NOTE AGREEMENT
Dated as of June 28, 1996
Up to $27,000,000 Floating Rate Senior Secured Notes
Due August 15, 2002
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 22
2.1 Registration of Notes 22
2.2 Exchange of Notes 23
2.3 Transfer of Notes 23
2.4 General Rules 23
2.5 Valid Obligations 23
2.6 Replacement of Notes 24
3. PAYMENT OF NOTES, COLLATERAL AND LOCK BOX ACCOUNT 24
3.1 Direct Payment 24
3.2 Issuance Taxes 25
3.3 Scheduled Principal Payments 25
3.4 Mandatory Prepayment due to Borrowing Base 25
3.5 Optional Prepayments 26
3.6 Notice of Prepayments 26
3.7 Allocation of Prepayments 27
3.8 Payments by Collateral Agent 27
3.9 Collateral 27
3.10 Lock Box Account 27
4. EVIDENCE OF ACTS OF NOTE HOLDERS 30
4.1 Execution by Note Holders or Agents30
4.2 Future Holders Bound 30
5. DEFAULTS - REMEDIES 30
5.1 Events of Default 30
5.2 Notice of Claimed Default 34
5.3 Acceleration of Maturities34
5.4 Rescission of Acceleration34
5.5 Default Remedies 35
5.6 Other Enforcement Rights 36
5.7 Effect of Sale, etc. 37
5.8 Delay or Omission; No Waiver 37
5.9 Restoration of Rights and Remedies 37
5.10 Application of Sale Proceeds 38
5.11 Cumulative Remedies 38
5.12 Limitations on Suits 39
5.13 Suits for Principal and Interest 39
5.14 Undertakings 39
5.15 Waiver by the Company 40
6. CERTAIN COVENANTS 40
6.1 Existence, Etc 40
6.2 Insurance 40
6.3 Taxes, Claims for Labor and Materials, Compliance with Laws 41
6.4 Maintenance, Etc. 41
6.5 Agreement to Deliver Security Documents 41
6.6 Payment of Notes and Maintenance of Office 42
6.7 Nature of Business 42
6.8 Use of Proceeds 42
6.9 Minimum Consolidated Total Net Worth 43
6.10 Minimum Consolidated EBITDA to Debt Service Ratio 43
6.11 Maximum Consolidated Debt to Total Net Worth Ratio 43
6.12 Restricted Payments 43
6.13 Limitation on Liens 43
6.14 Mergers, Consolidations, Etc. 44
6.15 Transactions with Affiliates 45
6.16 Repurchase of Notes 45
6.17 Investments 45
6.18 Notice of Default and Event of Default; Notice of Certain
Other Matters 46
6.19 Reports and Rights of Inspection 47
6.20 Amendment of Note Documents 51
6.21 Subordinated Debt 51
6.22 Distributions by Subsidiaries 51
6.23 Further Assurances 51
6.24 Independence of Covenants 52
6.25 Borrowing Base Certificates 52
6.26 Appraisals 53
7. COLLATERAL AGENT 54
8. AMENDMENTS, WAIVERS AND CONSENTS 55
8.1 Consent Required 55
8.2 Effect of Amendment or Waiver 55
9. MISCELLANEOUS; EXPENSES, TAXES AND INDEMNIFICATION 55
9.1 Successors and Assigns 55
9.2 Partial Invalidity 56
9.3 Communications 56
9.4 Governing Law 57
9.5 Maximum Interest Payable 57
9.6 Counterparts 58
9.7 Headings, Etc. 58
9.8 Amendments 58
9.9 Benefits of Agreement Restricted to Parties and Note
Holders 58
9.10 Waiver of Notice 58
9.11 Holidays 58
9.12 Accounting Principles 58
9.13 Directly or Indirectly 58
9.14 Exhibits 59
9.15 Satisfaction and Discharge of Agreement 59
9.16 Conflicts with Security Documents 59
9.17 Expenses of Transaction 59
9.18 Taxes, Etc. 60
9.19 Indemnification 60
9.20 Entire Agreement 61
Attachments to Note Agreement:
Schedules
Schedule 1 - Names, Addresses and Payment Instructions of
Initial Purchasers
Schedule 2 - Independent Appraiser
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - [Intentionally Deleted]
Exhibit D - Compliance Certificate
Exhibit E - Form of Data Processing Contract
Exhibit F - Form of Management Contract
Exhibit G - Form of Security Agreement (Master)
Exhibit H - Security Agreement (Lock Box)
Exhibit I - Form of Management Fee Release Request
Exhibit J - Form of Quarterly Release Request
Exhibit K - Form of Equipment Services Contract
- 1 -
NOTE AGREEMENT
Up to $27,000,000 Floating Rate Senior Secured Notes
Due August 15, 2002
Dated as of
June 28, 1996
To the purchasers named in
Schedule I attached hereto
Ladies and Gentlemen:
The undersigned, PLM International, Inc., a Delaware corporation (the
"Company" or a "Guarantor"), PLM Financial Services, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company ("FSI"), and PLM
Investment Management, Inc., a California corporation and a wholly owned
subsidiary of FSI ("IMI"), agree with SunAmerica Life Insurance Company and each
affiliate of SunAmerica designated by SunAmerica to purchase any Notes and their
respective successors and assigns and subsequent holders of the Notes (the
Purchasers of the first issuance of Notes being identified on Schedule 1
hereto), as follows:
.ECTION 1. DESCRIPTION OF NOTES AND DEFINITIONS
. (a) FSI and IMI have authorized the issuance and sale, pursuant to the Note
Purchase Agreement (the "Note Purchase Agreement") of even date herewith between
the Purchasers, FSI and IMI and joined in by the Company, of up to U.S.
$27,000,000 aggregate principal amount of floating rate Senior Secured Notes to
be dated the date of issue, to bear interest on the outstanding principal amount
thereof from time to time at a floating rate equal to the Applicable Libor Rate
plus 240 basis points, subject to increase as set forth in the immediately
following sentence (individually, a "Note" and collectively the "Notes,"
including any notes issued in substitution or replacement of any thereof). If at
any time any Note is rated NAIC 3 or lower by the NAIC, then effective upon the
date of such downgrading and continuing until such Note is rated higher than
NAIC 3, such rate as it applies to all such Notes that have been downgraded will
be automatically increased by 100 basis points. Interest on the Notes will be
payable quarterly on November 15, February 15, May 15, and August 15 in each
year (commencing November 15, 1996) and principal of the Notes will be payable
quarterly on November 15, February 15, May 15, and August 15 in each year
(commencing November 15, 1997), and at maturity. The Notes will bear interest on
overdue payments at the rate specified therein and will be substantially in the
form attached hereto as Exhibit A. Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months.
(b) Subject to the other terms and conditions of this
Agreement and the terms and conditions of the Note Purchase Agreement, the
Purchasers have agreed to purchase Notes having an aggregate original principal
amount not to exceed U.S. $27,000,000. The original principal amount of each
Note shall be determined pursuant to its related Note Purchase Agreement.
(c) The Obligations of each Issuer shall constitute and be
full recourse obligations of such Issuer.
. The Notes are subject to the terms of, and secured pursuant to, this Agreement
and the other Note Documents. In addition, payment and performance of all Notes
and other Obligations of all Issuers are guaranteed by the Company, and payment
and performance of the Notes issued by IMI and the other Obligations of IMI are
guaranteed by FSI.
. 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):
"Acceptable Security Interest" in any property shall mean a
Lien granted pursuant to a Note Document (i) which exists in favor of
the Collateral Agent for the benefit of itself and the other Persons to
be secured thereby as specified in the Note Document creating such
Lien, (ii) which is first priority, (iii) which secures only the
obligations secured thereby as specified in the Note Document creating
such Lien, and (iv) which is perfected and is enforceable by the
Collateral Agent, for the benefit of itself and the other Persons
specified in the Note Document creating such Lien, against the grantor
thereof.
"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, (A) except with respect to Section 6.15, this
definition of "Affiliate" shall be deemed to exclude 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 the first
issuance of Notes and on each November 15, February 15, May 15, and
August 15 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. "Libor Rate"
shall mean as of any Quarterly Payment 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 Bloomberg Screen on such date as the
three-month London Interbank Offered Rate. The Libor Rate determined on
each Quarterly Payment Date shall apply from such date through the date
immediately preceding the next Quarterly Payment 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 Subordinated Debt" means at any time the Debt
outstanding under the Principal Mutual Note Agreement and 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 any refinancing of the same in a principal amount not
greater than the outstanding principal amount of such Debt as of the
date of refinancing.
"Bank of America" shall mean Bank of America National Trust
and Savings Association.
"Borrowing Base Certificate" means a certificate, duly
executed by a Responsible Officer of the Company, FSI and IMI,
appropriately completed and in substantially in the form of Exhibit B.
"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.
"Capital Lease" means a lease with respect to which the lessee
is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person
and a Capital Lease, the amount of the obligation of such Person as the
lessee under such Capital Lease which would, in accordance with GAAP,
appear as a liability on a balance sheet of such Person.
"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.
"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.
"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) any Property of the Company or any Issuer, (ii) the Notes, (iii)
the Company or any Issuer's employees, payroll, income or gross
receipts, (iv) the Company or any Issuer's ownership or use of any of
its respective Property, or (v) any other aspect of the Company or any
Issuer's business.
"Closing" means the consummation of the first purchase of
Notes under the Note Purchase Agreements.
"Closing Date" means June 28, 1996.
"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 Note Documents.
"Collateral Agent" shall mean SunAmerica and any successor
thereto as Collateral Agent under the Collateral Agency Agreement.
"Collateral Agency Agreement" shall mean a Collateral Agency
Agreement between SunAmerica, as the initial Collateral Agent, or its
designated successor and the holders of the Notes.
"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 in good
faith and otherwise in a manner consistent with the terms of this
Agreement.
"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 Debt" means, as of any date of determination,
the total of all Debt of the Company and its Subsidiaries outstanding
on such date (excluding Non-Recourse Secured Debt), after eliminating
(in accordance with GAAP) all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
statements of the Company and its Subsidiaries.
"Consolidated Debt to Total Net Worth Ratio" means, as
measured as of the last day of each fiscal quarter of the Company, the
ratio of (a) Consolidated Debt to (b) Consolidated Total Net Worth.
"Consolidated EBITDA to Debt Service Ratio" means, as measured
quarterly as of the last day of each fiscal quarter of the Company the
ratio, expressed as a percentage, of (a) EBITDA for the preceding four
fiscal quarters including the fiscal quarter in which such measurement
date occurs to (b) Debt Service for the four fiscal quarter period next
following such measurement date (and for purposes of this definition,
the interest rate will be deemed to be the Debt Rate in effect as of
such measurement date).
"Consolidated Net Income" means, with reference to any period,
the net income (or loss) of the Company and its Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance with
GAAP, after eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
statements of the Company and its Subsidiaries in accordance with GAAP,
provided that there shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the
Company or a Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any
manner, realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Subsidiary) in which the Company or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Company or such Subsidiary in the form of cash
dividends or similar cash distributions,
(c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted by the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Subsidiary,
(d) any restoration to income of any contingency reserve
(other than Equipment maintenance reserves), except to the extent that
provision for such reserve was made out of income accrued during such
period,
(e) any gains resulting from any write-up of any assets (but
not any loss resulting from any write-down of any assets),
(f) any net gain from the collection of the proceeds of life
insurance policies,
(g) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Subsidiary,
(h) any net income or gain (but not any net loss) during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discounted operations or the disposition thereof,
(i) any deferred credit representing the excess of equity in
any Subsidiary at the date of acquisition over the cost of the
investment in such Subsidiary,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"Consolidated Total 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 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 Joint
Venture assets pursuant to the preceding provisions is inconsistent
with GAAP) and excluding any assets securing Non-Recourse Secured Debt
to the extent of the lesser of such Non-Recourse Secured Debt and the
Appraised Value of such assets. Solely for purposes of this definition,
the phrase "an item of Equipment" as used in the definition of
"Appraised Value" shall be deemed to refer to "an asset".
"Consolidated Total Liabilities" means, on a consolidated
basis, as at any date of determination, the sum of (i) Consolidated
Debt and (ii) all other liabilities of the Company and its Subsidiaries
(as to this clause (ii), as determined and computed in accordance with
GAAP), but excluding all Non-Recourse Secured Debt.
"Data Processing Contracts" means collectively those certain
agreements each entitled "Data Processing Servicing Agreement" entered
into by each Growth Fund and IMI, a representative copy of the same
being attached as Exhibit E.
"Debt," with respect to any Person shall mean, without
duplication (and in particular, the Debt of any Subsidiary of the
Company which is covered by a Guaranty given by the Company or any
other Subsidiary of the Company shall only be counted once for
determining the total Debt of the Company and its Subsidiaries on a
consolidated basis):
(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").
"Debt Rate" means, as of any date of determination, the
interest rate then in effect in respect of the Notes pursuant to
Section 1.1 of this Agreement.
"Debt Service" means, with respect to any period, the sum of
the following: (a) Interest Charges for such period and (b) all
payments of principal in respect of Debt of the Company and its
Subsidiaries (including the principal component of any payments in
respect of Capital Lease Obligations) paid or payable during such
period after eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
statements of the Company and its Subsidiaries in accordance with GAAP,
but excluding payments of principal in respect of Non-Recourse Secured
Debt.
"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.
"Defaulted Lease" means any Lease as to which FSI or the
Growth Fund that owns such Lease has reasonably determined, in
accordance with customary servicing procedures applicable to the Leases
owned by the Growth Funds, that such Lease is in material default;
provided, each Lease as to which the Lessee thereunder is delinquent in
an aggregate amount equal to the Scheduled Payments due thereunder
during a 90 day period shall automatically be deemed a Defaulted Lease
unless and until all defaults thereunder have been cured.
"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.
"EBITDA" means, for any period, the sum, determined (without
duplication) on a consolidated basis for the Company and its
Subsidiaries of (i) Consolidated Net Income for such period plus (ii)
interest expense for such period (excluding interest expense
attributable to Non-Recourse Debt) to the extent deducted in the
determination of such net income (or loss) plus (iii) depreciation,
amortization and other similar non-cash items to the extent deducted in
the determination of such net income (or loss) plus (iv) all taxes
accrued for such period on or measured by income to the extent deducted
in the determination of such net income (or loss) and plus (v) the
amount (if any) by which the line item identified as "equity interests
in affiliates" on the Company's balance sheet has been reduced during
such period by virtue of the Company's receipt of cash in respect of
such line item.
"Eligible Data Processing Expense Reimbursements" means as of
any date of determination the present value of the expense
reimbursements/fees due or to become due to IMI under the terms of the
Data Processing Contracts and in which there is an Acceptable Security
Interest and such fees and the rights of IMI thereto subject to no
other Liens, but excluding (a) in the case of any Data Processing
Contract that has not been renewed or has been terminated or notice of
termination has been given, any fees that would be attributable to any
period on or after the date of such termination, (b) any portion of
such fees that are subject to any action or proceeding asserting any
reduction, abatement, set-off or diminution thereof, and (c) any fees
the payment of which is more than 90 days past due; in each case as
such present value is calculated using the Debt Rate and assuming (i)
all payments are due on the last day of the relevant monthly period;
(ii) payments are discounted on a monthly basis using a 30 day month
and 360 day year; and (iii) payments are discounted to the last day of
the calculation period in which the date of determination falls.
"Eligible General Partner Interest" means the ownership
interest held by FSI in Growth Fund VII and No Load Growth Fund as the
general partner or manager and (a) in which there is an Acceptable
Security Interest and such interest shall be subject to no other Liens
and (b) as to which there is not pending against FSI any action or
proceeding asserting any reduction, abatement, set-off or other
diminution of any material part of the distributions and other payments
due and to become due in respect of such interest.
"Eligible Lease Negotiation and Acquisition Fees" means, as of
any date of determination, the lease negotiation fees and equipment
acquisition fees due or to become to IMI under the terms of the
Equipment Services Contracts (limited to and measured by the Purchase
Account Amounts then contained in the Purchase Accounts) and in which
there is an Acceptable Security Interest and such fees and the rights
of IMI thereto subject to no other Liens, but excluding (a) in the case
of any Equipment Services Contract that has not been renewed or has
been terminated or notice of termination has been given, any fees that
would be attributable to any period on or after the date of such
termination, (b) any portion of such fees that are subject to any
action or proceeding asserting any reduction, abatement, set-off or
diminution thereof, and (c) any fees the payment of which is more than
90 days past due.
"Eligible Leases" means a Lease owned by a Growth Fund (in
which such Growth Fund is the owner and lessor of the Equipment covered
by such Lease) and which is not a Defaulted Lease.
"Eligible Management Fees" means, as of any date of
determination, the present value of the management fees due and to
become due to IMI under the terms of the Management Contracts based on
(x) the Scheduled Payments of Eligible Leases in existence as of such
date of determination and (y) Projected Renewal Rentals as of such date
of determination, in which there is an Acceptable Security Interest and
such management fees and the rights of IMI thereto shall be subject to
no other Liens, but excluding (a) in the case of any Management
Contract that has not been renewed or has been terminated or notice of
termination has been given, any management fees that would be
attributable to any Schedule Payments or Projected Renewal Rentals due
on or after the date of such termination, (b) any portion of such
management fees that are subject to any action or proceeding asserting
any reduction, abatement, set-of or diminution thereof, and (c) any
management fees the payment of which is more than 90 days past due; in
each case as such present value is calculated using the Debt Rate and
assuming (i) all payments are due on the last day of the relevant
monthly period; (ii) payments are discounted on a monthly basis using a
30 day month and 360 day year; and (iii) payments are discounted to the
last day of the calculation period in which the date of determination
falls.
"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" means any and all items of transportation-related
tangible personal property (including parts) owned by the Growth Funds;
in each case held for sale, lease or rental to third parties.
"Equipment Assets" means any item of Equipment and any other
item of tangible personal property acquired by the Company or any
Subsidiary for the purpose of lease or sale in connection with the
business of the Company or such Subsidiary.
"Equipment Services Contracts" means collectively those
certain agreements each entitled "Equipment Service Agreements" entered
into by each of the Growth Funds and IMI, a representative copy of the
same being attached as Exhibit K.
"ERISA" means 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.
"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.
"Existing Senior Debt" means the Debt from time to time
outstanding pursuant to that certain Note Agreement dated as of June
30, 1994 between the Company, Sun Life Insurance Company of America,
American Life and Casualty Insurance Company, Alexander Hamilton Life
Insurance Company of America and Republic Western Insurance Company, as
heretofore or hereafter amended.
"FDIC" means the Federal Deposit Insurance Corporation and any
successor thereto.
"FSI Borrowing Base" means the sum of 65% of the FSI General
Partner Interest Amount, in each case determined as of the date of the
Borrowing Base Certificate then most recently delivered pursuant to
this Agreement.
"FSI Funds" means, as of any date of determination, those
funds (and any interest or investment income thereon) contained in the
Lock Box Account and designated by the Collateral Agent as being
traceable to Collateral in which FSI has granted to the Collateral
Agent a Security Lien.
"FSI General Partner Amount" means, as of any date of
determination, the sum of the General Partner Amount for each Eligible
General Partner Interest.
"FSI Guaranty" means the Guaranty Agreement executed by FSI in
favor of the holders of the Notes and the Collateral Agent.
"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.
"General Partner Amount" means, as of any date of
determination, the sum of (a) the product resulting from the
multiplication of (i) the Appraised Value of all Equipment then owned
by Growth Fund VII provided FSI owns an Eligible General Partner
Interest in Growth Fund VII, excluding Equipment that has suffered a
Casualty Loss, less all Debt of Growth Fund VII, times (ii) 5% and (b)
the product resulting from the multiplication of (i) the Appraised
Value of all Equipment then owned by No Load Growth Fund provided FSI
owns an Eligible General Partner Interest in No Load Growth Fund,
excluding Equipment that has suffered a Casualty Loss, less all Debt of
No Load Growth Fund, times (ii) 15%.
"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, a California limited partnership, and Professional Lease
Management Income Fund I, a California limited liability company.
"Growth Fund VII" means PLM Equipment Growth & Income Fund
VII, a California limited partnership.
"Guarantor" means the Company or FSI as the context requires.
"Guaranty" shall have the meaning set forth in paragraph (v)
of the definition of Debt.
"IMI Borrowing Base" means the sum of (a) 50% of the Eligible
Management Fees covered by clause (x) of the definition of Eligible
Management Fees, (b) 25% of the Eligible Management Fees covered by
clause (y) of the definition of Eligible Management Fees (but in no
event to exceed the Renewal Cap Amount), (c) 50% of the Eligible Data
Processing Expense Reimbursements, and (d) 50% of the Eligible Lease
Negotiation and Acquisition Fees, in each case determined as of the
date of the Borrowing Base Certificate most recently delivered pursuant
to this Agreement.
"IMI Funds" means, as of any date of determination, those
funds (and any interest or investment income thereon) contained in the
Lock Box Account and designated by the Collateral Agent as being
traceable to Collateral in which IMI has granted to the Collateral
Agent a Security Lien.
"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 Lease Obligations 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 consistent with the terms of this Agreement.
"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 2 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.
"Interest Charges" means, with respect to any period, the sum
(without duplication) of the following (in each case, eliminating all
offsetting debits and credits between the Company and its Subsidiaries
and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP): (a) all interest in respect of
Debt of the Company and its Subsidiaries, including imputed interest on
Capital Lease Obligations, deducted in determining Consolidated Net
Income for such period (excluding, however, any such interest on
Non-Recourse Secured Debt), together with all interest capitalized or
deferred during such period and not deducted in determining
Consolidated Net Income for such period (excluding, however, any such
interest on Non-Recourse Secured Debt), and (b) all debt discount and
expense amortized or required to be amortized in the determination of
Consolidated Net Income for such period (excluding, however, all such
debt discount and expense attributable to Non-Recourse Secured Debt).
"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. ss. 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.
"Issuer" means FSI and IMI, either individually or
collectively as the context requires.
"Lease" means a written lease by a Growth Fund or any trustee
under any trust that is the holder of legal or record title for the
benefit of a Growth Fund to a Lessee of any item of Equipment 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;
provided, any lease agreement which represents any conditional sales
transaction or similar transaction and which is in accordance with GAAP
is carried on the books of a Growth Fund as something other than an
operating lease or finance lease shall not constitute 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 applicable
Growth Fund 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.
"Lock Box Account" means the account required to be
established pursuant to the terms of the Security Agreement (Lock Box).
"Make-Whole Amount" shall mean an amount calculated by the
applicable Issuer and set forth in a certificate from such Issuer (or
if such Issuer fails to make such calculation, as calculated by the
Required Noteholders), determined as of the date of any prepayment
pursuant to Sections 3.4 or 3.5 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 Note shall be equal to 0.75% of the outstanding
principal amount prepaid.
"Management Contracts" means collectively those certain
agreements each entitled "Equipment Management Agreement" entered into
by each of the Growth Funds and IMI, a representative copy of the same
being attached as Exhibit F.
"Marine Container Pooling Arrangement" means any written
agreement, however denominated, pursuant to which (i) marine containers
owned by a Growth Fund 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 Growth Fund, 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 a Growth Fund 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 Growth Fund 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.
"Material Adverse Effect" shall mean a material and adverse
effect on the properties, business, financial condition or prospects of
the Company or any Issuer or on its ability to perform its obligations.
"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.
"No Load Growth Fund" means Professional Lease Management
Income Fund I, a California limited liability company.
"Non-Recourse Secured Debt" means Debt with respect to which
(a) none of the Company or any Subsidiary has or will have under any
circumstances (except fraud in the making), any personal or recourse
liability for the repayment of such Debt (whether directly as the
primary obligor or indirectly as a guarantor) and (b) the proceeds of
such Debt are used to pay the acquisition price for Equipment Assets
and the repayment thereof is secured by a Security Lien on the
Equipment Assets so acquired and the proceeds of such Equipment Assets.
"Note Documents" shall mean this Agreement, the Note Purchase
Agreements, the Notes, the Security Documents, the PLM Guaranty, the
FSI Guaranty, 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.
"Note Purchase Agreement" shall mean the Note Purchase
Agreement of even date herewith between FSI, IMI and SunAmerica (and
joined in by the Company).
"Notes" shall have the meaning set forth in Section 1.1.
"NRSRO" means a Nationally Recognized Statistical Rating
Organization.
"Obligations" shall mean as to each Issuer the payment of all
indebtedness and performance of all obligations of such Issuer now or
hereafter existing under this Agreement, the Notes issued by such
Issuer and the other Note Documents to which such Issuer is a party or
bound, whether for principal, interest, Make-Whole Amounts, fees,
expenses or otherwise.
"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, 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
6.13.
"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 Guaranty" means the Guaranty Agreement executed by PLM in
favor of the holders of the Notes and the Collateral Agent.
"PLM Security Agreement" means the Security Agreement executed
by PLM in favor of the holders of the Notes and the Collateral Agent.
"Portfolio Assets" means a portfolio, group or collection of
Equipment Assets.
"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.
"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.
"Projected Renewal Rentals" means, as of any date of
determination, and without duplication of any Scheduled Payment, the
Company's most recent good faith estimate prepared in the ordinary
course of business (taking into account matters typically considered by
the Company including, without limitation, age and condition of the
Equipment, legal requirements, and market conditions) and reflected in
the records of the Company kept for purpose of memorializing such
estimates of the rental payments (excluding any portion of any such
payment which is for taxes or similar charges and excluding any payment
for the purchase of any Equipment, whether such purchase is mandatory
or optional) that will be realized in respect of the Equipment
following the expiration of the then existing firm term of the Lease
covering such Equipment.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Purchase Account" means for each Growth Fund the actual bank
account, or book entry account maintained on such [Growth Funds] books
of account, maintained for the purpose of holding or recording (as
applicable) (a) sales proceeds from the sale of Equipment owned by such
Growth Fund that are intended to be utilized to purchase additional
Equipment for such Growth Fund and (b) equity contributions by limited
partners of such Growth Fund that are intended to be utilized to
purchase additional Equipment for such Growth Fund.
"Purchase Account Amount" means, as to each Purchase Account
as of any date of determination, the sum of the sales proceeds from the
sale of Equipment owned by such Growth Fund and equity contributions by
limited partners of such Growth Fund contained in the Purchase Account
for such Growth Fund less any portion thereof already identified by the
Company to be utilized for a purpose other than to purchase additional
Equipment for such Growth Fund.
"Purchasers" means every purchaser of the Notes.
"Quarterly Payment Date" means each quarterly payment date on
which any principal and/or accrued interest is required to be paid on
any Note pursuant to the terms of this Agreement.
"Quarterly Period" means the period from the first issuance of
Notes to November 14, 1996, and each succeeding November 15 to February
14 period, February 15 to May 14 period, May 15 to August 14 period,
and August 15 to November 14 period, as applicable.
"Rating Agency" shall mean Duff & Phelps Credit Rating Co. and
any other NRSRO that hereafter issues a rating in respect of the Notes.
"Renewal Cap Amount" means for any period through December 31,
1997, $6,000,000, and for the calendar quarter commencing January 1,
1998 and each subsequent calendar quarter means $5,750,000 less $83,333
for each calendar month that has elapsed since January 1, 1998.
"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.
"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.
"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.
"Scheduled Payments" means, with respect to any Lease as of
any date of determination, each regularly scheduled periodic (typically
monthly) rental payment (excluding any portion of any such payment
which is for taxes or similar charges) required to be paid by the
Lessee under such Lease after such date of determination without
abatement or set-off and excluding any payment for the purchase of the
Equipment covered by such Lease (whether such purchase is mandatory or
optional) and excluding any rental payment attributable to any renewal
or extension term of such Lease unless such renewal or extension term
has been irrevocably exercised and then only to the extent of each
rental payment is required to be paid by the Lessee during such renewal
or extension term without abatement or set-off.
"Security" has the meaning set forth in Section 2(1) of the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall mean collectively and individually,
as the context requires, the Security Agreement (Master) executed by
each Issuer in favor of the Collateral Agent of even date herewith in
substantially the form of Exhibit G.
"Security Agreement (Lock Box)" shall mean the Security
Agreement (Lock Box) executed by each Issuer in favor of the Collateral
Agent of even date herewith in substantially the form of Exhibit H.
"Security Documents" shall mean (i) each Security Agreement,
the Security Agreement (Lock Box Account) and the PLM Security
Agreement and (ii) 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 any Issuer or Guarantor 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 Issuers', Guarantors' or
any 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.
"Short-Term Warehouse Debt" shall mean the Indebtedness for
Borrowed Money under the Warehousing Credit Agreement dated September
27, 1995, as amended, among TEC Acquisub, Inc. the named Lenders
thereunder and First Union National Bank of North Carolina, as agent,
and the Warehousing Credit Agreement dated May 31, 1996 among American
Finance Group, Inc., the named Lenders thereunder, and First Union
National Bank of North Carolina, as agent, such facilities have an
aggregate maximum principal amount of $35,000,000 (the "Existing
Short-Term Warehouse Debt"), and any amendments thereto or refinancings
thereof up to $35,000,000 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.
"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.
"SunAmerica" means SunAmerica Life Insurance Company, an
Arizona corporation.
"TEC" means PLM Transportation Equipment Corporation, a
California corporation.
"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).
.ECTION 2. ISSUANCE AND DELIVERY OF NOTES
. All Notes purchased under the Note Purchase Agreements shall be registered
Notes. Each Issuer 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
issued by such Issuer. 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 applicable
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 Issuer of such Note shall not be affected by any notice or knowledge to
the contrary. Each Issuer 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 issued by such Issuer 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, each Issuer shall promptly furnish to such requesting party a
correct and complete list of all holders of the then Outstanding Notes issued by
such Issuer and a description of the interests so held.
. Upon surrender of any Note at the office or agency of an Issuer maintained
pursuant to Section 6.6, such Issuer, at the request of the holder thereof, will
execute and deliver, at such Issuer'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.
. Any Outstanding Note may be transferred at the office or agency of the Issuer
of such Note 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, 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 Issuers. Such notice shall be accompanied by a written
instrument of transfer in a form satisfactory to the Issuer of the applicable
Note (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 such Issuer 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 such Issuer, 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.
. 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 Issuer of such Note. 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. Each Issuer shall make a notation on each new Note delivered to it
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.
. 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 Issuer of such Note, 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.
. Upon receipt by an Issuer of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Note issued
by such Issuer 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 such Issuer, or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
such Issuer, 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, such Issuer 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 such Issuer in connection
therewith.
.ECTION 3. PAYMENT OF NOTES, COLLATERAL AND LOCK BOX ACCOUNT
. Notwithstanding anything in this Agreement or in the Notes to the contrary,
but subject to the provisions of Section 9.5 hereof, each Issuer will pay all
amounts payable with respect to the Notes issued by such Issuer and held by each
Purchaser or other registered holder of such 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 each Issuer
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.
. Each Issuer will pay all taxes, assessments and charges in connection with the
issuance and sale of the Notes issued by such Issuer and in connection with any
modification of such Notes and will indemnify and save each holder of such Notes
harmless, without limitation as to time, against any and all liabilities with
respect to all such taxes, assessments and charges. The obligations of each
Issuer 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.
. Principal on each Note will be payable in 20 equal quarterly payments
commencing as of the 15th day of November, 1997 and continuing thereafter on the
15 day of each succeeding February, May, and August until August 15, 2002, being
the final maturity of each Note; provided, 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 mandatory principal payment made pursuant to the first sentence of this
Section 3.3. Each Issuer shall also make required prepayments in accordance with
Section 3.4. No acquisition or purchase of any Notes by any Issuer or any
Affiliate thereof shall relieve such Issuer from or reduce its obligation to
make the required principal payments provided for in this Section 3.3.
. (a) If at any time the aggregate of the outstanding principal amount of all
Outstanding Notes issued by FSI is in excess of the FSI Borrowing Base, then and
in each such event (but subject to Section 4(c)), FSI shall immediately pay to
the Purchasers, as a prepayment on the principal of the Outstanding Notes issued
by FSI, the amount of such excess and shall pay to such Purchasers all accrued
interest on the principal amount so paid and the Make-Whole Amount based on such
principal payment.
(b) If at any time the aggregate of the outstanding principal
amount of all Outstanding Notes issued by IMI is in excess of the IMI Borrowing
Base, then and in each such event (but subject to Section 4(c)), IMI (or FSI as
Guarantor of IMI's Obligations) shall immediately pay to the Purchasers, as a
prepayment on the principal of the Outstanding Notes issued by IMI, the amount
of such excess and shall pay to such Purchasers all accrued interest on the
principal amount so paid and the Make-Whole Amount based on such principal
payment.
(c) If pursuant to Sections 3.4(a) or (b) a prepayment of the
Notes is required, then such prepayment may be deferred and not paid until the
earlier to occur of (i) the Quarterly Payment Date next occurring after the date
such prepayment is due pursuant to Section 3.4(a) or (b) and (ii) 60 days
following the date such prepayment is due pursuant to Section 3.4(a) or (b),
subject in each case to the satisfaction of the following conditions:
(1) In the case of a prepayment due on any Notes
issued by FSI, at all times during such deferral period the Lock Box
Account shall contain FSI Funds (calculated after taking into effect
any withdrawal pursuant to Section 3.10(e)) in an amount not less than
the sum of (x) the aggregate prepayments on such Notes then being
deferred and (y) any FSI Funds utilized under clause (2) immediately
following;
(2) In the case of a prepayment due on any Notes
issued by IMI, at all times during such deferral period the Lock Box
Account shall contain funds (whether FSI Funds, IMI Funds or both, but
calculated after taking into effect any withdrawal pursuant to Section
3.10(e)) in an amount not less than the aggregate prepayment on such
Notes being deferred; and
(3) No Default or Event of Default shall exist or
occur during such deferral period.
For purposes of this Section 3.4(c), FSI or the Company may deposit funds in the
Lock Box Account (all such funds to be deemed to be FSI Funds). If at any time
during such deferral period a Default or Event of Default shall occur, then all
prepayments then deferred shall become immediately due and payable. If the
Borrowing Base Certificate required to be delivered in connection with the
Quarterly Payment Date referred to in clause (i) above reflects that all or a
portion of such deferred prepayment would not be due based on such Borrowing
Base Certificate (the "Eliminated Portion"), then such deferred prepayment shall
be deemed reduced by the Eliminated Portion. Each partial prepayment of Notes
pursuant to this Section 3.4(c) shall be applied to reduce, prorata, the
scheduled principal payments on the Notes so prepaid.
(d) The provisions of this Section 3.4 shall not limit (by
implication or otherwise) the rights of the holders of the Notes and
the Collateral Agent under Section 5.
. Upon compliance with Section 3.6 and subject to Section 3.7 and the following
limitations, in addition to the scheduled and mandatory principal payments
required by Sections 3.3 and 3.4 each Issuer shall have the privilege, at any
time and from time to time, of prepaying any or all of the Outstanding Notes
issued by such Issuer, either in whole or in part (but if in part then in units
of $1,000,000), 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 3.5 shall be applied
to reduce, pro rata, the scheduled principal payments on the Notes so prepaid.
Each Issuer 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 and this Section 3.5) is a valuable right and the provision for
payment of the Make-Whole Amount by the Issuers if the Notes issued by such
Issuer are prepaid under Section 3.4 and this Section 3.5 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.
. Each Issuer will give notice of any prepayment of the Notes issued by such
Issuer to each holder thereof pursuant to Section 3.5 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 3.5.
. All partial prepayments by a particular Issuer or otherwise in respect of the
Notes shall be applied on all Outstanding Notes issued by such Issuer 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 such Issuer to the end that
successive applications shall result in substantially ratable payments.
. 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, 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.
. The Obligations are secured by the Collateral. Each Issuer and each Guarantor
will comply with its obligations under the Note Documents.
. 3.10 Lock Box Account
(a) Within 15 days following the Closing Date the Company and
each Issuer will enter into the Security Agreement (Lock Box) with a national
bank or other financial institution designated by the Collateral Agent and the
Lock Box Account will be established. Pursuant to the Security Agreement (Lock
Box), all partnership distributions, fees and other amounts payable to each
Issuer by each of the Growth Funds (excluding partnership distributions
applicable to FSI's partnership interest in each of the Growth Funds other than
Growth Fund VII and No Load Growth Fund) will be deposited into the Lock Box
Account and held in trust for the Collateral Agent and the holders of the Notes
issued by such Issuer. FSI shall instruct Growth Fund VII and No Load Growth
Fund in writing in connection with the Closing (such instructions to not be
revoked or revocable unless consented to in writing by the Collateral Agent) to
make payments of partnership distributions payable to FSI to the Lock Box
Account. IMI shall instruct each Growth Fund in writing in connection with the
Closing (such instructions to not be revoked or revocable unless consented to in
writing by the Collateral Agent) to make all payments of management fees, data
processing expense reimbursements/fees and lease negotiation and acquisition
fees payable to IMI by each Growth Fund to the Lock Box Account. Pursuant to the
Security Agreement (Lock Box), the Collateral Agent shall have the sole right to
disburse funds from the Lock Box Account.
(b) The Collateral Agent shall use reasonable efforts to
maintain records identifying the particular Issuer on whose behalf each payment
was made to the Lock Box Account, and the Issuers will assist the Collateral
Agent in making such determinations.
(c) On each Quarterly Payment Date and on or about each date
that a prepayment is required to be made by an Issuer on its Outstanding Notes,
the Collateral Agent shall disburse to the holders of the Outstanding Notes out
of funds then contained in the Lock Box Account the following:
(i) From the FSI Funds, to the holders of the
Outstanding Notes issued by FSI an amount of FSI Funds equal to all
accrued and unpaid interest (including interest on past due amounts) on
such Outstanding Notes;
(ii) From the IMI Funds, to the holders of the
Outstanding Notes issued by IMI, an amount of IMI Funds equal to all
accrued and unpaid interest (including interest on past due amounts) on
such Outstanding Notes;
(iii) To the extent the amount of IMI Funds
distributed pursuant to clause (ii) preceding is not sufficient to pay
all accrued and unpaid interest (including interest on past due
amounts) on the Outstanding Notes issued by IMI, from the remaining FSI
Funds to the holders of such Outstanding Notes issued by IMI an amount
equal to such deficiency;
(iv) From the remaining FSI Funds, to the holders of
the Outstanding Notes issued by FSI an amount equal to the principal
payments (including prepayments) due on such Outstanding Notes;
(v) From the remaining IMI Funds, to the holders of
the Outstanding Notes issued by IMI an amount equal to the principal
payments (including any prepayments) due on such Outstanding Notes;
(vi) To the extent the amount of IMI Funds
distributed pursuant to clause (v) preceding is not sufficient to pay
all principal payments (including prepayments) due on the Outstanding
Notes issued by IMI, from the remaining FSI Funds to the holders of
such Outstanding Notes issued by IMI an amount equal to such
deficiency;
(vii) As to any remaining FSI Funds, to FSI; and
(viii) As to any remaining IMI Funds, to IMI.
If as of any such date of payment the amount of FSI Funds
contained in the Lock Box Account are not sufficient to cover the payments then
due on the Outstanding Notes issued by FSI, then FSI shall pay such deficiency
directly to the applicable holders of such Notes. If as of any such date of
payment the amount of IMI Funds contained in the Lock Box Account are not
sufficient to cover the payments then due on the Outstanding Notes issued by
IMI, then IMI (or FSI as Guarantor of IMI's Obligations) shall pay such
deficiency directly to the applicable holders of such Notes.
(d) Notwithstanding anything to the contrary, after the
receipt by the Collateral Agent of any notice that a Default or Event of Default
has occurred and during the continuance of any Default or Event of Default, the
Collateral Agent shall apply all funds of each Issuer in the Lock Box Account to
prepay the Outstanding Notes issued by such Issuer. If there are any FSI Funds
remaining after the payment of all amounts (principal and interest) owed on the
Outstanding Notes issued by FSI, then to the extent necessary the remaining FSI
Funds shall be applied to prepay the Outstanding Notes issued by IMI until all
amounts on such Notes are paid.
(e) From time to time FSI may elect in accordance with the
applicable partnership agreement or operating agreement to declare (such
declaration to be evidenced by notice from FSI to Collateral Agent setting forth
the amount of such distribution and the scheduled payment date thereof) a
distribution to all partners (both limited and general) of Growth Fund VII or No
Load Growth Fund (as each such declaration as it applies to the related Growth
Fund, a "Distribution Declaration"). If during any Quarterly Period one or more
Distribution Declarations occur and the distributions covered by such
declaration(s) are required to be paid no later than the Business Day preceding
the Quarterly Payment Date next following such Quarterly Period and provided
that FSI's portion of the distributions covered by such Distribution Declaration
exceed the sum of (i) the aggregate of the principal payments due on the
Quarterly Payment Date next following such Quarterly Period and (ii) the amount
(if any) required to be maintained in the Lock Box Account pursuant to Section
3.4(c), then by notice in the form of Exhibit I given to the Collateral Agent
and SunAmerica, IMI may withdraw from the Lock Box Account prior to the
Quarterly Payment Date next following such Quarterly Period an amount up to (but
not in excess of) the total management fees of IMI then contained in the Lock
Box Account; provided, no such withdrawal may occur if a Default or Event of
Default exists or if at any time prior to such date the distributions covered by
any Distribution Declaration have failed to be paid on or before the date such
distributions were to be paid by the terms of the related declaration (and each
such declaration shall contain such a payment date) and the principal and
interest payments due on the related Quarterly Payment Date were not paid by the
expiration of the grace period described in Sections 5.1(a) and (b).
(f) On each Quarterly Payment Date each Issuer may withdraw
its funds contained in the Lock Box Account only (i) if and to the extent there
are any funds of such Issuer remaining in the Lock Box Account after the
Collateral Agent has made the payments then due on the Outstanding Notes of such
Issuer and any of the other Obligations of such Issuer then due but unpaid, 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 applicable Issuer
withdrawing such funds shall deliver to the Collateral Agent together with any
request for a release of funds from the Lock Box Account a certificate with
respect to the foregoing provisions of this Section 3.11(f) in the form of
attached Exhibit J signed by a Responsible Officer of such Issuer.
(g) If any Issuer or the Company receives any payment in
respect of or proceeds resulting from the Collateral or any part thereof, such
party shall deposit such payment or proceeds into the Lock Box Account promptly
after the receipt thereof.
.ECTION 4. EVIDENCE OF ACTS OF NOTE HOLDERS
. 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 each Issuer and the Collateral Agent.
. 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 an Issuer in pursuance of such action
irrespective of whether or not any notation in regard thereto is made upon such
Note.
.ECTION 5. DEFAULTS - REMEDIES
. 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 payment of any mandatory
prepayment on any Note and such default shall continue for more than
five Business Days; or
(d) Default shall occur in the payment of any Make-Whole
Amount; or
(e) Default shall occur in the observance or performance by
one or more Issuers or either Guarantor of any covenant or agreement
contained in Section 6.8, 6.14 or 6.16; in each case, to be performed
by one or more Issuers or either Guarantor; or
(f) Default shall occur in the observance or performance by
one or more Issuers or either Guarantor 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 any
one or more of the Issuers or either Guarantor 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 any one or more of
the Issuers or either Guarantor herein, or made by any one or more of
the Issuers or either Guarantor in any statement or certificate
furnished by any one or more of the Issuers in connection with the
consummation of the sale or delivery of the Notes or furnished by any
one or more of the Issuers or either Guarantor 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 and
such default shall not be cured within any applicable grace or cure
period (if any) or breach shall occur in any term of any evidence of
such Debt and such breach shall not be cured within any applicable
grace or cure period (if any) and the effect of such breach 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) and such default or breach shall not be
cured within any applicable grace or cure period (if any), 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) (i) Default shall occur in the repayment of any principal
of or the payment of any interest on any Debt of the Growth Fund, or
breach shall occur in any term of any evidence of such Debt, and in
each case $1,000,000 or more of outstanding principal shall be
immediately due and payable or shall have been accelerated and become
immediately due and payable; or
(j) There shall have occurred a change in the assets,
liabilities, financial condition, operations, affairs or prospects of
the Company or any Issuer, which, in the reasonable determination of
Required Noteholders, has, either individually or in the aggregate, had
a Material Adverse Effect; or
(k) (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
(l) (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 (excluding the termination of the ESOP which has
previously occurred); (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
(m) 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, any of its Subsidiaries or any Issuer 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
(n) Any of the Company, any of its Subsidiaries or any Issuer
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
(o) A custodian, trustee or receiver is appointed for any of
the Company, any of its Subsidiaries or any Issuer, or for the major
part of its property and is not discharged within 30 days after such
appointment; or
(p) 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 or any Issuer and, if instituted
against it, are consented to or are not dismissed within 60 days after
such institution; or
(q) A default shall occur under the PLM Guaranty or the FSI
Guaranty and such default shall not be cured within any applicable
grace or cure period expressly provided in PLM Guaranty or FSI
Guaranty, as applicable; or
(r) FSI shall resign, withdraw, be removed or transfer its
interest as the general partner or manager of any one or more of the
Growth Funds; or
(s) FSI's or IMI's (as applicable) rights to receive
partnership distributions in respect of the general
partnership/membership interest of FSI in either of Growth Fund VII or
No Load Growth Fund or data processing fees/reimbursements, management
fees or lease negotiation and acquisition fees in respect of any Growth
Fund are abated, reduced, set-off against or terminated other than in
connection with the dissolution or winding up of a Growth Fund not
caused by the resignation, withdrawal or removal of FSI as the general
partner or general manager of the Growth Fund or the dissolution or
bankruptcy of FSI.
. If the holder of any Note or of any other evidence of Debt of the Company or
any Issuer gives any notice or takes any other action with respect to a claimed
default, the Company and each Issuer agrees to give written notice within three
Business Days of such event to the Collateral Agent and all holders of the then
Outstanding Notes.
. When any Event of Default described in Section 5.1(a), (b), (c) or (d) has
happened and is continuing, any holder of any Note may, and when any Event of
Default described in Sections 5.1(e) through (m), inclusive, or described in
Sections 5.1(q), (r) or (s) has happened and is continuing, the Required
Noteholders may, by notice to the Issuers, 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(n), (o) or (p) 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 Issuer of each
Outstanding Note shall pay to each holder of the such Outstanding Note the
entire principal balance of, and accrued interest on, such Note 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. Each Issuer 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 3.6) is a valuable right and the provision for payment of
the Make-Whole Amounts by the Issuers 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, each Issuer further agrees, to the extent permitted by law, to pay
to the holders of the then Outstanding Notes issued by such Issuer all costs and
expenses incurred by them in the collection of such Notes upon any default
hereunder or thereon, including reasonable compensation to such holders'
attorneys for all services rendered in connection therewith.
. 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(e) through (m), inclusive, or
described in Sections 5.1(q), (r) or (s) the Required Noteholders may, by
written instrument given to the Issuers and the Collateral Agent, rescind and
annul such declaration and the consequences thereof; provided, 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 to
the extent set forth in this Agreement, the Collateral Agency Agreement, and the
other Note Documents. Pursuant to the Collateral Agency Agreement, the
Collateral Agent 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 and the Issuers
of the covenants, obligations and conditions to be performed and observed by the
Company and the Issuers and all other parties, other than the Collateral 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 may
exercise all of the rights and remedies delegated or granted to it under this
Agreement, the Collateral 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.
(c) If an Event of Default exists, the Collateral Agent, 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 Issuers held by or for the benefit of the
Collateral Agent 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 and the Issuers
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 and the Issuers 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 or any Issuer under the
federal bankruptcy laws or any other Requirements of Law, or in connection with
the insolvency of the Company or any Issuer, or in the event that a custodian,
receiver or trustee shall have been appointed for the Company, any Issuer or any
of their respective Properties, or in the event of any other proceedings in
respect of the Company, any Issuer or any of their respective 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, any Issuer or their respective 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 each 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 and providing for indemnity satisfactory to it pursuant to
the Collateral Agency Agreement, 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, 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 or the applicable Issuer, as the case may be, 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 or any Issuer. 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 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.
. No course of dealing on the part of the Collateral Agent or any holder of
Notes nor any delay, omission or failure on the part of the Collateral 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 such holder's rights, powers and remedies. Every right and
remedy given by this Article 5 or by law to the Collateral 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 or such holder's rights, powers and remedies.
. If the Collateral Agent 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, the
Company, the Issuers 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 shall continue as though
no such proceeding had been instituted.
. 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 under any of the other Note Documents by
the Collateral 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
Issuers (divided among the Issuers according to the relative value of,
as evidenced by sales proceeds received in respect of, the Collateral
sold).
If there is a deficiency in respect of any Note, Guarantors and the
Issuer of such Note 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.
. No waiver by the Collateral 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
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 to exercise the remedies granted to it
under this Agreement; (ii) such holders shall have offered to the Collateral
Agent the indemnity satisfactory to it as provided under the Collateral Agency
Agreement; and (iii) the Collateral Agent 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.
. Nothing in any provision of this Agreement, the Notes or any other Note
Document shall affect or impair the obligation of each Issuer (as to the Notes
issued by such Issuer), which obligation 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.
. 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 for any action taken or
omitted by it as the Collateral Agent, 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, 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.
. To the extent it lawfully may do so, each Guarantor and each Issuer 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,
each Guarantor and each Issuer 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, but it will suffer
and permit the execution of every such power as though no such law or laws had
been made or enacted.
.ECTION 6. CERTAIN COVENANTS
. The Company and each Issuer agrees 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. FSI agrees to not resign or otherwise consent to its removal as the
general partner or manager of each Growth Fund, and FSI agrees to not consent to
or join in any amendment or any instrument whereby FSI's ownership interest in
Growth Fund VII or No Load Growth Fund would be reduced or FSI's rights to
receive partnership distributions, fees or other amounts in respect of Growth
Fund VII or No Load Growth Fund would be reduced, abated, suspended or
terminated. IMI agrees to not resign or terminate its status as the party
providing the services relating to, and as the party entitled to receive,
management fees, data processing fees/reimbursements and lease negotiation and
acquisition fees from each Growth Fund, and IMI agrees to not consent to or join
in any amendment or any instrument whereby IMI's rights to receive fees or other
amounts in respect of a Growth Fund would be reduced, abated, suspended or
terminated. IMI shall continue to be a wholly owned subsidiary of FSI, and FSI
shall continue to be a wholly owned subsidiary of the Company.
. 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 Note Document, but without limiting in any manner
the insurance required to be maintained and kept in force under any such Note
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). 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 to the Collateral Agent within 30 days
following the Closing Date and on or before January 1 of each year thereafter, a
certificate evidencing the maintenance by it of policies for such insurance.
. The Company and each Issuer will (and the Company will cause its other
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, 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, the Issuer
or the applicable Subsidiary shall set aside on its books reserves deemed by it
to be adequate with respect thereto. The Company and each Issuer will (and the
Company will cause its other 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.
The Company and each Issuer will 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
make all repairs, replacements, and restorations as are consistent with industry
standards for prudent operation.
. 6.5 Agreement to Deliver Security Documents
(a) Each Guarantor and each Issuer shall from time to time
take all steps necessary or advisable to validate, perfect or maintain the
security interest of the Collateral Agent 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 holders of the Notes in, to or under all or any part of
the Collateral. In addition, each Guarantor and each Issuer hereby irrevocably
authorizes the Collateral Agent, to the extent permitted by law, to execute and
deliver, in the particular Guarantor's name and on the particular Guarantor's
behalf or in the particular Issuer's name and on such Issuer'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 duly perfected, first priority security interest
in and to the Collateral, subject only to the Permitted Liens, and to execute
and file, in the particular Guarantor's name and on such Guarantor's behalf or
in the particular Issuer's name and on such Issuer'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 first
priority security interest in and to the Collateral, subject only to the
Permitted Liens. Each Guarantor and each Issuer 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.
. Each Issuer 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 issued by
such Issuer according to the terms thereof. Each Guarantor and each Issuer will
maintain an office where notices, presentations and demands in respect of this
Agreement or the Notes may be made. Each such office shall be maintained at the
address specified for such party in or pursuant to Section 9.3 until 30 days
after such time as such party shall notify the holders of the Notes of any
change of location of such office. Each Issuer will also maintain an office or
agency where the Notes issued by such Issuer may be presented for registration
of transfer, exchange or replacement as provided in Article 2. Each Issuer
hereby initially designates the principal corporate office of such Issuer in San
Francisco, California as its agency for such purpose. Each Issuer will give to
the holders of the Notes prior written notice of any change of location of any
such office or agency. If either Guarantor or any Issuer 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 such
Guarantor or such Issuer in or pursuant to Section 9.3.
. 6.7 Nature of Business
(a) The Company will not engage in any business other than as
is directly related to the management, 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) Each of FSI and IMI shall not engage in any business other
than the business currently conducted by such party.
. Each Issuer may use the proceeds for the sale of the Notes issued by such
Issuer solely for the purpose of making loans to the Company (as evidenced by
loan documentation satisfactory to the Collateral Agent). The Company shall use
such loan proceeds (i) first, to retire the outstanding indebtedness owed on the
Principal Mutual Note Agreement (which retirement shall not occur later than 30
days following the first issuance of Notes) (ii) second, to purchase from time
to time outstanding 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.
. The Company and its Subsidiaries shall maintain at all times a Consolidated
Total Net Worth of not less than $45,000,000 plus the sum of 50% of Consolidated
Net Income for all periods commencing on and after July 1, 1996.
. The Company and its Subsidiaries shall maintain a minimum Consolidated EBITDA
to Debt Service Ratio of not less than 150%.
. The Company and its Subsidiaries shall maintain a Consolidated Debt to Total
Net Worth Ratio, as at the last day of any of the Company's fiscal quarters, of
no greater than 2 to 1.
. 6.12 Restricted Payments
(a) The Company will not declare any dividend which is payable
more than 60 days after the date of declaration thereof.
(b) None of the Company, any of its Subsidiaries or any Issuer
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.
. None of the Company, any of its Subsidiaries or any Issuer 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 securing the Existing Senior Debt;
(g) Liens securing the Short Term Warehouse Debt (which Liens
shall encumber only the Equipment Assets acquired with the Short Term
Warehouse Debt and the proceeds of such assets); and
(h) Liens securing Non-Recourse Secured Debt (which Liens
shall encumber only the Equipment Assets acquired with such
Non-Recourse Secured Debt and the proceeds of such assets).
Without limiting the foregoing, no Lien shall be permitted to exist in respect
of the partnership interests owned by FSI in respect of the Growth Funds
(excluding PLM Equipment Growth Fund VII and Professional Lease Management
Income Fund, L.L.C.) or in any partnership distributions or proceeds applicable
to such partnership interests.
None of the Company, any of its Subsidiaries or any Issuer 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 6.17; provided, the Company may
merge with one or more of its wholly-owned Subsidiaries if the Company is the
survivor of the merger; provided further, the Company may effect clause (i) or
(ii) preceding if the successor entity or acquiror (as applicable) has a debt
rating of BBB (or equivalent) or better issued by a NRSRO and the successor or
acquiror agrees to assume all of the Company's and Issuers' obligations under
the Note Documents in form satisfactory to the Required Noteholders. 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 6.14, (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 6.14 shall become effective unless and until
the successor or acquiror agrees to assume all of the Company's and Issuers
obligations under the Note Documents in form satisfactory to the Required
Noteholders.
. None of the Company, any of its Subsidiaries or any Issuer 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.
. None of the Company, any of its Subsidiaries or any Issuer 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, any of it
Subsidiaries or any Issuer repurchases any Notes, such Notes shall thereafter be
cancelled and no Notes shall be issued in substitution therefor.
. The Company shall not make or suffer to exist, or permit or suffer any of its
Subsidiaries or any Issuer to make or suffer to exist, any Investments in any
Person, except the following:
(a) Investments existing on the Closing Date;
(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) 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;
(d) Deposits on, or Investments in, Equipment Assets by the
Company;
(e) Investments by the Company consisting of the acquisition
of the Voting Stock or all or substantially all of the assets of
Persons engaged in businesses similar to the business of the Company;
(f) Investments by the Company consisting of the acquisition
of Portfolio Assets;
(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;
(j) Investments by FSI or TEC in any limited partnership of
which FSI or TEC is the general partner or in any corporation or
limited liability company of which FSI or TEC is manager; provided that
(i) without limiting the other provisions of this Section 6, all Debt
of such Person shall be Non-Recourse to the Company and its
Subsidiaries except FSI or TEC, as applicable, and (ii) 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 or TEC in Residual Interests;
and
(l) Investments by the Company in leveraged leases.
. (a) Immediately upon the Company or any Issuer becoming aware of the existence
of any condition or event which constitutes a Default or an Event of Default,
the Company or such Issuer 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 or the Issuer is taking or
proposes to take with respect thereto.
(b) Promptly following the commencement of an action, suit or
proceeding against (or upon the knowledge of the Company or any Issuer of an
action, suit or proceeding threatened against or affecting) the Company or any
Issuer before any court, arbitrator or governmental body, agency or official (i)
which in any manner draws into question the validity or enforceability of this
Agreement or any other Note Document, (ii) which involves the resignation,
withdrawal, removal or transfer of its interest by FSI as a general partner or
manager of any Growth Fund or the conversion of FSI's general partnership
interest in a Growth Fund to a limited partnership interest, (iii) which
involves the actual or threatened suspension, abatement, reduction, set-off
against or termination of any fee, partnership interest distributions or other
monies to which any Issuer would be entitled to receive but for such action,
(iv) which involves the actual or threatened resignation, withdrawal, removal or
termination of IMI as the equipment manager of or provider of data processing,
lease negotiation or equipment acquisition services to any Growth Fund, or (v)
which involves any breach of any state or federal securities laws in respect of
any Growth Fund or any breach of fuduciary duty on the part of FSI as general
partner or manager of any Growth Fund, the Company or any Issuer 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 or the Issuer is taking or proposes to take with respect thereto.
. The Company and each Issuer 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, such Subsidiary and
such Issuer, in accordance with generally accepted principles of accounting
consistently maintained (except for changes disclosed in the financial
statements furnished pursuant to this Section 6.19 and concurred in by the
Independent Public Accountants referred to in Section 6.19(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) Master Lease Summary Report. Within 45 days after the last
day of each calendar quarter, a report listing each item of Equipment
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;
(g) ERISA. (i) Promptly and in any event within ten days after
the Company or any Subsidiary 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 or any Subsidiary 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 or any Subsidiary 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 or any Subsidiary 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 or any Subsidiary specifying the nature of such occurrence
and any other information relating thereto requested by the Collateral
Agent, (v) promptly and in any event within ten days after the Company
or any Subsidiary 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 or
any Subsidiary 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 or any ERISA
Affiliate 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;
(h) 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
6.19(h) or Section 6.18 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 and of each Issuer stating that no
Material Adverse Effect, Default or Event of Default has occurred
during such calendar year and that the Company and each Issuer was in
compliance with the covenants contained in Article 6 during such
calendar year;
(i) 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 or any Issuer 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 or any Issuer
hereunder or thereunder or in connection herewith which has been
rendered inaccurate thereby;
(j) 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
(k) Information Required by Rule 144A. The Company and each
Issuer will, upon the request of the holder of any Outstanding Note
issued by such Issuer, 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 and each Issuer 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 or the Issuer's expense with respect to
out-of-pocket expenses) to visit and inspect, the Company's and each Issuer's
books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss the Company's and each Issuer's affairs, finances and
accounts with its respective officers, employees, and independent public
accountants (and by this provision the Company and each Issuer's authorizes said
accountants to discuss with such holders and their respective designees the
finances and affairs of the Company and each Issuer's) all at such reasonable
times and as often as may be reasonably requested.
. Without the prior written consent of the Required Noteholders, none of the
Company or any Issuer will not amend in any material respect any one or more of
the Note Documents.
. The Company shall have the right to make payments in respect of any Approved
Subordinated Debt including regularly scheduled installments of principal,
interest and fees, and prepayments; provided, 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.
. 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, subject to the provisions of the Note
Documents applicable to each Issuer.
. In addition to the obligations and documents that this Agreement requires the
Company or an Issuer to perform, the Company and each Issuer shall (and the
Company 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.
. 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.
. 6.25 Borrowing Base Certificates
(a) As soon as available and in any event not later than 15
days after the end of each calendar month or as may be otherwise required
pursuant to the terms hereof, a Borrowing Base Certificate (prepared as of the
end of the calendar month immediately preceding the date such Borrowing Base
Certificate is delivered to the Collateral Agent, in the case of monthly
Borrowing Base Certificates, and as of the most recent date feasible in the case
of other Borrowing Base Certificates), substantially in the form of Exhibit B or
another form agreed to by Collateral Agent, in each case certified by a
Responsible Officer of the Company and each Issuer. The portion of each
Borrowing Base Certificate relating to the General Partner Amount shall be based
on the most recently prepared Company Appraisal, and each Company Appraisal
prepared immediately following the preparation of an Independent Appraisal shall
reflect (as to the Equipment covered by such Independent Appraisal) Appraised
Values not to exceed those contained in such Independent Appraisal.
(b) If FSI shall resign or withdraw or be removed or transfer
its interest as the general partner or manager of any one or more of the Growth
Funds, then upon the occurrence thereof the Company or FSI shall give written
notice of such event to the Collateral Agent and the holders of the Outstanding
Notes. In such event the Company and each Issuer shall prepare and deliver to
the Collateral Agent and the holders of the Outstanding Notes a revised and
updated Borrowing Base Certificate, within 15 days following such event, each
such certificate to be prepared on the basis of excluding from the FSI Borrowing
Base and the IMI Borrowing Base any Equipment owned or management fees, data
processing expense reimbursements/fees or lease negotiation or acquisition fees
payable by each such Growth Fund as to which such event has occurred.
(c) If any Data Processing Contract, Management Contract or
Equipment Services Contract shall be terminated, then upon the occurrence
thereof the Company or IMI shall give written notice to the Collateral Agent and
the holders of the Outstanding Notes of such event. In such event the Company
and each Issuer shall prepare and deliver to the Collateral Agent and the
holders of the Outstanding Notes a revised and updated Borrowing Base
Certificate, within 15 days following such event, such certificate to be
prepared on the basis of excluding from the IMI Borrowing Base any fees or other
amounts payable under such contract.
(d) The Company and each Issuer shall provide to the
Collateral Agent such information as may be requested by the Collateral Agent
from time to time in respect of the data relied upon by the Company or the
Issuers in preparing any part of a Borrowing Base Certificate.
(e) Within 120 days following the end of each calendar year
(commencing with calendar year 1996), the Company shall cause the Company's
Independent Public Accountants to perform a review on a sampling basis of the
Company's and each Issuer's books and records to determine the accuracy of the
Borrowing Base Certificates prepared by the Company during such year. No later
than 30 days following the Closing Date the Company and SunAmerica shall agree
upon (and set forth in writing) the procedure to be followed by the Company's
Independent Accountants in performing such review (as agreed to, the "Borrowing
Base Review Procedures").
(f) In preparing estimates of Projected Renewal Rentals, the
Company agrees (i) to prepare and update such estimates on a regular basis (no
less frequently than quarterly) and in good faith and in the ordinary course of
business (taking into account matters typically considered by the Company,
including, without limitation, age and condition of the Equipment, legal
regulations and market environment) and (ii) to memorialize such estimates in
records of the Company specifically kept for such purpose.
. 6.26 Appraisals
(a) The Company has delivered (or will within five days
following the Closing Date) to the Collateral Agent a Company Appraisal covering
all of the Equipment owned by the Growth Funds as of the Closing Date. Within 60
days following the Closing Date the Company will cause an Independent Appraisal
to be prepared and delivered to the Collateral Agent in respect of the Equipment
contained in each of the following categories: vessels, aircraft and railcars.
(b) Commencing with calendar year 1997, once during each
calendar year the Collateral Agent may by notice to the Company require an
Independent Appraisal to be performed with respect to all Equipment.
(c) On no less than a quarterly basis the Company will update
the books and records maintained in respect of the Equipment to reflect the
Company's good faith determination of the Appraised Value of the Equipment on an
item by item basis. If an item of Equipment has been sold within the six month
period preceding the date of a Company Appraisal or Independent Appraisal
(provided such sale is on an arms length basis in a negotiated or bid
transaction rather than pursuant to a stipulated price previously agreed to by
the seller and the buyer [the preceding term stipulated price shall not be
deemed to cover a fair market value purchase option granted to a Lessee under a
Lease]), then the Company or Independent Appraiser (as applicable) shall apply
the sales price of such item of Equipment (net of customary sales costs) to any
other comparable item of Equipment with necessary adjustments for differences in
age, mileage, usage, number of cycles, recent market conditions and other
similar factors; provided, the Company may elect to use as the Appraised Value
of such comparable Equipment a value that is less than such net sales price.
(d) The Company shall make available to the Collateral Agent
from time to time upon request copies of the Company's or the Issuers' records
reflecting the Appraised Value of the Equipment as established by the Company.
In addition, in the event of any material write down in the Appraised Value of a
category of Equipment or an item of Equipment with an Appraised Value (prior to
such write down) of $7,500,000 or more (as to a category of Equipment) or
$1,000,000 or more (as to an item of Equipment), the Company shall provide to
the Collateral Agent a reasonably detailed description of the reason for such
write down. In determining the Appraised Value of each item of Equipment, the
Company and the Independent Appraiser shall assume that such item of Equipment
is sold within 180 days following the date of such appraisal.
.ECTION 7. COLLATERAL AGENT
By its purchase of a Note, each Purchaser appoints SunAmerica as the
initial Collateral Agent. The Company and the Issuers jointly and severally
hereby covenant and agree 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 and each Issuer
jointly and severally covenant and agree 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 and the Issuers for
such payment and indemnification. THE COMPANY AND EACH ISSUER JOINTLY AND
SEVERALLY HEREBY INDEMNIFY THE COLLATERAL AGENT FOR, AND HOLD 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.
.ECTION 8. AMENDMENTS, WAIVERS AND CONSENTS
. Any term, covenant, agreement or condition of this Agreement may, with the
consent of the Company and the Issuers, 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 consent in writing of the Required
Noteholders shall have been obtained; provided, 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, 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.
. 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 and the Issuers, 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.
.ECTION 9. MISCELLANEOUS; EXPENSES, TAXES AND INDEMNIFICATION
. Neither this Agreement nor any of the rights or obligations hereunder can be
assigned by the Company or any Issuer 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 and each Issuer shall bind and inure to the benefit of the respective
successors and assigns of such parties whether so expressed or not.
. 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.
. 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 FSI:
c/o 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 IMI:
c/o 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:
SunAmerica Life Insurance Company
c/o SunAmerica Corporate Finance
700 Louisiana, Suite 3905
Houston, Texas 77002
Attention: Tom Denkler
Telecopy: (713) 222-1402
Telephone number: (713) 222-9019
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.
. This Agreement and the Notes shall be construed in accordance with and
governed by the laws of the State of Texas and applicable federal law.
. Each Issuer and each of 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 an Issuer
results in such Issuer having paid, or demand having been made on such Issuer 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 such Issuer), and the provisions of
this Agreement, the Notes and the other Note Documents and any demand on such
Issuer 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. . 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.
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.
. 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.
. Nothing in this Agreement expressed or implied is intended or shall be
construed to give to any Person other than the Company, the Issuers, 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 Issuers, the holders of the Notes
and the Collateral Agent and their respective permitted successors and assigns.
. 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.
. 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.
. 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.
. 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. .
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.
. If at any time (a) the Issuers 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 or the Issuers 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 Issuers 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, 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.
. In the event that any covenants of the Company or the Issuers 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.
. The Company and each Issuer jointly and severally agree to pay and to
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 and the Issuers
jointly and severally agree to shall pay, within 30 days after receipt thereof,
all invoices of special counsel to the Note holders with respect to the Closing.
The Company and the Issuers jointly and severally agree 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.
. To the fullest extent permitted by applicable law, the Company and the Issuers
jointly and severally agree 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 none of the Company or any Issuer 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 and each Issuer
notice of the matter and an opportunity to defend it, at the sole cost and
expense of the Company and the Issuers, with legal counsel reasonably
satisfactory to such Note holder. The obligations of the Company and the Issuers
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 and the Issuers jointly and severally agree to 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
(a) 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. - Senior Secured Notes -
Summary of Principal Terms and Conditions" attached to letter dated May 23, 1996
from SunAmerica to Mr. J. Michael Allgood as Vice President and Chief Financial
Officer of the Company.
(b) THE NOTE DOCUMENTS ARE A WRITTEN LOAN AGREEMENT UNDER
SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE.
(c) SUCH WRITTEN LOAN AGREEMENT (BEING ALL OF THE NOTE
DOCUMENTS) REPRESENTS THE FINAL AGREEMENT AMONG THE ISSUERS, THE
GUARANTORS, THE PURCHASERS AND THE COLLATERAL AGENT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
(d) THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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:
Stephen Peary, Senior Vice President
PLM FINANCIAL SERVICES, INC.
By:
PLM INVESTMENT MANAGEMENT, INC.
By:
SUNAMERICA LIFE INSURANCE COMPANY
By:
Sam Tillinghast, Authorized Agent