AGREEMENT FOR PURCHASE AND SALE
OF SPECIAL BENEFICIARY INTERESTS
This Agreement for Purchase and Sale of Special Beneficiary Interests
is made this 18th day of November, 1999, by and between Equis Financial Group
Limited Partnership, a Massachusetts limited partnership with offices located at
00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Seller"), and Semele Group
Inc., a Delaware corporation with offices located at Xxx Xxxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Buyer");
WITNESSETH:
WHEREAS, the Seller owns a beneficial interest in each of the four
following Delaware business trusts, each such interest being defined in the
Second Amended and Restated Declaration of Trust, as amended to date, of each of
the trusts (each a "Declaration of Trust") as a "Special Beneficiary Interest,"
and the Seller in its capacity as such owner being defined in each Declaration
of Trust as the "Special Beneficiary":
AFG Investment Trust A
AFG Investment Trust B
AFG Investment Trust C
AFG Investment Trust D
(such Special Beneficiary Interests collectively the "Special Beneficiary
Interests," and such trusts collectively the "Trusts");
WHEREAS, the Seller wishes to sell and the Buyer wishes to purchase the
Special Beneficiary Interests subject to the provisions set forth herein;
WHEREAS, the Special Beneficiary Interests have the rights to
distributions and allocations provided for in the Declaration of Trust of each
of the Trusts, including an 8.25% share of all distributions;
WHEREAS, the Buyer has received from Josephthal & Co. Inc. a "fairness
opinion" with respect to the fairness to the Buyer from a financial point of
view of this acquisition and a related acquisition by the Buyer from Xxxx X.
Xxxxx, Xxxxx X. Xxxxx and certain trusts for the benefit of Xx. Xxxxx'x children
of all of the Common Stock of Equis II Corporation, which opinion is acceptable
to the Special Committee of the Board of Directors of the Buyer consisting of
the Buyer's independent directors;
NOW, THEREFORE, in consideration of the terms, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
1. PURCHASE AND SALE OF SPECIAL BENEFICIARY INTERESTS
The Seller hereby transfers, sells and assigns to the Buyer, and the
Buyer hereby purchases from the Seller, the Special Beneficiary Interests for a
purchase price of
$9,652,500, paid by the delivery to the Seller simultaneously with the execution
hereof of a promissory note of the Buyer payable to the Seller in the principal
amount of $9,652,500. Such promissory note, which is in the form of Exhibit A
hereto, bears interest on the unpaid principal balance thereof from time to time
at the rate of 7% per annum and is payable on the terms set forth therein. The
Special Beneficiary Interests are currently subject to a pledge executed by the
Seller securing indebtedness of Equis II Corporation, a Delaware corporation,
totalling approximately $19.5 million at September 30, 1999. The Buyer agrees
that as soon as such indebtedness has been repaid and such pledge has been
released, it will secure its obligations under such note by a pledge of the
Special Beneficiary Interests pursuant to a Security Agreement in the form of
Exhibit B hereto.
Pursuant to Article IX of the Declaration of Trust of each of the
Trusts, the Seller and the Buyer have delivered to the Managing Trustee of the
Trusts a duly executed and completed assignment form satisfactory to the
Managing Trustee, and the Managing Trustee has consented to the substitution of
the Buyer as a Substitute Special Beneficiary (as defined in each Declaration of
Trust) in place of the Seller, all as shown in the Assignment attached hereto as
Exhibit C.
2. FAMILIARITY WITH THE COMPANY
The Buyer hereby acknowledges that it is familiar with the investment
objectives, business, assets and liabilities of the Trusts, each of which have a
class of securities registered under Section 12(g) of the Securities Exchange
Act of 1934 and each of which are accordingly reporting companies under such
Act. The Buyer further hereby acknowledges that it has examined such reports
filed under such Act and has had the opportunity to make such inquiries of
employees and representatives of the Seller and to consult with such experts as
it has deemed appropriate or necessary in connection with the execution of this
Agreement and the consummation of the transaction provided for herein.
3. REPRESENTATIONS OF THE SELLER
The Seller hereby represents and warrants to the Buyer that
(a) it has good and marketable title to the Special Beneficiary
Interests free and clear of all liens, security interests, charges or
encumbrances of any kind except as set forth on Schedule 3 hereto, and upon the
execution of this Agreement title to the Special Beneficiary Interests will pass
to the Buyer free and clear of any pledge, lien, security interest, charge or
encumbrance of any kind except as set forth on such Schedule, and thereupon the
Buyer, as record and beneficial owner, will be entitled to all rights of the
Seller with respect to the Special Beneficiary Interests;
(c) the Seller is a duly formed and validly existing limited
partnership under the laws of the Commonwealth of Massachusetts with the right,
power and authority to enter into and carry out the provisions of this
Agreement; Equis Corporation is the sole general partner of the Seller; and Xxxx
X. Xxxxx is an officer of such general partner who has been duly authorized by
all necessary partnership and corporate action to execute, deliver and perform
on behalf of the Seller all such instruments and agreements and take all such
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other action as he may deem necessary or desirable for the Seller to consummate
the sale of the Special Beneficiary Interests to the Buyer, including, without
limiting the generality of the foregoing, this Agreement and the Assignment
attached hereto as Exhibit C;
(d) the execution, delivery and performance of this Agreement by the
Seller and the consummation by the Seller of the transaction contemplated hereby
do not and will not violate, conflict with or result in a breach of or
constitute a default under any of the terms, conditions or provisions of any
instrument or contract to which the Seller is a party or by which it or any of
its properties or assets is bound or any judgment, decree, order, statute, rule
or regulation to which it is subject or by which it or any of its properties or
assets is bound, or result in the creation of any lien, charge or encumbrance on
any of its properties or assets;
(e) the Seller has delivered to the Buyer true, accurate and complete
copies of the Declaration of Trust of each of the Trusts.
4. REPRESENTATIONS OF THE BUYER
The Buyer hereby represents and warrants to the Seller that
(a) the Buyer is a duly formed and validly existing corporation under
the laws of the State of Delaware with the right, power and authority to enter
into and carry out the provisions of this Agreement; and Xxxxx X. Xxxxx is an
officer of the Buyer who has been duly authorized by all necessary corporate
action to execute, deliver and perform on behalf of the Buyer all such
instruments and agreements and take all such other action as he may deem
necessary or desirable for the Buyer to consummate the purchase of the Special
Beneficiary Interests from the Seller, including, without limiting the
generality of the foregoing, this Agreement and the promissory note delivered to
the Seller pursuant to this Agreement;
(b) the execution, delivery and performance of this Agreement by the
Buyer and the consummation by the Buyer of the transaction contemplated hereby
do not and will not violate, conflict with or result in a breach of or
constitute a default under any of the terms, conditions or provisions of any
instrument or contract to which the Buyer is a party or by which it or any of
its properties or assets is bound or any judgment, decree, order, statute, rule
or regulation to which it is subject or by which it or any of its properties or
assets is bound, or result in the creation of any lien, charge or encumbrance on
any of its properties or assets.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All agreements, covenants, representations and warranties of the
parties are set forth and merged in this Agreement, and no other oral or written
understanding, representation or warranty shall be deemed to be part of this
Agreement . All of the representations, warranties, agreements and covenants of
the Seller contained in this Agreement shall survive the date hereof.
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6. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same agreement.
7. ENTIRE AGREEMENT
This Agreement represents the only agreement between the parties and
supersedes all prior agreements or understandings concerning the subject matter
hereof.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
9. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
Seller and the Buyer and their respective successors and assigns.
10. INDEMNIFICATION
The Seller will indemnify and hold the Buyer harmless from and against
any loss or expense, including reasonable legal fees and expenses, which the
Buyer may incur as the result of (i) any breach of the representations and
warranties made by the Seller hereunder or (ii) any claim made against the Buyer
arising out of the ownership by the Seller or the Company of the Stock or the
Partnership Interests prior to the date hereof. Whenever, on each occasion, and
as often as the Buyer shall incur any such loss or expense which may entitle the
Buyer to indemnification under the provisions of this Section 10 the Buyer shall
promptly so notify the Seller in writing of any such loss or expense and of the
amount of indemnification which may be claimed by the Buyer hereunder. The
Seller shall be entitled to take any and all such action as may be within its
power to mitigate the amount of any such loss or expense and shall be entitled
at its own expense to participate in and to select reputable counsel and direct
the defense of any such claim against the Buyer. If the Seller acknowledges in
writing that it is liable to the Buyer for such claim and elects to employ such
counsel and to direct such defense, the Seller shall have no further liability
hereunder for any legal fees and expenses incurred by the Buyer in connection
with such
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defense, provided that in such event the Buyer may employ its own counsel at its
own cost and expense.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"Buyer" "Seller"
SEMELE GROUP INC. EQUIS FINANCIAL GROUP LIMITED
PARTNERSHIP
By: Equis Corporation, General Partner
By:/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXX
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Name: Xxxxx X. Xxxxx Name: Xxxx X. Xxxxx
Title: President Title: President
