agreements relating to
such securities.
(d) The Escrow Agent is hereby authorized to execute purchases and
sales of Permitted Investments through the facilities of its own trading or
capital markets operations. The Escrow Agent shall send statements to each of
the General Partners quarterly reflecting activity for the Escrow Account for
the preceding calendar year. Although the Partnership recognizes that it may
obtain a broker confirmation or written statement containing comparable
information at no additional cost, the Partnership hereby agrees that
confirmations of Permitted Investments are not required to be issued by the
Escrow Agent for each quarter in which a quarterly statement is rendered.
However, no statement need be rendered for the Escrow Account if no activity
occurred for such quarter.
3. Concerning the Escrow Agent.
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Notwithstanding any provision contained herein to the contrary, the Escrow
Agent, including its officers, directors, employees and agents, shall, in its
capacity as Escrow Agent:
(a) not be liable for any action taken or omitted under this Agreement
so long as it shall have acted in good faith and without gross negligence;
(b) have no responsibility to inquire into or determine the
genuineness, authenticity, or sufficiency of any securities, checks, or other
documents or instruments submitted to it in connection with its duties
hereunder;
(c) be entitled to deem the signatories of any documents or instruments
submitted to it hereunder as being those purported to be authorized to sign such
documents or instruments on behalf of the parties hereto, and shall be entitled
to rely upon the genuineness of the signatures of such signatories without
inquiry and without requiring substantiating evidence of any kind;
(d) be entitled to refrain from taking any action contemplated by this
Agreement in the event that it becomes aware of any disagreement between the
parties hereto as to any facts or as to the happening of any contemplated event
precedent to such action;
(e) have no responsibility or liability for any diminution in value of
any assets held hereunder which may result from any investments or reinvestment
made in accordance with any provision which may be contained herein;
(f) be entitled to compensation for its services hereunder as per
EXHIBIT A attached hereto, which is made a part hereof, and for reimbursement of
its out-of-pocket expenses including, but not by way of limitation, the fees and
costs of attorneys or agents which it may find necessary to engage in
performance of its duties hereunder, all to be paid by the Partnership, and the
Escrow Agent shall have, and is hereby granted, a prior lien upon any property,
cash, or assets of the Escrow Account, with respect to its unpaid fees and
nonreimbursed expenses, superior to the interests of any other persons or
entities;
(g) be entitled and is hereby granted the right to set off and deduct
any unpaid fees and/or nonreimbursed expenses from amounts on deposit in the
Escrow Account;
(h) be under no obligation to invest the deposited funds or the income
generated thereby until it has received a Form W-9 or W-8, as applicable, from
the Partnership, regardless of whether such party is exempt from reporting or
withholding requirements under the Internal Revenue Code of 1986, as amended;
(i) be, and hereby is, jointly and severally indemnified and held
harmless by the Partnership from all losses, costs and expenses, including
attorney fees and expenses, which may be incurred by it as a result of its
acceptance of the Escrow Account or arising from the performance of its duties
hereunder, unless the Escrow Agent shall have been adjudged to have acted in bad
faith or to have been grossly negligent, and such indemnification shall survive
its resignation or removal, or the termination of this Agreement until
extinguished by any applicable statute of limitations;
(j) in the event any dispute shall arise between the parties with
respect to the disposition or disbursement of any of the assets held hereunder,
be permitted to interplead all of the assets held hereunder into a court of
competent jurisdiction, and thereafter be fully relieved from any and all
liability or obligation with respect to such interpleaded assets. The parties
further agree to pursue any redress or recourse in connection with such a
dispute, without making the Escrow Agent a party to same;
(k) have only those duties as are specifically provided herein, which
shall be deemed purely ministerial in nature, and shall under no circumstance be
deemed, as Escrow Agent, a fiduciary for any of the parties to this Agreement.
The Escrow Agent shall neither be responsible for, nor chargeable with,
knowledge of the terms and conditions of any other agreement, instrument or
document between the other parties hereto, in connection herewith. This
Agreement sets forth all matters pertinent to the escrow contemplated hereunder,
and no additional obligations of the Escrow Agent shall be inferred from the
terms of this Agreement or any other Agreement. IN NO EVENT SHALL THE ESCROW
AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i) DAMAGES OR EXPENSES ARISING
OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES WHICH RESULT FROM THE
ESCROW AGENT'S FAILURE TO ACT IN ACCORDANCE WITH REASONABLE COMMERCIAL
STANDARDS, OR (ii) SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
(l) have the right, but not the obligation, to consult with counsel of
choice and shall not be liable for action taken or omitted to be taken by Escrow
Agent either in accordance with the advise of such counsel or in accordance with
any opinion of counsel to the Partnership addressed and delivered to the Escrow
Agent; and
(m) have the right to perform any of its duties hereunder through
agents, attorneys, custodians or nominees.
Any banking association or corporation into which the Escrow Agent may be
merged, converted or with which the Escrow Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent shall be a party, shall succeed to all the Escrow Agent's rights,
obligations and immunities hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
4. Resignation or Removal of Escrow Agent.
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The Escrow Agent may resign as such following the giving of thirty (30)
days' prior written notice to the General Partners. Similarly, the Escrow Agent
may be removed and replaced following the giving of thirty (30) days' prior
written notice to the Escrow Agent by the General Partners. In either event,
the duties of the Escrow Agent shall terminate thirty (30) days after receipt of
such notice (or as of such earlier date as may be mutually agreeable); and the
Escrow Agent shall then deliver the balance of the moneys or assets then in its
possession to a successor escrow agent as shall be appointed by the General
Partners as evidenced by a written notice filed with the Escrow Agent.
If the General Partners has failed to appoint a successor prior to the
expiration of thirty (30) days following receipt of the notice of resignation or
removal, the Escrow Agent may petition any court of competent jurisdiction for
the appointment of a successor escrow agent or for other appropriate relief, and
any such resulting appointment shall be binding upon all of the parties hereto.
5. Termination.
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This Agreement shall terminate on December 31, 2003, unless earlier
terminated by the General Partners and the Escrow Agent.
6. Notices.
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Any notice, consent or request to be given in connection with any of the
terms or provisions of this Agreement shall be in writing and be given in
person, by facsimile transmission, courier delivery service or by mail, and
shall become effective (a) on delivery if given in person, (b) on the date of
delivery if sent by facsimile or by courier delivery service, or (c) four
business days after being deposited in the mails, with proper postage for
first-class registered or certified mail, prepaid.
Notices shall be addressed as follows:
(i) if to the Partnership or the General Partners:
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PW Preferred Yield Fund II, L.P.
c/o Pembroke Financial Limited Partnership, its Managing General Partner
c/o AFG Leasing VII Incorporated, its General Partner
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Vice President
Fax Number: (000) 000-0000
with a copy to:
General Equipment Management II, Inc., Administrative General Partner
c/o UBS Xxxxx Xxxxxx
000 Xxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Fax Number: (000) 000-0000
(ii) if to the Escrow Agent:
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Pembroke Financial Limited Partnership
c/o AFG Leasing VII Incorporated, its General Partner
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Vice President
Fax Number: (000) 000-0000
7. Governing Law, Counterparts.
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This Agreement shall be construed in accordance with the laws of the State
of California. It may be executed in several counterparts, each one of which
shall constitute an original and all collectively shall constitute but one
instrument.
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IN WITNESS WHEREOF, the parties have been duly executed this Escrow
Agreement as of the date first above written.
PW PREFERRED YIELD FUND II, L.P.
By: Pembroke Financial Limited Partnership,
its Managing General Partner
By:
its Managing General Partner
By: ____________________________
Name:
Title:
By: General Equipment Management II, Inc., its
Administrative General Partner
By: ____________________________
Name:
Title:
PEMBROKE FINANCIAL LIMITED PARTNERSHIP
By:
GENERAL EQUIPMENT MANAGEMENT II, INC. its General Partner
By: ____________________________ By: ______________________________
Name: Name:
Title: Title:
SCHEDULE A
SCHEDULE OF ESCROWED ASSETS
1. See the attached schedule of receivables dated 11/30/02, which will be
replaced and updated by a schedule dated 12/31/02 reflecting all receivables
actually held as of the date hereof.
2. All of the Partnership's right, title and interest in and to one or more
Purchase Agreements with Manufacturer's Leasing Services Corp., as purchaser,
and the Partnership, as seller, relating to certain equipment.
3. All of the Partnership's rights as a plaintiff in an action filed in
December 1998 against General Motors Corporation in the Superior Court for The
Commonwealth of Massachusetts relating to Master Lease Agreement No. 9108MI6433
and Rental Schedules X-0, X-0, X-0 and B-14.
EXHIBIT A
ESCROW AGENT FEES
As payment for its services hereunder, the Escrow Agent shall be entitled only
to such fees and other compensation to which the Escrow Agent would have been
entitled had the Escrow Agent undertaken such services in its capacity as
Managing General Partner of the Partnership, rather than as Escrow Agent.
