LIQUIDATING TRUST AGREEMENT
Dated as of December 31, 2002
by and between
PLM EQUIPMENT GROWTH FUND III
individually as Grantor
and
PLM FINANCIAL SERVICES, INC.
as the Trustee
TABLE OF CONTENTS
ARTICLE I: NAME AND DEFINITIONS 1
1.1 Name 1
1.2 Certain Terms Defined 2
ARTICLE II: NATURE OF TRANSFER 3
2.1 Purpose of Trust 3
2.2 Prohibited Activities 4
2.3 No Reversion to the Partnership 4
2.4 Payment of Liabilities 4
2.5 Bill of Sale, Assignment, Acceptance and
Assumption Agreement; Instruments of Further
Assurance 4
2.6 Incidents of Ownership 4
2.7 Notice to Unlocated Holders of Partnership Units 5
ARTICLE III: BENEFICIARIES 5
3.1 Beneficial Interests 5
3.2 Rights of Beneficiaries 5
3.3 No Transfer of Interests of Beneficiaries 6
3.4 Trustee as Beneficiary 6
ARTICLE IV: DURATION AND TERMINATION OF TRUST 6
4.1 Duration 6
4.2 Other Obligations of the Trustee upon Termination 7
ARTICLE V: ADMINISTRATION OF TRUST ASSETS 7
5.1 Sale of Trust Assets 7
5.2 Transactions with Related Persons 7
5.3 Payment of Claims, Expenses and Liabilities 7
5.4 Interim Distributions 7
5.5 Final Distribution 8
5.6 Reports to Beneficiaries and Others 8
5.7 Federal Income Tax Information 8
5.8 Employment of Manager 9
ARTICLE VI: POWERS OF AND LIMITATIONS ON THE TRUSTEE 9
6.1 Limitations on Trustee 9
6.2 Specific Powers of the Trustee 10
ARTICLE VII: CONCERNING THE TRUSTEE, EMPLOYEES AND AGENTS 12
7.1 Generally 12
7.2 Reliance by Trustee 13
7.3 Limitation on Liability to Third Persons 14
7.4 Recitals 14
7.5 Indemnification 14
7.6 Rights of Trustees, Employees, Independent Contractors
and Agents to Own Trust Units or Other Property
and to Engage in Other Business 15
7.7 Contribution Back 15
ARTICLE VIII: PROTECTION OF PERSONS DEALING WITH THE TRUSTEE 16
8.1 Action by Trustee 16
8.2 Reliance on Statements by the Trustee 16
ARTICLE IX: COMPENSATION OF TRUSTEE 16
9.1 Amount of Compensation 16
9.2 Dates of Payment 16
9.3 Expenses 16
ARTICLE X: THE TRUSTEE AND SUCCESSOR TRUSTEE 16
10.1 Number and Qualification of Trustees 16
10.2 Resignation and Removal 17
10.3 Appointment of Successor 17
10.4 Acceptance of Appointment by Successor Trustee 18
10.5 Bonds 18
ARTICLE XI: CONCERNING THE BENEFICIARIES 18
11.1 Evidence of Action by Beneficiaries 18
11.2 Limitation on Suits by Beneficiaries 18
11.3 Requirement of Undertaking 18
ARTICLE XII: MEETING OF BENEFICIARIES 19
12.1 Purpose of Meetings 19
12.2 Meeting Called by Trustee 19
12.3 Meeting Called on Request of Beneficiaries 19
12.4 Persons Entitled to Vote at Meeting of Beneficiaries 19
12.5 Quorum 19
12.6 Adjournment of Meeting 19
12.7 Conduct of Meetings 20
12.8 Record of Meeting 20
ARTICLE XIII: AMENDMENTS 20
13.1 Consent of Beneficiaries 20
13.2 Notice and Effect of Amendment 20
13.3 Trustee's Declining to Execute Documents 20
ARTICLE XIV: MISCELLANEOUS PROVISIONS 21
14.1 Filing Documents 21
14.2 Intention of Parties to Establish Trust 21
14.3 Beneficiaries Have No Rights or Privileges as
Holders of Partnership Units 21
14.4 Laws as to Construction 21
14.5 Severability 21
14.6 Notices 22
14.7 Counterparts. 22
SCHEDULE A: Schedule of Fees
EXHIBIT A: Form of Bill of Sale, Assignment, Acceptance and Assumption
Agreement
LIQUIDATING TRUST AGREEMENT
This LIQUIDATING TRUST AGREEMENT (this "Agreement"), dated as of December
31, 2002 (the "Effective Date"), by and between PLM Equipment Growth Fund III, a
California limited partnership, as Grantor (the "Partnership"), and PLM
Financial Services, Inc., a Delaware corporation, as Trustee (the "Trustee").
WHEREAS, the Partnership was organized for the objectives and purposes of
owning and leasing, and otherwise dealing with equipment and other personal
property; and
WHEREAS, the term of the Partnership expired on December 31, 2000 pursuant
to the terms of its Second Amended and Restated Agreement of Limited Partnership
dated as of March 10, 1988, as amended (the "Partnership Agreement"); and
WHEREAS, as of the date hereof, substantially all of the assets of the
Partnership have been sold or otherwise disposed of; and
WHEREAS, PLM Financial Services, Inc., a Delaware corporation (the "General
Partner"), believes it to be in the best interest of the Partnership to complete
the liquidation of the Partnership by transferring all remaining assets of the
Partnership (the "Retained Assets") to a liquidating trust (the "Trust") with
PLM Financial Services, Inc., serving as its initial trustee (the "Trustee"),
including a cash reserve set aside for the contingent and existing obligations
of the Partnership and the Liquidating Trust (the "Cash Reserve"); and
WHEREAS, the Trustee shall administer the Liquidating Trust pursuant to the
terms of this Agreement and, upon satisfaction of all liabilities and
obligations of the Partnership and the Liquidating Trust, the Trustee shall
distribute the residue of the proceeds of the liquidation of the assets of the
Partnership in accordance with the terms hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partnership hereby agrees to
grant, release, assign, convey and deliver unto the Trustee for the benefit of
the Beneficiaries (as hereinafter defined), all of the right, title and interest
of the Partnership in and to the Retained Assets for the uses and purposes
stated herein on the Effective Date, subject to the terms and provisions set out
below, and the Trustee hereby agrees to accept such Retained Assets and such
Trust, subject to the following terms and provisions:
ARTICLE I
NAME AND DEFINITIONS
1.1 Name. This Trust shall be known as the PLM Equipment
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Growth Fund III Liquidating Trust.
1.2 Certain Terms Defined For all
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purposes of this instrument, unless the context otherwise requires:
(a) "AFFILIATED PERSON" shall mean a Person (i) who in his individual
capacity is a director, trustee, officer, partner or employee of the Manager or
of a Person who controls, is controlled by or is under common control with the
Manager or (ii) who controls, is controlled by or is under common control with
the Manager.
(b) "AGREEMENT" shall mean this instrument as originally executed or as
it may from time to time be amended pursuant to the terms hereof.
(c) "BENEFICIAL INTEREST" shall mean each Beneficiary's proportionate share
of the Trust Assets in the Trust determined by the ratio of the number of
Partnership Units held by the Initial Beneficiary on the close of business on
the Record Date in the Partnership over the total number of Partnership Units
existing on such Record Date in the Partnership and thereafter each
Beneficiary's proportional beneficial interest in the Trust represented by Trust
Units.
(d) "BENEFICIARIES" shall mean the holders of Trust Units from time to time
on or after the Record Date, including the Initial Beneficiaries and the
Subsequent Beneficiaries.
(e) "GRANTOR" shall mean the Partnership.
(f) "INITIAL BENEFICIARIES" shall mean the initial holders of Trust Units.
(g) "LIQUIDATING TRUST" shall mean the liquidating trust maintained by the
Trustee holding the Trust Assets of the Partnership, identified as the "PLM
Equipment Growth Fund III Liquidating Trust"; also referred to herein as the
"Trust."
(h) "MANAGER" shall mean such Person or Persons who have been employed by,
or who have contracted with, the Trustee to assist in the management of the
Trust, and for the avoidance of doubt, the Manager may be the General Partner or
any affiliate of the General Partner.
(i) "PARTNERSHIP UNITS" shall mean the limited and general partnership
units in the Partnership held by each of the Beneficiaries as of the Record
Date.
(j) "PERSON" shall mean an individual, a corporation, a partnership, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, any unincorporated organization, or a government or political
subdivision thereof.
(k) "RECORD DATE" shall mean the date selected by the Grantor for
determination of the holders of Partnership Units entitled to become
Beneficiaries.
(l) "SUBSEQUENT BENEFICIARIES" shall mean Beneficiaries as reflected on the
books and records of the Trust from time to time after the Effective Date, other
than the Initial Beneficiaries.
(m) "TRUST" shall mean the Trust created by this Agreement.
(n) "TRUST ASSETS" shall mean all the property held from time to time by the
Trustee under this Agreement, which initially shall consist of the Retained
Assets of the Partnership granted, assigned and conveyed to the Trustee by the
Partnership, the Cash Reserves, and, in addition, shall thereafter include all
proceeds and other receipts of, from, or attributable to any assets, causes of
actions or claims held by the Trust.
(o) "TRUST UNITS" shall mean those equal, undivided portions into which the
Beneficial Interests in the Trust Assets are divided, as evidenced on the books
and records of the Trust.
(p) "TRUSTEE" shall mean the original Trustee under this Agreement and
its successor(s), if any.
ARTICLE II
NATURE OF TRANSFER
2.1 Purpose of Trust.
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(a) It is expected that the Partnership shall dissolve and liquidate
prior to fully winding up its affairs, including, but not limited to, the sale
of its remaining assets, the collection of any receivables and the payment of
any unsatisfied debts, claims, liabilities, commitments, suits and other
obligations, whether contingent or fixed or otherwise (the "Liabilities"),
except for such Liabilities for which the Partnership has previously reserved by
the retention of the Cash Reserves as described in the recitals hereto. The
Trust hereby is organized for the sole purpose of winding up the affairs of the
Partnership as promptly as reasonably possible and with no objective to continue
or engage in the conduct of a trade or business.
(b) The Cash Reserves and Retained Assets to be granted, assigned and
conveyed to the Trustee as of the Effective Date will be held in the Trust, and
the Trustee will: (i) further liquidate the Trust Assets as it deems necessary
to carry out the purpose of the Trust and facilitate distribution of the Trust
Assets; (ii) protect, conserve and manage the Trust Assets in accordance with
the terms and conditions hereof; and (iii) distribute the Trust Assets in
accordance with the terms and conditions hereof.
(c) It is intended that the granting, assignment and conveyance of the
Cash Reserves and the Retained Assets by the Partnership to the Trustee pursuant
hereto shall be treated for federal and state income tax purposes as if the
Partnership made such distributions directly to the holders of Partnership
Units. It is further intended that for federal, state and local income tax
purposes the Trust shall be treated as a liquidating trust under Treasury
Regulation Section 301.7701-4(d) and any analogous provision of state or local
law, and the Beneficiaries shall be treated as the owners of their respective
share of the Trust pursuant to Sections 671 through 679 of the Code and any
analogous provision of state or local law and shall be taxed on their respective
share of the Trust's taxable income (including both ordinary income and capital
gains) pursuant to Section 671 of the Code and any analogous provision of state
or local law. The Trustee shall file all tax returns required to be filed with
any governmental agency consistent with this position, including, but not
limited to, any returns required of grantor trusts pursuant to Section
1.671-4(a) of the Income Tax Regulations. The Partnership agrees that a
transfer agent acting on its behalf may prepare and file applicable K-1's
respecting the Beneficiaries' Partnership income. To the extent that the
Trustee becomes liable for the payment of taxes, including withholding taxes, in
respect of income derived from the investment of funds held hereunder or any
payment made hereunder (collectively, the "Taxes"), the Trustee may pay such
Taxes. The Trustee may withhold from any payment of the Trust Assets such
amount as the Trustee estimates to be sufficient to provide for the payment of
such Taxes not yet paid, and may use the sum withheld for that purpose. The
Trustee shall be indemnified and held harmless against any liability for Taxes
and for any penalties or interest in respect of Taxes on such investment income
or payments in the manner provided herein.
2.2 Prohibited Activities. The Trust
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shall not continue or engage in the conduct of any trade or business, and the
Trustee is expressly prohibited from, and shall have no power or authority to,
continue or engage in the conduct of any trade or business on behalf of the
Trust or the Beneficiaries, and all of the terms and conditions hereof shall be
construed accordingly.
2.3 No Reversion to the Partnership.
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Partnership. In no event shall any part of the Trust Assets revert to or be
distributed to the Partnership.
2.4 Payment of Liabilities. To the
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extent that there are available Trust Assets in the Trust, the Trust hereby
agrees to assume all Liabilities of the Partnership on the Effective Date.
Should any Liability be asserted against the Trust as the transferee of the
Trust Assets or as a result of the assumption made in this paragraph, the
Trustee may use such part of the Trust Assets as may be necessary in contesting
any such Liability or in payment thereof. In no event shall the Trustee,
Beneficiaries or employees or agents of the Trust be personally liable, nor
shall resort be had to the private property of such Persons or to any other
Trust Assets, in the event the Trust Assets are not sufficient to satisfy the
Liabilities asserted against or payable out of the Partnership's available Trust
Assets in the Trust.
2.5 Bill of Sale, Assignment, Acceptance and Assumption Agreement;
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Instruments of Further Assurance
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On the Effective Date,
the Partnership and the Trust shall execute a Bill of Sale, Assignment,
Acceptance and Assumption Agreement conveying the Retained Assets, Cash Reserves
and Liabilities to the Trust, a form of which is attached as Exhibit A hereto.
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After the dissolution of the Partnership, such Persons as shall have the right
and power to so act, will, upon reasonable request of the Trustee, execute,
acknowledge, and deliver such further instruments and do such further acts as
may be necessary or proper to carry out effectively the purposes of this
Agreement, to confirm or effectuate the transfer to the Trustee of any property
intended to be covered hereby, and to vest in the Trustee, its successors and
assigns, the estate, powers, instruments or funds in trust hereunder.
2.6 Incidents of Ownership. The holders
-----------------------
of Partnership Units as of the Record Date shall be the Initial Beneficiaries of
the Trust as holders of Trust Units in the Trust, and the Trustee shall retain
only such incidents of legal ownership as are necessary to undertake the actions
and transactions authorized herein.
2.7 Notice to Unlocated Holders of Partnership Units
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If the Trust holds Trust Assets for
unlocated holders of any Partnership Units, due notice shall be given to such
holders of Partnership Units in accordance with Delaware law.
ARTICLE III
BENEFICIARIES
3.1 Beneficial Interests.
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(a) The Beneficial Interest of each Initial Beneficiary hereof shall be
determined by the Partnership in accordance with a certified copy of the
Partnership's list of Partnership Unit holders as of the Record Date (the
"List"). The Partnership will deliver the certified copy of the List to the
Trustee within a reasonable time after the Record Date specifying the Beneficial
Interests of each Initial Beneficiary in the Partnership. For ease of
administration, the List shall express the Beneficial Interest of each Initial
Beneficiary in terms of units and it is intended that each unit shall represent
one Trust Unit in the Trust.
(b) In the case of the Partnership Unit holders, customary
institutional book-entry or other records or any other evidence of ownership
satisfactory to the Trustee will be deemed to evidence the Beneficial Interest
in the Trust of each such Beneficiary.
(c) If any conflicting claims or demands are made or asserted with
respect to the ownership of any Trust Units, or if there should be any
disagreement between the transferees, assignees, heirs, representatives or
legatees succeeding to all or part of the interest of any Beneficiary resulting
in adverse claims or demands being made in connection with such Trust Units,
then, in any of such events, the Trustee shall be entitled, at its sole
election, to refuse to comply with any such conflicting claims or demands. In
so refusing, the Trustee may elect to make no payment or distribution with
respect to such Trust Units, or to make such payment to a court of competent
jurisdiction or an escrow agent, and in so doing the Trustee shall not be or
become liable to any of such parties for their failure or refusal to comply with
any of such conflicting claims or demands, nor shall the Trustee be liable for
interest on any funds which it may so withhold. The Trustee shall be entitled
to refrain and refuse to act until either (i) the rights of the adverse
claimants have been adjudicated by a final judgment of a court of competent
jurisdiction, (ii) all differences have been adjusted by valid written agreement
between all of such parties, and the Trustee shall have been furnished with an
executed counterpart of such agreement, or (iii) there is furnished to the
Trustee a surety bond or other security satisfactory to the Trustee, as it shall
deem appropriate, to fully indemnify it as between all conflicting claims or
demands.
3.2 Rights of Beneficiaries. Each
-------------------------
Beneficiary shall be entitled to participate in the rights and benefits due to a
Beneficiary hereunder according to his Beneficial Interest. Each Beneficiary
shall take and hold the same subject to all the terms and provisions of this
Agreement. The interest of the Beneficiary hereby is declared and shall be in
all respects personal property and upon the death of an individual Beneficiary,
his Beneficial Interest shall pass as personal property to his legal
representative and such death shall in no way terminate or affect the validity
of this Agreement, provided that the Trustee shall not be required to evidence a
book entry transfer of a deceased Beneficiary's Beneficial Interest to his legal
representative until the Trustee shall have received Letters Testamentary or
Letters of Administration and written notice of the death of the deceased
Beneficiary. A Beneficiary shall have no title to, right to, possession of,
management of, or control of, the Trust Assets except as herein expressly
provided. No widower, widow, heir, or devisee of any person who may be a
Beneficiary shall have any right of dower, homestead, or inheritance, or of
partition, or of any other right, statutory or otherwise, in any property
forming a part of Trust Assets but the whole title to the Trust Assets shall be
vested in the Trustee and the sole interest of the applicable Beneficiaries
shall be the rights and benefits given to such Persons under this Agreement.
3.3 No Transfer of Interests of Beneficiaries
---------------------------------------------
The Beneficial Interest of a Beneficiary may not be
transferred by any Beneficiary in person or by a duly authorized agent or
attorney, or by the properly appointed legal representatives of the Beneficiary,
nor may a Beneficiary have authority or power to sell, assign, transfer,
encumber, or in any other manner dispose of his Beneficial Interest; provided,
however, that the Beneficial Interest shall be assignable or transferable by
will, intestate succession, or operation of law and, further provided, that the
executor or administrator of the estate of a Beneficiary may mortgage, pledge,
grant a security interest in, hypothecate or otherwise encumber, the Beneficial
Interest held by the estate of such Beneficiary if necessary in order to borrow
money to pay estate, succession or inheritance taxes or the expenses of
administering the estate of the Beneficiary, upon written notice to and upon
written consent of the Trustee.
Except as may be otherwise required by law, the Beneficial Interests of the
Beneficiaries hereunder shall not be subject to attachment, execution,
sequestration or any order of a court, nor shall such interests be subject to
the contracts, debts, obligations, engagements or liabilities of any
Beneficiary, but the interest of a Beneficiary shall be paid by the Trustee to
the Beneficiary free and clear of all assignments, attachments, anticipations,
levies, executions, decrees and sequestrations and shall become the property of
the Beneficiary only when actually received by such Beneficiary.
3.4 Trustee as Beneficiary. The Trustee,
----------------------
either individually or in a representative or fiduciary capacity, may be a
Beneficiary to the same extent as if it were not a Trustee hereunder and shall
have all the rights of a Beneficiary, including, without limitation, the right
to vote and to receive distributions, to the same extent as if it was not the
Trustee hereunder.
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.1 Duration. The existence of this Trust shall
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terminate upon the earliest of (i) a termination required by the applicable laws
of the State of Delaware, (ii) the termination due to the distribution of all
Trust Assets as provided in Section 5.5, or (iii) December 31, 2004; provided,
however, that the Trustee, in its discretion, may extend the existence of this
Trust to such later date as it may designate, if it determines that an extension
is reasonably necessary to pay or make provision for then known liabilities,
actual or contingent.
4.2 Other Obligations of the Trustee upon Termination
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Upon distribution of all the Trust
Assets, the Trustee shall provide for the retention of all necessary books,
records, lists of holders of Trust Units in the Trust, certificates and files
that shall have been delivered to or created by the Trustee for a period of ten
(10) years thereafter, at the Trustee's discretion, all of such records and
documents may be destroyed. Except as otherwise specifically provided herein,
upon the distribution of all Trust Assets in the Trust, the Trustee shall have
no further duties or obligations hereunder.
ARTICLE V
ADMINISTRATION OF TRUST ASSETS
5.1 Sale of Trust Assets. The Trustee is
----------------------
hereby authorized and directed, at such times as it may deem appropriate, to
transfer, assign, or otherwise dispose of all or any part of the Trust Assets in
the Trust as it deems appropriate at public auction or at private sale for cash,
securities or other property, or upon credit (either secured or unsecured as the
Trustee shall determine).
5.2 Transactions with Related Persons
----------------------------------
Notwithstanding any other provisions of this Agreement, the Trustee
shall not knowingly, directly or indirectly, sell or otherwise transfer all or
any part of any Trust Assets to, or contract with, (i) itself or any other
Trustee or an employee or agent (acting in its or their individual capacities)
of this Trust, or (ii) any Person of which any Trustee, employee or agent of
this Trust is an affiliate by reason of being a trustee, director, officer,
partner or direct or indirect beneficial owner of 5% or more of the outstanding
capital stock, shares or other equity interest of such Persons.
5.3 Payment of Claims, Expenses and Liabilities
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Provided the Trustee has been advised in
writing respecting such claims, expenses, charges, liabilities and obligations,
the Trustee shall pay from the Trust Assets in the Trust all claims, expenses,
charges, liabilities, and obligations of the Trust Assets and all Liabilities
relating to the Trust Assets and obligations which the Trustee specifically
assumes and agrees to pay pursuant to this Agreement and such transferee
liabilities which the Trustee may be obligated to pay as transferees of the
Trust Assets in the Trust, including among the foregoing, and without limiting
the generality of the foregoing, interest, penalties, taxes, assessments, and
public charges of every kind and nature and the costs, charges, and expenses
connected with or growing out of the execution or administration of this Trust
and such other payments and disbursements as are provided in this Agreement or
which may be determined to be a proper charge against the Trust Assets in the
Trust by the Trustee.
5.4 Interim Distributions. At such times
----------------------
as may be determined by it in its sole discretion, the Trustee shall distribute,
or cause to be distributed, to the Beneficiaries, in proportion to the number of
Trust Units held by each Beneficiary relating to the Trust, such cash or other
property comprising a portion of the Trust Assets as the Trustee may in its sole
discretion determine may be distributed without detriment to the conservation
and protection of the Trust Assets in the Trust.
5.5 Final Distribution. If the Trustee
-------------------
determines that the Liabilities and all other claims, expenses, charges,
liabilities and obligations of the Trust have been paid or discharged, or if the
existence of the Trust shall terminate pursuant to Section 4.1, the Trustee
shall, as expeditiously as is consistent with the conservation and protection of
the Trust Assets, distribute the Trust Assets to the Beneficiaries in proportion
to the number of Trust Units held by each Beneficiary in the Trust based on the
list submitted to the Trustee by the Partnership pursuant to Section 3.1 above,
as such list may be amended. The Trustee shall hold in the Trust and thereafter
make disposition of all liquidating distributions and other payments due any
Beneficiaries who have not been located, in accordance with Delaware law,
subject to applicable state laws regarding escheat and abandoned property. It
is understood that the Trustee and the Beneficiary's bank in any funds transfer
may rely solely upon any account numbers or similar identifying number provided
by the parties hereto to identify (i) the Beneficiary, (ii) the Beneficiary's
bank, or (iii) an intermediary bank. The Trustee may apply any of the Trust
Assets for any payment order it executes using any such identifying number, even
where its use may result in a person other than the Beneficiary being paid, or
the transfer of funds to a bank other than the Beneficiary's bank, or an
intermediary bank designated.
5.6 Reports to Beneficiaries and Others
-----------------------------------
As soon as practicable after the end of each taxable year of the
Trust and after termination of the Trust, the Trustee shall submit a written
report and account to the Beneficiaries showing (i) the assets and liabilities
of the Trust at the end of such taxable year or upon termination and the
receipts and disbursements of the Trustee for such taxable year or period, (ii)
any changes in the Trust Assets which they have not previously reported, and
(iii) any action taken by the Trustee in the performance of its duties under
this Agreement which it has not previously reported and which, in its opinion,
materially affects the Trust Assets. The Trustee may submit similar reports for
such interim periods during the taxable year as it deems advisable or as may be
required by the Securities and Exchange Commission. The taxable year of the
Trust shall end on December 31 of each year unless the Trustee deems it
advisable to establish some other date as the date on which the taxable year of
the Trust shall end.
5.7 Federal Income Tax Information
---------------------------------
As soon as practicable after the close of each taxable year, the
Trustee shall direct its transfer agent to mail to each Person who was a
Beneficiary at the close of the year, a statement showing on a Trust Unit basis
in the Trust the dates and amounts of all distributions made by the Trustee, if
any, income earned on assets held by the Trust, if any, such other information
as is reasonably available to the Trustee which the Trustee determines may be
helpful in determining the amount of gross income and expenses attributable to
the Trust that such Beneficiary should include in such Person's federal income
tax return for the preceding year and any other information as may be required
to be furnished under the tax laws. In addition, after receipt of a written
request in good faith, or in its discretion without such request or if required
by applicable law, such transfer agent (or if it cannot, the Trustee) shall
furnish to any Person who has been a Beneficiary at any time during the
preceding year a statement containing such further information as is reasonably
available to the transfer agent or Trustee, respectively, which shall be helpful
in determining the amount of taxable income which such Person should include in
such Person's federal income tax return.
5.8 Employment of Manager.
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(a) The Trustee shall be responsible for the general policies of the
Trust and for the general supervision of the activities of the Trust conducted
by all agents, employees, advisors or managers of the Trust. However, the
Trustee is not and shall not be required personally to conduct the activities of
the Trust, and consistent with its ultimate responsibility as stated above, the
Trustee shall have the power to appoint, employ or contract with any Person or
Persons (including any corporation, partnership, or trust in which one or more
of them may be directors, officers, shareholders, partners or trustees) as the
Trustee may deem necessary or proper for the transaction of the activities of
the Trust, including, but not limited to, PLM International, Inc. and its
affiliates. The Trustee may therefore employ or contract with such Person or
Persons (herein referred to as the "Manager") and may grant or delegate such
authority to the Manager as the Trustee may in its sole discretion deem
necessary or desirable to carry out the purpose of the Trust without regard to
whether such authority is normally granted or delegated by trustees.
The Trustee shall have the power to determine the terms and compensation of
the Manager or any other Person whom they may employ or with whom they may
contract. The Trustee may exercise broad discretion in allowing the Manager to
administer and regulate the operations of the Trust, to act as agent for the
Trust, to execute documents on behalf of the Trustee, and to make executive
decisions which conform to general policies and general principles previously
established by the Trustee.
(b) The Manager or other Persons shall not be required to administer
the Trust as its sole and exclusive function and may have other business
interests and may engage in other activities similar or in addition to those
relating to the Trust, including the rendering of advice or services of any kind
to investors or any other Persons and the management of other investments.
ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEE
6.1 Limitations on Trustee. Except as
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contemplated by this Agreement, the Trustee shall not at any time, on behalf of
the Trust or the Beneficiaries, enter into or engage in any trade or business,
and no part of any Trust Assets shall be used or disposed of by the Trustee in
furtherance of any trade or business. Except as the Trustee reasonably believes
is consistent with and in furtherance of its obligations under this Agreement,
the Trustee shall be restricted to the holding, collection and sale of the Trust
Assets and the payment and distribution thereof for the purposes set forth in
this Agreement and to the conservation and protection of the Trust Assets and
the administration thereof in accordance with the provisions of this Agreement.
In no event shall the Trustee receive any property, make any distribution,
satisfy or discharge any claims, expenses, charges, liabilities and obligations
or otherwise take any action which is inconsistent with a complete liquidation
of the Partnership within the meaning of the Internal Revenue Code of 1986, as
amended, Treasury Regulations promulgated thereunder, and rulings, decisions and
determinations of the Internal Revenue Service and courts of competent
jurisdiction, or take any action which would jeopardize the status of the Trust
as a "liquidating trust" for federal income tax purposes within the meaning of
Treasury Regulation Section 301.7701-4(d). This limitation shall apply
regardless of whether the conduct of any such trade or business is deemed by the
Trustee to be necessary or proper for the conservation and protection of the
Trust Assets. The Trustee shall not invest any of the cash held as Trust
Assets, except that the Trustee may invest in (i) direct obligations of the
United States of America or obligations of any agency or instrumentality thereof
which mature not later than one year from the date of acquisition thereof; (ii)
money market deposit accounts, checking accounts, savings accounts, or
certificates of deposit, commercial paper rated not less than A1P1, or other
time deposit accounts which mature not later than one year from the date of
acquisition thereof which are issued by a commercial bank, brokerage firm or
savings institution organized under the laws of the United States of America or
any state thereof; or (iii) other temporary investments not inconsistent with
the Trust's status as a liquidating trust for tax purposes (collectively,
"Permitted Investments"). It is hereby acknowledged that the Trustee shall not
be required to maximize the investment return on the Trust Assets during the
term of this Agreement. The Trustee shall be and hereby is relieved of all
liability with respect to the purchasing, holding or selling of Permitted
Investments in accordance with the terms hereof. The Trustee is not responsible
for any losses to the Trust which may occur, including, without limitation, by
reason of bank failure or the amount of the Trust exceeding the Federal Deposit
Insurance Corporation limits.
6.2 Specific Powers of the Trustee
----------------------------------
Subject to the provisions of Section 6.1, the Trustee shall have the
following specific powers in addition to any powers conferred upon them by any
other Section or provision of this Agreement or any statutory laws of the State
of Delaware; provided, however, that the enumeration of the following powers
shall not be considered in any way to limit or control the power of the Trustee
to act as specifically authorized by any other Section or provision of this
Agreement and to act in such a manner as the Trustee may deem necessary or
appropriate to conserve and protect any Trust Assets or to confer on the
Beneficiaries the benefits intended to be conferred upon them by this
Agreement:
(a) To determine the nature and amount of the consideration to be
received with respect to the sale or other disposition of, or the grant of
interests in, any Trust Assets.
(b) To collect, liquidate or otherwise convert into cash, or such other
property as the Trustee deems deem appropriate, all property, assets and rights
in any Trust Assets, and to pay, discharge and satisfy all other claims,
expenses, charges, liabilities, and obligations existing with respect to any
Trust Assets, the Trust or the Trustee.
(c) To elect, appoint, engage, retain or employ any Persons as agents,
representatives, employees, or independent contractors (including without
limitation real estate advisors, investment advisors, accountants, transfer
agents, custodians, attorneys-at-law, managers, appraisers, brokers, or
otherwise) in one or more capacities, and to pay compensation from the Trust
Assets for services in as many capacities as such Person may be so elected,
appointed, engaged, retained or employed, to prescribe the titles, powers and
duties, terms of service and other terms and conditions of the election,
appointment, engagement, retention or employment of such Persons and, except as
prohibited by law, to delegate any of the powers and duties of the Trustee to
any one or more Trustees, agents, representatives, employers, independent
contractors or other Persons.
(d) To retain and set aside such funds out of the Trust as the Trustee
shall deem necessary or expedient to pay, or provide for the payment of (i)
unpaid claims, expenses, charges, liabilities, and obligations of the Trust or
the Partnership, except to the extent that liabilities for which the Partnership
has previously reserved Cash Reserves are satisfied with funds from said Cash
Reserves; (ii) contingencies; and (iii) the expenses of administering the Trust
Assets.
(e) To do and perform any and all acts necessary or appropriate for the
conservation and protection of the Trust Assets, including acts or things
necessary or appropriate to maintain Trust Assets held by the Trustee pending
sale or other disposition thereof or distribution thereof to the Beneficiaries.
(f) To hold legal title to property of the Trust in the name of the Trust,
or in the name of the Trustee, or of any other Person, without disclosure of the
interest of the Trust therein.
(g) To cause any investments of any part of the Trust Assets to be
registered and held in the name of any one or more of its names or in the names
of a nominee or nominees without increase or decrease of liability with respect
thereto.
(h) To institute or defend actions or declaratory judgments or other actions
and to take such other action, in the name of the Trust or the Partnership or as
otherwise required, as the Trustee may deem necessary or desirable to enforce
any instruments, contracts, agreements, causes of action, claims or rights
relating to or forming a part of the Trust Assets.
(i) To determine conclusively from time to time the value of and to revalue
the securities and other property of the Trust, in accordance with independent
appraisals or other information as it deems necessary or appropriate.
(j) To cancel, terminate, or amend any instruments, contracts, agreements,
obligations or causes of action relating to or forming a part of any Trust
Assets, and to execute new instruments, contracts, agreements, obligations or
causes of action notwithstanding that the terms of any such instruments,
contracts, agreements, obligations or causes of action may extend beyond the
terms of this Trust, provided that no such new instrument, contract, agreement,
obligation or cause of action shall permit the Trustee to engage in any activity
prohibited by Section 6.1.
(k) To vote by proxy or otherwise on behalf of the Beneficiaries and with
full power of substitution all shares of stock and all securities held by the
Trustee hereunder and to exercise every power, election, discretion, option and
subscription right and give every notice, make every demand, and to do every act
or thing in respect to any shares of stock or any securities held by the Trustee
which the Trustee might or could do if the Trustee was the absolute owner
thereof.
(l) To undertake or join in any merger, plan of reorganization,
consolidation, liquidation, dissolution, readjustment or other transaction of
any corporation, any of whose shares of stock or other securities, obligations,
or properties may at any time constitute a part of any Trust Assets, and to
accept the substituted shares of stock, bonds, securities, obligations and
properties and to hold the same in trust in accordance with the provisions
hereof.
(m) In connection with the sale or other disposition or distribution of any
securities held by the Trustee, to comply with the applicable federal and state
securities laws, and to enter into agreements relating to the sale or other
disposition or distribution thereof.
(n) To authorize transactions between corporations or other entities whose
securities, or other interests therein (either in the nature of debt or equity)
are held by the Trustee as part of any Trust Assets.
(o) To terminate and dissolve any entities owned by the Trust.
(p) To have a judicial settlement of its account of the Trust at any time to
the extent it determines necessary or advisable.
(q) To perform any act authorized, permitted, or required under any
instrument, contract, agreement, right, obligation or cause of action relating
to or forming a part of any Trust Assets whether in the nature of an approval,
consent, demand or notice thereunder or otherwise, unless such act would require
the consent of the Beneficiaries in accordance with the express provisions of
this Agreement.
ARTICLE VII
CONCERNING THE TRUSTEE,
BENEFICIARIES, EMPLOYEES AND AGENTS
7.1 Generally. The Trustee accepts and undertakes to
---------
discharge the Trust created by this Agreement, upon the terms and conditions
thereof on behalf of the Beneficiaries. The Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs. No provision of this Agreement
shall be construed to relieve the Trustee from liability for its own willful
misconduct, knowingly and intentionally committed in bad faith, except that:
(a) No successor Trustee shall be in any way responsible for the acts
or omissions of the Trustee in office prior to the date on which he or it
becomes a Trustee.
(b) The Trustee shall not be liable for the performance of such duties and
obligations as are specifically set forth in this Agreement except for its bad
faith or willful misconduct, and no implied covenants or obligations shall be
read into this Agreement against the Trustee.
(c) The Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Agreement.
(d) The Trustee shall not be liable for any act which the Trustee may
do or omit to do hereunder, or for any mistake of fact or law, or for any error
of judgment, or for the misconduct of any employee, agent, representative or
attorney appointed by it, or for anything that it may do or refrain from doing
in connection with this Agreement while acting in good faith; unless caused by
or arising from gross negligence, willful misconduct, fraud or any other breach
of fiduciary duty of the Trustee or any of its employees, agents,
representatives or attorneys.
(e) The duties and obligations of the Trustee shall be limited to and
determined solely by the express provisions of this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Trustee.
7.2 Reliance by Trustee. Except as
---------------------
otherwise provided in Section 7.1:
(a) The Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(b) The Trustee may consult with legal counsel, auditors or other
experts to be selected by it, including firms with which the Trustee may be an
affiliate, and the advice or opinion of such counsel, accountants, auditors or
other experts shall be full and complete protection to the Trustee, the
employees and the agents of the Trustee in respect of any action taken or
omitted or suffered by them in good faith and in reliance on, or in accordance
with, such advice or opinion.
(c) Persons dealing with the Trustee shall look only to the Trust
Assets to satisfy any liability relating to the Trust Assets incurred by the
Trustee to such Person in carrying out the terms of this Trust, and the Trustee
shall have no obligation to satisfy any such liability.
(d) As far as practicable and except as expressly permitted above, the
Trustee shall cause any written instrument creating an obligation of the Trust
to include a reference to this Agreement and to provide that neither the
Beneficiaries, the Trustee nor their agents shall be liable thereunder and that
the other parties to such instrument shall look solely to the Trust Assets for
the payment of any claim thereunder or the performance thereof; provided,
however, that the omission of such provision from any such instrument shall not
render the Beneficiaries, the Trustee, or their agents liable, nor shall the
Trustee be liable to anyone for such omission.
7.3 Limitation on Liability to Third Persons.
---------------------------------------------
No Beneficiary shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any Person in
connection with the Trust Assets or the affairs of this Trust; and neither the
Trustee nor any employee or agent of this Trust shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any Person in
connection with any Trust Assets or the affairs of this Trust, except for such
Person's own willful misconduct, knowingly and intentionally committed in bad
faith; and all such other Persons shall look solely to any Trust Assets for
satisfaction of claims of any nature arising in connection with the affairs of
this Trust. The Trustee shall, at all times, maintain insurance for the
protection of all Trust Assets, its Beneficiaries, the Trustee and its employees
and agents in such amount as the Trustee shall deem adequate to cover all
foreseeable liability to the extent available at reasonable rates.
7.4 Recitals. Any written instrument creating an
--------
obligation of this Trust shall be conclusively taken to have been executed or
done by the Trustee, or the employee or agent of this Trust only in its capacity
as Trustee under this Agreement or in his capacity as employee or agent of the
Trust.
7.5 Indemnification. The Trustee and each of
---------------
its employees and agents (each an "Indemnified Person" and collectively, the
"Indemnified Persons") shall be indemnified out of all Trust Assets against all
liabilities and expenses, including amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and all costs and expenses, including,
but not limited to, reasonable counsel fees and disbursements paid or incurred
in investigating or defending against any such claim, demand, action, suit or
proceeding by the Indemnified Persons in connection with the defense or
disposition of any action, suit or other proceeding by the Trust or any other
Person, whether civil or criminal, in which the Indemnified Person may be
involved or with which the Indemnified Person may be threatened while in office
or thereafter, by reason of its or his being or having been such a Trustee,
employee or agent; provided, however, that the Indemnified Person shall not be
entitled to such indemnification in respect of any matter as to which the
Indemnified Person shall have been adjudicated to have acted in bad faith or
with willful misfeasance or in reckless disregard of the Indemnified Person's
duties. The rights accruing to any Indemnified Person under these provisions
shall not exclude any other right to which the Indemnified Person may be
lawfully entitled. The Trustee may make advance payments in connection with
indemnification under this Section, provided that the Indemnified Person shall
have given a written undertaking to repay any amount advanced to the Indemnified
Person and to reimburse the Trust in the event it is subsequently determined in
a final adjudication by a court of law that the Indemnified Person is not
entitled to such indemnification. The Trustee may purchase such insurance as it
believes, in the exercise of its discretion, adequately insures that each
Indemnified Person shall be indemnified against any such loss, liability or
damage pursuant to this Section. The rights accruing to any Indemnified Person
by reason of the foregoing shall not be deemed to exclude any other right to
which he may legally be entitled nor shall anything else contained herein
restrict the right of the Trustee to indemnify or reimburse such Indemnified
Person in any proper case even though not specifically provided for herein, nor
shall anything contained herein restrict the right of any such Indemnified
Person to contribution under applicable law. As security for the timely and
full payment and satisfaction of all of the present and future obligations of
the parties to the Trustee under this Agreement, including without limitation
the indemnity obligations hereunder, whether joint or several, the Trust (and by
accepting distributions hereunder, each Beneficiary) hereby grants to the
Trustee a continuing security interest in and to any and all of the Trust
Assets, whether now existing or hereafter acquired or created, together with the
products and proceeds thereof, all payments and other distributions with respect
thereto, and any and all investments, renewals, substitutions, modifications and
extensions of any and all of the foregoing. The Trustee shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code. In
addition, in the event the Trustee has not received any payment, indemnity,
reimbursement or other amount due it under this Agreement, then, notwithstanding
any other term or provision of this Agreement, the Trustee may in its discretion
set off and apply any of the Trust Assets as is required to pay and satisfy
those obligations. Promptly after the receipt by the Trustee of notice of any
demand or claim or the commencement of any action, suit or proceeding, the
Trustee shall, if a claim in respect thereof is to be made against any of the
other parties hereto, notify such other parties thereof in writing; but the
failure by the Trustee to give such notice shall not relieve any party from any
liability which such party may have to the Trustee hereunder. Notwithstanding
any obligation to make payments and deliveries hereunder, the Trustee may retain
and hold for such time as it reasonably deems necessary such amount of the Trust
Assets as it shall from time to time in its sole discretion reasonably deem
sufficient to indemnify itself for any such loss or expense and for any amounts
due it hereunder. Except as required by law or as expressly provided herein,
the Trustee shall be under no duty to institute any suit, or to take any
remedial procedures under this Agreement, or to enter any appearance or in any
way defend any suit in which it may be made a defendant hereunder until it shall
be indemnified as provided above, except as expressly set forth herein.
7.6 Rights of Trustees, Employees, Independent Contractors and Agents
-------------------------------------------------------------------
to Own Trust Units or Other Property and to Engage in Other Business.
----------------------------------------------------------------------------
Any Trustee, employee,
independent contractor or agent may own, hold and dispose of Trust Units for its
or his individual account, and may exercise all rights thereof and thereunder to
the same extent and in the same manner as if it were not a Trustee, employee,
independent contractor or agent. Any Trustee, employee, independent contractor
or agent may, in his personal capacity or in a capacity of trustee, officer,
director, shareholder, partner, member, advisor, employee of any Person or
otherwise, have business interests and holdings similar to or in addition to
those relating to the Trust. Subject to the provisions of Article V hereof, any
Trustee, employee, independent contractor or agent of the Trust may be a
trustee, officer, director, shareholder, partner, member, advisor, employee or
independent contractor of, or otherwise have a direct or indirect interest in,
any Person who may be engaged to render advice or services to the Trust, and may
receive compensation from such Person as well as compensation as Trustee,
employee, independent contractor or agent or otherwise hereunder so long as such
interest is disclosed to the Trustee. None of these activities in and of
themselves shall be deemed to conflict with its duties as Trustee, employee,
independent contractor or agent.
7.7 Contribution Back. In the event any
------------------
amount of Trust Assets released to a party under this Agreement is invalidated,
declared to be fraudulent or preferential or must otherwise be restored or
returned by the Trustee in connection with the insolvency, bankruptcy or
reorganization of such party, whether by order of or settlement before any court
or other authority or otherwise, such party shall contribute back to the Trust
an amount such that such party will be affected by that invalidation,
declaration, restoration or return ratably in proportion to the distributions it
received under this Agreement, together with any related assignment, release or
other instrument or document the Trustee may request to restore the status quo
ante.
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEE
8.1 Action by Trustee. All action required or
-----------------
permitted to be taken by the Trustee, in its capacity as Trustee, shall be taken
by a written vote, resolution, or other writing signed by the Trustee then
serving.
8.2 Reliance on Statements by the Trustee.
-------------------------------------
Any Person dealing with the Trustee shall be fully protected in
relying upon the Trustee's certificate or instrument signed by the Trustee that
it has authority to take any action under this Trust.
ARTICLE IX
COMPENSATION OF TRUSTEE
9.1 Amount of Compensation. The
------------------------
compensation of the Trustee shall be in accordance with the terms specified on
Schedule A hereto or upon such other terms and conditions as may be agreed upon
------- -
by the Trustee and the Beneficiaries holding Trust Units representing at least a
majority of the aggregate Beneficial Interests. Schedule A shall apply only to
-------- -
the initial Trustee and, in the event a successor to the initial Trustee shall
serve, such schedule shall be deleted from this Agreement and neither such
deletion nor the substitution of a counterpart schedule applicable to the
successor Trustee shall constitute an amendment of this Agreement.
9.2 Dates of Payment. The compensation payable
----------------
to the Trustee pursuant to the provisions of Section 9.1 shall be in accordance
with Schedule A or, if Schedule A is no longer in force, at such other times as
-------- - -------- -
the Trustee may determine.
9.3 Expenses. The Trustee shall be reimbursed from the
--------
Trust Assets for all expenses reasonably incurred by it in the performance of
its duties in accordance with this Agreement including the reasonable
compensation and out-of-pocket expenses of attorneys, accountants, appraisers,
consultants and other persons retained by the Trustee or the Manager pursuant to
the terms of this Agreement.
ARTICLE X
THE TRUSTEE AND SUCCESSOR TRUSTEE
10.1 Number and Qualification of Trustees.
----------------------------------------
Subject to the provisions of Section 10.3 relating
to the period pending the appointment of a successor Trustee, there shall be one
Trustee of this Trust, which shall be a citizen and resident of or a corporation
or other entity which is incorporated or formed under the laws of a state of the
United States and, if a corporation, it shall be authorized to act as a
corporate fiduciary under the laws of the State of Delaware. The number of
Trustees may be increased or decreased from time to time by the Trustee.
If any corporate Trustee shall ever change its name, or shall reorganize or
reincorporate, or shall merge with or into or consolidate with any other
corporation or entity, bank or trust company, such corporate Trustee shall be
deemed to be a continuing entity and shall continue to act as a Trustee
hereunder with the same liabilities, duties, powers, titles, discretions and
privileges as are herein specified for a Trustee.
10.2 Resignation and Removal. Any
-------------------------
Trustee may resign and be discharged from the Trust hereby created by giving
written notice thereof to any remaining Trustee or Trustees or by giving written
notice to the Beneficiaries holding Beneficial Interests representing an
aggregate of at least a majority of the total Beneficial Interests. Such
resignation shall become effective on the day specified in such notice or upon
the appointment of such Trustee's successor and such successor's acceptance of
such appointment, whichever is earlier. Any Trustee may be removed at any time,
with or without cause, by Beneficiaries having an aggregate Beneficial Interest
of at least a majority of the total Beneficial Interests in the Trust. All
obligations of the Trustee hereunder shall cease and terminate on the effective
date of its resignation and its sole responsibility thereafter shall be to hold
the Trust Assets for a period of thirty (30) calendar days following the
effective date of resignation, at which time, if a successor Trustee shall have
been appointed and have accepted such appointment in a writing to the
Beneficiaries, then upon written notice thereof given by a representative of the
Beneficiaries to the resigning Trustee, the resigning Trustee shall deliver the
Trust Assets to the successor Trustee. If a successor Trustee shall not have
been appointed within a thirty (30) day period from the predecessor Trustee's
resignation, for any reason whatsoever, the resigning Trustee shall deliver the
Trust Assets to a court of competent jurisdiction in the county in which the
Trust Assets are there being held and give written notice of the same to the
parties hereto.
The resigning Trustee shall be entitled to payment of any unpaid fees
(which shall be pro-rated as of the effective date of the resignation) and
expenses and to reimbursement by the Beneficiaries out of the Trust Assets for
any expenses incurred in connection with the transfer of the Trust Assets
pursuant to and in accordance with the provisions of this section.
10.3 Appointment of Successor. Should
------------------------
at any time a Trustee resign or be removed, die, become mentally incompetent or
incapable of action (as determined by the Beneficiaries holding Trust Units
representing an aggregate of at least a majority of the total Beneficial
Interests in the Trust), or be adjudged bankrupt or insolvent, unless any
remaining Trustees shall decrease the number of Trustees of the Trust pursuant
to Section 10.1 hereof, a vacancy shall be deemed to exist and a successor shall
be appointed by any remaining Trustees. If such a vacancy is not filled by any
remaining Trustees within ninety (90) days, the remaining Trustees must notify
the Beneficiaries of their inability to fill such vacancy, and the Beneficiaries
may, pursuant to Article XII hereof, call a meeting to appoint a successor
Trustee by Beneficiaries holding Trust Units representing an aggregate of at
least a majority of the total Beneficial Interests in the Trust. Pending the
appointment of a successor Trustee, the remaining Trustee or Trustees then
serving may take any action in the manner set forth in Section 8.1.
10.4 Acceptance of Appointment by Successor Trustee.
-----------------------------------------------
Any successor Trustee appointed hereunder
shall execute an instrument accepting such appointment hereunder and shall
deliver one counterpart thereof to each of the other Trustees and, in case of a
resignation, to the resigning Trustee. Thereupon such successor Trustee shall,
without any further act, become vested with all the estates, properties, rights,
powers, trusts and duties of his or its predecessor in the Trust hereunder with
like effect as if originally named therein; but the resigning Trustee shall
nevertheless, when requested in writing by the successor Trustee or by the
remaining Trustees, execute and deliver an instrument or instruments conveying
and transferring to such successor Trustee upon the trust herein expressed, all
the estates, properties, rights, powers and trusts of such resigning Trustee,
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by it hereunder.
10.5 Bonds. No bond shall be required of the original
-----
Trustee hereunder, and no bond shall be required of any successor Trustee
hereunder. If a bond is required by law, no surety or security with respect to
such bond shall be required unless required by law.
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.1 Evidence of Action by Beneficiaries.
------------------------------------
Whenever in this Agreement it is provided that the Beneficiaries
may take any action (including the making of any demand or request, the giving
of any notice, consent, or waiver, the removal of a Trustee, the appointment of
a successor Trustee, or the taking of any other action), the fact that at the
time of taking any such action such Beneficiaries have joined therein may be
evidenced (i) by any instrument or any number of instruments of similar tenor
executed by Beneficiaries in person or by agent or attorney appointed in
writing, or (ii) by the record of the Beneficiaries voting in favor thereof at
any meeting of Beneficiaries duly called and held in accordance with the
provisions of Article XII.
11.2 Limitation on Suits by Beneficiaries.
--------------------------------------
No Beneficiary shall have any right by virtue of any
provision of this Agreement to institute any action or proceeding at law or in
equity against any party other than the Trustees upon or under or with respect
to any Trust Assets or the agreements relating to or forming part of any Trust
Assets, and the Beneficiaries do hereby waive any such right.
11.3 Requirement of Undertaking.
----------------------------
The Trustee may request any court to require, and any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Agreement, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and 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
claims or defenses made by such party litigant; provided, however, that the
provisions of this Section shall not apply to any suit by the Trustee.
ARTICLE XII
MEETING OF BENEFICIARIES
12.1 Purpose of Meetings. A meeting of the
-------------------
Beneficiaries may be called at any time and from time to time pursuant to the
provisions of this Article for the purposes of taking any action which the terms
of this Agreement permit a Beneficiary having a specified aggregate Beneficial
Interest to take either acting alone or with the Trustee.
12.2 Meeting Called by Trustee. The
--------------------------
Trustee may at any time call a meeting of the Beneficiaries of the Trust to be
held at such time and at such place within the State of Delaware (or elsewhere
if so determined by a majority of the Trustees) as the Trustee shall determine.
Written notice of every meeting of the Beneficiaries shall be given by the
Trustee (except as provided in Section 12.3), which written notice will set
forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, and shall be mailed not more than sixty
(60) nor less than ten (10) days before such meeting is to be held to all of the
Beneficiaries of record not more than sixty (60) days before the date of such
meeting. The notice shall be directed to the Beneficiaries at their respective
addresses as they appear in the records of the Trust.
12.3 Meeting Called on Request of Beneficiaries.
-------------------------------------------
Within thirty (30) days after written request to
the Trustee by Beneficiaries holding Trust Units representing at least a
majority of the aggregate Beneficial Interests to call a meeting of all of the
Beneficiaries, which written request shall specify in reasonable detail the
action proposed to be taken, the Trustee shall proceed under the provisions of
Section 12.2 to call a meeting of the Beneficiaries, and if the Trustee fails to
call such meeting within such thirty (30) day period then such meeting may be
called by Beneficiaries holding Trust Units representing at least a majority of
the aggregate Beneficial Interests.
12.4 Persons Entitled to Vote at Meeting of Beneficiaries.
-----------------------------------------------------------
Each Beneficiary shall be
entitled to vote at a meeting of the Beneficiaries of the Trust either in person
or by his proxy duly authorized in writing. The vote of each Beneficiary shall
be weighted based on the number of Trust Units in the Trust held by each
Beneficiary determined pursuant to the list described in Section 3.1, as such
list is amended hereby. The signature of the Beneficiary on such written
authorization need not be witnessed or notarized.
12.5 Quorum. At any meeting of Beneficiaries, the
------
presence of Beneficiaries holding Trust Units representing at least a majority
of the aggregate Beneficial Interests sufficient to take action on any matter
for the transaction of which such meeting was called shall be necessary to
constitute a quorum; but if less than a quorum be present, Beneficiaries having
aggregate Beneficial Interests of more than 50% of the total Beneficial
Interests in the Trust of all Beneficiaries represented at the meeting may
adjourn such meeting with the same effect and for all intents and purposes as
though a quorum had been present.
12.6 Adjournment of Meeting. Subject to
----------------------
Section 12.5 hereof, any meeting of Beneficiaries of the Trust may be adjourned
from time to time and a meeting may be held at such adjourned time and place
without further notice.
12.7 Conduct of Meetings. The Trustee
---------------------
shall appoint the Chairman and the Secretary of the meeting. The vote upon any
proposal submitted to any meeting of Beneficiaries shall be by written ballot.
An Inspector of Votes, appointed by the Chairman of the meeting, shall count all
votes cast at the meeting for or against any proposal and shall make and file
with the Secretary of the meeting its verified written report.
12.8 Record of Meeting. A record of the
-------------------
proceedings of each meeting of Beneficiaries of the Trust shall be prepared by
the Secretary of the meeting. The record shall be signed and verified by the
Secretary of the meeting and shall be delivered to the Trustee to be preserved
by it. Any record so signed and verified shall be conclusive evidence of all
the matters therein stated.
ARTICLE XIII
AMENDMENTS
13.1 Consent of Beneficiaries. At the
------------------------
direction or with the consent of Beneficiaries holding Trust Units representing
at least a majority of the aggregate Beneficial Interests, or such greater
percentage as shall be specified in this Agreement for the taking of an action
by the Beneficiaries under the affected provision of this Agreement, the Trustee
shall promptly make and execute a declaration amending this Agreement for the
purpose of adding any material provisions to or changing in any material manner
or eliminating any of the material provisions of this Agreement or amendments
thereto as they apply to the Trust; provided, however, that no such amendment
shall permit the Trustee to engage in any activity prohibited by Section 6.1
hereof or affect the Beneficiaries' rights to receive their pro rata shares of
the Trust Assets at the time of distribution; provided further, however, that no
consent of the Beneficiaries shall be required with respect to any amendment
made solely for the purpose of facilitating the transferability by Beneficiaries
of Trust Units or to comply with applicable laws, including tax laws, so long as
such amendment has been approved by the Trustee.
13.2 Notice and Effect of Amendment.
----------------------------------
Promptly after the execution by the Trustee of any such declaration
of amendment, the Trustee shall give notice of the substance of such amendment
to the Beneficiaries or, in lieu thereof, the Trustee may send a copy of the
amendment to each Beneficiary. Upon the execution of any such declaration of
amendment by the Trustee, this Agreement shall be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties, and immunities of the Trustee and the Beneficiaries
under this Agreement with respect to the Trust shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modification
and amendments, and all the terms and conditions of any such amendment shall be
thereby deemed to be part of the terms and conditions of this Agreement for any
and all purposes.
13.3 Trustee's Declining to Execute Documents.
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If, in the reasonable opinion of the Trustee, any
document required to be executed pursuant to the terms of Section 13.2 hereof
adversely affects any right, obligation, immunity or indemnity in favor of the
Trustee under this Agreement, the Trustee may in its discretion decline to
execute such document.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Filing Documents. This Agreement shall
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be filed or recorded in such office or offices as the Trustee may determine to
be necessary or desirable. A copy of this Agreement and all amendments thereof
shall be maintained in the office of the Trustee and shall be available at all
times during regular business hours for inspection by any Beneficiary or his
duly authorized representative. The Trustee shall file or record any amendment
of this Agreement in the same places where the original Agreement is filed or
recorded. The Trustee shall file or record any instrument which relates to any
change in the office of the Trustee in the same places where the original
Agreement is filed or recorded.
14.2 Intention of Parties to Establish Trust.
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This Agreement is not intended to create and shall
not be interpreted as creating a corporation, association, partnership, or joint
venture of any kind for purposes of federal income taxation or for any other
purpose.
14.3 Beneficiaries Have No Rights or Privileges as Holders of
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Partnership Units.
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Except as expressly provided in this Agreement or under
applicable law, the Beneficiaries shall have no rights or privileges
attributable to their former status as holders of Partnership Units.
14.4 Laws as to Construction. The
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Trustee, and the Beneficiaries (by their acceptance of any distributions made to
them pursuant to this Agreement), consent and agree that this Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
Delaware, without reference to the choice of law principles thereof. Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the state of California and the United States District Court for any
District within such state for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit,
action or proceeding may be served on each party hereto anywhere in the world by
the same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the jurisdiction
of any such court in any such suit, action or proceeding and to the laying of
venue in such court. Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Each of
the parties hereto agrees that a final judgment in any action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. All parties waive the right to
a jury trial of all such disputes, claims and demands.
14.5 Severability. In the event any provision of
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this Agreement or the application thereof to any Person or circumstances shall
be finally determined by a court of proper jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement, or the application
of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each provision
of this Agreement shall be valid and enforced to the fullest extent permitted by
law.
14.6 Notices. Any notice or other communication by the
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Trustee to any Beneficiary shall be deemed to have been sufficiently given, for
all purposes, if deposited, postage prepaid, in a post office or letter box
addressed to such Person at his address as shown in the records of the Trust.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
cable, telegram, facsimile transmission or telex to the Trustee at the following
address or at such other addresses as shall be specified by the Trustee:
If to the Trustee:
PLM Financial Services, Inc.
253 3rd Street South, Suite 200
St. Petersburg, FL 33716
Fax: (727) 803-8200
14.7 Counterparts. This Agreement may be
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executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the General Partner of the Grantor has caused this
Agreement to be executed by an authorized officer, and the Trustee hereunder has
executed this Agreement, as Trustee and not as an individual, as of the date
first set forth herein.
GRANTOR:
PLM EQUIPMENT GROWTH FUND III
By: PLM Financial Services, Inc., its General Partner
By: Richard K Brock
Its: Chief Financial Officer
TRUSTEE:
PLM FINANCIAL SERVICES, INC.
By: Richard K Brock
Its: Chief Financial Officer
SCHEDULE A
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SCHEDULE OF FEES
to act as
TRUSTEE, REGISTRAR, TRANSFER AGENT AND DISTRIBUTION AGENT
OF THE LIQUIDATING TRUST
The Trustee shall receive no compensation for its services hereunder, other than
an amount equivalent to the compensation and other payments that the Trustee
would have received as General Partner of the Partnership for the same or
similar services undertaken by the Trustee hereunder if the General Partner had
undertaken such services on behalf of the Partnership.
EXHIBIT A
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FORM OF BILL OF SALE, ASSIGNMENT, ACCEPTANCE
AND ASSUMPTION AGREEMENT
This BILL OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT, made,
executed and entered into as of December 31, 2002, by and among PLM Equipment
Growth Fund III, a California limited partnership (the "Assignor"), and PLM
Financial Services, Inc. a Delaware corporation, not in its individual capacity
or in its capacity as the general partner of the Assignor, but solely as trustee
(the "Trustee") of the PLM Equipment Growth Fund III Liquidating Trust (the
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"Liquidating Trust").
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RECITALS
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WHEREAS, the Trustee and the Assignor are parties to a Liquidating Trust
Agreement dated as of the date hereof (the "Agreement"), pursuant to which the
Assignor has created the Liquidating Trust and engaged the Trustee as trustee to
administer the Liquidating Trust pursuant to the terms of a Plan of Liquidation
and Dissolution of even date herewith (the "Plan"); and
WHEREAS, the Agreement contemplates that the Assignor will place, as of the date
hereof and in accordance with the Plan, all of its unliquidated and/or
undistributed assets, including but not limited to, cash, equipment and
securities, along with certain cash reserves subject to disbursement for the
Assignor's contingent liabilities and the Liquidating Trust's contingent
liabilities, into the Liquidating Trust established to receive said assets and
reserves; and
WHEREAS, the Trustee and the Assignor now desire to carry out the intent and
purpose of the Agreement by the execution and delivery to the Trustee by the
Assignor of this instrument evidencing the conveyance, assignment, transfer,
sale and delivery to the Trustee of the Transferred Assets (as hereinafter
defined) and the acceptance by the Trustee of the Assumed Obligations (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing premises and for $10 and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged:
ASSIGNMENT
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The Assignor does hereby convey, assign, transfer, sell and deliver unto
the Trustee and its successors and assigns, forever, for the benefit of the
Liquidating Trust, all of Assignor's right, title and interest in, to and under
all of the assets of the Assignor as set forth and more fully described by
category of asset and more fully enumerated by Assignor on Exhibit A hereto,
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including, without limitation any accounts receivable, limited partnership
interests, beneficial interests, rights in litigation, security interests,
contract rights or agreements, rights to payment or distributions or similar
rights that the Assignor may possess in same (together, the "Transferred
-----------
Assets").
ACCEPTANCE AND ASSUMPTION
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The Trustee accepts the foregoing conveyance, assignment, transfer and
delivery of the Transferred Assets and agrees to assume all liabilities and
obligations relating to the Transferred Assets to the extent specifically set
forth in the Agreement (the "Assumed Obligations").
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TO HAVE AND TO HOLD the Transferred Assets and the Assumed Obligations unto the
Trustee, its successors and assigns, FOREVER, for the benefit of the Liquidating
Trust.
The Assignor hereby constitutes and appoints the Trustee and its successors and
assigns as its true and lawful attorneys-in-fact in connection with the
transactions contemplated by this instrument, with full power of substitution,
in the name and stead of the Assignor but on behalf of and for the benefit of
the Trustee and its successors and assigns, to demand and receive any and all of
the assets, properties, rights and business hereby conveyed, assigned, and
transferred or intended so to be, and to give receipt and releases for and in
respect of the same and any part thereof, and from time to time to institute and
prosecute, in the name of the Assignor or otherwise, for the benefit of the
Trustee or its successors and assigns, proceedings at law, in equity, or
otherwise, which the Trustee or its successors or assigns reasonably deem proper
in order to collect or reduce to possession or endorse any portion of the
Transferred Assets and to do all acts and things in relation to the assets which
the Trustee or its successors or assigns reasonably deem desirable.
This instrument shall be binding upon and shall inure to the benefit of the
respective successors and assigns of the Assignor and the Trustee.
This instrument shall be construed and enforced in accordance with the laws of
the State of Delaware, without regard to conflict of law.
[The remainder of this page is left intentionally blank.]
IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale, Assignment,
Acceptance and Assumption Agreement under seal on the date first above written.
ASSIGNOR
PLM EQUIPMENT GROWTH FUND III
By: PLM Financial Services, Inc., its general partner
By: Richard K Brock
Its: Chief Financial Officer
TRUSTEE
PLM FINANCIAL SERVICES, INC., not in its individual capacity
but solely as trustee of the Liquidating Trust
By: Richard K Brock
Its: Chief Financial Officer
EXHIBIT A
TRANSFERRED ASSETS
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EQUIPMENT:
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- - See attached schedules of equipment and other assets, which are prepared
as of the dates set forth thereon, and which will be updated and replaced with
final schedules after accounting for transactions, if any, occurring on or prior
to December 31, 2002.
LITIGATION:
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- - All of Assignors rights with respect to claims and counterclaims against
Sahara Airlines Ltd. and any other rights which Assignor may have with respect
to any litigation matters or claims relating to the assets of the Assignor
transferred hereby.