EXHIBIT 10.1
PLM INTERNATIONAL, INC.
NOTE AGREEMENT
Dated as of June 30, 1994
Re: $35,000,000 9.78% Series A Senior Secured Notes
Due June 30, 2001
$10,000,000 Floating Rate Series B Senior Secured Notes
Due June 30, 2001
TABLE OF CONTENTS
Section Heading Page
1. DESCRIPTION OF NOTES AND DEFINITIONS. . . . . . . . . . . 1
1.1 Description of Notes . . . . . . . . . . . . . . . . 1
1.2 Terms; Security. . . . . . . . . . . . . . . . . . . 2
1.3 Definitions. . . . . . . . . . . . . . . . . . . . . 2
2. ISSUANCE AND DELIVERY OF NOTES. . . . . . . . . . . . . . 23
2.1 Registration of Notes. . . . . . . . . . . . . . . . 23
2.2 Exchange of Notes. . . . . . . . . . . . . . . . . . 23
2.3 Transfer of Notes. . . . . . . . . . . . . . . . . . 23
2.4 General Rules. . . . . . . . . . . . . . . . . . . . 24
2.5 Valid Obligations. . . . . . . . . . . . . . . . . . 24
2.6 Replacement of Notes . . . . . . . . . . . . . . . . 24
3. PAYMENT OF NOTES, COLLATERAL, TRUST ACCOUNT, CASH
COLLATERAL ACCOUNTS AND RELEASE OF COLLATERAL . . . . . . 25
3.1 Direct Payment . . . . . . . . . . . . . . . . . . . 25
3.2 Issuance Taxes . . . . . . . . . . . . . . . . . . . 25
3.3 Required Prepayments . . . . . . . . . . . . . . . . 25
3.4 Optional Prepayments . . . . . . . . . . . . . . . . 25
3.5 Notice of Prepayments. . . . . . . . . . . . . . . . 26
3.6 Allocation of Prepayments. . . . . . . . . . . . . . 26
3.7 Payments by Collateral Agent . . . . . . . . . . . . 26
3.8 Collateral . . . . . . . . . . . . . . . . . . . . . 27
3.9 Trust Account and Cash Collateral Account. . . . . . 27
3.10 Release of Collateral. . . . . . . . . . . . . . . . 28
4. EVIDENCE OF ACTS OF NOTE HOLDERS. . . . . . . . . . . . . 29
4.1 Execution by Note Holders or Agents. . . . . . . . . 29
4.2 Future Holders Bound . . . . . . . . . . . . . . . . 29
5. DEFAULTS - REMEDIES . . . . . . . . . . . . . . . . . . . 29
5.1 Events of Default. . . . . . . . . . . . . . . . . . 29
5.2 Notice of Claimed Default. . . . . . . . . . . . . . 32
5.3 Acceleration of Maturities . . . . . . . . . . . . . 32
5.4 Rescission of Acceleration . . . . . . . . . . . . . 33
5.5 Default Remedies . . . . . . . . . . . . . . . . . . 34
5.6 Other Enforcement Rights . . . . . . . . . . . . . . 35
5.7 Effect of Sale, etc. . . . . . . . . . . . . . . . . 36
5.8 Delay or Omission; No Waiver . . . . . . . . . . . . 36
5.9 Restoration of Rights and Remedies . . . . . . . . . 36
5.10 Application of Sale Proceeds . . . . . . . . . . . . 37
5.11 Cumulative Remedies. . . . . . . . . . . . . . . . . 37
5.12 Limitations on Suits . . . . . . . . . . . . . . . . 38
5.13 Suits for Principal and Interest . . . . . . . . . . 38
5.14 Undertakings . . . . . . . . . . . . . . . . . . . . 38
5.15 Waiver by the Company. . . . . . . . . . . . . . . . 39
6. COMPANY COVENANTS . . . . . . . . . . . . . . . . . . . . 39
6.1 Company Existence, Etc . . . . . . . . . . . . . . . 39
6.2 Insurance. . . . . . . . . . . . . . . . . . . . . . 39
6.3 Taxes, Claims for Labor and Materials, Compliance
with Laws. . . . . . . . . . . . . . . . . . . . . . 40
6.4 Maintenance, Etc.. . . . . . . . . . . . . . . . . . 40
6.5 Agreement to Deliver Security Documents. . . . . . . 41
6.6 Payment of Notes and Maintenance of Office . . . . . 43
6.7 Nature of Business; Diversification of Assets. . . . 43
6.8 Use of Proceeds. . . . . . . . . . . . . . . . . . . 44
6.9 Deposit of Payments Under Approved Subordinated
Debt . . . . . . . . . . . . . . . . . . . . . . . . 44
6.10 Sale of Equipment. . . . . . . . . . . . . . . . . . 44
6.11 Minimum Collateral Coverage Ratio. . . . . . . . . . 44
6.12 Maximum Note Balance to Net Worth Ratio. . . . . . . 44
6.13 Minimum Consolidated Net Worth . . . . . . . . . . . 44
6.14 Minimum Consolidated Interest Coverage Ratio . . . . 44
6.15 Maximum Funded Debt Maintenance Ratio. . . . . . . . 44
6.16 Restricted Payments. . . . . . . . . . . . . . . . . 45
6.17 Limitation on Liens. . . . . . . . . . . . . . . . . 45
6.18 Mergers, Consolidations, Etc.. . . . . . . . . . . . 46
6.19 Transactions with Affiliates . . . . . . . . . . . . 47
6.20 Repurchase of Notes. . . . . . . . . . . . . . . . . 47
6.21 Investments. . . . . . . . . . . . . . . . . . . . . 47
6.22 Notice of Default and Event of Default . . . . . . . 49
6.23 Reports and Rights of Inspection . . . . . . . . . . 49
6.24 Amendment of Note Documents. . . . . . . . . . . . . 54
6.25 Subordinated Debt. . . . . . . . . . . . . . . . . . 54
6.26 Distributions by Subsidiaries. . . . . . . . . . . . 55
6.27 Further Assurances . . . . . . . . . . . . . . . . . 55
6.28 Independence of Covenants. . . . . . . . . . . . . . 55
7. COLLATERAL AGENT. . . . . . . . . . . . . . . . . . . . . 55
8. AMENDMENTS, WAIVERS AND CONSENTS. . . . . . . . . . . . . 56
8.1 Consent Required . . . . . . . . . . . . . . . . . . 56
8.2 Effect of Amendment or Waiver. . . . . . . . . . . . 56
9. MISCELLANEOUS; EXPENSES, TAXES AND INDEMNIFICATION. . . . 57
9.1 Successors and Assigns . . . . . . . . . . . . . . . 57
9.2 Partial Invalidity . . . . . . . . . . . . . . . . . 57
9.3 Communications . . . . . . . . . . . . . . . . . . . 57
9.4 Governing Law. . . . . . . . . . . . . . . . . . . . 58
9.5 Maximum Interest Payable . . . . . . . . . . . . . . 58
9.6 Counterparts . . . . . . . . . . . . . . . . . . . . 58
9.7 Headings etc.. . . . . . . . . . . . . . . . . . . . 58
9.8 Amendments . . . . . . . . . . . . . . . . . . . . . 59
9.9 Benefits of Agreement Restricted to Parties and
Note Holders . . . . . . . . . . . . . . . . . . . . 59
9.10 Waiver of Notice . . . . . . . . . . . . . . . . . . 59
9.11 Holidays . . . . . . . . . . . . . . . . . . . . . . 59
9.12 Accounting Principles. . . . . . . . . . . . . . . . 59
9.13 Directly or Indirectly . . . . . . . . . . . . . . . 59
9.14 Exhibits . . . . . . . . . . . . . . . . . . . . . . 59
9.15 Satisfaction and Discharge of Agreement. . . . . . . 59
9.16 Conflicts with Security Documents. . . . . . . . . . 60
9.17 Expenses of Transaction. . . . . . . . . . . . . . . 60
9.18 Taxes, Etc.. . . . . . . . . . . . . . . . . . . . . 61
9.19 Indemnification. . . . . . . . . . . . . . . . . . . 61
9.20 Entire Agreement . . . . . . . . . . . . . . . . . . 62
Attachments to Note Agreement:
Schedules
Schedule I - Names and Addresses of Purchasers
Schedule II - Amortization Table
Schedule III - Independent Appraiser
Schedule 6.21 -Investments existing on Closing Date
Exhibits
Exhibit A-1 - Form of Series A Note
Exhibit A-2 - Form of Series B Note
Exhibit B - First Union Cash Collateral Account Agreement
Exhibit C - Collateral Agency Agreement
Exhibit D - Compliance Certificate
Exhibit E - Note Purchase Agreements
Exhibit F - Security Agreement (Trailers)
Exhibit G - Security Agreement (Master)
Exhibit H - Security Agreement (Trust Account)
Exhibit I - Trust Agreement
Exhibit J - Form of Stock Pledge Agreement
Exhibit K - Form of Certificate for release of funds
Exhibit L - Form of Certificate for release of collateral
Exhibit M - Certificate of Title Agency Agreement
Exhibit N - Bankers Trust Cash Collateral Account Agreement
PAGE
PLM INTERNATIONAL, INC.
NOTE AGREEMENT
Re: $35,000,000 9.78% Series A Senior Secured Notes
Due June 30, 2001
$10,000,000 Floating Rate Series B Senior Secured Notes
Due June 30, 2001
Dated as of
June 30, 1994
To the purchasers named in
Schedule I attached hereto
Ladies and Gentlemen:
The undersigned, PLM International, Inc., a Delaware
corporation (the "Company"), agrees with each of the purchasers
named in Schedule I (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND DEFINITIONS.
1.1 Description of Notes. The Company has authorized
the issuance and sale, pursuant to the Note Purchase Agreements
(the "Note Purchase Agreements") of even date herewith between each
of the Purchasers and the Company as set forth therein, of (i)
$35,000,000 aggregate principal amount of its 9.78% Series A Senior
Secured Notes to be dated the date of issue, to bear interest from
such date at the rate of 9.78% per annum, subject to increase as
set forth in the immediately following sentence (individually, a
"Series A Note" and collectively the "Series A Notes," including
any notes issued in substitution or replacement of any thereof),
and (ii) $10,000,000 aggregate principal amount of its Floating
Rate Series B Senior Secured Notes to be dated the date of issue,
to bear interest from such date at a floating rate per annum equal
to the Applicable Libor Rate plus 275 basis points, subject to
increase as set forth in the immediately following sentence
(individually, a "Series B Note" and collectively the "Series B
Notes," including any notes issued in substitution or replacement
of any thereof) (the Series A Notes and the Series B Notes herein
being called collectively the "Notes," or individually a "Note").
If at any time the Notes are rated NAIC 3 or lower by the NAIC,
then effective upon the date of such downgrading and continuing
until the Notes are rated higher than NAIC 3, such rate will be
automatically increased by 100 basis points. Interest on the Notes
will be payable quarterly on September 30, December 31, March 31,
and June 30 in each year (commencing September 30, 1994) and
principal of the Notes will be payable quarterly on September 30,
December 31, March 31, and June 30 in each year (commencing June
30, 1997), and at maturity. The Notes will bear interest on
overdue payments at the rate specified therein and will be
substantially in the forms attached hereto as Exhibit A-1 and A-2
for Series A Notes, and Series B Notes, respectively. Interest on
the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
1.2 Terms; Security. The Notes are subject to the terms
of, and secured pursuant to, this Agreement.
1.3 Definitions. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below
or provided for in the section or other part of this Agreement
referred to following such term (such definitions to be equally
applicable to both the singular and plural forms of the terms
defined):
"Affiliate" means, with respect to any Person, (i)
each other Person that, directly or indirectly, through
one or more intermediaries, owns or controls, whether
beneficially or as a trustee, guardian or other
fiduciary, ten percent (10%) or more of the Stock having
ordinary voting power in the election of directors of
such Person, (ii) each Person that controls, is
controlled by or is under common control with such Person
or any Affiliate of such Person and (iii) each of such
Person's officers, directors, joint venturers and
partners; provided, however that (A) except with respect
to Section 6.19, this definition of "Affiliate" shall be
deemed to exclude Transcisco and the Growth Funds and (B)
in no case shall the Collateral Agent or any Note holder
be deemed to be an Affiliate of the Company for purposes
of this Agreement. For the purpose of this definition,
"control" of a Person shall mean the possession, directly
or indirectly, of the power to direct or cause the
direction of its management or policies, whether through
the ownership of voting securities, by contract or
otherwise.
"Agreement" shall mean this Note Agreement, as it
may from time to time be supplemented or amended in
accordance with the provisions hereof.
"Applicable Libor Rate" shall mean commencing on
July 1, 1994 and on each October 1, January 1, April 1,
and July 1 thereafter until the Notes are paid in full,
the Libor Rate for such day (provided, if any such day is
not a day on which The Wall Street Journal is published,
then the immediately preceding day on which The Wall
Street Journal is published shall be used (as to each,
the "Quarterly Determination Date")). "Libor Rate" shall
mean as of any Quarterly Determination Date the rate
quoted in the "Money Rates" section of the Wall Street
Journal on such date as the three-month London Interbank
Offered Rate or, if the Wall Street Journal ceases to
publish the three-month London Interbank Offered Rate,
the rate quoted on the Reuters Screen on such date as the
three-month London Interbank Offered Rate. The Libor
Rate determined on each Quarterly Determination Date
shall apply from such date through the date immediately
preceding the next Quarterly Determination Date.
"Appraisal Report" shall mean the most recent
Company Appraisal report or Independent Appraisal report
required under this Agreement.
"Appraised Value" shall mean, with respect to an
item of Equipment, the expected proceeds realizable upon
a "non-distressed" arm's-length sale of the Equipment,
less commissions, fees and other costs and expenses
normally incurred (other than by the acquiror) in
connection with the sale of such Equipment, assuming that
such Equipment is sold within 180 days. If any item of
Equipment is subject to a Lease wherein the Lessee is
granted the option to purchase such Equipment for a
predetermined amount (as compared to a purchase price
being equal to the fair market value of such item of
Equipment as of the expiration of the lease), the
Appraised Value of such item of Equipment shall not be
greater than such predetermined amount. In no event
shall the value of the rental payments under any lease of
Equipment be included in determining the Appraised Value
of such item of Equipment.
"Approved Investment Entity" shall mean a bank or
trust company organized under the laws of the United
States or any state thereof, having capital, surplus and
undivided profits aggregating at least $200,000,000, and
having a Thomson Bank Watch rating of B or better or
which has (or which is a subsidiary of a holding company
which has) publicly traded debt securities rated, at the
time of issuance of such time deposits or certificates of
deposits, A or better by Standard & Poor's Ratings Group
or A2 or better by Moody's Investors Services, Inc.
"Approved Subordinated Debt" means at any time all
Debt of the Company subordinate in right of payment to
the Obligations of the Company to the Note holders and
the Collateral Agent, the terms of which Debt shall have
been approved in writing by the Required Noteholders and
shall include, without limitation, the Debt of the
Company evidenced by (i) the promissory note dated
February 1, 1988, as amended through the date hereof, in
the original principal amount of $5,000,000 executed by
the Company in favor of Transcisco, (ii) the promissory
note dated February 1, 1988, as amended through the date
hereof, in the original principal amount of $3,000,000,
executed by the Company in favor of Drexel Burnham
Lambert Incorporated, and (iii) the Principal Mutual Note
Agreement, or with respect to the Debt described in
clause (i) or (ii) above, any substitute or refinancing
thereof, in a principal amount not greater than such
Debt, that (A) is subordinated to the rights of the Note
holders on terms acceptable to counsel for the Required
Noteholders and (B) does not mature before May 20, 1995.
"Bank of America" shall mean Bank of America
National Trust and Savings Association.
"Bank of America Credit Facility" shall mean that
certain Third Amended and Restated Loan Agreement dated
as of October 28, 1992, by and among Bank of America
National Trust and Savings Association, as agent, and the
Note holders named therein, as amended.
"Bankers Trust" shall mean Bankers Trust Company.
"Bankers Trust Cash Collateral Account" means the deposit
account to be established by the Company and maintained by the
Company at Bankers Trust and administered by the Collateral
Agent in accordance with the Bankers Trust Cash Collateral
Account Agreement.
"Bankers Trust Cash Collateral Account Agreement" means
the Cash Collateral Account Agreement (Bankers Trust) of even
date herewith between the Company and the Collateral Agent, in
substantially the form of Exhibit N.
"Business Day" shall mean any day other than (i) a
Saturday or Sunday or (ii) a day on which banks in the
Cities of San Francisco, New York or Texas are authorized
or required to be closed.
"Capitalized Cost" shall mean, with respect to any
item or items of Equipment, the aggregate capitalized
cost for such Equipment, net of any acquisition or other
fees paid or payable by the Company to FSI or any
Affiliate of the Company or FSI.
"Capitalized Lease" shall mean any lease the
obligation for Rentals with respect to which is required
to be capitalized on a balance sheet of the Lessee in
accordance with generally accepted accounting principles.
"Capitalized Rentals" of any Person shall mean as of
the date of any determination the amount at which the
aggregate Rentals due and to become due under all
Capitalized Leases under which such Person is a Lessee
would be reflected as a liability on a consolidated
balance sheet of such Person in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof, (ii) time deposits and
certificates of deposit of any Approved Investment Entity
with maturities of not more than six months from the date
of acquisition by such Person, (iii) commercial paper
issued by any Person incorporated in the United Sates of
America, which commercial paper is accorded the highest
rating by Standard & Poor's Ratings Group, Moody's
Investors Service, Inc. or other nationally recognized
credit rating agency of similar standing, and in each
case maturing not more than six months after the date of
acquisition by such Person and (iv) investments in money
market funds having a rating from Standard and Poors
Ratings Group or Moody's Investors Service, Inc. in the
highest investment category granted thereby (including
funds for which the Collateral Agent or any of its
affiliates is investment manager or adviser).
"Cash Flow" shall be determined from January 1 to
December 31 for each calendar year and shall mean (i) the
sum of operating income, depreciation and amortization
minus (ii) capital expenditures (excluding purchases of
equipment for lease or resale), tax payments, net
interest expenses and principal payments under all
Indebtedness for Borrowed Money (other than (A) the
repayment of the Bank of America Credit Facility (B)
payment of principal under the ESOP Term Loan, and (C)
the repayment of mandatory prepayments of Approved
Subordinated Debt due in 1995 in an aggregate amount not
to exceed $8,000,000) during such calendar year, in each
case determined for the Company and its Subsidiaries on
a consolidated basis in accordance with GAAP.
"Casualty Loss" means any of the following events
with respect to any item of Equipment: (i) the actual
total loss or constructive total loss of such item of
Equipment, (ii) such item of Equipment shall become lost,
stolen, destroyed, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, (iii)
the seizure or deprivation of use of such item of
Equipment for a period and under circumstances resulting
in a claim for loss under applicable insurance policies
for a period exceeding 180 days or the condemnation or
confiscation of such item of Equipment or (iv) such item
of equipment shall be deemed under its Lease to have
suffered a casualty loss as to the entire item of
Equipment.
"Certificate of Title Agency Agreement" means the
Certificate of Title Agency Agreement among First
Security Bank of Utah and the Purchasers of even date
herewith in substantially the form of Exhibit M.
"Certificate of Title Agent" means First Security
Bank of Utah, as Certificate of Title Agent under the
Certificate of Title Agency Agreement.
"Charges" means all federal, state, county, city,
municipal, local, foreign or other governmental taxes,
levies, assessments, charges or claims, in each case then
due and payable, upon or relating to (i) the Collateral,
(ii) the Notes, (iii) the Company's or any of its
Restricted Subsidiaries' employees, payroll, income or
gross receipts, (iv) the Company's or any of its
Restricted Subsidiaries' ownership or use of any of its
respective Property, or (v) any other aspect of the
Company's or any of its Restricted Subsidiaries'
business.
"Closing" means the consummation of the purchase of
the Notes under the Note Purchase Agreements.
"Closing Date" means the date of the Closing.
"Code" shall mean the Internal Revenue Code of 1986,
as amended, any successor statute, and the rules and
regulations issued thereunder as from time to time in
effect.
"Collateral" shall mean any and all Property in
which the Collateral Agent has been granted a security
interest or other interest to secure the Obligations
pursuant to the Security Documents.
"Collateral Agent" shall mean Bankers Trust and any
successor thereto as Collateral Agent under the
Collateral Agency Agreement.
"Collateral Agency Agreement" shall mean that
certain Collateral Agency Agreement of even date herewith
among Bankers Trust, as collateral agent, and the holders
of the Notes in substantially the form of Exhibit C.
"Collateral Coverage Ratio" shall mean the ratio,
expressed as a percentage, of (i) the aggregate Appraised
Value of the Equipment constituting Collateral to (ii)
the aggregate principal amount of the then Outstanding
Notes, less the balance in the Bankers Trust Cash
Collateral Account; provided that only items of
Collateral that are items of Eligible Equipment in which
the Collateral Agent or the Certificate of Title Agent
(for the benefit of the holders of the Notes) has (A) a
first priority perfected lien securing the Obligations to
its reasonable satisfaction, (B) directly or indirectly,
title or ownership of such Eligible Equipment that is
functionally equivalent to granting the Collateral Agent
(for the benefit of the Note holders) or the Note holders
a first priority perfected lien in such Eligible
Equipment and that would have no actual or potential
adverse consequences to the Collateral Agent or the Note
holders, or (C) such other arrangement as is approved in
writing in advance by the Required Noteholders, shall be
included in Collateral for the purposes of this Ratio.
"Company" shall have the meaning set forth in the
first sentence.
"Company Appraisal" with respect to any item or
items of Equipment means any report showing Appraised
Value prepared by the Company.
"Company Appraised Value" with respect to any item
or items of Equipment means the Appraised Value
determined by the Company.
"Company ESOP Credit Agreement" means the ESOP
Installment Credit Agreement dated as of August 21, 1989,
between the Company and the ESOP, as amended pursuant to
Amendment No. 1 to ESOP Installment Credit Agreement
dated as of June 25, 1990, Amendment No. 2 to ESOP
Installment Credit Agreement dated as of July 26, 1991,
and Amendment No. 3 to ESOP Installment Credit Agreement
dated as of December 9, 1991.
"Compliance Certificate" means a certificate signed
by the Company's Chief Financial Officer or Corporate
Controller, substantially in the form set forth in
Exhibit D, with such changes therein as the Collateral
Agent may from time to time reasonably request for the
purpose of having such certificate disclose the matters
certified therein and the method of computation thereof.
"Consolidated Interest Coverage Ratio" means, on a
consolidated basis for the Company and its Subsidiaries,
as measured quarterly as of the last day of each fiscal
quarter of the Company for the preceding four fiscal
quarters, including the fiscal quarter in which such
measurement date occurs, the ratio, expressed as a
percentage, of (i) operating income plus depreciation and
amortization to (ii) net interest expense, as determined
and computed in accordance with GAAP.
"Consolidated Net Worth" means, on a consolidated
basis, as at any date of determination, the difference
between Consolidated Total Assets and Consolidated Total
Liabilities.
"Consolidated Total Assets" means, on a consolidated
basis, as at any date of determination, all assets of the
Company and its Subsidiaries, as determined and computed
in accordance with GAAP, excluding (i) Restricted Cash
and (ii) the investment by the Company or any Subsidiary
in any and all Joint Ventures nonconsolidated with the
Company and which have Indebtedness for Borrowed Money,
as determined and computed in accordance with GAAP
(except to the extent the exclusion of assets in clauses
(i) and (ii) above is inconsistent with GAAP).
"Consolidated Total Liabilities" means, on a
consolidated basis, as at any date of determination, all
(i) liabilities of (A) the Company, and (B) its
Subsidiaries, and (ii) all Indebtedness for Borrowed
Money of any and all Joint Ventures nonconsolidated with
the Company, except to the extent such liabilities are
Non-Recourse to the Company and its Subsidiaries, as
determined and computed in accordance with GAAP (except
to the extent the consolidation of the liabilities
described in clause (ii) above is inconsistent with
GAAP), excluding the outstanding principal amount under
the ESOP Term Loan.
"Debt," with respect to any Person shall mean,
without duplication:
(i) its liabilities for borrowed money;
(ii) liabilities secured by any Lien existing
on Property or assets owned by such Person
(regardless of whether such liabilities have been
assumed);
(iii) its capitalized lease obligations;
(iv) any other obligations (other than
deferred taxes and other noncurrent liabilities)
that are required by GAAP to be shown as
liabilities on its balance sheet; and
(v) all obligations of such Person
guaranteeing or in effect guaranteeing any debt,
dividend, distribution, or other obligation of any
other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without
limitation, obligations incurred through an
agreement, contingent or otherwise, by such Person
(A) to purchase such debt or obligation or any
property or assets constituting security therefor;
(B) to advance or supply funds to purchase or pay
such debt or obligation or to maintain working
capital or other balance sheet condition or any
income statement condition or otherwise to advance
or make available funds for the purchase or payment
of such debt or obligation; (C) to lease property
or to purchase securities or other property or
services primarily for the purpose of assuring the
owner of such debt or obligation of the ability of
the primary obligor to make payment of the debt or
obligation; or (D) otherwise to assure the owner of
such debt or obligation of the primary obligor
against loss in respect thereof (any of the
foregoing in this paragraph (v), a "Guaranty").
"Default" shall mean any event or condition, the
occurrence of which would, with the lapse of time or the
giving of notice, or both, constitute an Event of
Default.
"Disposition" or to "Dispose" means the sale, lease,
transfer, assignment, condemnation, or other disposition
(including pursuant to any Casualty Loss) of Equipment,
other than a Lease incurred in the ordinary course of
business of the Company or its Subsidiaries.
"Disposition Report" shall mean a report certified
by a Responsible Officer of the Company which includes
for the applicable period with respect to each item of
Equipment constituting Collateral that was Disposed of
during such period (i) a description (including serial
number), (ii) the Net Proceeds from such Disposition if
required under Section 3.9, (iii) the date of deposit of
the Net Proceeds in the Bankers Trust Cash Collateral
Account, and (iv) a reconciliation of the most recent
Appraised Value with the Net Proceeds.
"Eligible Equipment" shall mean Equipment of the
same type managed by the Company on the date of this
Agreement (e.g., aircraft, aircraft engines and spare
parts, marine vessels, mobile offshore drilling units,
portable buildings, marine containers, storage
containers, trucks, trailers and railroad rolling stock
or such other type of equipment approved by the Required
Noteholders).
"Environmental Laws" means all Requirements of Law,
including, without limitation, all administrative orders,
directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Agency,
in each case relating to environmental, health, safety
and land use matters, including, without limitation, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal
Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the
California Hazardous Waste Control Law, the California
Solid Waste Management, Resource, Recovery and Recycling
Act, the California Water Code and the California Health
and Safety Code.
"Equipment" shall mean any and all items of
transportation-related tangible personal property
(including parts) (i) owned directly by the Company or
pursuant to clause (ii)(B) or (ii)(C) of the definition
of Collateral Coverage Ratio, or (ii) owned at the
Closing by PLM Rental or PLM Australia; in each case held
for sale, lease or rental to third parties.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, any successor statute,
and the rules and regulations issued thereunder as from
time to time in effect.
"ERISA Affiliate" means each trade or business,
including the Company, whether or not incorporated, which
together with the Company would be treated as a single
employer under Section 4001 of ERISA or subsections (b),
(c), (m) or (o) of Section 414 of the Code.
"ESOP" means the PLM International, Inc. Employee
Stock Ownership Plan adopted effective as of August 17,
1989, and the PLM International, Inc. Employee Stock
Ownership Plan Trust established pursuant to the PLM
International, Inc. Employee Stock Ownership Plan Trust
Agreement effective as of August 17, 1989, between the
Company and SSBTC, as trustee.
"ESOP Term Loan" means the term loan made to the
Company pursuant to the ESOP Term Loan Agreement for the
purpose of funding the Company ESOP loan.
"ESOP Term Loan Agreement" means the Second Amended
and Restated Loan Agreement dated as of December 9, 1991,
between the Company, Harris Trust and Savings Bank,
Credit Suisse and Sanwa Bank of California, as amended
pursuant to the Limited Waiver and Consent dated as of
August 14, 1992 (the ``Existing ESOP Term Loan
Agreement''), and any credit agreement between the
Company and the ESOP and related to the purchase of
Company shares of capital stock by the ESOP, which credit
agreement, when taken into account with the Existing ESOP
Term Loan Agreement, does not exceed the aggregate amount
principal under the Existing Term Loan Agreement.
"Event of Default" means any of the events set forth
in Section 5.1.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"First Security" means First Security Bank of Utah.
"First Union" means First Union National Bank of
North Carolina.
"First Union Cash Collateral Account" means the
deposit account to be established by the Company and
maintained by the Company at First Union and administered
by the Company and the Collateral Agent, for the benefit
of the holders of the Notes, pursuant to the First Union
Cash Collateral Account Agreement.
"First Union Cash Collateral Account Agreement"
shall mean the First Union Cash Collateral Account
Agreement of even date herewith among the Company and the
Collateral Agent and acknowledged by First Union in
substantially the form of Exhibit B.
"FDIC" means the Federal Deposit Insurance
Corporation and any successor thereto.
"FSI" means PLM Financial Services, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Company.
"Funded Debt" of any Person shall mean all
Indebtedness for Borrowed Money of such Person excluding
(i) Short-Term Warehouse Debt, (ii) Non-Recourse Debt of
up to $10,000,000 in Unrestricted Subsidiaries, (iii)
additional Non-Recourse Debt to finance commissions and
brokerage fees for a no-load partnership fund secured
only by a lien on the management and administrative fees
payable to the Company and its Subsidiaries by such
partnership and the partnership interests of the general
partner in such partnership, and (iv) the ESOP Term Loan
(but only to the extent secured by Restricted Cash).
"Funded Debt Maintenance Ratio" shall mean the
ratio, expressed as a percentage, of (i) Funded Debt to
(ii) the sum of Funded Debt plus shareholders' equity,
with shareholders equity determined for the Company and
its Subsidiaries on a consolidated basis in accordance
with GAAP, but excluding in its calculation (A) all
assets of the Company and its Subsidiaries consisting of
Restricted Cash and (B) all assets of the Company and its
Subsidiaries consisting of the investment by the Company
or any of its Subsidiaries in any and all Joint Ventures
nonconsolidated with the Company having Indebtedness for
Borrowed Money, (C) any Indebtedness for Borrowed Money
of the Growth Funds to the extent such Indebtedness is
Non-Recourse to the Company and its Subsidiaries, and (D)
liabilities of the Company consisting of the ESOP Term
Loan (but only to the extent secured by Restricted Cash),
and including in its calculation as liabilities of the
Company any Indebtedness for Borrowed Money of any and
all Joint Ventures nonconsolidated with the Company,
except to the extent such liabilities are Non-Recourse to
the Company and its Subsidiaries.
"GAAP" means generally accepted accounting
principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards
Board which are applicable to the circumstances of the
date of determination.
"Governmental Agency" means (i) any federal, state,
county, municipal or foreign government, or political
subdivision thereof, (ii) any governmental or quasi-
governmental agency, authority, board, bureau,
commission, department, instrumentality or public body,
(iii) any court or administrative tribunal, or (iv) with
respect to any Person, any arbitration tribunal or other
non-governmental authority to whose binding jurisdiction
that Person has consented.
"Growth Funds" means, collectively, PLM Equipment
Growth Fund, a California limited partnership, PLM
Equipment Growth Fund II, a California limited
partnership, PLM Equipment Growth Fund III, a California
limited partnership, PLM Equipment Growth Fund IV, a
California limited partnership, PLM Equipment Growth Fund
V, a California limited partnership, PLM Equipment Growth
Fund VI, a California limited partnership, and PLM
Equipment Growth & Income Fund VII and any other similar
California limited partnership hereafter formed for the
purpose of owning and holding for lease transportation-
related equipment, of which FSI shall be the general
partner.
"Guaranty" shall have the meaning set forth in
paragraph (v) of the definition of Debt.
"IMI" means PLM Investment Management, Inc., a
California corporation and a wholly-owned Subsidiary of
FSI.
"Indebtedness for Borrowed Money" of any Person
shall mean without duplication (i) all Debt of such
Person for borrowed money or which has been incurred by
such Person in connection with the acquisition of assets,
(ii) all Capitalized Rentals of such Person, (iii) all
Guaranties by such Person of Indebtedness for Borrowed
Money of others, and (iv) all obligations and liabilities
secured by a Security Lien (excluding Security Liens
arising by operation of law) on any asset owned by such
Person, irrespective of whether such obligation or
liability is assumed, to the extent of the lesser of such
obligation or liability or the fair market value of such
asset.
"Indemnified Matters" has the meaning set forth in
Section 9.19.
"Indemnitees" has the meaning set forth in Section
9.19.
"Independent Appraisal" with respect to any item or
items of Equipment shall mean any report showing
Appraised Value prepared by the Independent Appraiser;
provided that if a particular item or items of Equipment
have been purchased in the ordinary course of business
from third parties not affiliated with the Company within
the six-month period preceding such appraisal and such
Equipment has not suffered material damage or a Casualty
Loss since the date of purchase, then the purchase price
of such Equipment (as reflected on invoices or similar
documentation) shall be relied upon by the Independent
Appraiser as evidence of the fair market value of such
item of equipment.
"Independent Appraised Value" shall mean the
Appraised Value of any item or items of Equipment
determined by the Independent Appraiser.
"Independent Appraiser" shall mean any one or more
of the qualified independent appraisal firms listed on
Schedule III or any other qualified independent appraisal
firm approved by the Required Noteholders from time to
time.
"Independent Public Accountants" shall mean any of
(i) Arthur Andersen & Co., (ii) Deloitte & Touche, (iii)
Coopers & Lybrand, (iv) Ernst & Young, (v) KPMG Peat
Marwick and (vi) Price Waterhouse or (vii) any other
qualified independent accounting firm of national stature
approved by the Required Noteholders.
"Investment" means, when used in connection with any
Person, any investment by or of that Person, whether by
means of purchase or other acquisition of Stock or other
securities of any other Person or by means of loan or
advance (other than advances to employees for moving or
travel expenses, drawing accounts and similar
expenditures in the ordinary course of business), capital
contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other
Person, including any partnership and joint venture
interests of such Person in any other Person or in any
Participation Equipment. The amount of any Investment
shall be determined and computed in accordance with GAAP.
"Investment Company Act" means the Investment
Company Act of 1940, as amended (15 U.S.C. Sec. 80a-1 et
seq.), as the same may be in effect from time to time, or
any successor statute thereto.
"IRS" means the U.S. Department of Treasury,
Internal Revenue Service, and any successor thereto.
"Joint Venture" means a corporation, partnership,
joint venture or other similar legal arrangement (whether
created pursuant to contract or conducted through a
separate legal entity) now or hereafter formed by the
Company or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such
Person; provided, however, that "Joint Venture' shall not
include either any Growth Fund or similar syndicated
investment funds sponsored by the Company, the ESOP or
the trust created pursuant to the Trust Agreement dated
June 25, 1985 with respect to a Fairchild Metro III model
SA227-AC aircraft (in which the Company holds a 19.65%
beneficial interest).
"Lease" means a written lease by the Company, any
trustee under any trust that is the holder of legal or
record title for the benefit of the Company, IMI as agent
for the Company, or any of the Company's Subsidiaries, to
a Lessee of any item of Equipment constituting Collateral
and shall include all new Leases, Marine Container
Pooling Arrangements, Marine Vessel Pooling Arrangements,
charters of marine vessels and any other agreement
designated by the Collateral Agent in writing as a Lease.
"Lessee" means, with respect to each Lease, the
Lessee or charterer thereunder, including in the case of
each Marine Container Pooling Arrangement or Marine
Vessel Pooling Arrangement, the Person leasing marine
containers or marine vessels owned by the Company under
such pooling arrangement.
"Lien" shall mean any mortgage, pledge, priority,
security interest, encumbrance, contractual deposit
arrangement, lien (statutory or otherwise) or charge of
any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and filing of
or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction) or any other
type of preferential arrangement for the purpose, or
having the effect of, protecting a creditor against loss
or securing the payment or performance of an obligation.
"Make-Whole Amount" shall mean an amount calculated
by the Company and set forth in a certificate from the
Company and confirmed by the Required Noteholders in
writing (or if the Company fails to make such
calculation, as calculated by the Required Noteholders),
determined as of the date of any prepayment pursuant to
Section 3.4 or the date of any acceleration pursuant to
Section 5.3 in respect of each Note (or the portion
thereof) to be prepaid or each Note being accelerated.
The Make-Whole Amounts on each Series A Note shall be
equal to the greater of (i) 1% of the outstanding
principal amount prepaid or (ii) the excess of (A) the
present value of the principal amount prepaid and
interest that would have been due and owing on the amount
so prepaid but for such prepayment, discounted at a rate
equal to the current yield to maturity on actively traded
U.S. Treasury Securities with the maturity approximately
equal to the remaining average life of the Notes, plus 50
basis points, over (B) the principal amount so prepaid.
The remaining average life of the Notes used in the
preceding calculation shall be determined immediately
prior to the prepayment for which the Make-Whole Amounts
are being determined. The Make-Whole Amounts on each
Series B Note shall be equal to 1% of the outstanding
principal amount prepaid.
"Marine Container Pooling Arrangement" means any
written agreement, however denominated, pursuant to which
(i) marine containers owned by the Company are leased to
a Person who incorporates such containers into a pool of
marine containers that are subleased to others and (ii)
such Person agrees to pay to the Company, on a periodic
basis, a percentage of the aggregate net revenues
received in respect of any and all of the marine
containers comprising such pool.
"Marine Vessel Pooling Arrangement" means any
written agreement, however denominated, pursuant to which
(i) marine vessels owned by the Company or any Marine
Subsidiary are leased to a Person who incorporates such
marine vessels into a pool of marine vessels that are
subleased to others and (ii) such pool or Person agrees
to pay to the Company or such Marine Subsidiary, as the
case may be, on a periodic basis, a percentage of the
aggregate net revenues received in respect of any and all
of the marine vessels comprising such pool.
"Marine Subsidiary" means a wholly-owned Subsidiary
of the Company organized for the purpose of holding legal
or record title to one or more marine vessels.
"Material Adverse Effect" shall mean a material and
adverse effect on the properties, business, financial
condition or prospects of the Company or on its ability
to perform its obligations.
"MCC Ratio" shall have the meaning set forth in
Section 6.11.
"Multiemployer Plan" shall mean a plan described in
Section 3(37) or Section 4001(a)(3) of ERISA to which the
Company or any ERISA Affiliate is required to contribute
on behalf of any of its employees.
"NAIC" shall mean the National Association of
Insurance Commissioners.
"Negative Cash Flow" shall mean Cash Flow, if such
number is a negative number.
"Net Proceeds" means proceeds in cash and Cash
Equivalents in U.S. Dollars as and when received by the
Person making a Disposition, net of (i) the direct costs
relating to such Disposition excluding amounts payable to
the Company or any Subsidiary of the Company, (ii) sale,
use, or other transaction taxes paid or payable as a
result thereof, (iii) amounts required to be applied to
repay principal, interest, and prepayment premiums and
penalties on Debt secured by a purchase money Lien
permitted hereunder on the Equipment subject to the
Disposition, and (iv) federal and state income or
franchise taxes payable by such Person with respect to
any gain recognized as a result of such Disposition,
which taxes shall be deemed to equal the amount of such
gain multiplied by the combined effective federal and
applicable state alternative minimum tax rates (taking
into account the deductibility of state taxes against
federal income and using the actual weighted average
state tax rates in the case of a Person conducting a
multistate business and operating performance of the
Company for federal income tax purposes), as determined
by such Person's corporate controller or chief financial
officer and certified to the Collateral Agent and the
Required Noteholders in a certificate, in form
satisfactory to the Collateral Agent, executed by a
Responsible Officer of the Company at the time of each
deposit of Net Proceeds into the Cash Collateral Account.
Taxes described in clauses (ii) and (iv) shall reduce Net
Proceeds only to the extent the Person making a
Disposition is not reimbursed for such taxes by another
party to such Disposition. "Net Proceeds" shall also
include proceeds paid on account of any Casualty Loss;
and net of (A) all money actually applied to repair the
damaged Equipment or Equipment affected by seizure,
condemnation or taking, (B) all of the costs and expenses
reasonably incurred in connection with the collection of
such proceeds, award or other payments, (C) any amounts
retained by or paid to parties having superior rights to
such proceeds, awards or other payments, and (D) taxes
described in clauses (ii) and (iv) above to the extent
required to be paid in connection with such Casualty
Loss.
"New Leases" shall have the meaning set forth in Section
6.5.
"Non-Recourse" means Debt with respect to which the
Company or any Restricted Subsidiary of the Company has
or will have under any circumstances (except fraud in the
making), no personal liability or obligation and has
granted no Security Lien on its Property, which lack of
personal liability and obligation is evidenced by
documents acceptable to counsel to the Required
Noteholders.
"Note Balance to Net Worth Ratio" shall mean the
ratio, expressed as a percentage, of the aggregate
principal amount of the then Outstanding Notes to
Consolidated Net Worth.
"Note Documents" shall mean this Agreement, the Note
Purchase Agreements, the Notes, the Security Documents,
all documents (in the respective forms thereof as
executed) the forms of which are referenced in or
appended to the Note Purchase Agreements or this
Agreement as exhibits or schedules, and all other
documents or instruments executed and delivered in
connection with the Note Purchase Agreements or this
Agreement, except for the Collateral Agency Agreement and
the Certificate of Title Agency Agreement.
"Note Purchase Agreements" shall mean the Note
Purchase Agreements of even date herewith between the
Company and the Purchasers in substantially the form of
Exhibit E.
"Notes" shall have the meaning set forth in
Section 1.1.
"Obligations" shall mean the payment of all
indebtedness and performance of all obligations of the
Company now or hereafter existing under this Agreement,
the Notes and the other Note Documents, whether for
principal, interest, Make-Whole Amounts, fees, expenses
or otherwise.
"Old Leases" shall have the meaning set forth in Section
6.5.
"Outstanding" shall mean with respect to the Notes
at any time, all Notes which have been duly authorized,
issued and delivered (except Notes for which new Notes
have been issued pursuant to Section 2.2, Section 2.3 or
Section 2.6); provided that with respect to any approval
or consent required or permitted to be given by any one
or more of the holders of Notes under this Agreement or
any other Note Document, "Outstanding" Notes shall be
exclusive of any Notes then owned (beneficially or
otherwise) by the Company or any Affiliate or any Notes
which have been paid in full.
"Participation Equipment" means an item of
Equipment, owned by a Person unaffiliated with the
Company and on lease to another third party, in which the
Company acquires a right to share, directly or
indirectly, in a specified percentage of the residual
value thereof upon the lease, re-lease or sale of such
item of equipment after the original lease maturity date.
"PBGC" means the Pension Benefit Guaranty
Corporation and any successor thereto.
"Permitted Affiliate Insurance" means marine vessel
war risk insurance, marine vessel increased value
insurance and marine vessel hull and machinery insurance
issued by Transportation Equipment Indemnity Company,
Ltd., an insurance company organized under the laws of
the Commonwealth of Bermuda ("TEI"), if and only if, upon
the issuance of such insurance and at all times during
which such insurance remains outstanding, TEI retains no
more than 5% of the insurance liability and obtains
reinsurance for the remaining 95% of the insurance
liability with financially sound and reputable insurance
companies that are not Affiliates of the Company.
"Permitted Liens" shall have the meaning set forth
in Section 6.17.
"Person" shall mean an individual, general
partnership, limited partnership, corporation, limited
liability company, trust, unincorporated organization,
government, governmental agency or governmental
subdivision.
"Plan" means any plan (other than a Multiemployer
Plan) subject to Title IV of ERISA which (i) is currently
or hereafter sponsored, maintained or contributed to by
the Company or any ERISA Affiliate or (ii) was at any
time during the five preceding years sponsored,
maintained or contributed to by the Company or any of its
ERISA Affiliates.
"PLM Australia" means PLM Australia Air, a
California corporation and wholly-owned subsidiary of the
Company.
"PLM Rental" means PLM Rental, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company.
"PLM Rental Security Agreement" shall mean the
Security Agreement (Trailers) by PLM Rental in favor of
the Collateral Agent and the Certificate of Title Agent
of even date herewith in substantially the form of
Exhibit F.
"Positive Cash Flow" shall mean Cash Flow, if such
number is a positive number.
"Principal Mutual Note Agreement" means the Note
Agreement dated as of January 15, 1989, between the
Company and Principal Mutual Life Insurance Company, as
amended by Amendment No. 1 to Note Agreement dated as of
May 1989, Amendment No. 2 to Note Agreement dated as of
June 1, 1989, Amendment No. 3 to Note Agreement dated as
of August 6, 1990, Amendment No. 4 to Note Agreement
dated as of June 21, 1991, Amendment No. 5 to Note
Agreement dated as of December 16, 1991, Amendment No. 6
to Note Agreement dated as of October 30, 1992, and by
such other amendments thereto permitted by Section
6.25(b).
"Prohibited Transaction" means any transaction
described in Section 406 of ERISA which is not exempt by
reason of Section 408 of ERISA or the transitional rules
set forth in Section 414(c) of ERISA or any transaction
described in Section 4975(c) of the Code which is not
exempt by reason of Section 4975(c)(2) or Section 4975(d)
of the Code, or the transitional rules of Section 2003(c)
of ERISA.
"Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, and
whether tangible or intangible.
"Purchasers" shall have the meaning set forth in the
first sentence.
"Rating Agency" shall mean Duff & Phelps Credit
Rating Co.
"Rental Yard Trailers" means, collectively, any and
all Equipment constituting piggy-back trailers on lease
through the Kankakee, Beaverville, and Southern Railroad
and trailers designated by the Company as being
maintained at, or being transferred to, rental yards for
short-term rentals.
"Rentals" shall mean and include all fixed rents
(including as such all payments which the Lessee is
obligated to make to the lessor on termination of the
lease or surrender of the property) payable by the
Company or a Subsidiary of the Company, as Lessee or
subLessee under a lease of real or personal property, but
shall be exclusive of any amounts required to be paid by
the Company or such Subsidiary (whether or not designated
as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if
any, required to be paid by the Lessee regardless of
sales volume or gross revenues.
"Reportable Event" means any of the events set forth
in Section 4043(b) of ERISA or the regulations
thereunder, the withdrawal of the Company or any ERISA
Affiliate from a Plan during a plan year in which it was
a "substantial employer" as defined in section 4001(a)(2)
of ERISA, the filing of a notice of intent to terminate
a Plan or a Multiemployer Plan or the treatment of an
amendment to a Plan as a termination under section 4041
of ERISA, the institution of proceedings to terminate a
Plan or a Multiemployer Plan by the PBGC, any other event
or condition which might constitute grounds under Tile IV
of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan or Multiemployer Plan,
the partial or complete withdrawal of the Company or any
ERISA Affiliate from a Multiemployer Plan, an amendment
to a Plan necessitating the posting of security under
Section 401(a)(29) of the Code, or a failure by the
Company or an ERISA Affiliate to make a payment required
by Section 412(m) of the Code and Section 302(e) of ERISA
when due.
"Required Noteholders" shall mean the holder or
holders of at least 51% in aggregate principal amount of
the then Outstanding Notes.
"Requirements of Law" means, as to any Person, any
law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental
Agency, in each case applicable to or binding upon the
Person or any of its Property or to which the Person or
any of its Property is subject.
"Residual Interest" means, with respect to any
Person and expressed in terms of the amount so invested,
a purchased right to share, or the option to acquire the
right to share, directly or indirectly, in a specified
percentage of the Residual Value (which percentage shall
reflect the excess of the Residual Value above the Strike
Price) of any item of Participation Equipment.
"Residual Value" means the net proceeds (whether in
the form of cash or the fair market liquidation value of
other consideration) realized upon the lease, re-lease or
sale of any item of Participation Equipment after the
original lease maturity date.
"Responsible Officer" shall mean with respect to any
corporation or company, the President, Executive Vice
President, Senior Vice President or any Vice President;
and with respect to Bankers Trust, as Collateral Agent,
any officer within the Corporate Trust and Agency Group
(or any successor group thereto) of the Collateral Agent
including any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer of
the Collateral Agent customarily performing functions
similar to those performed by any of the above designated
officers and, with respect to a particular matter, any
other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the
particular subject; and with respect to any Person which
is a corporation or national or state banking association
(other than Bankers Trust, as Collateral Agent), any Vice
President, corporate trust officer or other officer, in
each case employed by such entity.
"Restricted Cash" means cash or Cash Equivalents
maintained in a segregated cash collateral account over
which the Company has no dominion or control and which is
solely for the repayment of Indebtedness for Borrowed
Money, including the ESOP Term Loan.
"Restricted Payments" shall have the meaning set
forth in Section 6.16.
"Restricted Subsidiaries" shall mean all
subsidiaries of the Company except the Unrestricted
Subsidiaries.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Security Agreement" shall mean the Security
Agreement (Master) by the Company in favor of the
Collateral Agent and the Certificate of Title Agent of
even date herewith in substantially the form of Exhibit
G.
"Security Agreement (Trust Account)" shall mean the
Security Agreement (Trust Account) by the Company in
favor of the Collateral Agent of even date herewith in
substantially the form of Exhibit H.
"Security Documents" shall mean (i) the Security
Agreement, the Bankers Trust Cash Collateral Account
Agreement, the First Union Cash Collateral Account
Agreement, the Trust Agreement, and the Security
Agreement (Trust Account), (ii) an Aircraft Chattel
Mortgage (U.S.) covering U.S.-registered aircraft,
executed by First Security, as owner trustee, in favor of
the Collateral Agent, for the benefit of the Note
holders, (iii) a Mortgage covering United Kingdom-
registered aircraft, Instruments by Way of Security
(Chattel Mortgages and Security Agreements) covering New
Zealand aircraft, and a Deed of Covenants and a Statutory
Mortgage covering a Bahamian marine vessel, in each case
executed by the Company in favor of the Collateral Agent
for the benefit of the holders of the Notes, (iv) an
Aircraft Mortgage covering Australia-registered aircraft
executed by PLM Australia, in favor of the Collateral
Agent for the benefit of the holders of the Notes, (v)
the PLM Rental Security Agreement, and (vi) all other
security agreements, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation
statements, extension agreements and other agreements or
instruments now, heretofore, or hereafter delivered by
the Company or any Subsidiary to the Collateral Agent in
connection with this Agreement or any transaction
contemplated hereby to secure or guarantee the payment of
any part of the Notes or the performance of the Company's
or any of its Subsidiaries' other obligations under the
Note Documents.
"Security Lien" shall mean with respect to any
Property or assets, any right or interest therein of a
creditor to secure Debt owed to it or any other
arrangement with such creditor (i) which provides for the
payment of such Debt out of such Property or assets or
(ii) which allows it to have such Debt satisfied out of
such Property or assets, in either case prior to the
general creditors of any owner thereof, including without
limitation any lien, mortgage, deed of trust, assignment
of production, security interest, pledge, deposit,
production payment, rights of a vendor under any title
retention or conditional sale agreement or lease
substantially equivalent thereto, or any other charge or
encumbrance for security purposes, whether arising by law
or agreement or otherwise, but excluding any right of
offset which arises in the ordinary course of business.
"Series A Notes" shall have the meaning set forth in
Section 1.1.
"Series B Notes" shall have the meaning set forth in
Section 1.1.
"Short-Term Warehouse Debt" shall mean the
Indebtedness for Borrowed Money under the Warehousing
Credit Agreement dated June 30, 1993 among TEC Acquisub,
the named Lenders thereunder and First Union, as agent,
(the ``Existing Short-Term Warehouse Debt'') and any
amendments thereto or refinancings thereof up to
$30,000,000 for all such Debt, in the aggregate, which
amendments or refinancings (i) shall be substantially
similar to the terms of the Existing Short-Term Warehouse
Debt and (ii) shall not contain any terms more onerous to
the Company, the Collateral Agent, or the Note holders
than under the Existing Short-Term Warehouse Debt.
"SSBTC" means State Street Bank and Trust Company,
not in its individual capacity but solely in its capacity
as trustee for the ESOP.
"Stock" means all shares, options, warrants,
interests, participations or other equivalents
(regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including
common stock, preferred stock, or any other "equity
security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Exchange
Act).
"Strike Price" means the amount in excess of which
a Person will participate in the Residual Value of any
item of Participation Equipment.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership (other than the
Growth Funds) or other business entity (i) of which an
aggregate of more than fifty percent (50%) of the
outstanding Stock or other voting interest having
ordinary voting power to elect a majority of the
directors, managers or trustees of such Person
(irrespective of whether, at the time, Stock or other
voting interest of any other class or classes of such
Person shall have or might have voting power by reason of
the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by
such Person or one or more Subsidiaries of such Person or
(ii) that is otherwise consolidated with the Company in
accordance with GAAP.
"Substitution Report" shall mean a report certified
by a Responsible Officer of the Company which includes
for the applicable period with respect to each item of
Equipment acquired by the Company and added to the
Collateral during such period (i) a description
(including serial number), (ii) if the Equipment being
added to the Collateral is an individual item having a
fair market value less than $100,000 or is one or more
items collectively having a fair market value of less
than $1,000,000, the Company Appraised Value, and (iii)
if the Equipment being added to the Collateral is an
individual item having a fair market value of $100,000 or
greater or is one or more items collectively having a
fair market value of $1,000,000 or greater, the
Independent Appraised Value of such item.
"TEC" shall mean TEC Acquisub, Inc., a wholly-owned
Subsidiary of the Company.
"Transcisco" means Transcisco Industries, Inc., a
Delaware corporation, formerly known as "PLM Companies,
Inc."
"Trust Account" shall be a deposit account
maintained at First Union that is subject to the Trust
Agreement.
"Trust Agreement" shall mean the Trust Agreement
among First Union, the Company and the Purchasers, among
others, of even date herewith in substantially the form
of Exhibit I.
"Unrestricted Subsidiary" shall mean any Subsidiary
formed or acquired by the Company after the date hereof
and designated as such by the Company in writing to the
Collateral Agent and the holders of the then Outstanding
Notes and all the capital stock of which has been pledged
to the Collateral Agent free and clear of all Liens
except applicable securities laws, pursuant to a Stock
Pledge Agreement in substantially the form of Exhibit J.
"Voting Stock" shall mean securities of any class or
classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar
functions).
SECTION 2. ISSUANCE AND DELIVERY OF NOTES.
2.1 Registration of Notes. All Notes purchased under
the Note Purchase Agreements shall be registered Notes. The
Company shall cause to be kept at its office or agency, maintained
pursuant to Section 6.6, a register for the registration and
transfer of Notes. The name and address of each holder of record
of one or more Notes, each registration of transfer thereof and the
name and address of each transferee of one or more Notes shall be
registered in the register. The Person in whose name any Note
shall be registered shall be deemed and treated as the owner and
holder thereof for all purposes of this Agreement, and the Company
shall not be affected by any notice or knowledge to the contrary.
The Company shall furnish to the Collateral Agent within 60 days
after the end of each calendar year a correct and complete list of
all holders of Notes and a description of the interests so held.
Upon the request from time to time of any holder of an Outstanding
Note or the Collateral Agent, the Company shall promptly furnish to
such requesting party a correct and complete list of all holders of
the then Outstanding Notes and a description of the interests so
held.
2.2 Exchange of Notes. Upon surrender of any Note at
the office or agency of the Company maintained pursuant to
Section 6.6, the Company, at the request of the holder thereof,
will execute and deliver, at the Company's expense (except as
provided below), one or more new Notes payable to such holder in
exchange therefor, for a like aggregate principal amount in
denominations of not less than $3,000,000 in original principal
amount.
2.3 Transfer of Notes. Any Outstanding Note may be
transferred at the office or agency of the Company maintained
pursuant to Section 6.6, by surrendering such Note for
cancellation, together with a written notice specifying the
denomination or denominations of the new Notes (which shall not be
less than $3,000,000 in original principal amount) and the name and
address of the Person in whose name such Note or Notes are to be
registered; provided that the holders of the Notes shall not have
the right to transfer any of the Notes to Bank of America without
the consent of the Company. Such notice shall be accompanied by a
written instrument of transfer in a form satisfactory to the
Company (which must specify the taxpayer identification number of
the transferee), duly executed by the holder of such Note or by
such holder's attorney duly authorized in writing, and the Company
may require evidence satisfactory to it as to the compliance of any
such transfer with the Securities Act, and all other Requirements
of Law. Thereupon the Company, at its expense, shall issue in the
name of the transferee or transferees, and deliver in exchange
therefor, a new Note or Notes, for a like aggregate principal
amount, in authorized denominations. Any transfer of a Note shall
comply with applicable federal and state securities or blue sky
laws and all other Requirements of Law or be subject to an
applicable exemption therefrom.
2.4 General Rules. All transfers, exchanges or
replacements of Notes pursuant to Section 2.2, Section 2.3, or
Section 2.6 shall be without expense to the holder of the Notes,
except that any taxes or other governmental charges required to be
paid with respect to the same shall be paid by the holder of the
Note requesting such transfer, exchange or replacement as a
condition precedent to the exercise of such privilege. All Notes
surrendered for transfer, exchange or replacement shall be
cancelled by the Company. Each new Note delivered pursuant to
Section 2.2 or Section 2.3 shall be dated and bear interest from
the most recent date to which interest has been paid on the
surrendered Note or Notes, or dated the date of the surrendered
Note or Notes if no interest has been paid thereon. The Company
shall make a notation on each new Note delivered pursuant to
Section 2.2, Section 2.3 or Section 2.6 of the amount of all
payments of principal previously made on the old Note or Notes with
respect to which such new Note is issued.
2.5 Valid Obligations. All Notes executed and delivered
in exchange for, upon transfer of, or in replacement of, other
Notes as provided in this Agreement shall be the valid obligations
of the Company, evidencing the same debt as such other Notes, and
shall be entitled to the benefits of this Agreement to the same
extent as the Notes in exchange for or upon transfer or replacement
of which they were executed and delivered.
2.6 Replacement of Notes. Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note and
(a) in the case of loss, theft or destruction, of
an indemnity agreement signed by the holder of the Note
in form and substance reasonably satisfactory to the
Company, or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company, at its own expense, will execute and deliver in lieu
thereof, a new Note of like tenor, and of the same series, dated
and bearing interest from the date to which interest has been paid
on such lost, stolen, destroyed or mutilated Note or dated the date
of such lost, stolen, destroyed or mutilated Note if no interest
has been paid thereon. If, after the delivery of a new Note, a
bona fide purchaser of the original Note in lieu of which such new
Note was issued presents for payment such original Note, the
Company shall be entitled to recover such new Note from the Person
to whom it was delivered or any Person taking therefrom, except a
bona fide purchaser, and shall be entitled to recover upon the
indemnity provided therefor (which shall be unsecured) to the
extent of any loss, damage, cost or expense incurred by the Company
in connection therewith.
SECTION 3. PAYMENT OF NOTES, COLLATERAL, TRUST ACCOUNT, CASH
COLLATERAL ACCOUNTS AND RELEASE OF COLLATERAL.
3.1 Direct Payment. Notwithstanding anything in this
Agreement or in the Notes to the contrary, but subject to the
provisions of Section 9.5 hereof, the Company will pay all amounts
payable with respect to the Notes held by each Purchaser or other
registered holder of Notes (without any presentment of any such
Notes and without any notation of such payment being made thereon)
by crediting before noon, local time, of the place of payment of
each such Note, as otherwise specified, by bank wire transfer of
immediately available funds, to the account of such holder in any
bank in the United States as may be designated in writing by such
holder (including in such writing the ABA number of such holder's
bank), or in such manner as may be directed or to such other
address in the United States as may be designated in writing by
such holder. The addresses and other instructions of each
Purchaser set forth in Schedule I shall be deemed to constitute
notice, direction or designation (as appropriate) to the Company
with respect to direct payment as aforesaid. The holder of each
Note to which this Section 3.1 applies agrees, by its acceptance of
such Note, that in the event it shall sell or transfer such Note it
will, prior to the delivery of such Note (unless it has already
done so), make a notation thereon of all principal, if any, paid on
such Note and will also note thereon the date to which interest has
been paid on such Note.
3.2 Issuance Taxes. The Company will pay all taxes,
assessments and charges in connection with the issuance and sale of
the Notes and in connection with any modification of the Notes and
will indemnify and save each holder of any Note harmless, without
limitation as to time, against any and all liabilities with respect
to all such taxes, assessments and charges. The obligations of the
Company under this Section 3.2 shall survive the prepayment or
payment of the Notes and the termination of this Agreement and
continue in favor of the holders of the Notes.
3.3 Required Prepayments. Until the Notes shall be paid
in full, the Company will prepay and apply to the payment of the
Notes and there shall become due and payable on the Notes the
amortization amount indicated on each of the dates listed in the
table attached as Schedule II; provided that if any such date is
not a Business Day, the applicable amortization amount shall become
due and payable on the first Business Day after such date. No
premium shall be payable in connection with any required prepayment
made pursuant to the first sentence of this Section 3.3. The
Company shall also make required prepayments in accordance with
Section 3.9. No acquisition or purchase of any Notes by the
Company or any Affiliate thereof shall relieve the Company from or
reduce its obligation to make the required prepayments provided for
in this Section 3.3.
3.4 Optional Prepayments. Upon compliance with
Section 3.5 and subject to Section 3.6 and the following
limitations, in addition to the prepayments required by
Section 3.3, the Company shall have the privilege, at any time and
from time to time, of prepaying the Outstanding Notes, either in
whole or in part (but if in part then in units of $5,000,000), by
payment of the principal amount of the Notes or portion thereof to
be prepaid, together with accrued interest thereon, plus, to the
extent permitted by law, the Make-Whole Amount (based on such
principal amount). Each partial prepayment of Notes pursuant to
this Section 3.4 shall be applied to reduce, pro rata, the
scheduled principal payments on the Notes in inverse order of
payment. The Company acknowledges that the right of the holders of
the Notes to maintain their investment free and clear of prepayment
(except as specifically provided in this Section 3.4) is a valuable
right and the provision for payment of the Make-Whole Amount by the
Company if the Notes are prepaid under this Section 3.4 or
accelerated under Section 5.3 as a result of an Event of Default is
intended to provide compensation for the deprivation of such right
under such circumstances.
3.5 Notice of Prepayments. The Company will give notice
of any prepayment of the Notes (other than the prepayments required
by Section 3.3) to each holder thereof not less than ten days nor
more than 30 days before the date fixed for such optional
prepayment. Each such notice and each such prepayment shall be
accompanied by a certificate from a Responsible Officer (a) stating
the principal amount to be prepaid, (b) stating the proposed date
of prepayment, (c) stating the accrued interest on each such Note
to such date through the date of prepayment, and (d) stating the
Make-Whole Amounts required under Section 3.4 (calculated as of the
date of such notice or prepayment, as the case may be, and, in the
case of any notice, proffered solely as an estimate of the
Make-Whole Amounts due upon prepayment) and setting forth the
calculations used in computing such Make-Whole Amounts, accompanied
by a copy of the Statistical Release H.15(519) (or other source of
market data) used in determining the Make-Whole Amounts.
3.6 Allocation of Prepayments. All partial prepayments
shall be applied on all Outstanding Notes ratably in accordance
with the unpaid principal amounts thereof but only in units of
$1,000, and to the extent that such ratable application shall not
result in an even multiple of $1,000, adjustment may be made by the
Company to the end that successive applications shall result in
substantially ratable payments.
3.7 Payments by Collateral Agent. If upon the exercise
of any remedy provided herein or provided in any of the Note
Documents or otherwise the Collateral Agent comes into possession
of any monies properly owing to the Collateral Agent or the holders
of the Notes, it shall distribute such monies pursuant to
Section 5.10. All payments to be made on account of any Note shall
be made by the Collateral Agent by check mailed to the address of
the holder thereof as shown in the register maintained in
accordance with Section 6.6; provided, that the Collateral Agent
shall make any payment on account of any Note held by an
institutional holder thereof by wire transfer to the account of
such holder in any bank in the United States specified in a written
request (which shall be no later than two Business Days prior to
such payment) given to the Collateral Agent by such holder. The
address of each Purchaser set forth in Schedule I under the heading
"Payment Instructions" shall be deemed to constitute such a written
request with respect to such Purchaser.
3.8 Collateral.
(a) The Obligations are secured by the Collateral.
(b) The Company shall (i) deposit cash in the Cash Collateral
Account or (ii) grant to the Collateral Agent Security Liens on
additional or substitute Equipment from time to time as is
necessary to satisfy the MCC Ratio and shall comply with Section
6.5 with respect to each such grant. If the additional or
substitute Equipment to be added to the collateral pool is an
aircraft, marine vessel or any other item of equipment reasonably
expected to have a fair market value in excess of $100,000, or if
the substitute Equipment is a number of items of Equipment
reasonably expected to have an aggregate fair market value in
excess of $1,000,000, then the Company shall provide to the
Collateral Agent, prior to such substitution or addition, an
Independent Appraisal of the Appraised Value of such item or items
of Equipment.
(c) PLM Rental and PLM Australia own items of Equipment that
constitute Collateral. Such Subsidiaries have granted, or pursuant
to the last sentence of Section 6.5 will grant, a first priority
perfected Security Lien on such items of Equipment to the
Collateral Agent. Any additional Equipment to be added to the
Collateral will be owned by the Company or pursuant to clause
(ii)(B) or (ii)(C) of the definition of Collateral Coverage Ratio.
If any third party asserts or threatens to assert a fraudulent
transfer claim with respect to the granting by PLM Rental or PLM
Australia of a Security Lien on Equipment to secure the
Obligations, the Equipment with respect to which such claim was
made shall be deemed unsecured (and thus the fair market value of
such Equipment will not be included in the Collateral Coverage
Ratio) and the Company shall within 10 days after receipt by the
Company of any such pending or threatened claim, substitute
Eligible Equipment and/or deposit cash into the Cash Collateral
Account, in an aggregate amount sufficient to satisfy the MCC
Ratio.
3.9 Trust Account and Cash Collateral Account.
(a) Pursuant to the Trust Agreement, all proceeds, rentals
and other amounts payable to the Company or the Subsidiaries under
the Leases will be deposited into the Trust Account and held in
trust for the Collateral Agent and the holders of the Notes.
Pursuant to the Security Agreement (Trust Account), upon notice by
the Collateral Agent to the Company, the Company will instruct
First Union to deposit funds in the Trust Account that are
attributable to the Leases into the First Union Cash Collateral
Account. Pursuant to the First Union Cash Collateral Agreement,
the Collateral Agent shall have the sole right to disburse funds
from the First Union Cash Collateral Account, and First Union shall
transfer funds from the First Union Cash Collateral Account only
upon such instructions. The Collateral Agent shall instruct First
Union to disburse funds from the First Union Cash Collateral
Account to the Company unless and until First Union has been
notified by the Collateral Agent that a Default or Event of Default
has occurred. After the receipt by First Union of any such notice
and during the continuance of any Default or Event of Default, the
Collateral Agent shall apply all funds in the First Union Cash
Collateral Account to prepay the Notes.
(b) If required under Section 3.10, the Company and its
Subsidiaries shall deposit into the Bankers Trust Cash Collateral
Account the Net Proceeds of any Disposition of Equipment
constituting Collateral immediately upon receipt thereof. With
respect to any item of Collateral that is damaged but has not
suffered a Casualty Loss, the net proceeds of any insurance
required to be maintained by Section 6.2 or any Security Document
shall be deposited into the Bankers Trust Cash Collateral Account
if the applicable Security Document requires the Company or its
Subsidiaries, Lessee or insurer to pay such proceeds to the
Collateral Agent or the Certificate of Title Agent. To the extent
Net Proceeds deposited into the Bankers Trust Cash Collateral
Account are not used to purchase Eligible Equipment within 12
months after the deposit thereof, unless the Required Noteholders
consent in writing, such funds shall be applied as a prepayment of
the Notes.
(c) The Company may withdraw funds from the Bankers Trust
Cash Collateral Account only if (i)(A) such funds are applied
directly to purchase substitute or additional Eligible Equipment to
be owned by the Company and in which the Collateral Agent will be
granted a first priority perfected lien (or pursuant to clause
(ii)(B) or (ii)(C) of the definition of Collateral Coverage Ratio,
clear title) to secure the Obligations, in each case in
transactions closing simultaneously with such withdrawal, or (B)
the most recent Appraisal Report of all Equipment constituting
Collateral shows that after giving effect to such withdrawal, the
MCC Ratio will be satisfied; and (ii) no Default or Event of
Default exists and, after giving effect to such withdrawal, no
Default or Event of Default shall occur. The Company shall deliver
to the Collateral Agent together with any request for a release of
funds from the Bankers Trust Cash Collateral Account a certificate
with respect to the foregoing provisions of this Section 3.9(c) in
the form of attached Exhibit K signed by a Responsible Officer.
Upon the occurrence and during the continuance of a Default or an
Event of Default, the Collateral Agent shall apply all funds in the
Bankers Trust Cash Collateral Account to prepay the Notes.
3.10 Release of Collateral. The Collateral Agent will,
without further authorization from the holders of the Notes, upon
the written request of the Company, release or terminate the
Security Lien it holds for the benefit of the holders of the Notes,
(i) in any item of Collateral with respect to which a Casualty Loss
has occurred, for the sole purpose of permitting recovery of any
insurance or other compensation due in respect thereof, if and only
if (A) no Default or Event of Default exists or would occur by
virtue of such release or termination and (B) the Net Proceeds with
respect thereto are deposited in the Bankers Trust Cash Collateral
Account or, subject to Section 6.7, Eligible Equipment purchased
with such Net Proceeds is subjected to a first priority perfected
lien or otherwise satisfies the standards required for inclusion in
the Collateral Coverage Ratio or (ii) in any item of Collateral
with respect to which the Company intends a Disposition other than
a Casualty Loss, if and only if (A)(1) the Net Proceeds of such
Disposition shall be deposited simultaneously into the Bankers
Trust Cash Collateral Account as provided in Section 3.9 (provided
that if such Net Proceeds are not entirely cash, United States
Dollars, the Company shall also have deposited cash into the
Collateral Account in an amount, or substituted Eligible Equipment
that satisfies the standards required for inclusion in the
Collateral Coverage Ratio with an Appraised Value, equal to the
amount of the noncash proceeds) or (2) the most recent Appraisal
Report of all Equipment constituting Collateral shows that after
giving effect to such Disposition, the MCC Ratio will be satisfied;
and (B) no Default or Event of Default exists or will occur by
virtue of such Disposition. The Company shall deliver to the
Collateral Agent together with any request for a release of
Collateral a certificate with respect to the foregoing provisions
of this Section 3.10 in the form of attached Exhibit L signed by a
Responsible Officer.
SECTION 4. EVIDENCE OF ACTS OF NOTE HOLDERS.
4.1 Execution by Note Holders or Agents. Any request,
consent, demand, authorization, notice, waiver or other action
required or permitted by this Agreement to be given or taken by the
holders of the Notes may be embodied in and evidenced by one or
more instruments of substantially similar tenor and may be signed
or executed by such holders in person or by agent or agents duly
appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument
or instruments are delivered to the Company and the Collateral
Agent.
4.2 Future Holders Bound. Any request, consent, demand,
authorization, notice, waiver or other action of the holder of any
Note shall bind every future holder of the same Note and the holder
of every Note issued in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Company in
pursuance of such action irrespective of whether or not any
notation in regard thereto is made upon such Note.
SECTION 5. DEFAULTS - REMEDIES.
5.1 Events of Default. Any one or more of the following
shall constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest
on any Note when the same shall become due and such
default shall continue for more than five Business Days;
or
(b) Default shall occur in the payment of any
scheduled principal on any Note and such default shall
continue for more than five Business Days; or
(c) Default shall occur in the making of any
Make-Whole Amount; or
(d) Default shall occur in the observance or
performance by the Company of any covenant or agreement
contained in Section 6.8, 6.16, 6.18 or 6.20; in each
case, to be performed by the Company; or
(e) Default shall occur in the observance or
performance by the Company of any covenant or agreement
contained in Section 6.7(b) to be performed by the
Company which is not remedied to the satisfaction of the
Required Noteholders within 180 days of the occurrence
thereof; or
(f) Default shall occur in the observance or
performance of any provision of this Agreement (excluding
defaults described in clauses (a) through (e) above) or
any other Note Document; in each case, to be performed by
the Company, which is not remedied to the satisfaction of
the Required Noteholders within 30 days after the
occurrence thereof, or any of the Note Documents shall
cease to be in full force and effect; or
(g) Any representation or warranty made by the
Company herein, or made by the Company in any statement
or certificate furnished by the Company in connection
with the consummation of the sale or delivery of the
Notes or furnished by the Company pursuant hereto, is
untrue in any material respect as of the date of the
issuance or making thereof; or
(h) (i) Default shall occur in the repayment of any
principal of or the payment of any interest on any
Approved Subordinated Debt or breach shall occur in any
term of any evidence of such Debt the effect of which is
to permit acceleration of such Approved Subordinated
Debt, (ii) default shall occur in the repayment of any
principal of or the payment of any interest on any Debt
of the Company other than any Approved Subordinated Debt,
or breach shall occur in any term of any evidence of such
Debt, in each case exceeding, in the aggregate
outstanding principal amount, $1,000,000 (including
undrawn committed or available amounts and including
amounts owing to all creditors under a syndicated or
combined credit arrangement), or (iii) breach or
violation of any term or provision of any evidence of
Debt referred to in the preceding clause (ii) and of any
other loan agreement, mortgage, indenture, guaranty or
other agreement relating thereto shall occur, the effect
of which is to permit acceleration under the applicable
instrument, loan agreement, mortgage, indenture, guaranty
or other agreement, whether or not waived by the note
holder or obligee, and such failure shall not have been
cured within the applicable cure or grace period, or
there is an acceleration under the applicable instrument,
loan agreement, mortgage, indenture, guaranty or other
agreement; or
(i) There shall have occurred a change in the
assets, liabilities, financial condition, operations,
affairs or prospects of the Company, which, in the
reasonable determination of Required Noteholders, has,
either individually or in the aggregate, had a Material
Adverse Effect; or
(j) (i) Any corporation or Person, or a group of
related corporations or Persons, shall acquire
(A) beneficial ownership of in excess of fifty percent
(50%) of the outstanding Stock or other voting interest
having ordinary voting power to elect a majority of the
directors, managers or trustees of the Company
(irrespective of whether at the time stock of any other
class or classes shall have or might have voting power by
reason of the happening of any contingency) or (B) all or
substantially all of the Property of the Company, or
(ii) a majority of the board of directors of the Company,
at any time, shall be composed of Persons other than
(A) Persons who were members of the board of directors of
the Company on the date of this Agreement, or (B) Persons
who subsequently become members of the board of directors
of the Company and who either (1) are appointed or
recommended for election with the affirmative vote of a
majority of the directors in office as of the date of
this Agreement or (2) are appointed or recommended for
election with the affirmative vote of a majority of the
board of directors of the Company who are described in
clauses (ii)(A) and (ii)(B)(1) above, or (iii) during any
consecutive 24-month period more than two out of the top
five Company's senior management as of the date of this
Agreement shall have ceased to devote substantially all
of their business time to managing the Company; or
(k) (i) Any Reportable Event or a Prohibited
Transaction shall occur with respect to any Plan or
Multiemployer Plan; (ii) a notice of intent to terminate
a Plan or Multiemployer Plan under Title IV of ERISA
shall be filed; (iii) a notice shall be received by the
plan administrator of a Plan or Multiemployer Plan that
the PBGC has instituted proceedings to terminate such
plan or appoint a trustee to administer such plan;
(iv) any other event or condition shall exist which
might, in the opinion of the Required Noteholders,
constitute grounds under Title IV of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan or Multiemployer Plan; (v) the
Company or any ERISA Affiliate shall withdraw from a
Multiemployer Plan; (vi) any accumulated funding
deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, shall
exist with respect to any Plan; (vii) the actuarial
present value of the benefit liabilities under any Plan
shall exceed the current value of the assets (computed on
a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities
(for this purpose, the term "actuarial present value of
the benefit liabilities" shall have the meaning specified
in section 4041 of ERISA); (viii) a liability to or on
account of a Plan or Multiemployer Plan is incurred under
sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or
(ix) a Plan amendment shall result in an increase in
current liability such that the Company or any ERISA
Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code; and in case of the
occurrence of one or more events or conditions described
in clauses (i) through (ix) above, such events or
conditions are more likely than not to result in an
aggregate liability of the Company and ERISA Affiliates,
as determined in good faith by the Required Noteholders,
in excess of five percent (5%) of Consolidated Tangible
Net Worth, and such liability shall not be covered in
full, for the benefit of the Company, by insurance
maintained with financially sound and reputable insurance
companies that are not Affiliates; or
(l) Final judgment or judgments for the payment of
money aggregating in excess of $1,000,000 is or are
outstanding against any of the Company or any of its
Subsidiaries or against any of its property or assets,
and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise
for a period of 30 days from the date of its entry; or
(m) Any of the Company or any of its Subsidiaries
causes or suffers an order for relief to be entered with
respect to it under applicable federal bankruptcy law or
applies for or consents to the appointment of a
custodian, trustee or receiver for it or for the major
part of its property; or
(n) A custodian, trustee or receiver is appointed
for any of the Company or any of its Subsidiaries, or for
the major part of its property and is not discharged
within 30 days after such appointment; or
(o) Bankruptcy, reorganization, insolvency
proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of
debtors, are instituted by or against any of the Company
or any of its Subsidiaries and, if instituted against it,
are consented to or are not dismissed within 60 days
after such institution.
5.2 Notice of Claimed Default. If the holder of any
Note or of any other evidence of Debt of the Company gives any
notice or takes any other action with respect to a claimed default,
the Company agrees to give written notice within three Business
Days of such event to the Collateral Agent and all holders of the
then Outstanding Notes.
5.3 Acceleration of Maturities. When any Event of
Default described in Section 5.1(a), (b) or (c) has happened and is
continuing, any holder of any Note may, and when any Event of
Default described in Sections 5.1(d) through (k), inclusive, of
Section 5.1 has happened and is continuing, the Required
Noteholders may, by notice to the Company, declare the entire
principal and all interest accrued on all Notes to be, and all
Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived. When any Event of Default
described in Sections 5.1(l) through (o), inclusive, has occurred,
then all of the then Outstanding Notes shall immediately become due
and payable without presentment, demand or notice of any kind. The
Notes are not prepayable except as provided in Article 3.
Accordingly, any acceleration following an Event of Default shall
be deemed to be a breach of Article 3, and the Company shall pay to
each holder of the then Outstanding Notes the entire principal
balance of, and accrued interest on, the Notes plus, to the extent
permitted by law, the Make-Whole Amount as liquidated damages
reasonably calculated to compensate such holder for loss of its
bargain and not as a penalty. The Company acknowledges that the
right of the holders of the Notes to maintain their investment free
and clear of prepayment (except as specifically provided in
Section 3.4) is a valuable right and the provision for payment of
the Make-Whole Amounts by the Company if the Notes are accelerated
as a result of an Event of Default is intended to provide
compensation for the deprivation of such right under such
circumstances. Without limiting the provisions of Section 9.17,
the Company further agrees, to the extent permitted by law, to pay
to the holders of the then Outstanding Notes all costs and expenses
incurred by them in the collection of any Notes upon any default
hereunder or thereon, including reasonable compensation to such
holders' attorneys for all services rendered in connection
therewith.
5.4 Rescission of Acceleration. The provisions of
Section 5.3 are subject to the condition that if the principal of
and accrued interest on all or any of the then Outstanding Notes
have been declared immediately due and payable by reason of the
occurrence of any Event of Default described in Sections 5.1(d)
through (k), inclusive, the Required Noteholders may, by written
instrument filed with the Company and the Collateral Agent, rescind
and annul such declaration and the consequences thereof; provided
that at the time such declaration is annulled and rescinded:
(a) No judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this
Agreement;
(b) All arrears of interest upon all the Notes and
all other sums payable under the Notes and under this
Agreement (except any principal, interest or Make-Whole
Amounts on the Notes which have become due and payable
solely by reason of such declaration under Section 5.3)
shall have been duly paid; and
(c) Each and every other Default and Event of
Default shall have been made good, cured or waived
pursuant to Section 8.1;
and provided further, that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereto.
5.5 Default Remedies.
(a) The exercise of remedies under this Agreement and the
other Note Documents are granted to the holders from time to time
of the Outstanding Notes and are delegated by such holders to the
Collateral Agent or the Certificate of Title Agent, as applicable,
to the extent set forth in this Agreement, the Collateral Agency
Agreement, the Certificate of Title Agency Agreement and the other
Note Documents. Pursuant to the Collateral Agency Agreement and
the Certificate of Title Agency Agreement, the Collateral Agent and
the Certificate of Title Agent, respectively, shall exercise such
remedies for the equal and proportionate benefit and security of
the holders from time to time of the Outstanding Notes and for the
enforcement of the prompt and complete payment when due of all sums
due in connection with this Agreement, the Notes and each of the
other Note Documents and for the performance and observance by the
Company of the covenants, obligations and conditions to be
performed and observed by the Company and all other parties, other
than the Collateral Agent, the Certificate of Title Agent and the
holders of Outstanding Notes, to this Agreement and each of the
other Note Documents.
(b) If an Event of Default exists, the Collateral Agent and
the Certificate of Title Agent, as applicable, may exercise all of
the rights and remedies delegated or granted to it under this
Agreement, the Collateral Agency Agreement, the Certificate of
Title Agency Agreement or any of the other Note Documents, and all
of the rights and remedies herein or therein conferred, it being
expressly understood that no such remedy is intended to be
exclusive of any other remedy or remedies; but each and every
remedy shall be cumulative and shall be in addition to every other
remedy given herein or therein or now or hereafter existing at law
or in equity or by statute, and may be exercised from time to time
as often as may be deemed expedient by the Collateral Agent or the
Certificate of Title Agent, as applicable.
(c) If an Event of Default exists, the Collateral Agent or
the Certificate of Title Agent, as applicable, to the extent it may
lawfully do so, may also, with or without proceeding with sale or
foreclosure or demanding payment of the Notes, without notice,
appropriate and apply to the payment of the Obligations all or any
portion of the Collateral in its possession and any and all
balances, credits, deposits accounts, reserves, or other monies due
or owing to the Company held by or for the benefit of the
Collateral Agent or the Certificate of Title Agent, as applicable,
under this Agreement, any of the other Note Documents or otherwise.
(d) All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of the Company
contained in this Agreement, or in any document referred to herein
or in any agreement supplementary hereto or in any of the other
Note Documents, shall be deemed cumulative to and not in derogation
or substitution of any of the terms, covenants, conditions, or
agreements of the Company contained herein.
5.6 Other Enforcement Rights.
(a) The Collateral Agent may (but unless first requested so
to do by the Required Noteholders and furnished with indemnity
satisfactory to it pursuant to the Collateral Agency Agreement
shall not be under any obligation to) proceed to protect and
enforce this Agreement, the Notes and each other Note Document by
suit or suits or proceedings in equity, at law or in bankruptcy,
and whether for the specific performance of any covenant or
agreement herein granted, or for foreclosure thereunder, or for the
appointment of a receiver or receivers for the foreclosure
thereunder, or for the appointment of a receiver or receivers for
the Collateral or any part thereof, for the recovery of judgment
for the Obligations or for the enforcement of any other proper
legal or equitable remedy available under Requirements of Law.
(b) In the event that an Event of Default has occurred and is
continuing and there shall be pending any case or proceeding for
the bankruptcy or for the reorganization or arrangement of the
Company under the federal bankruptcy laws or any other Requirements
of Law, or in connection with the insolvency of the Company, or in
the event that a custodian, receiver or trustee shall have been
appointed for the Company or any of its Properties, or in the event
of any other proceedings in respect of the Company or any of its
Properties, (i) the Collateral Agent may file such proofs of claim
and other papers or documents as may be necessary or advisable in
order to have the claims of the Collateral Agent and of the holders
of the Notes allowed in any judicial proceedings relative to the
Company or its Properties, and (ii) irrespective of whether the
principal of all of the Notes shall then be due and payable as
therein expressed, by proceedings for the payment thereof, by
declaration or otherwise, the Collateral Agent shall be entitled
and empowered to file and prove a claim for the whole amount of
principal, Make-Whole Amounts (if any) and interest owing and
unpaid in respect of the Notes, and any other sum or sums owing
thereon or pursuant thereto or hereto, and to collect and receive
any monies or other Property payable or deliverable on any such
claim, and to distribute the same after the deduction of all
amounts due it hereunder, under the other Note Documents and the
Collateral Agency Agreement; and any receiver, custodian, assignee
or trustee in bankruptcy, trustee or debtor in reorganization or
trustee or debtor in any proceedings for the adoption of an
arrangement is hereby authorized by each holder of any Note, by the
acceptance of the Note or Notes held by it, to make such payments
to the Collateral Agent, and, if the Collateral Agent shall consent
to the making of such payments directly to the holders of the
Notes, to pay to the Collateral Agent all amounts due it hereunder
and under the other Note Documents or the Collateral Agency
Agreement.
(c) Notwithstanding anything in this Agreement or any other
Note Document to the contrary, the Required Noteholders shall have
the right, at any time, by an instrument or instruments in writing
executed and delivered to the Collateral Agent or the Certificate
of Title Agent, as applicable, and providing for indemnity
satisfactory to it pursuant to the Collateral Agency Agreement or
the Certificate of Title Agency Agreement, respectively, to direct
the method and place of conducting all proceedings to be taken in
connection with the enforcement of the terms and conditions hereof
and thereof; provided, that such direction shall not be otherwise
than in accordance with the provisions of Requirements of Law.
5.7 Effect of Sale, etc.
(a) To the maximum extent permitted by law, any sale or sales
pursuant to the provisions hereof or of any other Note Document,
whether under the power of sale granted thereby or pursuant to any
legal proceedings, shall operate to divest the Company of all
right, title, interest, claim and demand whatsoever, either at law
or in equity, of, in and to the Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and
all rights of redemption by, through or under the Company. At any
such sale the holder of any Note may bid for and purchase the
Property sold and may make payment therefor as set forth below, and
any holder of Notes so purchasing any such Property, upon
compliance with the terms of sale, may hold, retain and dispose of
such Property without further accountability.
(b) The receipt by the Collateral Agent, the Certificate of
Title Agent or by any Person authorized under any judicial
proceedings to make any such sale, of the proceeds of any such sale
shall be a sufficient discharge to any purchaser of the Collateral,
or of any part thereof, sold as aforesaid; and no such purchaser
shall be bound to see to the application of such proceeds, or be
bound to inquire as to the authorization, necessity or propriety of
any such sale. In the event that, at any such sale, any holder of
Notes is the successful purchaser, it shall be entitled, for the
purpose of making settlement or payment, to use and apply its Notes
by crediting thereon the amount apportionable and applicable
thereto out of the net proceeds of such sale.
5.8 Delay or Omission; No Waiver. No course of dealing
on the part of the Collateral Agent or the Certificate of Title
Agent, as applicable, or any holder of Notes nor any delay,
omission or failure on the part of the Collateral Agent or the
Certificate of Title Agent or any holder of Notes to exercise any
right or power shall exhaust or impair such right or power or
operate as a waiver of such right or power or prevent its exercise
during the continuance of a default or otherwise prejudice the
Collateral Agent's or the Certificate of Title Agent's or such
holder's rights, powers and remedies. Every right and remedy given
by this Article 5 or by law to the Collateral Agent or the
Certificate of Title Agent or any holder of Notes may be exercised
from time to time as often as may be deemed expedient by the
Collateral Agent's, the Certificate of Title Agent's or such
holder's rights, powers and remedies.
5.9 Restoration of Rights and Remedies. If the
Collateral Agent or the Certificate of Title Agent, as applicable,
shall have instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding shall have been continued
or abandoned for any reason, or shall have been determined
adversely to the Collateral Agent, then and in every such event,
the Collateral Agent or the Certificate of Title Agent, as
applicable, the Company and the holders of the Notes shall, to the
maximum extent permitted by law and subject to any determination in
such proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter rights and remedies of
the Collateral Agent or the Certificate of Title Agent, as
applicable, shall continue as though no such proceeding had been
instituted.
5.10 Application of Sale Proceeds. The proceeds of any
exercise of rights with respect to the Collateral, or any part
thereof, and the proceeds and the avails of any remedy hereunder
shall be paid to and applied as follows:
(a) First, to the payment of (i) costs and expenses
of foreclosure or suit or other exercise of a right or
remedy, if any, and (ii) all fees, expenses, liabilities
and advances, including legal expenses and attorneys'
fees, incurred or made hereunder, the Collateral Agency
Agreement or the Certificate of Title Agency Agreement or
under any of the other Note Documents by the Collateral
Agent or the Certificate of Title Agent or the holders of
the Notes and (iii) all taxes or assessments superior to
the Security Lien held by the Collateral Agent hereunder,
except any taxes or assessments subject to which said
sale may have been made;
(b) Second, to the payment to the holders of the
Notes of the amounts then due, owing or unpaid on the
Notes for principal, interest and Make-Whole Amounts, if
any; and in case such proceeds shall be insufficient to
pay in full the whole amount so due, owing or unpaid upon
the Notes, then ratably according to the aggregate of
such principal and the accrued and unpaid interest and
Make-Whole Amounts, if any, with application on each Note
to be made, first, to unpaid interest thereon, second, to
unpaid Make-Whole Amounts, if any, and third, to the
unpaid principal thereof; and
(c) Third, to the payment of the surplus, if any,
to the Company and its successors and assigns.
If there be a deficiency, the Company shall remain liable
therefor and shall forthwith pay the amount of any such deficiency
to the Collateral Agent to be distributed in the same order set
forth above in this Section 5.10.
5.11 Cumulative Remedies. No waiver by the Collateral
Agent or the Certificate of Title Agent or by the holder of any
Note of any default, whether such waiver be full or partial, shall
extend to or be taken to affect any subsequent default, or to
impair the rights resulting therefrom except as may be otherwise
expressly provided herein. No remedy hereunder is intended to be
exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given
hereunder or otherwise existing, nor shall the giving, taking or
enforcement of any other or additional security, collateral or
guaranty for the payment of or performance of the Obligations
secured pursuant to this Agreement operate to prejudice, waive or
affect the security of this Agreement or any other Note Document or
any rights, powers or remedies hereunder or thereunder, nor shall
the Collateral Agent or the Certificate of Title Agent or any
holder of any Note be required to first look to, enforce or exhaust
such other or additional security, collateral or guaranties.
5.12 Limitations on Suits.
(a) No holder of any Note shall have the right to institute
any suit, action or proceeding at law or in equity, for the
execution of any power of this Agreement or for any other remedy
under or upon this Agreement or any other Note Document, unless (i)
the Required Noteholders shall have made written request upon the
Collateral Agent or the Certificate of Title Agent, as applicable,
to exercise the remedies granted to it under this Agreement, the
Collateral Agency Agreement, the Certificate of Title Agency
Agreement or the other Note Documents or to institute such action,
suit or proceeding in its own name; (ii) such holders shall have
offered to the Collateral Agent or the Certificate of Title Agent,
as applicable, the indemnity satisfactory to it as provided under
the Collateral Agency Agreement or the Certificate of Title Agency
Agreement; and (iii) the Collateral Agent or the Certificate of
Title Agent, as applicable, shall have refused or omitted to comply
with such request for a period of 15 days after such written
request shall have been received by it.
(b) Such notification, request, offer of indemnity and
refusal or omission are hereby declared, in every case, to be
conditions precedent to the exercise by any holder of a Note of any
remedy hereunder; it being understood and intended that no one or
more holders of Notes shall have any right in any manner whatever
by its or their action to enforce any right under this Agreement,
except in the manner herein provided, and that all judicial
proceedings to enforce any provision of this Agreement shall be
instituted, had and maintained in the manner herein provided and
for the equal benefit of all holders of the then Outstanding Notes.
5.13 Suits for Principal and Interest. Nothing in any
provision of this Agreement, the Notes or any other Note Document
shall affect or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and Make-Whole
Amounts (if any) and interest on the Notes to the respective
holders of the then Outstanding Notes on the dates when due, and at
the place in such Notes expressed, whether upon acceleration or
otherwise, or affect or impair the right of action, which is also
absolute and unconditional, of such holders to institute suit to
enforce such payment by virtue of the contract embodied in the
Notes.
5.14 Undertakings. Each of the parties to this Agreement
and to each other Note Document agrees, and each holder of any Note
by its acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require in any suit for the enforcement
of any right or remedy under this Agreement or such other Note
Document, or in any suit against the Collateral Agent or the
Certificate of Title Agent for any action taken or omitted by it as
the Collateral Agent or the Certificate of Title Agent, as
applicable, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claim or defenses
made by such party litigant; but the provisions of this
Section 5.14 shall not apply to any suit instituted by the
Collateral Agent or the Certificate of Title Agent, to any suit
instituted by any Note holder, or group of Note holders, holding
more than 33% in aggregate principal amount of the then Outstanding
Notes, or to any suit instituted by any Note holder for the
enforcement of the payment of the principal of, or interest or
Make-Whole Amounts (if any) on, any Note, on or after the date when
such Note or portion thereof shall have become due.
5.15 Waiver by the Company. To the extent it lawfully
may do so, the Company hereby covenants that it will not at any
time insist upon or plead, or in any manner claim or take the
benefit or advantage of, any stay (except in connection with a
pending appeal), valuation, appraisal, redemption or extension law
now or at any time hereafter in force which, but for this waiver,
might be applicable to any sale made under any judgment, order or
decree based on any of the Notes or this Agreement or any other
Note Document; and, to the extent it lawfully may do so, the
Company hereby expressly waives and relinquishes all benefit and
advantage of any and all such laws and hereby covenants that it
will not hinder, delay or impede the execution of any power herein
granted to the holders of the Notes or delegated to the Collateral
Agent or the Certificate of Title Agent, as applicable, but it will
suffer and permit the execution of every such power as though no
such law or laws had been made or enacted.
SECTION 6. COMPANY COVENANTS.
6.1 Company Existence, Etc. The Company will, and will
cause each of its Subsidiaries to, preserve and keep in force and
effect (i) its company existence, (ii) all licenses and permits
necessary to the proper conduct of its business and (iii) all
qualifications in each jurisdiction where the nature of its
business or the Property owned by it makes such qualification
necessary.
6.2 Insurance.
(a) The Company will maintain and keep in force, or will
cause to be maintained and kept in force (to the extent not
otherwise maintained and kept in force in compliance with any
Security Document, but without limiting in any manner the insurance
required to be maintained and kept in force under any such Security
Document) insurance of the types and in amounts then customarily
carried in lines of business similar to that of the Company and its
Subsidiaries, including fire, extended coverage, public liability,
property damage, environmental hazard and workers' compensation, in
each case carried with financially sound and reputable insurance
companies, excluding in any event all Affiliates of the Company
except to the extent of Permitted Affiliate Insurance (subject to
commercial reasonableness as to each type of insurance). Except
where otherwise required (i) by the applicable insurance market,
(ii) a Lease under which the Equipment is leased on the Closing
Date, or (iii) a Lease for aircraft, all such policies of property
insurance shall carry endorsements naming the Collateral Agent as
sole loss payee (form BFU 438 or equivalent). Whether or not the
Collateral Agent is designated as sole loss payee under any policy
required to be maintained under this Section 6.2(a), insurance
proceeds under all such policies shall be allocated and paid in
accordance with the applicable Security Document. All policies
required to be maintained under this Section 6.2(a) shall carry
endorsements naming the Collateral Agent and each Note holder as an
additional insured, and in each case indicating that (A) any loss
thereunder shall be payable to the Collateral Agent or the holders
of the Notes then Outstanding, as the case may be, notwithstanding
any action, inaction or breach of representation or warranty by the
Company or any Lessee; (B) there shall be no recourse against the
Collateral Agent or any Note holder for payment of premiums or
other amounts with respect thereto, and (C) at least 30 days' prior
written notice of cancellation, lapse or material change in
coverage shall be given to the Collateral Agent by the insurer.
Without limiting the foregoing, the insurance coverage required to
be maintained under this Section 6.2(a) shall insure all Equipment
constituting Collateral at not less than the greater of the
applicable Lease stipulation value or the Appraised Value.
(b) The Company shall provide each of the Purchasers and the
Collateral Agent at the closing of the sale of the Notes, and each
of the holders of the then Outstanding Notes on or before January 1
of each year thereafter, with a certificate evidencing the
maintenance by it of policies for such insurance.
6.3 Taxes, Claims for Labor and Materials, Compliance
with Laws. The Company will, and will cause each of its
Subsidiaries to, promptly pay and discharge all Charges imposed
upon it or upon or in respect of all or any part of its Property or
business, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or
materials, which if unpaid might become a Lien upon any of its
Property; provided that it shall not be required to pay any such
Charge, account payable or claim if (i) the validity, applicability
or amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale of
any of its Property or any material interference with the use
thereof by it, and (ii) if required under GAAP, the Company or the
applicable Subsidiary shall set aside on its books reserves deemed
by it to be adequate with respect thereto. The Company will and
will cause each of its Subsidiaries to, promptly comply in all
material respects with all Requirements of Law, including without
limitation, all Requirements of Law relating to health, safety or
the environment.
6.4 Maintenance, Etc. The Company will, and will cause
each of its Subsidiaries to, maintain, preserve and keep its assets
(whether owned in fee or a leasehold or other interest) in good
repair and working order in accordance with industry standards and
from time to time will, subject to Sections 3.9 and 3.10, make all
repairs, replacements, and restorations as are consistent with
industry standards for prudent operation.
6.5 Agreement to Deliver Security Documents.
(a) The Company shall from time to time take all steps
necessary or advisable to validate, perfect or maintain the
security interest of the Collateral Agent or the Certificate of
Title Agent, as applicable, for the benefit of itself and the
holders of the Notes, in, or to defeat the assertion by any third
party of any material adverse claim with respect to, any interest,
right or remedy of the Collateral Agent or the Certificate of Title
Agent, as applicable, or the holders of the Notes in, to or under
all or any part of the Collateral, including causing to be marked
on the first page and signature page of each document comprising
chattel paper (including all Leases other than rental agreements
relating to rental yard trailers) a legend that such chattel paper
is the one and only executed original of such chattel paper as
verified by the original signature of a Responsible Officer of the
Collateral Agent or the Certificate of Title Agent, as applicable,
in the space provided and is subject to a security interest in
favor of the Collateral Agent or the Certificate of Title Agent, as
applicable, for the benefit of itself and the holders of the Notes.
In addition, the Company hereby irrevocably authorizes the
Collateral Agent and the Certificate of Title Agent, as applicable,
to the extent permitted by law, to execute and deliver, in the
Company's name and on the Company's behalf, such instruments and
documents as may, in the Collateral Agent's or the Required
Noteholders' reasonable judgment, be necessary or desirable to
evidence or protect the Collateral Agent's or the Certificate of
Title Agent's, as applicable, duly perfected, first priority
security interest in and to the Collateral, subject only to the
Permitted Liens, and to execute and file, in the Company's name and
on the Company's behalf, financing statements (including amendments
and continuation statements) and other security perfection
documentation in such jurisdictions where it may be necessary or
appropriate to validate, perfect or maintain the Collateral Agent's
or the Certificate of Title Agent's, as applicable, first priority
security interest in and to the Collateral, subject only to the
Permitted Liens. Notwithstanding the conditions to Closing in the
Note Purchase Agreement, but without limiting the generality of the
foregoing, the Company shall submit for re-registration with the
Collateral Agent the aircraft registered in Australia with Bank of
America as lienholder on or before July 29, 1994, and shall cause
evidence thereof to be delivered to the Collateral Agent by such
date. The Company shall also take such further action with respect
to the Collateral Agent's security interest in the Collateral as
shall be reasonably required by the Collateral Agent or the
Required Noteholders from time to time.
(b) The Company may from time to time request that
Collateral be reregistered or retitled in a new jurisdiction. The
Collateral Agent and the Note holders shall permit such retitling
to occur provided that the following conditions are satisfied: (i)
the chief financial officer of the Company certifies that no
Default or Event of Default exists or would result from the
reregistration or retitling of the Collateral involved, (ii) the
Company and/or the mortgagor executes a mortgage or other security
document containing provisions substantially similar to the
Security Document under which such Collateral was initially granted
to the Collateral Agent (the "New Mortgage") or other documentation
that when filed or registered will satisfy the standards set forth
in the definition of Collateral Coverage Ratio ("Other
Documentation"), and (iii) the Company obtains a legal opinion from
counsel in such new jurisdiction (which counsel shall be acceptable
to the Collateral Agent) addressing the following issues in a form
that (together with the exceptions contained therein) is acceptable
to the Collateral Agent: (A) the New Mortgage or the Other
Documentation, as applicable, is valid, binding and enforceable
against the Company and/or the mortgagor (subject to bankruptcy and
equitable principles exceptions), (B) the New Mortgage or the Other
Documentation, as applicable, is in proper form and may be enforced
by the Note holders or the Collateral Agent in accordance with the
terms thereof, and no filing or other action regarding the New
Mortgage or the Other Documentation, as applicable (that has not
been duly taken), is customary or required in connection with the
execution, delivery, performance, or enforcement of the New
Mortgage or the Other Documentation, as applicable, and (C) the
execution, delivery, performance and enforcement of the New
Mortgage or the Other Documentation, as applicable, is not and will
not be subject to any tax, duty, fee or other charge, including,
without limitation, any registration, transfer or withholding tax,
stamp duty or similar levy, imposed by or within the new
jurisdiction or any political subdivision or taxing authority
thereof, except for such charges as have been paid by the Company
upon the retitling or reregistration of the Company involved and
upon the recording or filing of the New Mortgage or Other
Documentation, as applicable.
(c) On or before the expiration of each Lease existing
on the date hereof covering the Collateral (each such lease being
an "Old Lease") and prior to or contemporaneously with taking
possession of any newly acquired Equipment constituting Collateral,
the Company shall use, and shall cause PLM Rental and PLM Australia
to use, its commercially reasonable efforts to enter into one or
more new or renewal Leases (which, in the case of newly acquired
Equipment constituting Collateral, may include a lease to which the
Equipment is subject at the time of acquisition and which is
assumed by the Company in accordance with the terms thereof) (each
such Lease being a "New Lease") covering the items of Equipment
covered by the Old Lease or so acquired, as the case may be.
Except with respect to Rental Yard Trailers with respect to clauses
(ii) and (iii) below, in which case, the following requirements
shall only be effective upon the request of the Collateral Agent or
the Required Noteholders, the Company shall, and shall cause PLM
Rental and PLM Australia to, (i) only enter into New Leases
containing notice to the Lessee thereunder of the Collateral
Agent's or the Certificate of Title Agent's, as applicable,
security interest in all payments due to the lessor thereunder and
requiring (in language acceptable to counsel for the Required
Noteholders) such Lessee to make all such payments at the direction
of the Collateral Agent or the Certificate of Title Agent, as
applicable, upon notice with respect thereto from the Collateral
Agent or the Certificate of Title Agent, as applicable, (ii)
deliver to the Collateral Agent or the Certificate of Title Agent,
as applicable, no later than five Business Days after any Equipment
becomes subject to a New Lease or any extension of an existing
Lease, an original executed chattel paper counterpart of such New
Lease or amendment to an existing Lease, if the Equipment being
leased has an Appraised Value of $500,000 or more, and (iii) the
Company shall use its commercially reasonable efforts to ensure
that all New Leases will (A) require the Lessee thereunder to make
all payments due thereunder without abatement, set off or
counterclaim for any reason and (B) will otherwise contain terms
upon which a lender would lend against the rental payments
thereunder on a non-recourse basis (without regard to the
creditworthiness of the Lessee).
(d) At the Closing, the Company delivered to the
Collateral Agent certain undated letters to Lessees notifying
Lessees to pay all amounts due under their applicable leases to the
Bankers Trust Cash Collateral Account Agreement, in the form of
Exhibit O. The Company shall duly execute and deliver to the
Collateral Agent such additional letters in substantially the form
set forth in Exhibit O as the Collateral Agent may request from
time to time with respect to Lessees. The Collateral Agent shall
not deliver any letter described in the immediately preceding
sentence to any Lessee until the Required Noteholders notify the
Collateral Agent, which notice may be sent only upon the occurrence
of any Event of Default. Upon the receipt of such notice, the
Collateral Agent shall send such letters to the Lessees.
6.6 Payment of Notes and Maintenance of Office. The
Company will punctually pay or cause to be paid the principal and
interest (and Make-Whole Amounts, if any) to become due in respect
of the Notes according to the terms thereof. The Company will
maintain an office where notices, presentations and demands in
respect of this Agreement or the Notes may be made. Such office
shall be maintained at the address specified for the Company in or
pursuant to Section 9.3 until 30 days after such time as the
Company shall notify the holders of the Notes of any change of
location of such office. The Company will also maintain an office
or agency where the Notes may be presented for registration of
transfer, exchange or replacement as provided in Article 2. The
Company hereby initially designates the principal corporate office
of the Company in San Francisco, California as its agency for such
purpose. The Company will give to the holders of the Notes prior
written notice of any change of location of any such office or
agency. If the Company shall fail to maintain any such office or
agency (and this sentence shall not be deemed to waive such
failure), such presentations may be made at the address specified
for the Company in or pursuant to Section 9.3.
6.7 Nature of Business; Diversification of Assets.
(a) The Company will not engage in any business other than as
is directly related to the ownership, brokerage, investment in,
lease and maintenance of equipment held for lease or sale and the
public and private syndication of investment programs in any of the
foregoing businesses.
(b) The Company shall cause no more than 50% of the Equipment
constituting Collateral (determined on the basis of Appraised Value
from time to time) to be in any one transportation sector (e.g.
aircraft, marine vessels, marine containers, storage containers,
railcars, or trailers). Without limiting the foregoing, the
Company shall ensure that each category of Equipment constituting
Collateral listed below shall not exceed the percentages set forth
opposite its category (determined on the basis of Appraised Value)
of the aggregate Equipment constituting Collateral:
Type of Equipment Maximum Percentage of Collateral
Any one item of Equipment 15%
Marine Containers 10%
6.8 Use of Proceeds. The Company shall use the proceeds
from the sale of the Notes (i) first, to repay the Debt due under
the Bank of America Credit Facility, (ii) second, subject to
Section 6.16, to repurchase, to the extent of up to $3,000,000,
capital stock of the Company, and (iii) third, as to the remainder
of such proceeds, for other legal purposes in the ordinary course
of business of the Company and its Subsidiaries, subject to all
provisions of the Note Documents. No proceeds from the sale of the
Notes shall be used for any other purpose.
6.9 Deposit of Payments Under Approved Subordinated
Debt. No later than July 30, 1994, the Company will deposit in a
restricted, segregated deposit account at the Collateral Agent cash
in the amount required to repay in full the Approved Subordinated
Debt described in clauses (i) and (ii) of the definition thereof.
6.10 Sale of Equipment. Except for Leases in the
ordinary course of business of the Company or its Subsidiaries, the
Company shall not and shall not permit or suffer any of its
Subsidiaries to, directly or indirectly, whether in one or a series
of transactions, Dispose of any of its or their respective
Equipment that is included in its then current MCC Ratio, other
than Dispositions in accordance with the terms of Sections 3.9 and
3.10.
6.11 Minimum Collateral Coverage Ratio. The Company and
its Subsidiaries shall maintain at all times a Collateral Coverage
Ratio of not less than 200% (the "MCC Ratio").
6.12 Maximum Note Balance to Net Worth Ratio. The
Company and its Subsidiaries shall maintain at all times a Note
Balance to Net Worth Ratio of not more than 100%.
6.13 Minimum Consolidated Net Worth. The Company and its
Subsidiaries shall maintain at all times a Consolidated Net Worth
of not less than $40,000,000.
6.14 Minimum Consolidated Interest Coverage Ratio. The
Company and its Subsidiaries shall maintain a Consolidated Interest
Coverage Ratio, as at the last day of any of the Company's fiscal
quarters, of not less than 225%.
6.15 Maximum Funded Debt Maintenance Ratio. The Company
and its Subsidiaries shall maintain at all times a Funded Debt
Maintenance Ratio of not more than 65%.
6.16 Restricted Payments.
(a) None of the Company or, with respect to item (iv) below
only, any Subsidiary will except as hereinafter provided:
(i) Declare or pay any dividends either in cash or
property, on any shares of its capital stock of any
class; or
(ii) Redeem, repurchase or retire any shares of its
capital stock of any class or any warrants, rights or
options to purchase or acquire any shares of its capital
stock, other than preferred stock that reverts to the
Company automatically upon the termination of the ESOP;
(iii) Make any other payment or distribution in
respect of its capital stock, other than stock options
granted to employees as compensation; or
(iv) Make any Investments in Subsidiaries or Joint
Venturers, except for Investments permitted by Sections
6.21(b), (d), (f), (g), (h), (i), (j) or (k).
(such declarations or payments of dividends, redemptions,
purchases, payments, distributions or Investments collectively, the
"Restricted Payments"), except during any calendar year, to the
extent of (1) 50% of Positive Cash Flow for each preceding calendar
year from and including 1993 through the immediately preceding
calendar year (the "Applicable Period") less (2) 100% of Negative
Cash Flow for each calendar year in the Applicable Period and (3)
less the aggregate amount of any Restricted Payments made by the
Company prior to the date on which the applicable Restricted
Payment is being determined.
(b) The Company will not declare any dividend which is a
Restricted Payment payable more than 60 days after the date of
declaration thereof.
(c) In addition to the restrictions in Section 6.16(a),
neither the Company nor any of its Subsidiaries shall make any
Investment in any Person nonconsolidated with the Company for the
purpose of or having the effect of repaying Debt of such Person.
6.17 Limitation on Liens. None of the Company or any of
the Subsidiaries will, without the prior written consent of the
Required Noteholders, create or incur, or suffer to be incurred or
to exist, any Lien on its Property, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer any
Property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its general creditors, or
pledge the Stock of any Subsidiary, except for the following Liens
("Permitted Liens"):
(a) Liens for Charges or levies and liens securing
claims or demands of mechanics and materialmen, provided
that payment thereof is not at the time required by
Section 6.3;
(b) Liens of or resulting from any judgment or
award, the time for the appeal or petition for rehearing
of which shall not have expired, or in respect of which
it shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which
a stay of execution pending such appeal or proceeding for
review shall have been secured;
(c) Liens incidental to the conduct of business or
the ownership of property or assets (including
warehousemen's and attorneys' liens and statutory
landlords' liens), or to secure statutory obligations, or
other liens of like general nature incurred in the
ordinary course of business and not in connection with
the borrowing of money, provided in each case, the
obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate actions or
proceedings;
(d) Reservations, exceptions, easements,
rights-of-way, conditions, restrictions, leases, and
other similar title exceptions or encumbrances affecting
real property that were not incurred in the borrowing of
money and that, individually and in the aggregate, do not
materially detract from the value of such property or
materially interfere with the use in the ordinary conduct
of its business as such business is proposed to be
conducted;
(e) Liens granted to the holders of the Notes or
the Collateral Agent, securing the Notes or other
Obligations;
(f) Liens on Property of the Company or its
Subsidiaries not constituting Collateral securing Debt
excluded from the definition of Funded Debt;
(g) Liens on Property of Unrestricted Subsidiaries
securing Indebtedness for Borrowed Money in an aggregate
amount not to exceed $10,000,000 of such Unrestricted
Subsidiaries; and
(h) Liens on the segregated deposit account
described in Section 6.9 for payment of Approved
Subordinated Debt.
6.18 Mergers, Consolidations, Etc. None of the Company
or any of its Subsidiaries will, without the prior written consent
of the Required Noteholders, (i) consolidate with or be a party to
a merger with any other Person or (ii) Dispose, directly or
indirectly, in one transaction or a series of transactions, of all
or substantially all of its assets or (iii) form or own any
interest in any subsidiary, partnership or other entity except as
permitted under Section 6.21; provided, that the Company may merge
with one or more of its wholly-owned Subsidiaries if the Company is
the survivor of the merger. If the Required Noteholders fail to
notify the Company that they are refusing their consent to a
transaction for which their consent is required under this Section
on or before the 60th day after the Company requests such consent
in writing, the Required Noteholders will be deemed to have
consented to such transaction. If the Required Noteholders consent
(or are deemed to consent) to a transaction covered by this Section
6.18, (A) if the closing of such transaction does not occur with 60
days after such consent (or deemed consent) the Company must
request consent to such transaction again, and (B) no transaction
covered by clauses (i) or (ii) of this Section 6.18 shall become
effective unless and until the successor or acquiror agrees to
assume all of the Company's obligations under the Note Documents in
form satisfactory to the Required Noteholders.
6.19 Transactions with Affiliates. None of the Company
or any of its Subsidiaries will enter into or be a party to any
transaction or arrangement with any Affiliate (including without
limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate),
except upon fair and reasonable terms no less favorable to it than
would be obtained in a comparable arm's-length transaction with a
Person other than an Affiliate.
6.20 Repurchase of Notes. None of the Company or any of
its Subsidiaries may repurchase or make any offer to repurchase any
Notes unless the offer has been made to repurchase Notes, pro rata,
from all holders of the then Outstanding Notes at the same time and
upon the same terms. In case the Company or any Subsidiary
repurchases any Notes, such Notes shall thereafter be cancelled and
no Notes shall be issued in substitution therefor.
6.21 Investments. The Company shall not make or suffer
to exist, or permit or suffer any of its Subsidiaries to make or
suffer to exist, any Investments in any Person, except (subject to
Section 6.16) the following:
(a) Investments existing on the Closing Date and specifically
disclosed on Schedule 6.21;
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any
agency or any state thereof maturing within 180 days from the date
of acquisition thereof; (ii) commercial paper maturing no more than
180 days form the date of creation thereof and currently rated at
least "A-1" by Standard & Poor's Ratings Group or "P-1" by Moody's
Investors Service, Inc.; (iii) certificates of deposit, maturing no
more than 180 days from the date of investment therein, issued by
commercial banks incorporated under the laws of the United States
of America, or any State thereof, and each having combined capital,
surplus and undivided profits of not less than $200,000,000 and
currently rated at least "A-1" by Standard & Poor's Ratings Group
or "P-1" by Moody's Investors Service, Inc.; (iv) time deposits,
maturing no more than 180 days from the date of creation thereof,
with commercial banks having membership in the FDIC and in amounts
not exceeding the maximum amounts of insurance thereunder; and (v)
demand deposits on deposit in accounts maintained at any FDIC
insured bank;
(c) the Investment by the Company pursuant to the Company
ESOP Credit Agreement;
(d) Investments by FSI or TEC consisting of purchases by FSI
or TEC of limited partnership units (or loans by FSI or TEC to the
affected limited partnership convertible into limited partnership
units) in syndicated offerings, sponsored by FSI or TEC, of limited
partnership units of limited partnerships in which FSI or TEC is a
general partner, which investments are made by FSI or TEC for the
purpose of satisfying minimum purchase requirements for the release
of proceeds from impound accounts;
(e) Investments in the form of intercompany loans or advances
to or in the Company, by any Subsidiary of the Company if and only
if, at the request of the Required Noteholders, the Subsidiary
making such loan or advance executes a subordination agreement
subordinating such Debt to the Notes and the Obligations;
(f) Deposits on, or Investments in, the Equipment by the
Company;
(g) Investments by the Company or FSI consisting of capital
contributions to PLM Securities Corp., solely to the extent
necessary to enable PLM Securities Corp., to comply with the net
capital requirements to which it is subject as a broker-dealer
registered with the National Association of Securities Dealers;
(h) Investments by the Company consisting of capital
contributions to Transportation Equipment Indemnity Company, Ltd.,
solely to the extent necessary at the time such Investment is made,
based on financial calculations performed by KPMG Peat Marwick, or
of other independent public accountants of recognized national
standing, to enable Transportation Equipment Indemnity Company,
Ltd. to comply with the Bermuda insurance code or any governmental
regulations pertaining thereto;
(i) Investments by FSI or TEC in existence as of February 1,
1988, and other Investments by FSI and TEC, consisting in each case
of purchases by FSI or TEC of limited partnership units (or loans
by FSI or TEC to the affected limited partnership convertible into
limited partnership units) in syndicated offerings, sponsored by
FSI or TEC, of limited partnership units of limited partnerships in
which FSI or TEC is a general partner, which investments are made
by FSI or TEC for the purpose of satisfying minimum purchase
requirements for the release of proceeds from impound accounts;
provided that the aggregate amount of Investments not in existence
as of February 1, 1988 shall not exceed $3,000,000 (without giving
effect to any write-down) at any time and further, provided no such
Investment shall have remained outstanding for a period in excess
of 120 days;
(j) Investments by FSI or TEC in any limited partnership of
which FSI or TEC is the general partner or in any corporation of
which FSI or TEC is manager; provided that (i) such Investment does
not exceed a nominal initial investment plus unreimbursed
organizational and offering expenses incurred as a sponsor of such
limited partnership or corporation, which are syndications of
investment funds, (ii) all Debt of such Person shall be Non-
Recourse to the Company and its Subsidiaries except FSI or TEC, as
applicable, and (iii) such Person shall be engaged in a business
reasonably similar to any of the businesses engaged in by the
Company and its Subsidiaries as of the date of this Agreement;
(k) Investments by the Company in TEC Acquisub, Inc.
consisting of capital contributions solely to the extent necessary
to make down payments of up to 20% of the purchase price of
Equipment acquired by TEC Acquisub, Inc.;
(l) Investments by the Company in Subsidiaries and Joint
Ventures to the extent permitted under Section 6.16;
(m) Investments by the Company or TEC in Residual Interests;
and
(n) Investments by the Company in leveraged leases.
6.22 Notice of Default and Event of Default. Immediately
upon becoming aware of the existence of any condition or event
which constitutes a Default or an Event of Default, the Company
shall deliver to the Collateral Agent and the holders of the then
Outstanding Notes a written notice specifying the nature and period
of existence thereof and what action the Company is taking or
proposes to take with respect thereto.
6.23 Reports and Rights of Inspection. The Company will
keep proper books of record and account in which full and correct
entries will be made of all dealings or transactions of or in
relation to the business and affairs of the Company and the
Subsidiaries, in accordance with generally accepted principles of
accounting consistently maintained (except for changes disclosed in
the financial statements furnished pursuant to this Section 6.23
and concurred in by the Independent Public Accountants referred to
in Section 6.23(b)), and will furnish to each holder of the then
Outstanding Notes and the Collateral Agent (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and
in any event within 45 days after the end of each
quarterly fiscal period (except the last) of each
calendar year, copies of:
(i) consolidated balance sheets of the
Company and its Subsidiaries and their respective
successors as of the close of such period, and
(ii) consolidated statements of income, cash
flows and owners' equity of the Company and its
Subsidiaries and their respective successors for
the portion of the calendar year ending with such
period,
in each case setting forth in comparative form the
figures for the corresponding period of the preceding
calendar year, all in reasonable detail and certified as
complete and correct, subject to changes resulting from
year-end adjustments, by an authorized financial officer
of the Company;
(b) Annual Statements. As soon as available and in
any event within 120 days after the end of each calendar
year, copies in duplicate of:
(i) consolidated balance sheets of the
Company and its Subsidiaries and their respective
successors as of the close of such calendar year,
and
(ii) consolidated statements of income, cash
flows and owners' equity of the Company and its
Subsidiaries and their respective successors for
such calendar year,
in each case setting forth in comparative form the
figures for the preceding calendar year, all in
reasonable detail and accompanied by an unqualified
opinion thereon of a firm of an Independent Public
Accountant selected by the Company to the effect that the
financial statements have been prepared in accordance
with generally accepted accounting principles and that
the examination of such accountants in connection with
such financial statements has been made in accordance
with GAAP and, accordingly, includes such tests of the
accounting records and such other auditing procedures as
were considered necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof,
one copy of each interim or special audit, if any, of the
Company made by independent accountants;
(d) Compliance Certificates. As soon as
practicable and in any event within 60 days after the end
of each fiscal quarter of the Company (including, without
limitation, the fiscal quarter of the Company most
recently completed prior to the date hereof), except with
respect to the final fiscal quarter of each fiscal year,
in which case as soon as possible and in any event within
120 days after the end of such fiscal quarter, a
Compliance Certificate dated on the execution date
thereof but effective as of the last day of such fiscal
quarter, duly executed by a Responsible Officer of the
Company, with appropriate insertions satisfactory to the
Required Noteholders, in their sole discretion;
(e) SEC Filings. As soon as available and in no
event later than five Business Days after the same shall
have been filed with the SEC, a copy of each Form 8-K
Current Report, Form 10-K Annual Report, Form 10-Q
Quarterly Report, Annual Report to Shareholders, Proxy
Statement or Registration Statement of the Company or any
of its Subsidiaries;
(f) Aged Accounts Receivable and Delinquency
Reports. Within 30 days after the last day of each
calendar month (including, without limitation, each of
the three months most recently ended prior to the date
hereof), a report showing the aggregate aged accounts
receivable of rental payments due under Leases and, as to
rental payments more than 90 days past due from a single
Lessee which exceed $25,000, after applicable reserves,
a description of such delinquent obligations, identifying
the amount of the rental payment due but not paid, the
name of the Lessee under such Lease, and information
explaining or otherwise relating to the failure of the
rental payments to have been received when due;
(g) Equipment Disposition Report. Within 60 days
after the last day of each calendar quarter, a
Disposition Report of all Equipment constituting
Collateral as to which a Disposition occurred during such
quarter;
(h) Casualty Loss Report. Within 45 days after any
Casualty Loss affecting Collateral having an Appraised
Value of $1,000,000 or greater, a report describing such
Casualty Loss;
(i) Equipment Substitution Report. Within 60 days
after the last day of each calendar quarter, a
Substitution Report of all Equipment acquired by the
Company and added to the Collateral during such month;
(j) Annual Report and Additional Reports of
Appraised Value. (i) As soon as available and in any
event within 120 days after the end of each calendar
year, and at any time as required by the Required
Noteholders (but in no event (A) more often than once per
calendar year per category of Equipment (in addition to
the required annual report) or (B) within 90 days from
the most recent report from an Independent Appraiser
under this Section 6.23(j)) a report from the Independent
Appraiser which sets forth the Appraised Value of each
item of Equipment constituting Collateral, and (ii)
within 60 days after the end of each calendar quarter, a
report from the Company which sets forth the Appraised
Value of each Item of Equipment constituting Collateral
and is otherwise in a form, and is based on assumptions
satisfactory to, the Required Noteholders.
(k) Master Lease Summary Report. Within 45 days
after the last day of each calendar quarter, a report
listing each item of Equipment constituting Collateral
and the Capitalized Cost thereof, and including with
respect to each such item (other than with respect to
(i) Rental Yard Trailers, (ii) marine vessels subject to
a Marine Vessel Pooling Arrangement, and (iii) marine
containers subject to a Marine Container Pooling
Arrangement), showing the Lease with respect thereto and
describing, as to each such Lease, the Lessee thereunder,
the then current monthly rental payment thereunder, the
initial term thereof, the scheduled expiration date
thereof and such other information relating to such Lease
as the Required Noteholders may reasonably require, and
listing separately with respect to all (1) Rental Yard
Trailers, (2) marine containers subject to Marine
Container Pooling Arrangements and (3) marine vessels
subject to Marine Vessel Pooling Arrangements, the
aggregate utilization thereof and the aggregate lease or
rental revenue obtained therefrom, in each case based on
the best information then reasonably available to the
Company;
(l) ERISA. (i) Promptly and in any event within
ten days after the Company knows or has reason to know of
the occurrence of a Reportable Event with respect to a
Plan with regard to which notice must be provided to the
PBGC, a copy of such materials required to be filed with
the PBGC with respect to such Reportable Event and in
each such case a statement of a Responsible Officer of
the Company setting forth details as to such Reportable
Event and the action which the Company or an ERISA
Affiliate, as appropriate, proposes to take with respect
thereto; (ii) promptly and in any event within ten days
after the Company knows or has reason to know of the
occurrence of any Prohibited Transaction that could
result in liability, directly or indirectly, to the
Company or an ERISA Affiliate, a written notice signed by
a Responsible Officer of the Company specifying the
nature thereof, what action the Company or the ERISA
Affiliate, as appropriate, is taking or proposes to take
with respect thereto, and, when known, any action taken
or proposed by the IRS, the Department of Labor or the
PBGC with respect thereto, (iii) promptly after receipt
of each actuarial report for any Plan and each annual
report for any Multiemployer Plan, true and complete
copies of each such report, (iv) immediately upon
becoming aware that a Multiemployer Plan has been
terminated, that the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer
Plan, or that the PBGC has instituted or intends to
institute proceedings under Title IV of ERISA to
terminate a Multiemployer Plan, a written notice signed
by a Responsible Officer of the Company specifying the
nature of such occurrence and any other information
relating thereto requested by the Agent, (v) promptly and
in any event within ten days after the Company knows or
has reason to know of any condition existing with respect
to a Plan that presents a material risk of termination of
the Plan, imposition of an excise tax, requirement to
provide security to the Plan or incurrence of other
liability by the Company or any ERISA Affiliate a
statement of a Responsible Officer of the Company
describing such condition; (vi) at least ten days prior
to the filing by any plan administrator of a Plan of a
notice of intent to terminate such Plan, a copy of such
notice; (vii) at least ten days prior to the filing
thereof with the Secretary of the Treasury, a copy of any
application by the Company or an ERISA Affiliate for a
waiver of the minimum funding standard under Section 412
of the Code; (viii) promptly and in no event more than
ten days after the filing thereof with the IRS, copies of
each annual report which is filed on Form 5500, together
with certified financial statements for the Plan (if any)
as of the end of the applicable plan year and actuarial
statements on Schedule B to such Form 5500; (ix) promptly
and in any event within ten days after it knows or has
reason to know of any event or condition that might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, a statement of a Responsible
Officer of the Company describing such event or
condition; (x) promptly and in no event more than ten
days after receipt thereof by the Company or any ERISA
Affiliate, a copy of each notice received by the Company
or an ERISA Affiliate concerning the imposition of any
withdrawal liability with respect to a Multiemployer
Plan; (xi) promptly after receipt thereof a copy of any
notice the Company or any ERISA Affiliate may receive
from the PBGC or the IRS with respect to any Plan or
Multiemployer Plan; provided, that this subsection; and
(xii) shall not apply to notices of general application
promulgated by the PBGC or the IRS;
(m) Supplemental Information; Notice of Material
Adverse Effect, Default or Event of Default. Immediately
upon becoming aware of any event that has resulted in or
could reasonably be expected to result in a Material
Adverse Effect, Default or Event of Default, notice with
respect thereto, and if no notice under this Section
6.23(m) or Section 6.22 is given within any calendar
year, within 60 days after the end of each such calendar
year, a certificate by a Responsible Officer of the
Company stating that no Material Adverse Effect, Default
or Event of Default has occurred during such calendar
year and that the Company was in compliance with the
covenants contained in Article 6 during such calendar
year;
(n) Supplemental Disclosure. Immediately upon
becoming aware of any material matter hereafter arising
which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or
described by the Company in this Agreement or any of the
other Note Documents (including all Schedules and
Exhibits hereto or thereto) or which is necessary to
correct any information set forth or described by the
Company hereunder or thereunder or in connection herewith
which has been rendered inaccurate thereby;
(o) Requested Information. With reasonable
promptness, such other data and information as the
Collateral Agent, the Rating Agency or any holder of the
then Outstanding Notes may reasonably request; and
(p) Information Required by Rule 144A. The Company
will, upon the request of the holder of any Outstanding
Note, provide such holder, and any qualified
institutional buyer designated by such holder, such
financial and other information as such holder may
reasonably determine to be necessary in order to permit
compliance with the information requirements of Rule 144A
under the Securities Act in connection with the resale of
Notes, except at such times as the Company is subject to
the reporting requirements of section 13 or 15(d) of the
Exchange Act. For the purpose of this paragraph, the
term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act.
Without limiting the foregoing, the Company will permit each holder
of a then Outstanding Note that is a financial institution or an
insurance company or that represents holders of at least 10% in
aggregate principal amount of the Outstanding Notes (or such
Persons as any of them may designate), (in each case while a
Default or Event of Default has occurred and is continuing at the
Company's expense with respect to out-of-pocket expenses) to visit
and inspect, the Company's books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss
the Company's affairs, finances and accounts with its respective
officers, employees, and independent public accountants (and by
this provision the Company authorizes said accountants to discuss
with such Note holders and their respective designees the finances
and affairs of the Company) all at such reasonable times and as
often as may be reasonably requested.
6.24 Amendment of Note Documents. Without the prior
written consent of the Required Noteholders, the Company will not
amend in any material respect any one or more of the Note
Documents.
6.25 Subordinated Debt.
(a) The Company shall not make any payment in respect of any
Approved Subordinated Debt other than regularly scheduled
installments of principal, interest and fees, in and to the extent
provided for under the terms of such Approved Subordinated Debt as
presently existing or as amended hereafter as permitted by this
Agreement; provided, however that no such payment shall be made if,
as of the date of such payment, any Event of Default or Default
shall have occurred and be continuing or if, immediately after
giving effect to such payment, any Event of Default or Default
would have occurred. Notwithstanding the foregoing, regularly
scheduled payments of principal and interest under the Principal
Mutual Note Agreement may be made unless prohibited by the terms of
Section 9 thereof, as in effect on the date of this Agreement or
subsequently amended as permitted by this Agreement.
(b) The Company shall not amend or modify any provision
contained in any documentation relating to the Approved
Subordinated Debt or the Company's Series A Cumulative Convertible
Preferred Stock to which the Company is a party (i) relating to the
principal, interest or repayment schedule of any of such Debt or
relating to dividends payable with respect to such Preferred Stock
or (ii) the amendment or modification of which could reasonably be
expected to materially and adversely affect the holders of the
Notes, except as approved by the Required Noteholders in accordance
with the terms hereof, and the Company shall not permit any of its
Subsidiaries to amend or modify any provision contained in any
documentation relating thereto to which such Subsidiary is a party.
6.26 Distributions by Subsidiaries. The Company shall
cause each Subsidiary to distribute to the Company all of its
available cash to the extent it is not reasonably necessary for the
operation of such Subsidiary's business.
6.27 Further Assurances. In addition to the obligations
and documents that this Agreement requires the Company to perform,
the Company shall (and shall cause any of its Subsidiaries to)
promptly upon request by the Collateral Agent or the Required
Noteholders do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and
continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other
instruments as the Collateral Agent or the Required Noteholders, as
the case may be, may reasonably require from time to time in order
(i) to effectuate the purposes of this Agreement or any other Note
Document, (ii) to perfect and maintain the validity, effectiveness
and priority of any of the Note Documents and the Security Liens
intended to be created thereby, and (iii) to assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Collateral
Agent and the Required Noteholders the rights granted or now or
hereafter intended to be granted to the Collateral Agent or the
Required Noteholders under any Note Document or the Collateral
Agency Agreement or under any other document executed in connection
therewith.
6.28 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that
it would be permitted by an exception to, or otherwise fall within
the limitations of, another covenant, shall not avoid the
occurrence of a Default or Event of Default if such action is taken
or condition exists.
SECTION 7. COLLATERAL AGENT.
The Company hereby covenants and agrees to pay the Collateral
Agent from time to time, and the Collateral Agent shall be entitled
to, compensation as agreed for all services rendered by it
hereunder and under the other Note Documents and in the exercise
and performance of any of its powers and duties hereunder and
thereunder, which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust, and the Company covenants and agrees to pay or
reimburse the Collateral Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with the provisions of this
Agreement, the Collateral Agency Agreement or the other Note
Documents (including the reasonable compensation and the expenses
and disbursements of its counsel and of all the Persons not
regularly in its employ) except any such expense, disbursement or
advance as may arise from its gross negligence or wilful
misconduct. Except as is expressly set forth in this Agreement or
the Note Documents, the Collateral Agent agrees that it shall have
no right against any Holder for the payment of compensation for its
services hereunder or under any of the Note Documents or any
expenses or disbursements incurred in connection with the exercise
and performance of its powers and duties hereunder or thereunder or
any indemnification against liability that it may incur in the
exercise and performance of such powers and duties, but on the
contrary shall, subject to the provisions hereof, look solely to
the Company for such payment and indemnification. THE COMPANY
HEREBY INDEMNIFIES THE COLLATERAL AGENT FOR, AND HOLDS IT HARMLESS
AGAINST, ANY LOSS, LIABILITY OR EXPENSE INCURRED WITHOUT GROSS
NEGLIGENCE OR WILFUL MISCONDUCT ON ITS PART, ARISING OUT OF OR IN
CONNECTION WITH THE ACCEPTANCE OR ADMINISTRATION OF THIS AGREEMENT,
THE OTHER NOTE DOCUMENTS OR THE COLLATERAL AGENCY AGREEMENT,
INCLUDING THE COSTS AND EXPENSES OF DEFENDING ITSELF AGAINST ANY
CLAIM OR LIABILITY IN CONNECTION WITH THE EXERCISE OR PERFORMANCE
OF ANY OF ITS POWERS OR DUTIES HEREUNDER AND UNDER THE NOTE
DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY LOSS, LIABILITY OR
EXPENSE RELATING TO FEDERAL, STATE, LOCAL, OR FOREIGN LAW,
INCLUDING SECURITIES, ENVIRONMENTAL LAW AND COMMERCIAL LAW OR OTHER
REQUIREMENTS OF LAW, WHICH ARISES UNDER COMMON LAW OR AT EQUITY OR
IN CONTRACT OR OTHERWISE. THE FOREGOING INDEMNITY SHALL COVER
LOSSES, LIABILITIES OR EXPENSES RESULTING FROM THE ORDINARY
NEGLIGENCE OF THE COLLATERAL AGENT, WHETHER SOLE, JOINT,
CONTRIBUTORY OR CONCURRENT.
SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS.
8.1 Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company,
be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or
prospectively), if and only if the Company shall have obtained the
consent in writing of the Required Noteholders; provided that
without the written consent of the holders of all of the then
Outstanding Notes, no such waiver, modification, alteration or
amendment shall be effective (i) which will extend the time of
payment of the principal of or the interest on any Note or reduce
the principal amount thereof or change the rate of interest
thereon, or (ii) which will change any of the provisions with
respect to optional prepayments, or (iii) which will change the
percentage of holders of the Notes required to consent to any such
amendment, alteration or modification or to take any other action
or give any other consent under this Agreement; and further
provided that without the consent in writing of the Collateral
Agent, no such waiver, modification, alteration or amendment shall
be effective which will change Section 5.10(a), Article 7 or this
Section 8.1.
8.2 Effect of Amendment or Waiver. Any such amendment
or waiver shall apply equally to all of the holders of the then
Outstanding Notes and shall be binding upon them, upon each future
holder of any Note and upon the Company, whether or not such Note
shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent
thereon.
SECTION 9. MISCELLANEOUS; EXPENSES, TAXES AND INDEMNIFICATION.
9.1 Successors and Assigns. Neither this Agreement nor
any of the rights or obligations hereunder can be assigned by the
Company without the prior written consent of the Required
Noteholders. Subject to the immediately preceding sentence,
whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such
party; and all the covenants, promises and agreements in this
Agreement contained by or on behalf of the Company shall bind and
inure to the benefit of the respective successors and assigns of
such parties whether so expressed or not.
9.2 Partial Invalidity. The unenforceability or
invalidity of any provision or provisions of this Agreement shall
not render any other provision or provisions herein contained
unenforceable or invalid.
9.3 Communications. All communications provided for
herein shall be in writing and shall be (unless otherwise required
by the specific provision hereof in respect of any matter)
delivered personally, deposited in the United States mail, first
class, or sent by telecopy or telefax and confirmed by United
States first class mail, addressed as follows:
If to the Company:
PLM International, Inc.
One Market
Steuart Street Tower, Suite 900
San Francisco, CA 94105-1301
Attn: Chief Financial Officer and General Counsel
Telecopy: (415) 905-7256
Telephone number: (415) 974-1399
If to the holders of the Notes, to the addresses set
forth on Schedule 1.
If to the Collateral Agent:
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust and Agency Group, Corporate
Services
Telecopy: (212) 250-6961
Telephone number: (212) 250-6648
or to any such party at such other address as any such party may
designate by notice duly given in accordance with this Section to
the other parties. All notices shall be effective only upon
receipt.
9.4 Governing Law. This Agreement and the Notes shall
be construed in accordance with and governed by the laws of the
State of Texas (without regard to conflicts of laws principles) and
applicable federal law.
9.5 Maximum Interest Payable. Each of the Company and
the holders of the Notes specifically intend and agree to
contractually limit the amount of interest payable under this
Agreement, the Notes and all other Note Documents to the maximum
rate or amount of interest permitted under applicable law. If
applicable law is ever construed so as to render usurious any
amounts called for under this Agreement, the Notes or any other
Note Document, or contracted for, charged, taken, reserved or
received with respect to the extension of credit evidenced hereby
and thereby, or if acceleration of maturity of any of the Notes or
if any prepayment by the Company results in the Company having
paid, or demand having been made on the Company to pay, any
interest in excess of that permitted by applicable law, then all
excess amounts theretofore received by the holder or holders of the
Notes shall be credited on the principal balances of the Notes (or,
if the Notes have been or would thereby be repaid in full, refunded
to the Company), and the provisions of this Agreement, the Notes
and the other Note Documents and any demand on the Company shall
immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder shall immediately be reduced,
without the necessity of the execution of any new document, so as
to comply with applicable law, but so as to permit the recovery of
the fullest amount otherwise called for hereunder and thereunder.
The right to accelerate maturity of the Notes does not include the
right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and no holder of the Notes intends
to collect any unearned interest in the event of acceleration. All
sums paid or agreed to be paid to any holders of the Notes, for the
use, forbearance or detention of the indebtedness evidenced hereby
and thereby shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term
of such indebtedness until payment in full so that the rate or
amount of interest on account of such indebtedness does not exceed
the applicable usury ceiling. As used herein, the term "interest"
means interest as determined under applicable law, regardless of
whether denominated as interest in this Agreement, the Notes or the
other Note Documents. The provisions of this Section 9.5 shall
control over all other provision of this Agreement, any Notes and
any other Note Documents.
9.6 Counterparts. This Agreement may be executed, and
delivered in any number of counterparts, each of such counterparts
constituting an original but all together only one Agreement.
9.7 Headings etc. Any headings or captions preceding
the text of the several sections hereof are intended solely for
convenience of reference and shall not constitute a part of this
Agreement nor shall they affect its meaning, construction or
effect. All references herein or in any other Note Document to the
masculine, feminine or neuter gender shall also include and refer
to each other gender not so referred to.
9.8 Amendments. This Agreement may, subject to the
provisions of Article 8 hereof, from time to time and at any time,
be amended or supplemented by an instrument or instruments in
writing executed by the parties hereto.
9.9 Benefits of Agreement Restricted to Parties and Note
Holders. Nothing in this Agreement expressed or implied is
intended or shall be construed to give to any Person other than the
Company, the holders of the Notes and the Collateral Agent and
their respective permitted successors and assigns any legal or
equitable right, remedy or claim under or in respect of this
Agreement or any covenant, condition or provision herein contained;
and all such covenants, conditions and provisions are and shall be
held to be for the sole and exclusive benefit of the Company, the
holders of the Notes and the Collateral Agent and their respective
permitted successors and assigns.
9.10 Waiver of Notice. Whenever in this Agreement the
giving of notice by mail or otherwise is required, the giving of
such notice may be waived only in writing by the Person or Persons
entitled to receive such notice.
9.11 Holidays. In any case where the date of maturity of
interest or principal on the Notes or the date fixed for any
payment (in whole or in part) of any Note or the day for
performance of any act or the exercising of any right, as provided
herein, shall not be a Business Day, then payment of such interest
on or principal of the Notes may be made or such act performed or
right exercised, on the next succeeding Business Day, with the same
force and effect as if done on the nominal date provided herein.
9.12 Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or combination or
other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with
GAAP, consistently applied, to the extent applicable, except where
such principles are inconsistent with the requirements of this
Agreement.
9.13 Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by
such Person.
9.14 Exhibits. All references herein to Exhibits or
Schedules shall be to the Exhibits and Schedules attached to this
Agreement unless the context otherwise requires reference to an
exhibit or schedule to another document. All Exhibits and
Schedules attached to this Agreement are made a part hereof for all
purposes.
9.15 Satisfaction and Discharge of Agreement. If at any
time (a) the Company shall pay and discharge the entire
indebtedness on all Notes hereunder by paying or causing to be paid
the principal of, and Make-Whole Amounts (if any) and interest on,
all Notes hereunder, as and when the same become due and payable or
(b) all such Notes shall have been cancelled as herein provided
(other than any Notes which shall have been destroyed, lost or
stolen and which shall have been replaced as provided in
Section 2.6); and if the Company shall also pay and perform or
cause to be paid and performed all other Obligations, then and in
that case this Agreement shall cease, terminate, and become null
and void, and thereupon the Collateral Agent shall, upon written
request of the Company and any other relevant party to the Note
Documents forthwith execute proper instruments acknowledging
satisfaction of and discharging this Agreement and releasing all
Liens held by it pursuant to the terms hereof; provided that the
provisions of Article 7, Sections 9.17 and 9.19 and this
Section 9.15 shall survive the satisfaction and discharge of this
Agreement.
9.16 Conflicts with Security Documents. In the event
that any covenants of the Company contained herein conflict
directly with any covenants of the Company contained in any other
Note Document, this Agreement shall control. It is the intent of
the parties hereto that any apparent conflict between any Note
Document and this Agreement shall be construed, to the greatest
extent possible, to avoid any such conflict.
9.17 Expenses of Transaction. The Company will pay and
will indemnify and hold each Note holder harmless in respect of all
of the following:
(a) all costs and expenses incurred by the Note
holders in connection with the development, preparation,
delivery, administration and execution of, and any
amendment, supplement, waiver or modification to, this
Agreement or any other Note Documents or any document
contemplated by or referred to herein or therein or the
consummation of the transactions contemplated hereby and
thereby, including the reasonable attorneys' fees and
expenses (for its regular or special counsel and local
counsel as appropriate), incurred by the Note holders
with respect thereto;
(b) all costs and expenses incurred by the Note
holders in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or
restructuring regarding the Notes) under this Agreement
or any other Note Documents, or any document contemplated
by or referred to herein or therein, including reasonable
attorneys' fees and expenses (for its regular or special
counsel and local counsel as appropriate), incurred by
the Note holders;
(c) appraisal, audit, environmental inspection and
review, search and filing costs, fees and expenses,
incurred or sustained in connection with the matters
referred to under paragraphs (a) and (b) of this section;
and
(d) fees, costs and expenses, if any, incurred by
the Note holders with respect to the Collateral Agent or
to the Rating Agency and the NAIC to maintain ratings
therefrom.
Without limiting the generality of the foregoing, the Company shall
pay, within 30 days after receipt thereof, all invoices of special
and local counsel to the Note holders with respect to the Closing.
9.18 Taxes, Etc. The Company agrees to pay all
governmental taxes, assessments and other Charges (except income,
gross receipts, ad valorem, intangibles, franchise or other similar
taxes imposed on the Collateral Agent or the Note holders),
including any interest or penalties thereon, at any time payable or
ruled to be payable in respect of the existence, execution or
delivery of the Note Documents or the issuance of the Notes by
reason of any existing or hereafter enacted federal, state, local
or foreign statute, and to indemnify and hold the Collateral Agent
and the Note holders and each of their successors and assigns
harmless against liability in connection with any such taxes,
assessments or other Charges.
9.19 Indemnification. To the fullest extent permitted by
applicable law, the Company agrees to protect, indemnify, defend
and hold harmless each Note holder and each of their respective
directors, officers, employees and agents and any Person who
controls any Note holder within the meaning of the Securities Act
(each an "Indemnitee" and collectively, the "Indemnitees") from and
against any liabilities, losses, obligations, damages, penalties,
expenses or costs of any kind or nature and from any suits,
judgments, claims or demands (including in respect of or for all
reasonable attorneys' fees and expenses and other fees and
disbursements of consultants of such Indemnitees in connection with
any investigative, administrative or judicial proceedings, whether
or not such Indemnitees shall be designated a party thereto) based
on any federal, state, local or foreign law or other statutory
regulation, including securities, Environmental Law and commercial
law or other Requirement of Law, which arises under common law or
at equity or on contract or otherwise on account of or in
connection with any matter or thing or any action or failure to act
by the Indemnitees, or any of them arising out of or relating to
this Agreement or any other Note Documents, or any document
contemplated by or referred to herein or therein, except the
Company shall have no liability under this Section 9.19 to any
Indemnitee to the extent such liability arises from the willful
misconduct or gross negligence of such Indemnitee (collectively,
the "Indemnified Matters"). THE FOREGOING INDEMNITY SHALL COVER
LOSSES, LIABILITIES OR EXPENSES RESULTING FROM THE ORDINARY
NEGLIGENCE OF THE INDEMNITEES, WHETHER SOLE, JOINT, CONTRIBUTORY OR
CONCURRENT. Upon receiving notice of any suit, claim or demand
asserted by any Person that any Note holder believes is covered by
this indemnity, such Note holder shall give the Company notice of
the matter and an opportunity to defend it, at the Company's sole
cost and expense, with legal counsel reasonably satisfactory to
such Note holder. The obligations of the Company under this
Section 9.19 shall survive the payment and performance of the
Obligations and the termination of this Agreement. To the extent
that the undertaking to indemnify, pay and hold harmless set forth
in this Section 9.19 may be unenforceable because it is violative
of any law or public policy, the Company shall contribute the
maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
9.20 Entire Agreement. This Agreement, together with the
Schedules and Exhibits hereto, and the other Note Documents
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supersede any
prior agreements or understandings with respect thereto, including
without limitation, the "PLM International, Inc. - Summary of
Certain Terms of Senior Secured Notes" draft dated June 16, 1994.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the
date first above written.
PLM INTERNATIONAL, INC.
By: /s/Stephen Peary
Stephen Peary, Senior Vice
President
SUN LIFE INSURANCE COMPANY
OF AMERICA
By: /s/Sam Tillinghast
Sam Tillinghast, Authorized
Agent
By: /s/Fred Van Etten
Fred Van Etten, Authorized Agent
AMERICAN LIFE AND CASUALTY
INSURANCE COMPANY
By: /s/John H. Rahill
Name: John Rahill,
Title: Vice President
ALEXANDER HAMILTON LIFE
INSURANCE COMPANY OF AMERICA
By: /s/William Lang
Name: William Lang,
Title: Vice President
REPUBLIC WESTERN INSURANCE
COMPANY
By: /s/Bradley Newman
Name: Bradley Newman,
Title: Treasurer