PROMISSORY NOTE
FIRST UNION NATIONAL BANK
$5,000,000.00 San Francisco, California
July 15, 1998
PLM INTERNATIONAL, INC., a Delaware corporation ("Borrower"), for value
received, hereby unconditionally promises to pay to the order of FIRST UNION
NATIONAL BANK ("FUNB"), in lawful money of the United States of America and in
immediately available funds, the principal sum of Five Million Dollars
($5,000,000) or the aggregate unpaid principal amount of all advances made to
Borrower by FUNB, whichever is less (each such advance being a "Loan"), together
with accrued and unpaid interest thereon, payable on the dates and in the manner
set forth below. All amounts owed hereunder shall be paid by Borrower in full,
free and clear of any deduction or withholding for taxes or otherwise.
1. Principal. The outstanding principal amount hereunder shall be due and
payable in full on October 13, 1998 (the "Maturity Date"). Amounts borrowed
hereunder may be repaid and, prior to the business day immediately preceding the
Maturity Date and subject to the applicable terms and conditions precedent to
borrowings hereunder, reborrowed. Each request for a Loan hereunder shall be in
the minimum dollar amount of One Hundred Thousand Dollars ($100,000) and shall
be requested by Borrower's irrevocable written notice, in the form of a "Notice
of Borrowing" attached hereto as Exhibit A, and delivered to FUNB by a
responsible officer of Borrower not later than 12:00 noon, Charlotte, North
Carolina time, one (1) business day prior to the requested funding date. Each
request for a Loan hereunder shall constitute a reaffirmation by Borrower and
the responsible officer of Borrower requesting the same that the representations
and warranties contained in this Note are true, correct and complete in all
material respects to the same extent as though made on and as of the date of the
request, except to the extent such representations and warranties specifically
relate to an earlier date, in which event they shall be true, correct and
complete in all material respects as of such earlier date.
2. Interest Rate and Payments. Borrower further promises to pay interest on the
outstanding principal amount hereof from the date hereof until payment in full,
which interest shall be payable at the rate per annum equal to the Prime Rate,
as the same may fluctuate on a daily basis, or the maximum rate permissible by
law, whichever is less. The "Prime Rate" shall be the rate of interest per annum
publicly announced from time to time by FUNB as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. Borrower acknowledges that the rate announced
publicly by FUNB as its prime rate is an index or base rate and shall not
necessarily be the lowest rate charged to FUNB's customers or other banks.
Interest shall be payable monthly in arrears on the first business day of each
calendar month following the date first set forth above and shall be calculated
on the basis of a 360-day year for the actual number of days elapsed. Any
principal repayment or interest payment on the Loans hereunder not paid when
due, whether at stated maturity, by acceleration or otherwise, shall bear
interest at a rate per annum which is determined by adding two percent (2.0%) to
the rate per annum otherwise applicable to such Loans.
3. Place of Payments. All amounts payable hereunder shall be payable at the
office of FUNB at One First Union Center, 301 South College Street, Charlotte,
North Carolina 28288, Attention: Maria Ostrowski, or at such other place as the
holder hereof may designate in writing.
4. Prepayment; Application of Payments and Notation on Books. This Note may be
prepaid at any time without penalty. All money paid toward the satisfaction of
this Note shall be applied first to the payment of interest as required
hereunder and then to the retirement of the principal. Each Loan made hereunder,
and all payments of principal and interest, shall be evidenced by notations made
by FUNB on its books and records; provided, however, that the failure by FUNB to
make such notations shall not limit or otherwise affect the obligations of
Borrower with respect to the repayments of principal or payments of interest on
the Loans. Absent manifest error, the aggregate unpaid amount of each Loan set
forth on the books and records of FUNB shall be presumptive evidence of the
principal amount owing and unpaid under this Note.
5. Conditions Precedent. The effectiveness of this Note and the obligation of
FUNB to make any Loan is conditioned upon FUNB's receiving, in form and
substance satisfactory to it, the following:
(a) Note. This Note, duly executed and delivered by Borrower;
(b) Corporate Documents. A certificate of a responsible officer of Borrower
(i) certifying that the certified copies of the certificate of incorporation and
bylaws of Borrower, attached as Exhibits A and B to the Certificate of Assistant
Secretary of Borrower dated as of December 2, 1997 and delivered to FUNB as
Agent under the AFG Agreement, as defined below, are true and accurate, remain
in full force and effect and have not been amended since that date, (ii)
attaching true and correct copies of all resolutions of the board of directors
of Borrower authorizing or relating to the execution, delivery and performance
of this Note and the consummation of the transactions contemplated hereby and
(iii) setting forth the name, title and signature of the authorized signers for
Borrower;
(c) Certificate of Officer. A certificate, dated as of the date hereof,
and, as to each requested Loan, a certificate dated as of the date of such Loan,
of the Chief Financial Officer or Corporate Controller of Borrower to the effect
that (i) the representations and warranties of Borrower contained in Section 6
are true, accurate and complete in all material respects as of the date hereof
and (ii) no Event of Default or event which with the passage of time or notice
or both would become an Event of Default under this Note has occurred;
(d) Opinion. An original favorable opinion of counsel on behalf of
Borrower, in form and substance satisfactory to FUNB, dated as of the date
hereof and addressed to FUNB, together with copies of any officer's certificates
or legal opinions of other counsel or law firm specifically identified and
expressly relied upon by such counsel;
(e) Notice of Borrowing. As to each requested Loan, at least one (1)
business day before each Loan, a Notice of Borrowing;
(f) No Event of Default. As to each requested Loan, no event shall have
occurred and be continuing or would result from the making of such Loan on the
requested funding date which constitutes an Event of Default or which with the
passage of time or notice or both would constitute an Event of Default under
this Note or under (and as separately defined in) the Growth Fund Agreement, the
TEC AcquiSub Agreement or the AFG Agreement, as each is defined below; and
(g) Other Documents. Such other documents, information and items from
Borrower as reasonably requested by FUNB.
6. Representations and Warranties. Borrower hereby warrants and represents to
FUNB as follows, and agrees that each of said warranties and representations
shall be deemed to continue until full, complete and indefeasible payment and
performance of the obligations hereunder and shall apply anew to each borrowing:
(a) Existence and Power. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified and licensed as a foreign corporation and authorized to do
business in each jurisdiction within the United States where its ownership of
property and assets or conduct of business requires such qualification. Borrower
has the corporate power and authority, rights and franchises to own its property
and assets and to carry on its business as now conducted. Borrower has the
corporate power and authority to execute, deliver and perform the terms of this
Note and all other instruments and documents contemplated hereby or thereby.
(b) Note Authorized; Binding Obligations. The execution, delivery and
performance of this Note have been duly authorized by all necessary and proper
corporate action on the part of Borrower and this Note constitutes a legally
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally.
(c) No Conflict; Legal Compliance. The execution, delivery and payment of
this Note will not: (i) contravene any provision of Borrower's certificate of
incorporation or bylaws; (ii) contravene, conflict with or violate any
applicable law or regulation, or any order, writ, judgment, injunction, decree,
determination or award of any court or governmental authority, which
contravention, conflict or violation, in the aggregate, may have a Material
Adverse Effect ("Material Adverse Effect" means any set of circumstances or
events which has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Note, is or could
reasonably be expected to be material and adverse to the condition (financial or
otherwise) or business operations of Borrower, materially impairs or could
reasonably be expected to materially impair the ability of Borrower to perform
its obligations hereunder or under any other agreement between Borrower and
FUNB, or materially impairs or could reasonably be expected to materially impair
the ability of FUNB to enforce any of its legal remedies pursuant to this Note
or under applicable law); or (iii) violate or result in the breach of, or
constitute a default under any indenture or other loan or credit agreement, or
other agreement or instrument to which Borrower is a party or by which Borrower,
or its property and assets may be bound or affected. Borrower is not in
violation or breach of or default under any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any contract, agreement,
lease, license, indenture or other instrument to which it is a party, the
non-compliance with, the violation or breach of or the default under which
would, with reasonable likelihood, have a Material Adverse Effect.
7. Default. The occurrence of any one or more of the following shall constitute
an "Event of Default" hereunder:
(a) Failure to make Payments. Borrower fails to pay timely any of the
principal amount due under this Note or any accrued interest or other amounts
due hereunder on the date the same becomes due and payable, whether by
acceleration or otherwise and such failure shall not have been cured to FUNB's
satisfaction within five (5) calendar days; or
(b) Payments under Other Agreements with FUNB. Any of Borrower, American
Finance Group, Inc., TEC AcquiSub, Inc., PLM Equipment Growth Fund V, PLM
Equipment Growth Fund VI, PLM Equipment Growth & Income Fund VII, Professional
Lease Management Income Fund I, L.L.C., PLM Financial Services, Inc. fails to
pay any sum due FUNB under any agreement to which such person is a party, as
such sum shall become due and payable, whether by acceleration or otherwise and
such failure shall not be cured to FUNB's satisfaction within five (5) calendar
days; or
(c) Other Agreements. (i) Borrower defaults in the repayment of any
principal of or the payment of any interest on any indebtedness of Borrower, or
breaches any term of any evidence of such indebtedness or defaults in any
payment in respect of any contingent obligation in each case exceeding, in the
aggregate outstanding principal amount, $1,000,000 or (ii) Borrower breaches or
violates any term or provision of any evidence of indebtedness or contingent
obligation under any loan agreement, mortgage, indenture, guaranty or other
agreement relating thereto if the effect of such breach is to permit
acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement and such failure shall not have been
cured within the applicable cure period, or there is an acceleration under the
applicable instrument, loan agreement, mortgage, indenture, guaranty or other
agreement or such indebtedness otherwise becomes or is caused to become then due
and payable in its entirety; or
(d) Breach of Covenants or Representations or Warranties. Borrower fails or
neglects to perform, keep or observe any of the covenants contained herein; or
any representation or warranty made by or on behalf of Borrower in this Note or
any other agreement or any statement or certificate at any time given in writing
pursuant hereto or in connection herewith shall be false, misleading or
incomplete in any material respect when made; or
(e) Insolvency; Bankruptcy. Borrower shall (i) cease to be solvent, (ii)
admit in writing its inability to pay its debts as they mature, (iii) make an
assignment for the benefit of creditors, (iv) apply for or consent to the
appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its properties or business, or such a receiver, liquidator,
custodian or trustee otherwise shall be appointed and shall not be discharged
within sixty (60) days after such appointment, or a bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by
or against Borrower or any order, judgment or decree shall be entered against
Borrower decreeing its dissolution or division; provided, however, with respect
to an involuntary petition in bankruptcy, such petition shall not have been
dismissed within sixty (60) days after the filing of such petition; or
(f) Material Adverse Effect. There shall have been a change in the assets,
liabilities, financial condition, operations, affairs or prospects of Borrower
or any guarantor of any of Borrower's obligations to FUNB which, in the
reasonable determination of FUNB has, either individually or in the aggregate,
had a Material Adverse Effect; or
(g) Judgments, Writs and Attachments. There shall be a money judgment, writ
or warrant of attachment or similar process entered or filed against Borrower
which (net of insurance coverage) remains unvacated, unbonded, unstayed or
unpaid or undischarged for more than sixty (60) days (whether or not
consecutive) or in any event later than five (5) calendar days prior to the date
of any proposed sale thereunder; or
(h) Legal Obligations. This Note or any other agreement between Borrower
and FUNB shall for any reason other than the full, complete and indefeasible
satisfaction of the obligations thereunder cease to be, or be asserted by
Borrower, not to be, a legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms; or
(i) Other Credit Agreements. Without limiting the generality of, and in
addition to the events described in this Section 7, the occurrence of any "Event
of Default" (i) as defined under the Third Amended and Restated Warehousing
Credit Agreement dated as of December 2, 1997, by and among each of PLM
Equipment Growth Fund V, PLM Equipment Growth Fund VI, PLM Equipment Growth &
Income Fund VII, Professional Lease Management Income Fund I, L.L.C., PLM
Financial Services, Inc. and the Lenders and Agent named therein, as the same
may from time to time be amended, modified, supplemented, renewed, extended or
restated (the "Growth Fund Agreement") or any other loan or security document
related to the Growth Fund Agreement; (ii) as defined in the Second Amended and
Restated Warehousing Credit Agreement dated as of December 2, 1997, by and among
TEC AcquiSub, Inc. and the Lenders and Agent named therein, as the same may from
time to time be amended, modified, supplemented, renewed, extended or restated
(the "TEC AcquiSub Agreement") or any other loan or security document related to
the TEC AcquiSub Agreement; or (iii) as defined in the Amended and Restated
Warehousing Credit Agreement dated as of December 2, 1997, as amended through
the date hereof, by and among American Finance Group, Inc. and the Lenders and
Agent named therein, as the same may from time to time be further amended,
modified, supplemented, renewed, extended or restated (the "AFG Agreement") or
any other loan or security document related to the AFG Agreement; or
(j) Criminal Proceedings. A criminal proceeding shall have been filed in
any court naming Borrower as a defendant for which forfeiture is a potential
penalty under applicable federal or state law which, in the reasonable
determination of FUNB, may have a Material Adverse Effect; or
(k) Action by Governmental Authority. Any court or governmental authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely affect Borrower's financial condition, operations or ability to
perform or pay its obligations arising under this Note or any instrument or
agreement executed in relation hereto. Borrower shall have thirty (30) days from
the earlier of the date Borrower first discovers it is the subject of Government
Action or FUNB or any agency gives notice of Government Action to take such
steps as are necessary to obtain relief from the Government Action. For the
purpose of this paragraph, "relief from Government Action" means to discharge or
to obtain a dismissal of or release or relief from (i) any Government Action so
that the affected party or parties do not incur any monetary liability in the
case of Borrower, or (ii) any disqualification of or other limitation on the
operation of Borrower which in the reasonable determination of FUNB may have a
Material Adverse Effect; or
(l) Governmental Decrees. Any court or governmental authority, including,
without limitation, the Securities and Exchange Commission, shall enter a
decree, order or ruling prohibiting any of American Finance Group, Inc., TEC
AcquiSub, Inc., PLM Equipment Growth Fund V, PLM Equipment Growth Fund VI, PLM
Equipment Growth & Income Fund VII, Professional Lease Management Income Fund I,
L.L.C. or PLM Financial Services, Inc. from releasing or paying to Borrower any
funds in the form of management fees, profits or otherwise which, in the
reasonable determination of FUNB may have a Material Adverse Effect.
8. Remedies. Upon the occurrence and continuance of any Event of Default, FUNB
shall have no further obligation to advance money or extend credit to or for the
benefit of Borrower. In addition, upon the occurrence and during the continuance
of an Event of Default, FUNB may do any one or more of the following, all of
which are hereby authorized by Borrower: (a) declare all or any of the
obligations of Borrower under this Note and any other instrument executed by
Borrower in relation hereto to be immediately due and payable, and such
obligations shall immediately become due and payable and immediately collectible
by FUNB pursuant to applicable law; provided that if such Event of Default is
under Section 7(f) or 7(g), then all of the obligations of Borrower hereunder
shall become immediately due and payable and collectible forthwith without the
requirement of any notice or other action by FUNB; and (b) exercise in addition
to all other rights and remedies granted hereunder, any and all rights and
remedies otherwise available at law or in equity.
9. Waiver; Representations and Expenses. Borrower waives presentment and demand
for payment, notice of dishonor, protest and notice of protest of this Note and
all other notices or demands in connection with the delivery, acceptance,
performance, default or endorsement of this Note, and shall pay all costs and
expenses of collection when incurred by FUNB, including, without limitation,
reasonable attorneys' fees, costs and other expenses. The right to plead any and
all statutes of limitations as a defense to any demands hereunder is hereby
waived to the full extent permitted by law. No extension nor indulgence granted
from time to time shall be construed as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of the rights
of FUNB herein. The liability of Borrower shall be unconditional, without regard
to the liability of any other party, and shall not be in any manner affected by
any forbearance, partial action or delay on the part of FUNB in regard to the
exercise of any right, power or remedy under this Note.
10. Indemnity. Borrower shall pay, indemnify, and hold FUNB and each of its
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including reasonable attorney's fees and the
allocated cost of in-house counsel) of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Note and any other documents related hereto, or the transactions
contemplated hereby and thereby, and with respect to any investigation,
litigation or proceeding (including any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, dissolution or relief of debtors or any appellate
proceeding) related to this Note or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that Borrower
shall have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities arising from the gross negligence or willful misconduct
of such Indemnified Person.
11. Governing Law; Amendment and Interpretation. This Note shall be governed by,
and construed and enforced in accordance with, the laws of the North Carolina,
excluding conflict of laws principles that would cause the application of laws
of any other jurisdiction. If any provision of this Note is held to be invalid
or unenforceable by a court of competent jurisdiction, the other provisions of
this Note shall remain in full force and effect and FUNB may at any time
thereafter require payment in full of all amounts due hereunder. This Note may
not be terminated, amended, supplemented, waived or modified orally, but only by
an instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, waiver or modification is sought. The
headings of Sections shall not be taken into account in interpreting the terms
of this Note.
12. Successors and Assigns. The provisions of this Note shall inure to the
benefit of and be binding on any successor to Borrower and shall extend to any
holder hereof. Borrower may not assign its rights or delegate its obligations
hereunder.
13. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER,
BY EXECUTION HEREOF, AND FUNB, BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS NOTE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS
NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT TO FUNB TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
and delivered as of the date first written above.
PLM INTERNATIONAL, INC.
By:
Name:
Title:
EXHIBIT A
NOTICE OF BORROWING
(PLM International, Inc.)
Date:
To: First Union National Bank
One First Union Center
301 South College Street
Charlotte, NC 28288
Re: Promissory Note dated as of July 15, 1998 (as the same may from time to
time be amended, modified, supplemented, renewed, extended or restated,
the "Note"), by PLM International, Inc., a Delaware corporation
("Borrower") in favor of First Union National Bank ("FUNB").
Ladies and Gentlemen:
The undersigned refers to the Note, the terms defined therein used herein as
defined, and hereby gives you notice irrevocably, pursuant to Section 1 of the
Note, of the borrowing of a Loan specified herein:
1. The business day of the proposed borrowing is , 199_.
2. The aggregate amount of the proposed borrowing is $ .
------
The undersigned hereby certifies that the following statements are true,
accurate and complete as of the date hereof, and will be true, accurate and
complete on the date of the proposed borrowing, before and after giving effect
thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Borrower set
forth in Section 6 of the Note are true, accurate and complete as though made on
and as of such date (except to the extent such representations and warranties
relate to an earlier date, in which case they are true, accurate and complete as
of such date);
(b) no Event of Default or event which with the passage of
time or notice or both would become an Event of Default has occurred and is
continuing, or would result from such proposed borrowing; and
(c) the proposed borrowing will not cause the aggregate
principal amount of all outstanding Loans to exceed $5,000,000.
PLM INTERNATIONAL, INC.,
a Delaware corporation
By:
Name:
Title:
By:
Printed Name: