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Plan of Liquidation and Dissolution

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Date:
2002
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33K
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#1502459

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PLAN OF LIQUIDATION AND DISSOLUTION This Plan of Liquidation and Dissolution (this "Plan"), is entered into as of July 18, 2002, by and among AFG Leasing IV Incorporated, a Massachusetts corporation ("AFG IV"), both in its individual capacity and as the general partner, and on behalf, of American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Partners V-C Limited Partnership and American Income Partners V-D Limited Partnership (together, the "AIP Partnerships"), AFG Leasing VI Incorporated, a Massachusetts corporation ("AFG VI"), both in its individual capacity and as the general partner, and on behalf, of American Income Fund I-A, a Massachusetts Limited Partnership, American Income Fund I-B, a Massachusetts Limited Partnership, American Income Fund I-C, a Massachusetts Limited Partnership, American Income Fund I-D, a Massachusetts Limited Partnership and American Income Fund I-E, a Massachusetts Limited Partnership (collectively, the "AIF Partnerships"), AFG Aircraft Management Corporation, a Massachusetts corporation ("AFG AMC", and, together with AFG IV and AFG VI, hereinafter collectively referred to as the "General Partners"), both in its individual capacity and as the general partner, and on behalf, of AIRFUND International Limited Partnership and AIRFUND II International Limited Partnership (together, the "Airfund Partnerships," and hereinafter, together with the AIP Partnerships and the AIF Partnerships, collectively referred to as the "Partnerships"). R E C I T A L S - - - - - - - - WHEREAS, the Partnerships are nominal defendants in a class action lawsuit in the United States District Court for the Southern District of Florida (the "Court") captioned Leonard Rosenblum, et al. v. Equis Financial Group Limited Partnership, et al. (Civ. 98-8030) (the "Litigation"); and WHEREAS, the Court approved a Revised Stipulation of Settlement of the litigation, a copy of which is attached hereto as Exhibit A (as amended, the ------- - "Settlement Stipulation"), pursuant to a Final Judgment and Order entered onto the docket on June 18, 2002, a copy of which is attached hereto as Exhibit B (as ------- - amended, the "Order"); and WHEREAS, pursuant to the terms of the Order, the Partnerships have agreed to dissolve and commence liquidation of their remaining assets on or before July 18, 2002, the date that is thirty days following the first date on which the Order becomes final, binding and non-appealable (the "Effective Date"); and WHEREAS, the Settlement Stipulation and Order contemplate that upon dissolution, the General Partners shall (i) cancel each Partnership's Certificate of Limited Partnership; (ii) apply and distribute all cash and proceeds in accordance with the provisions set forth in their respective limited partnership agreements and further distributions noted below; (iii) after allocating reasonable estimates of cash amounts to be used for contingent or existing liabilities, liquidate each Partnership's assets; (iv) place all cash other than the cash reserves referred to in (ii) above and any assets that could not be sold for cash prior to dissolution in a liquidating trust for the benefit of the unitholders of each of the Partnerships (the "Unitholders") with a nationally recognized financial institution as its trustee (each, a "Liquidating Trust"); (v) distribute all of the net cash proceeds from the sale of assets of each Liquidating Trust and cash, less reserves for any contingent liabilities, to the beneficiaries of each Liquidating Trust no later than December 31, 2003; and (vi) undertake certain other transactions, all as more fully described in the Settlement Stipulation and the Order; and WHEREAS, in furtherance of the liquidation and dissolution of the Partnerships as described herein, the General Partners have negotiated the appointment of Wilmington Trust FSB as the trustee of each Liquidating Trust (the "Trustee"), each substantially pursuant to the terms of a Liquidating Trust Agreement, a form of which is attached hereto as Exhibit C; and ------- - WHEREAS, in furtherance of the liquidation and dissolution of the Partnerships as described herein, the General Partners have adopted and approved this Plan; NOW THEREFORE, the General Partners authorize the following on behalf of the Partnerships: 1. Each of the Partnerships shall enter into, execute and deliver a Liquidating Trust Agreement with the Trustee. 2. Upon dissolution, pursuant to Section 10 of Chapter 109 of the Massachusetts General Laws, the General Partner of each Partnership shall cause it to file with the Secretary of State of The Commonwealth of Massachusetts, a Certificate of Cancellation, a form of which is attached hereto as Exhibit D and ------- - cancels the Partnership's Limited Partnership Certificate. 3. The Partnerships shall, after having set aside cash funds that the General Partners have determined sufficient for the satisfaction of any contingent or existing obligations or the payment of any fees or expenses with respect to any Partnership (the "Cash Reserves") and reserving cash to be transferred to each Liquidating Trust for estimated fees, expenses and contingent liabilities of each Liquidating Trust (the "Retained Assets"), in accordance with each Partnership's limited partnership agreement and the terms of the Settlement Stipulation, distribute all available cash to each respective Partnership's Unitholders. 4. American Income Partners V-A Limited Partnership, American Income Partners V-B Limited Partnership, American Income Fund I-C, a Massachusetts limited partnership, American Income Fund I-D, a Massachusetts limited partnership and American Income Fund I-E, a Massachusetts limited partnership shall each transfer to the Trustee on behalf of such Partnership's respective Liquidating Trust, all its right, title and interest: (i) as indirect payee in and to promissory notes issued indirectly by Semele Group Inc. on April 30, 1997 (the "Semele Notes"), if the Semele Notes have not previously been sold or repaid, in accordance with the terms of the Order, on or prior to the Effective Date and (ii) as indirect stockholder in and to 177,730 shares of common stock of Semele Group, Inc. (the "Semele Stock"), each of which were issued as partial consideration paid to such Partnerships for the purchase of three vessels formerly owned by subsidiaries of such Partnerships. 5. Each of the Partnerships shall assign all of its right, title and interest (i) as lender in and to promissory notes issued by Echelon Residential Holdings LLC as of March 8, 2000, as amended, together with the right to receive any accrued but unpaid interest relating thereto (the "Echelon Notes") and (ii) in and to that certain Pledge Agreement (Partnerships) dated as of March 8, 2000 relating to the Echelon Notes (the "Pledge Agreement"). The Partnerships acknowledge that from and after the Effective Date, the Trustee shall be the Agent (as such term is defined in the Pledge Agreement). 6. Without limiting the foregoing, the Partnerships shall enter into, execute and deliver to the Trustee a Bill of Sale, Assignment, Acceptance and Assumption Agreement, a form of which is attached hereto as Exhibit E, which, ------- -
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