EXHIBIT 10.14
INTERCOMPANY RELATIONSHIP AGREEMENT
by and between
AMERICAN FINANCE GROUP, INC.
and
PLM INTERNATIONAL, INC.
Dated as of __, 1998
TABLE OF CONTENTS
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ARTICLE IDEFINITIONS
SECTION 1.1 Certain Definitions.................................... 1
ARTICLE IICOSTS AND EXPENSES
SECTION 2.1 Allocation of Costs and Expenses....................... 5
ARTICLE IIICORPORATE SERVICES
SECTION 3.1 Services............................................... 6
SECTION 3.2 Compensation........................................... 6
ARTICLE IVCORPORATE GOVERNANCE
SECTION 4.1 PLMI Consent to Certain Actions........................ 6
ARTICLE VEQUITY PURCHASE RIGHTS
SECTION 5.1 Equity Purchase Rights................................. 7
SECTION 5.2 Procedure.............................................. 8
SECTION 5.3 Closing................................................ 9
ARTICLE VIFINANCIAL AND OTHER INFORMATION
SECTION 6.1 Twenty Percent Threshold............................... 10
SECTION 6.2 PLMI Annual Statements................................. 15
SECTION 6.3 Forty Percent Threshold................................ 16
SECTION 6.4 Fifty Percent Threshold................................ 16
SECTION 6.5 Ten Percent Threshold.................................. 17
SECTION 6.6 Confidentiality........................................ 18
ARTICLE VIIREGISTRATION RIGHTS
SECTION 7.1 Requested Registrations................................ 18
SECTION 7.2 Registration Procedures................................ 20
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SECTION 7.3 Cooperation from PLMI.................................. 23
SECTION 7.4 Restriction on Disposition of Registrable Shares....... 23
SECTION 7.5 Selection of Underwriters.............................. 23
SECTION 7.6 Registration Expenses.................................. 24
SECTION 7.7 Conversion of Other Securities......................... 24
SECTION 7.8 Rule 144............................................... 24
SECTION 7.9 Transfer of Registration Rights........................ 24
ARTICLE VIIIBUSINESS AND REGISTRATION STATEMENT INDEMNIFICATION
SECTION 8.1 General Cross Indemnification.......................... 25
SECTION 8.2 Registration Statement Indemnification................. 26
SECTION 8.3 Contribution........................................... 27
SECTION 8.4 Procedure.............................................. 28
SECTION 8.5 Other Matters.......................................... 29
ARTICLE IXOTHER PROVISIONS
SECTION 9.1 Intercompany Borrowings................................ 29
SECTION 9.2 Keepwell Payments...................................... 30
ARTICLE XMISCELLANEOUS
SECTION 10.1 Notices................................................ 30
SECTION 10.2 Binding Nature of Agreement............................ 31
SECTION 10.3 Descriptive Headings................................... 31
SECTION 10.4 Remedies............................................... 31
SECTION 10.5 Governing Law.......................................... 31
SECTION 10.6 Counterparts........................................... 31
SECTION 10.7 Severability........................................... 31
SECTION 10.8 Amendment and Modification............................. 32
SECTION 10.9 Entire Agreement; No Third Party Beneficiaries......... 32
SECTION 10.10 No Assignment.......................................... 32
SECTION 10.11 Recapitalization, Dilution Adjustments, etc............ 32
SECTION 10.12 Further Assurances..................................... 32
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INTERCOMPANY RELATIONSHIP AGREEMENT
THIS INTERCOMPANY RELATIONSHIP AGREEMENT is entered into as of
____________, 1998 by and between AMERICAN FINANCE GROUP, INC., a Delaware
corporation ("AFG"), and PLM INTERNATIONAL, INC., a Delaware corporation
("PLMI").
RECITALS
PLMI is the owner of all of the issued and outstanding shares of
capital stock of AFG as of the date hereof. In contemplation of AFG ceasing to
be so wholly owned by PLMI and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto, intending to
be legally bound hereby, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1 Certain Definitions. In addition to the terms defined
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elsewhere in this Agreement, the following terms shall have the following
meanings:
"Agreement" and "hereof" and "herein" means this Intercompany
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Relationship Agreement, including all amendments, modifications and supplements
and any exhibits or schedules to any of the foregoing, and shall refer to this
Agreement as the same may be in effect at the time such reference becomes
operative.
"Average Market Price" of any security on any date means the average
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of the daily closing prices for the 10 consecutive trading days selected by AFG
commencing not less than 20 days nor more than 30 trading days before the day in
question. The closing price for each day shall be the last reported sales price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange, Inc. or, if such security is not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such security is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the
National Association of Securities Dealers, Inc. Automated Quotations National
Market System or, if such security is not listed or admitted to trading on any
national
securities exchange or quoted on such National Market System, the average of the
closing bid and asked prices in the over-the-counter market as furnished by any
New York Stock Exchange member firm selected from time to time by AFG for that
purpose. For the purpose of this definition, the term "trading day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on such exchange or in such market.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
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Friday that is not a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
"Common Stock" means the common stock, par value $.01 per share, of
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AFG.
"Corporate Services" means the services described in Exhibit A
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hereto.
"Equity Purchase Shares" means shares of Common Stock or any
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securities convertible into or exchangeable for shares of Common Stock or any
options, warrants or rights to acquire shares of Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Fair Market Value" means, with respect to shares of Common Stock, the
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fair market value thereof as jointly determined by AFG and PLMI or, in the event
AFG and PLMI are unable to agree, as determined by a mutually acceptable
nationally recognized investment banking or other financial advisory firm.
"Form S-1" means AFG's registration statement on Form S-1 (No. 333-
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_____) relating to the registration of certain shares of Common Stock under the
Securities Act.
"GAAP" means United States generally accepted accounting principles.
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"Indebtedness" means, with respect to any Person, any liability of
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such Person in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments, including (a) any liability of such Person
under any agreement related to the fixing of interest rates on any Indebtedness,
(b) any capitalized lease obligations of such Person (if and to the extent the
same would appear on a balance
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sheet of such Person prepared in accordance with GAAP), (c) reimbursement
obligations of such Person in respect of letters of credit (regardless of
whether such items would appear on a balance sheet of such Person) and (d)
guarantees by such Person with respect to the items described in (a), (b) and
(c) above (regardless of whether such guarantees would appear on a balance sheet
of such Person).
"Initial Public Offering" means the contemplated initial public
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offering by AFG of Common Stock registered under the Securities Act.
"Keepwell" means any guaranty, keepwell, net worth or financial
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condition maintenance agreement of or by any member of the PLMI Affiliated Group
provided to any Person (including but not limited to any insurance regulatory
authority) with respect to any actual or contingent obligation of AFG or any
other Subsidiary of AFG.
"Old Warehouse Credit Facility" means the warehouse credit facility
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provided for by the Amended and Restated Warehousing Credit Facility, dated as
of December 2, 1997, by and between AFG and First Union Bank of North Carolina,
as agent for the lenders thereunder.
"Outstanding Common Stock" means the shares of Common Stock issued and
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outstanding, and shall not include shares of Common Stock held by AFG as
treasury stock or by any Subsidiary of AFG.
"Person" means any individual, corporation, partnership, joint
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venture, limited liability company, association or other business entity and any
trust, unincorpo rated organization or government, including any agency or
political subdivision thereof.
"PLMI Affiliated Group" means, collectively, PLMI and all of its
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direct and indirect subsidiaries now or hereafter existing, other than AFG and
its Subsidiaries.
"Prospectus" means the prospectus or prospectuses included in any
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Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments and supplements to such prospectus, including post-
effective amendments and all material incorporated by reference in such
prospectus or prospectuses.
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"Public Company Stock" means any class or series of Common Stock for
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which reports are required to be filed under Section 13 or Section 15(d) of the
Exchange Act.
"Registrable Shares" means any shares of Common Stock or any other
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equity security issued by AFG held by any member of the PLMI Affiliated Group or
by any transferee thereof described in Section 7.9 hereof.
"Registration Statement" means any registration statement of AFG filed
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with the SEC under the Securities Act, including but not limited to any
registration statement that relates to any of the Registrable Shares and the
registration statement relating to the Initial Public Offering, including in
each such case the Prospectus relating thereto, amendments and supplements to
such Registration Statement, including post-effective amendments, all exhibits
and all materials incorporated by reference in such Registration Statement and
Prospectus.
"Regulation S-K" means Regulation S-K of the General Rules and
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Regulations under the Securities Act.
"Regulation S-X" means Regulation S-X of the General Rules and
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Regulations under the Securities Act.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
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"Securitization Facility" means that certain Pooling and Servicing
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Agreement and Indenture of Trust, dated as of July 1, 1995, by and between AFG
Credit Corporation and First Union National Bank of North Carolina, as amended
and supplemented.
"Subsidiary" of AFG shall include all corporations, partnerships,
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joint ventures, limited liability companies, associations and other entities (a)
in which AFG owns (directly or indirectly) fifty percent or more of the
outstanding voting stock, voting power, partnership interests or similar
ownership interests, (b) of which AFG otherwise directly or indirectly controls
or directs the policies or operations or (c) which would be considered
subsidiaries of AFG within the meaning of Regulation S-K or Regulation S-X.
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"Transactions" means, collectively, (a) all capital contributions to,
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or purchases of capital stock of, AFG by any member of the PLMI Affiliated
Group, (b) the borrowings made by AFG under the Securitization Facility and the
Warehouse Credit Facility and (c) the Initial Public Offering.
"Underwritten Registration" or "Underwritten Offering" means a
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registration in which securities of AFG are sold to underwriters for re-offering
to the public.
"Warehouse Credit Facility" means the warehouse credit facility
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provided for by the Warehousing Credit Agreement, dated as of [______], 1998, by
and between AFG and First Union National Bank of North Carolina, as agent for
the lenders thereunder.
"Wholly Owned Subsidiary" of AFG shall include all Subsidiaries of AFG
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in which AFG owns (directly or indirectly) all of the outstanding voting stock,
voting power, partnership interests or similar ownership interests, except for
director's qualifying shares in nominal amounts.
ARTICLE II
COSTS AND EXPENSES
SECTION II.1 Allocation of Costs and Expenses. AFG shall pay (or, to
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the extent incurred by and paid for by any member of the PLMI Affiliated Group,
shall promptly reimburse such member of the PLMI Affiliated Group for any and
all amounts so paid) for all fees, costs and expenses incurred by AFG or any
member of the PLMI Affiliated Group in connection with the Transactions,
including but not limited to any and all fees, costs and expenses related to (a)
the preparation and negotiation of this Agreement and of all of the
documentation related to Transactions and all related transactions, (b) the
preparation and execution or filing of any and all further documents,
agreements, forms, applications, contracts or consents associated with the
Transactions and all related transactions, (c) the preparation, printing and
filing of the Registration Statement for the Initial Public Offering and any
other Registration Statements relating to any of the Transactions, including all
fees and expenses of complying with applicable federal, state or foreign
securities laws and applicable rules and regulations of domestic or foreign
securities exchanges, including the National Association of Securities Dealers,
Inc. Automated Quotations National Market System, together with fees and
expenses of counsel retained to effect such compliance, (d) the preparation,
printing and
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distribution of each of the Prospectuses for the Initial Public Offering and any
other Transactions and (e) the listing of the Common Stock and any other
securities of AFG on any domestic or foreign securities exchange, including the
National Association of Securities Dealers, Inc. Automated Quotations National
Market System; provided, however, that AFG shall have no obligation to pay
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any underwriting fees, discounts, commissions or expenses attributable to the
sale of Registrable Shares, including but not limited to the fees and expenses
of any underwriters and such underwriters' counsel.
ARTICLE III
CORPORATE SERVICES
SECTION III.1 Services. During the three-year period immediately
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following the date hereof, PLMI shall provide AFG the Corporate Services;
provided, however, that the nature and scope of each of the Corporate Services
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shall not be greater than that provided by PLMI to AFG prior to the date hereof
and shall not be greater than that provided by PLMI to its own internal
organizations during such three-year period.
SECTION III.2 Compensation. In consideration of the provision of the
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Corporate Services by PLMI to AFG hereunder during the three-year period
specified in Section 3.1 hereof, AFG shall pay PLMI an annual service fee in the
amount of $500,000, which fee shall be payable by AFG in four equal installments
of $125,000 each on or before the thirtieth day of each January, April, July and
September.
ARTICLE IV
CORPORATE GOVERNANCE
SECTION IV.1 PLMI Consent to Certain Actions. Until the earlier to
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occur of (a) the date on which the members of the PLMI Affiliated Group shall
cease to own, in the aggregate, at least 35% of the voting power of the
Outstanding Common Stock and (b) the date on which the members of the PLMI
Affiliated Group shall cease to own, in the aggregate, at least 35% of all of
the issued and outstanding shares of Common Stock (not including, for purposes
of determining such percentages, any shares of Common Stock held as treasury
stock by AFG or held by any Subsidiary of AFG), AFG shall not permit any of the
following to occur without the prior written consent of PLMI:
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(i) any consolidation or merger of AFG with or into any Person or of
any Person with or into AFG (other than a merger or consolidation of AFG with or
into a Wholly Owned Subsidiary of AFG);
(ii) any consolidation or merger of any Subsidiary of AFG with or into
any Person or of any Person with or into any Subsidiary of AFG (other than a
merger or consolidation of a Subsidiary of AFG with or into a Wholly Owned
Subsidiary of AFG);
(iii) any sale, lease, exchange or other disposition by AFG or any
Subsidiary of AFG, directly or indirectly, in a single transaction or series of
related transactions, of all or substantially all of the assets of AFG or any
Subsidiary of AFG (other than transactions to which AFG and one or more Wholly
Owned Subsidiaries of AFG are the only parties);
(iv) any alteration or amendment of the Amended and Restated
Certificate of Incorporation of AFG or the Amended and Restated By-Laws of AFG;
(v) any issuance by AFG or any Subsidiary of AFG of any shares of its
respective capital stock or any options, warrants or rights to acquire such
capital stock or securities convertible into or exchangeable for capital stock,
except (x) up to 910,000 options to purchase shares of Common Stock of AFG
issuable pursuant to employee and director stock option, profit sharing and
other benefit plans of AFG and its Subsidiaries and the issuance of the shares
of Common Stock underlying such options, (y) the issuance of shares of capital
stock of a Wholly Owned Subsidiary of AFG to AFG or another Wholly Owned
Subsidiary of AFG and (z) in the Initial Public Offering;
(vi) the election or appointment of persons to, or the filling of a
vacancy in, the offices of President or Chief Executive Officer of AFG;
provided, however, that this provision shall in no way limit the ability of AFG
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to effect the removal of any person from either or both of such offices; or
(vi) the dissolution, liquidation or winding up of AFG.
ARTICLE V
EQUITY PURCHASE RIGHTS
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SECTION V.1 Equity Purchase Rights. So long as the members of the
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PLMI Affiliated Group own, in the aggregate, directly or indirectly, at least
35% of the voting power of the Outstanding Common Stock and 35% of the issued
and outstanding Common Stock, the members of the PLMI Affiliated Group shall
have the equity purchase rights set forth in this Article V (the "Equity
Purchase Rights"); provided, however, that the members of the PLMI Affiliated
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Group shall not be entitled to Equity Purchase Rights to the extent that the
principal national securities exchange in the United States on which the Common
Stock is listed, if any, prohibits or limits the granting by AFG of such Equity
Purchase Rights.
SECTION V.2 Procedure. As soon as practicable after determining to
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issue Equity Purchase Shares, but in any event at least five Business Days prior
to issuing Equity Purchase Shares to any Person other than to a member of the
PLMI Affiliated Group (and other than Equity Purchase Shares issued by AFG (i)
under its employee stock option or other benefit plans, (ii) if AFG then has
outstanding Public Company Stock, under dividend reinvestment plans that offer
Common Stock to security holders at a discount from Average Market Price (as
defined below) no greater than is then customary for public corporations, (iii)
pursuant to the Initial Public Offering or (iv) otherwise than for cash
consideration), AFG shall notify PLMI by written notice of such proposed sale
(which notice shall specify, to the extent practicable, the purchase price for,
and terms and conditions of, such Equity Purchase Shares) and shall offer to
sell to PLMI (which offer may be assigned by PLMI to another member of the PLMI
Affiliated Group) at the purchase price (net of any underwriting discounts or
commissions), if any, to be paid by the transferee(s) of such Equity Purchase
Shares an amount of Equity Purchase Shares determined as provided below.
Immediately after the amount of Equity Purchase Shares to be sold to other
Persons is known to AFG, it shall notify PLMI (or such assignee) of such amount.
If such offer is accepted in writing within five Business Days after the notice
of such proposed sale (or such longer period as is necessary for the members of
the PLMI Affiliated Group to obtain regulatory approvals), AFG shall sell to
such member of the PLMI Affiliated Group an amount of Equity Purchase Shares
(the "Equity Purchase Share Amount") equal to the product of (A) the quotient of
(x) the number of shares of Common Stock owned by the members of the PLMI
Affiliated Group, in the aggregate, immediately prior to the issuance of the
Equity Purchase Shares by (y) the aggregate number of shares of Outstanding
Common Stock owned by Persons other than by members of the PLMI Affiliated Group
immediately prior to the issuance of the Equity Purchase Shares, multiplied by
(B) the aggregate number of Equity Purchase Shares being issued by AFG to
Persons other than members of the PLMI Affiliated Group rounded up to the
nearest whole Equity Purchase Share. If, at the time of the
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determination of any Equity Purchase Share Amount, any other Person has
preemptive or other equity purchase rights similar to the Equity Purchase
Rights, such Equity Purchase Share Amount shall be recalculated to take into
account the amount of Common Stock to be sold to such Persons, rounding up such
Equity Purchase Share Amount to the nearest whole Equity Purchase Share. If AFG
determines in good faith that, in light of the advice of an investment banking
firm advising it or of its other financial advisors, it must consummate the
issuance and sale of the Equity Purchase Shares prior to the members of the PLMI
Affiliated Group having obtained any necessary regulatory approvals, AFG shall
notify PLMI in writing of such determination and shall then be free so to
consummate such issuance and sale without the members of the PLMI Affiliated
Group having the right then to purchase its proportionate share of such Equity
Purchase Shares; provided, however, that in such event the members of
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the PLMI Affiliated Group shall have the right to purchase from AFG, within 60
Business Days (or such longer period (up to one year) as is necessary for the
members of the PLMI Affiliated Group to obtain regulatory approvals) Common
Stock in an amount equal to the amount of Common Stock it would have received
had it been able to purchase (and, in the case of Equity Purchase Shares other
than Common Stock, securities exercisable or exchangeable for or convertible
into Common Stock) the Equity Purchase Shares offered to it pursuant to this
Article V, at a per share purchase price equal to the lower of (i) the sum of
the purchase price (net of any underwriting discounts or commissions), if any,
paid by the transferee(s) plus the exercise price, if any, of such Equity
Purchase Shares, and (ii) the Average Market Price per share of Common Stock
and, if there is no Average Market Price, the Fair Market Value per share of
Common Stock, in each case, at the time of purchase by the members of the PLMI
Affiliated Group.
SECTION V.3 Closing. The purchase and sale of any Equity Purchase
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Shares pursuant to this Article V shall take place at 9:00 A.M. on the latest of
(i) the fifth Business Day following the acceptance of such offer, (ii) the
Business Day on which such Equity Purchase Shares are issued to Persons other
than the members of the PLMI Affiliated Group and (iii) the fifth Business Day
following the expiration of any required governmental or other regulatory
waiting periods or the obtaining of any required governmental or other
regulatory consents or approvals, at the offices of PLMI indicated in Section
10.1 hereof, or at such other time and place as PLMI and AFG will agree. At the
time of purchase, AFG shall deliver to PLMI (or such assignee) certificates
registered in the name of the appropriate members of the PLMI Affiliated Group
representing the shares purchased, and the members of the PLMI Affiliated Group
shall transfer to AFG the purchase price in United States dollars by bank check
or wire transfer of immediately available funds, as specified by AFG, to an
account
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designated by AFG not less than five Business Days prior to the date of
purchase. AFG and the members of the PLMI Affiliated Group shall use their best
efforts to comply as soon as practicable with all federal and state laws and
regulations and stock exchange listing requirements applicable to any purchase
and sale of securities under this Article V.
ARTICLE VI
FINANCIAL AND OTHER INFORMATION
SECTION VI.1 Twenty Percent Threshold. AFG agrees that during any
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period in which the members of the PLMI Affiliated Group own, in the aggregate,
at least 20% of the voting power of the Outstanding Common Stock or 20% of the
Common Stock then outstanding, or during any period in which any member of the
PLMI Affiliated Group is required to account for its investment in AFG under the
equity method of accounting (determined in accordance with GAAP consistently
applied after consultation with PLMI Auditors (as defined below)):
(a) Maintenance of Books and Records. AFG shall, and shall cause
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each of its Subsidiaries to, (i) make and keep books, records and accounts,
which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of AFG and such Subsidiaries and (ii) devise and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (w) transactions are executed in accordance with
management's general or specific authorization, (x) transactions are recorded as
necessary (1) to permit preparation of financial statements in conformity with
GAAP or any other criteria applicable to such statements and (2) to maintain
accountability for assets, (y) access to assets is permitted only in accordance
with management's general or specific authorization and (z) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Notwithstanding the foregoing, the provisions of this paragraph (a) shall be
inapplicable at any time when PLMI is providing AFG hereunder the services
specified in Item (10) of Exhibit A hereto.
(b) Fiscal Year. AFG shall, and shall cause each of its Subsidiaries
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to, maintain a fiscal year which commences on January 1 and ends on December 31
of each calendar year; provided, however, that, if on the date hereof any
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Subsidiary of AFG has a fiscal year which ends on a date other than December 31,
AFG
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shall use its best efforts to cause such Subsidiary to change its fiscal
year to one which ends on December 31 provided that such change is reasonably
practical.
(c) Summary Monthly Financial Information. As soon as practicable,
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and within seven Business Days after the end of each of the first eleven months
in each fiscal year of AFG and within eight Business Days after the end of the
last month in each fiscal year of AFG, AFG shall deliver to PLMI a summary of
consolidated net income and consolidated pre-tax income for AFG and its
Subsidiaries for such month and the year-to-date period. Notwithstanding the
foregoing, the provisions of this paragraph (c) shall be inapplicable at any
time when PLMI is providing AFG hereunder the services specified in Item (10) of
Exhibit A hereto.
(d) Detailed Monthly Financial Information. As soon as practicable,
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and within 15 Business Days after the end of each of the first eleven months in
each fiscal year of AFG and within ten Business Days after the end of the last
month in each fiscal year, AFG shall deliver to PLMI (i) a summary consolidated
balance sheet and consolidated statement of income for AFG and its Subsidiaries
as of and for the year-to-date period, and (ii) a comparative (A) summary of net
income, (B) summary of financial operations, (C) summary of key business
indicators, (D) balance sheet and (E) summary of return on assets, return on
equity and ratio of assets to equity. Notwithstanding the foregoing, the
provisions of this paragraph (d) shall be inapplicable at any time when PLMI is
providing AFG hereunder the services specified in Item (10) of Exhibit A hereto.
(e) Unaudited Quarterly Financial Statements. As soon as
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practicable, and within 18 days after the end of each of the first three fiscal
quarters in each fiscal year of AFG, AFG shall deliver to PLMI drafts of (i) the
consolidated financial statements of AFG and its Subsidiaries (and notes
thereto) for such periods and for the period from the beginning of the current
fiscal year to the end of such quarter, setting forth in each case in
comparative form for each such fiscal quarter of AFG the consolidated figures
(and notes thereto) for the corresponding quarter and periods of the previous
fiscal year in reasonable detail and in accordance with Article 10 of Regulation
S-X, and (ii) a discussion and analysis by management of AFG's and its
Subsidiaries' financial condition and results of operations for such fiscal
period, including but not limited to an explanation of any material adverse
change, all in reasonable detail and prepared in accordance with Item 303(b) of
Regulation S-K. The information set forth in clauses (i) and (ii) above is
herein referred to as the "Quarterly Financial Statements." AFG shall deliver to
PLMI all revisions to such drafts as soon as any such revisions are prepared or
made. No later than two Business Days prior to the date AFG publicly files
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the Quarterly Financial Statements with the SEC or otherwise, AFG shall deliver
to PLMI the final form of the Quarterly Financial Statements certified by the
chief financial or accounting officer of AFG as presenting fairly, in all
material respects, the financial condition and results of operations of AFG and
its consolidated Subsidiaries. Notwithstanding the foregoing, the provisions of
this paragraph (e) shall be inapplicable at any time when PLMI is providing AFG
hereunder the services specified in Item (10) of Exhibit A hereto.
(f) Audited Annual Financial Information. As soon as is practicable,
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AFG shall deliver to PLMI (i) within 40 days after the end of each fiscal year
of AFG, drafts of (x) the consolidated financial statements of AFG (and notes
thereto) for such year, setting forth in each case in comparative form the
consolidated figures (and notes thereto) for the previous fiscal year in
reasonable detail and in accordance with Regulation S-X and (y) a discussion and
analysis by management of AFG's consolidated financial condition and results of
operations for such year, including but not limited to an explanation of any
material adverse change, all in reasonable detail and prepared in accordance
with Item 303(a) of Regulation S-K and (ii) within 35 days after the end of each
fiscal year of AFG, a draft of a discussion and analysis of AFG's consolidated
financial condition and results of operations for such year, including but not
limited to an explanation of any material adverse change, all in reasonable
detail and prepared in accordance with Item 303(a) of Regulation S-K, for
inclusion in the annual report to stockholders of any member of the PLMI
Affiliated Group. The information set forth in (i) and (ii) above is herein
referred to as the "AFG Annual Financial Statements." AFG shall deliver to PLMI
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all revisions to such drafts as soon as any such revisions are prepared or made.
AFG shall deliver to PLMI, no later than 80 days after the end of each fiscal
year of AFG, the final form of the AFG Annual Financial Statements accompanied
by an opinion thereon by AFG's independent certified public accountants.
Notwithstanding the foregoing, the provisions of this paragraph (f) shall be
inapplicable at any time when PLMI is providing AFG hereunder the services
specified in Item (10) of Exhibit A hereto.
(g) Other Financial Information. AFG shall provide to PLMI upon
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request such other information and analyses as PLMI may reasonably request on
behalf of any member of the PLMI Affiliated Group in order to analyze the
financial statements and condition of AFG and its Subsidiaries and shall provide
PLMI and its accountants with an opportunity to meet with management of AFG and
its accountants in connection therewith. AFG shall deliver to PLMI all
Quarterly Financial Statements and audited annual financial statements of each
Subsidiary of AFG that is itself required to file financial statements with the
SEC or otherwise make such financial statements
12
publicly available, with such financial statements to be provided in the same
manner and detail and on the same time schedule as those financial statements of
AFG required to be delivered to PLMI pursuant to this Section 6.1.
Notwithstanding the foregoing, the provisions of this paragraph (g) shall be
inapplicable at any time when PLMI is providing AFG hereunder the services
specified in Item (10) of Exhibit A hereto.
(h) General Financial Statement Requirements. All information
----------------------------------------
provided by AFG or any of its Subsidiaries to PLMI pursuant to Sections 6.1(c)-
(g) inclusive shall be consistent in terms of format and detail and otherwise
with the procedures in effect on the date hereof with respect to the provision
of such financial and other information by AFG and its Subsidiaries to PLMI
(and, where appropriate, as presently presented in financial and other reports
delivered to the Board of Directors of PLMI), with such changes therein as may
be reasonably requested by PLMI from time to time. Notwithstanding the
foregoing, the provisions of this paragraph (h) shall be inapplicable at any
time when PLMI is providing AFG hereunder the services specified in Item (10) of
Exhibit A hereto.
(i) Budgets and Projections. AFG shall, as promptly as practicable,
-----------------------
deliver to PLMI copies of all annual and other budgets and financial projections
(consistent in terms of format and detail and otherwise with the procedures in
effect on the date hereof) relating to AFG or any of its Subsidiaries and shall
provide PLMI an opportunity to meet with management of AFG to discuss such
budgets and projections.
(j) Public Information and SEC Reports. AFG and each of its
----------------------------------
Subsidiaries that files information with the SEC shall deliver to PLMI (to the
attention of its General Counsel), as soon as substantially final drafts are
prepared, copies of all reports, notices and proxy and information statements to
be sent or made available by AFG or any of its Subsidiaries to their
securityholders and all regular, periodic and other reports filed under Sections
13, 14 and 15 of the Exchange Act (including Reports on Forms 10-K, 10-Q and 8-K
and Annual Reports to Stockholders), and all Registration Statements and
Prospectuses to be filed by AFG or any of its Subsidiaries with the SEC or any
securities exchange pursuant to the listed company manual (or similar
requirements) of such exchange (collectively, "AFG Public Documents"), and, as
--------------------
soon as practicable, but in no event later than one Business Day prior to the
date the same are printed, sent or filed, whichever is earliest, final copies of
all AFG Public Documents. Notwithstanding the foregoing, the provisions of this
paragraph (j) shall be inapplicable at any time when PLMI is providing AFG
hereunder the services specified in Item (11) of Exhibit A hereto.
13
(k) Press Releases and Certain Additional Documents. Prior to
-----------------------------------------------
issuance, AFG shall deliver to PLMI copies of all press releases and other
statements to be made available by AFG or any of its Subsidiaries to the public,
including but not limited to information concerning material developments in the
business, properties, results of operations, financial condition or prospects of
AFG or any of its Subsidiaries. No report, registration, information or proxy
statement, Prospectus or other document that refers, or contains information
with respect, to any member of the PLMI Affiliated Group shall be filed with the
SEC or otherwise made public by AFG or any of its Subsidiaries without the prior
written consent of PLMI with respect to those portions of such document that
contain information concerning any member of the PLMI Affiliated Group, except
as may be required by law, rule or regulation (in such cases AFG shall use its
best efforts to notify the relevant member of the PLMI Affiliated Group and get
such member's consent before making a filing with the SEC or otherwise making
any such information public).
(l) Other Information. With reasonable promptness, AFG shall deliver
-----------------
to PLMI such additional financial and other information and data with respect to
AFG and its Subsidiaries and their businesses, properties, financial positions,
results of operations and prospects as from time to time may be reasonably
requested by PLMI.
(m) Earnings Releases. PLMI agrees that, unless required by law,
-----------------
rule or regulation or unless AFG shall have consented thereto, no member of the
PLMI Affiliated Group shall publicly release any quarterly, annual or other
financial information of AFG or any of its Subsidiaries ("AFG Information")
---------------
delivered to PLMI pursuant to this Section 6.1 prior to the time that PLMI
publicly releases financial information of PLMI for the relevant period. AFG
and PLMI shall consult on the timing of their annual and quarterly earnings
releases and shall give each other an opportunity to review the information
therein relating to AFG and its Subsidiaries and to comment thereon. In the
event that any member of the PLMI Affiliated Group is required by law to release
such AFG Information publicly prior to the public release of PLMI's financial
information and fails to obtain AFG's consent to release such AFG Information,
PLMI shall give AFG notice of such release of AFG Information as soon as
practicable but no later than immediately prior to such release of AFG
Information.
(n) PLMI Affiliated Group Public Filings. AFG shall cooperate fully
------------------------------------
with PLMI to the extent reasonably requested by PLMI in the preparation of any
PLMI Affiliated Group member's public earnings releases, quarterly reports on
Form 10-Q, Annual Reports to Stockholders, Annual Reports on Form 10-K, any
Current
14
Reports on Form 8-K and any other proxy, information and registration
statements, reports, notices, prospectuses and any other filings made by any
member of the PLMI Affiliated Group with the SEC, any national securities
exchange or otherwise made publicly available (collectively, "PLMI Public
-----------
Filings"). AFG agrees to provide to PLMI all information that PLMI reasonably
-------
requests in connection with any such PLMI Public Filings or that, in the
judgment of PLMI's General Counsel, is required to be disclosed therein under
any law, rule or regulation. Such information shall be provided by AFG in a
timely manner to enable PLMI to prepare, print and release such PLMI Public
Filings on such date as PLMI shall determine. If and to the extent requested by
PLMI, AFG shall diligently review all drafts of such PLMI Public Filings and
prepare in a diligent and timely fashion any portion of such PLMI Public Filing
pertaining to AFG. Prior to any printing or public release of any PLMI Public
Filing, an appropriate executive officer of AFG shall, if requested by PLMI,
certify that the information relating to AFG in such PLMI Public Filing is
accurate, true and correct in all material respects. Unless required by law,
rule or regulation, AFG shall not publicly release any financial or other
information that conflicts with the information with respect to AFG that is
included in any PLMI Public Filing without PLMI's prior written consent.
SECTION VI.2 PLMI Annual Statements. In connection with any PLMI
----------------------
Affiliated Group member's preparation of its audited annual financial statements
and its Annual Reports to Stockholders (collectively the "PLMI Annual
Statements"), during any period in which the members of the PLMI Affiliated
Group own, in the aggregate, at least 20% of the voting power of the Outstanding
Common Stock of AFG then outstanding (or such lesser percentage during any time
that any member of the PLMI Affiliated Group is required, in accordance with
GAAP, to account for its investment in AFG under the equity method of
accounting), AFG agrees as follows:
(a) Coordination of Auditors' Opinions. AFG shall use its best
----------------------------------
efforts to (i) enable its independent certified public accountants (the "AFG
---
Auditors") to complete their audit such that they will date their opinion on the
--------
AFG Annual Financial Statements on the same date that PLMI independent certified
public accountants (the "PLMI Auditors") date their opinion on the PLMI Annual
-------------
Statements and (ii) enable PLMI to meet its timetable for the printing, filing
and public dissemina tion of the PLMI Annual Statements.
(b) Cooperation in Preparation of PLMI Affiliated Group Annual
----------------------------------------------------------
Statements. AFG will provide to PLMI on a timely basis all information that any
----------
member of the PLMI Affiliated Group reasonably requires to meet its schedule for
the preparation, printing, filing and public dissemination of the PLMI Annual
15
Statements. In this respect, AFG shall provide all required financial
information with respect to AFG and its consolidated Subsidiaries to the AFG
Auditors in a sufficient and reasonable time and in sufficient detail to permit
the AFG Auditors to take all steps and perform all review necessary to provide
sufficient assistance to the PLMI Auditors with respect to information to be
included or contained in the PLMI Annual Statements, such assistance to the PLMI
Auditors to be in conformity with current and past practices.
(c) Access to Personnel and Working Papers. AFG shall authorize the
--------------------------------------
AFG Auditors to make available to the PLMI Auditors both the personnel who
performed or are performing the annual audit of AFG and, consistent with
customary professional practice and courtesy of such auditors with respect to
the furnishing of work papers, work papers related to the annual audit of AFG,
in all cases within a reasonable time after the AFG Auditor's opinion date, so
that the PLMI Auditors are able to perform the procedures they consider
necessary to take responsibil ity for the work of the AFG Auditors as it
relates to the PLMI Auditors' report on the PLMI Annual Statements, all within
sufficient time to enable PLMI to meet its timetable for the printing, filing
and public dissemination of the PLMI Annual Statements.
SECTION VI.3 Forty Percent Threshold. AFG agrees that during any
-----------------------
period in which the members of the PLMI Affiliated Group own, in the aggregate,
at least 40% of the voting power of the Outstanding Common Stock (or in which,
notwithstanding such percentage, any member of the PLMI Affiliated Group is
required, in accordance with GAAP, to consolidate AFG's financial statements
with its financial statements):
(a) Internal Auditors. AFG shall provide PLMI's internal auditors
-----------------
access to AFG's and its Subsidiaries' books and records so that PLMI may conduct
reasonable audits relating to the financial statements provided by AFG pursuant
to Sections 6.1(c)-(g) hereof, inclusive, as well as to the internal accounting
controls and operations of AFG and its Subsidiaries.
(b) Accounting Estimates and Principles. AFG shall give PLMI as much
-----------------------------------
prior notice as reasonably practical of any proposed determination of, or any
significant changes in, accounting estimates or accounting principles from those
in effect on the date hereof. In this connection, AFG shall consult with PLMI
and, if requested by PLMI, AFG shall consult with its independent public
accountants with respect thereto. AFG shall not make any such determination or
changes without PLMI's prior written consent if such a determination or change
would be sufficiently material to be required to be disclosed in AFG's financial
statements as filed with the SEC or
16
otherwise publicly disclosed therein. If PLMI so requests, AFG shall be required
to obtain the concurrence of AFG Auditors as to such determination or change
prior to its implementation.
SECTION VI.4 Fifty Percent Threshold. AFG agrees that during any
-----------------------
period in which the members of the PLMI Affiliated Group own, in the aggregate,
at least 50% of the voting power of the Outstanding Common Stock (or in which,
notwithstanding such percentage, any member of the PLMI Affiliated Group is
required, in accordance with GAAP, to consolidate AFG's financial statements
with its financial statements):
(a) Management Certification. AFG's chief financial or accounting
------------------------
officer shall submit a quarterly representation in the form prescribed by PLMI
attesting to the accuracy and completeness of the financial and accounting
records referred to therein.
(b) Detailed Quarterly Financial Information. As soon as
----------------------------------------
practicable, and within nine Business Days after the end of the first three
fiscal quarters in each fiscal year of AFG, AFG shall deliver to PLMI (i) a
detailed consolidated balance sheet and consolidated statement of income
consistent with PLMI's present chart of accounts (with such changes in such
chart of accounts as may be requested by PLMI from time to time) and related
analyses of intercompany accounts and investment securities for AFG and its
Subsidiaries as of and for the year-to-date period, and (ii) statistical
information necessary for inclusion in any PLMI Affiliated Group member's
quarterly earnings press release, along with appropriate supporting
documentation.
(c) Detailed Annual Financial Information. As soon as practicable,
-------------------------------------
and within 90 Business Days after the end of each fiscal year of AFG, AFG shall
deliver to PLMI (i) a detailed consolidated balance sheet and consolidated
statement of income consistent with PLMI's present chart of accounts (with such
changes in such chart of accounts as may be requested by PLMI from time to time)
and related analyses of intercompany accounts and investment securities for AFG
and its Subsidiaries as of and for the full fiscal year, and (ii) statistical
information necessary for inclusion in any PLMI Affiliated Group member's annual
earnings press release, along with appropriate supporting documentation.
(d) Accountants' Reports. Promptly, but in no event later than five
--------------------
Business Days following the receipt thereof, AFG shall deliver to PLMI copies of
all reports submitted to AFG or any of its Subsidiaries by their independent
certified public accountants, including but not limited to each report submitted
to AFG or any of
17
its Subsidiaries concerning its accounting practices and systems and any comment
letter submitted to management in connection with their annual audit and all
responses by management to such reports and letters.
SECTION VI.5 Ten Percent Threshold. AFG agrees that, during any
---------------------
period in which the members of the PLMI Affiliated Group own, in the aggregate,
at least 10% but less than 20% of the voting power of the Outstanding Common
Stock, AFG shall:
(a) furnish to PLMI as soon as publicly available, copies of all
financial statements, reports, notices and proxy statements sent by AFG in a
general mailing to all its stockholders, of all reports on Forms 10-K, 10-Q and
8-K, and of all final Prospectuses filed pursuant to Rule 424 under the
Securities Act; and
(b) permit PLMI to visit and inspect any of the properties, corporate
books, and financial and other records of AFG and its Subsidiaries, and to
discuss the affairs, finances and accounts of any such corporations with the
officers of AFG and the AFG Auditors, all at such times and as often as PLMI may
reasonably request.
SECTION VI.6 Confidentiality. All information provided by AFG
---------------
pursuant to this Article VI shall, except if the purpose for which such
information is furnished to PLMI pursuant to this Agreement contemplates such
disclosure and except for disclosure to the other members of the PLMI Affiliated
Group by PLMI, be kept confidential by PLMI and the other members of the PLMI
Affiliated Group, and PLMI and the other members of the PLMI Affiliated Group
shall not disclose any such information in any manner whatsoever, until such
information is disclosed by AFG or otherwise becomes generally available to the
public, except as such disclosure may be required by law, rule or regulation.
Any information furnished to PLMI by AFG pursuant to Sections 6.1(g), 6.1(i),
6.1(l), 6.2(c), 6.4 and 6.5(b) hereof shall be used solely for financial
reporting, planning, control and record keeping purposes of the members of the
PLMI Affiliated Group.
ARTICLE VII
REGISTRATION RIGHTS
SECTION VII.1 Requested Registrations.
-----------------------
18
(a) Right to Request Registration. At any time and from time to time
-----------------------------
after the date hereof, upon the written request of any member of the PLMI
Affiliated Group requesting that AFG effect the registration under the
Securities Act of all or part of the Registrable Shares (a "Demand
------
Registration"), AFG shall use its best efforts to effect, as expeditiously as
possible, the registration under the Securities Act of such number of
Registrable Shares requested to be so registered; provided, however, that AFG
-------- -------
shall not be required to file a Registration Statement pursuant to this Section
7.1(a), (i) within a period of six months after the effective date of any other
Registration Statement of AFG requested hereunder, (ii) relating to an offering
on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to
similar effect) promulgated under the Securities Act if AFG is not, at the time,
eligible to register shares of Common Stock on Form S-3 (or a successor form) or
(iii) with respect to any offering that is not reasonably expected to yield
gross proceeds of at least $10 million.
Promptly after receipt of any such request for a Demand Registration,
AFG shall give written notice of such request to all other holders of Common
Stock having rights to have their shares included in such registration and
shall, subject to the provisions of Section 7.1(c) hereof, include in such
registration all such Registrable Shares with respect to which each member of
the PLMI Affiliated Group or such other stockholder has requested to be so
registered.
(b) Effective Registration. A registration requested pursuant to
----------------------
this Section 7.1 shall not be deemed to have been effected (and, therefore, not
requested for purposes of Section 7.1(a) above) (i) unless the registration
statement relating thereto has become effective under the Securities Act, (ii)
if after it has become effective such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason other than a misrepresentation or an
omission by any member of the PLMI Affiliated Group and, as a result thereof,
the Registrable Shares requested to be registered cannot be completely
distributed in accordance with the plan of distribution, (iii) if the conditions
to closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied or waived other than
by reason of some act or omission by any member of the PLMI Affiliated Group or
(iv) if, pursuant to Section 7.1(c) hereof, less than all of the Registrable
Shares requested be registered were actually registered.
(c) Priority. If a requested registration pursuant to this Section
--------
7.1 involves an underwritten offering and the managing underwriter shall advise
AFG that in its opinion the number of securities requested to be included in
such registration
19
exceeds the number that can be sold in such offering without having an adverse
effect on such offering, including the price at which such securities can be
sold, then AFG will be required to include in such registration the maximum
number of shares that such underwriter advises can be so sold, allocated (i)
first, to Registrable Shares requested by the members of the PLMI Affiliated
Group to be included in such registration, (ii) second, among all shares of
Common Stock requested to be included in such registration by any other
stockholder of AFG owning shares of Common Stock eligible for such registration,
pro rata on the basis of the number of shares of Common Stock requested to be
--- ----
included in such registration and (iii) third, among other securities, if any,
requested and otherwise eligible to be included in such registration (including
securities to be sold for the account of AFG).
(d) Preemption of Demand Registration. Notwithstanding the
---------------------------------
foregoing, if the Board of Directors of AFG determines in its good faith
judgment, (i) after consultation with a nationally recognized investment banking
firm, that there will be an adverse effect on a then contemplated public
offering of AFG's securities, (ii) that the disclosures that would be required
to be made by AFG in connection with such registration would be materially
harmful to AFG because of transactions then being considered by, or other events
then concerning, AFG, or (iii) that registration at the time would require the
inclusion of pro forma or other information, which requirement AFG is reasonably
--- -----
unable to comply with, then AFG may defer the filing (but not the preparation)
of the Registration Statement that is required to effect any registration
pursuant to this Section 7.1 for a reasonable period of time, but not in excess
of 90 calendar days (or any longer period agreed to by the requesting holders of
Registrable Shares), provided that at all times AFG is in good faith using all
--------
reasonable efforts to file such Registration Statement as soon as practicable.
(e) Other Registration Rights. AFG shall not, without the prior
-------------------------
written consent of PLMI, grant to any Person the right, other than as set forth
herein and except to employees, directors, agents and consultants of AFG, to
request AFG to register any securities of AFG except such rights as are not more
favorable than the rights granted to the members of the PLMI Affiliated Group
herein.
SECTION VII.2 Registration Procedures. If and whenever AFG is
-----------------------
required to use its best efforts to effect or cause the registration of any
Registrable Shares under the Securities Act as provided in this Agreement, AFG
shall:
(a) prepare and file with the SEC as expeditiously as possible, but
in no event later than 90 calendar days after receipt of a request for
registration with
20
respect to such Registrable Shares, a Registration Statement on any form for
which AFG then qualifies or which counsel for AFG shall deem appropriate, which
form shall be available for the sale of the Registrable Shares in accordance
with the intended methods of distribution thereof, and use its best efforts to
cause such Registration Statement to become effective as soon as practicable;
provided, however, that before filing with the SEC a Registration Statement
-------- -------
or Prospectus or any amendments or supplements thereto, including any documents
incorporated by reference therein, AFG shall (x) furnish to PLMI and to one
counsel selected by PLMI (or by PLMI and holders of other securities covered by
such Registration Statement, but in no event to more than one firm of attorneys
for all such selling securityholders) copies of all such documents proposed to
be filed, which documents shall be subject to the review of PLMI and such
counsel, and (y) notify PLMI of any stop order issued or threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 calendar days or such shorter period which shall terminate
when all Registrable Shares covered by such Registration Statement have been
sold (but not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174, or any successor thereto, thereunder,
if applicable), and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish, without charge, to PLMI and each underwriter, if any,
such number of copies of such Registration Statement, each amendment and
supplement thereto (including one conformed copy to PLMI and one signed copy to
each managing underwriter, and in each case, including all exhibits thereto),
and the Prospectus included in such Registration Statement (including each
preliminary Prospectus), in conformity with the requirements of the Securities
Act, and such other documents as PLMI may reasonably request in order to
facilitate the disposition of the Registrable Shares registered thereunder;
(d) use its best efforts to register or qualify such Registrable
Shares covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as the selling securityholders, and the
managing underwriter,
21
if any, reasonably request and do any and all other acts and things that may be
reasonably necessary or advisable to enable the selling securityholders and each
underwriter, if any, to consummate the disposition in such jurisdictions of the
Registrable Shares registered thereunder; provided, however, that AFG
-------- -------
shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(e) immediately notify the managing underwriter, if any, PLMI and the
selling securityholders at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
that comes to AFG's attention if, as a result of such event, the Prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and AFG shall
promptly prepare and furnish to the selling securityholders a supplement or
amendment to such Prospectus so that, as thereafter delivered, such Prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that if AFG determines in good faith
-------- -------
that the disclosure that would be required to be made by AFG would be materially
harmful to AFG because of transactions then being considered by, or other events
then concerning, AFG, or a supplement or amendment to such Prospectus at such
time would require the inclusion of pro forma or other information, which
--- -----
requirement AFG is reasonably unable to comply with, then AFG may defer, for a
reasonable period of time not to exceed 90 calendar days, furnishing to the
selling securityholders a supplement or amendment to such Prospectus; provided,
--------
further, that at all times AFG is in good faith using all reasonable efforts to
-------
file such amendment as soon as practicable;
(f) use its best efforts to cause all such securities being
registered to be listed on each securities exchange on which similar securities
issued by AFG are then listed, and enter into such customary agreements,
including a listing application and indemnification agreement, in customary form
(provided that the applicable listing requirements are satisfied), and to
--------
provide a transfer agent and registrar for such Registrable Shares covered by
such Registration Statement no later than the effective date of such
Registration Statement;
(g) make available for inspection by PLMI and any holder of
securities covered by such Registration Statement, any underwriter participating
in any
22
distribution pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by such persons (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
-----------
and properties of AFG and its Subsidiaries (collectively, "Records"), if any, as
-------
shall be reasonably necessary to enable them to exercise their due diligence
responsibilities, and cause AFG's and its Subsidiaries' officers, directors and
employees to supply all information and respond to all inquiries reasonably
requested by any such Inspector in connection with such Registration Statement.
Notwithstanding the foregoing, AFG shall have no obligation to disclose any
Records to the Inspectors in the event AFG determines that such disclosure is
reasonable likely to have an adverse effect on AFG's ability to assert the
existence of an attorney-client privilege with respect thereto;
(h) if requested, use its best efforts to obtain a "cold comfort"
letter from AFG's independent public accountants in customary form and covering
such matters of the type customarily covered by "cold comfort" letters;
(i) make available senior management personnel to participate in, and
cause them to cooperate with the underwriters in connection with, "road show"
and other customary marketing activities, including "one-on-one" meetings with
prospective purchasers of the Registrable Shares;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering a period of at
least 12 months, beginning with the first month after the effective date of such
Registration Statement (as the term "effective date" is defined in Rule 158(c)
under the Securities Act), which earning statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder; and
(k) use its best efforts to create, without charge, a depositary
arrangement whereby depositary shares representing fractional shares of
Registrable Shares will be issued to the public, to execute and provide, without
charge, customary documentation in respect thereof and such other documentation
that PLMI may reasonably request in order to facilitate the disposition of the
depositary shares created thereunder.
SECTION VII.3 Cooperation from PLMI. PLMI shall use its best efforts
---------------------
to furnish or cause to be furnished promptly to AFG such information concerning
23
PLMI as AFG or its agents may reasonably request in connection with the
preparation of any Registration Statement pursuant to Section 7.2 hereof.
SECTION VII.4 Restriction on Disposition of Registrable Shares. PLMI
------------------------------------------------
agrees that, upon receipt of any notice from AFG of the happening of any event
of the kind described in Section 7.2(e) hereof, PLMI shall, and shall cause each
member of the PLMI Affiliated Group to, discontinue disposition of Registrable
Shares pursuant to the Registration Statement covering such Registrable Shares
until receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7.2(e) hereof, or until otherwise notified by AFG, and,
if so directed by AFG, PLMI shall, and shall cause each member of the PLMI
Affiliated Group to, deliver to AFG (at AFG's expense) all copies (including but
not limited to any and all drafts), other than permanent file copies, then in
their possession, of the Prospectus covering such Registrable Shares at the time
of receipt of such notice. In the event AFG gives any such notice, the period
mentioned in Section 7.2(b) hereof shall be extended by the greater of (x) three
months or (y) the number of days during the period from and including the date
of the giving of such notice pursuant to Section 7.2(e) hereof to and including
the date when the selling securityholders will have received the copies of the
supplemented or amended Prospectus contemplated by Section 7.2(e) hereof.
SECTION VII.5 Selection of Underwriters. If any offering pursuant to
-------------------------
a registration requested pursuant to Section 7.1 hereof is to be an Underwritten
Offering, PLMI shall have the right to select a managing underwriter or
underwriters to administer the offering.
SECTION VII.6 Registration Expenses. AFG shall pay the following
---------------------
registration expenses incurred in connection with a registration hereunder: (a)
all registration and filing fees, (b) fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable Shares),
(c) printing expenses, (d) internal expenses (including without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (e) the fees and expenses incurred in connection with the
listing of the Registrable Shares on any national securities exchange or
interdealer quotation system, (f) the reasonable fees and disbursements of
counsel for AFG and customary fees and expenses for independent certified public
accountants retained by AFG (including the expenses of any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters), (g) the reasonable fees and
disbursements of not more than one firm of attorneys acting as legal counsel for
all of the selling securityholders, collectively, (h) the fees and
24
expenses of any registrar and transfer agent and (i) the underwriting fees,
discounts and commissions applicable to any Common Stock sold for the account of
AFG. Except as otherwise provided in clause (i) of this Section 7.6, AFG shall
have no obligation to pay any underwriting fees, discounts, commissions or
expenses attributable to the sale of Registrable Shares, including but not
limited to the fees and expenses of any underwrit ers and such underwriters'
counsel.
SECTION VII.7 Conversion of Other Securities. If any holder of
------------------------------
Registrable Shares offers any options, rights, warrants or other securities
issued by it or any other Person that are offered with, convertible into or
exercisable or exchangeable for any Registrable Shares, the Registrable Shares
underlying such options, rights, warrants or other securities shall be eligible
for registration pursuant to Section 7.1 hereof.
SECTION VII.8 Rule 144. If and for so long as AFG is subject to the
--------
reporting requirements of the Exchange Act, AFG shall take such measures and
file such information, documents and reports as shall be required by the SEC as
a condition to the availability of Rule 144 (or any successor provision) under
the Securities Act.
SECTION VII.9 Transfer of Registration Rights.
-------------------------------
(a) Any member of the PLMI Affiliated Group may transfer all or any
portion of its rights under this Article VII and Article VIII hereof to any
transferee (each, a "transferee") of Registrable Shares. Any transfer of
----------
registration rights pursuant to this Section 7.9 shall be effective upon receipt
by AFG of written notice from such member of the PLMI Affiliated Group stating
the name and address of any transferee and identifying the amount of Registrable
Shares with respect to which the rights under this Article VII (and Article VIII
hereof) are being transferred and the nature of the rights so transferred. In
connection with any such transfer, the term "PLMI" or "member of the PLMI
Affiliated Group" as used in this Agreement shall, where appropriate to assign
such rights and obligations to such transferee, be deemed to refer to the
transferee holder of such Registrable Shares. Any member of the PLMI Affiliated
Group and such transferees may exercise the registration rights provided for
herein in such proportion as they shall agree among themselves.
(b) After such transfer, each member of the PLMI Affiliated Group
shall retain its rights under this Agreement with respect to all other
Registrable Shares owned by such member of the PLMI Affiliated Group.
25
(c) Upon the request of any member of the PLMI Affiliated Group, AFG
shall execute a Registration Rights Agreement with such transferee or a proposed
transferee substantially similar to the applicable sections of this Agreement.
ARTICLE VIII
BUSINESS AND REGISTRATION STATEMENT INDEMNIFICATION
SECTION VIII.1 General Cross Indemnification.
-----------------------------
(a) PLMI agrees to indemnify and hold harmless AFG and its
Subsidiaries and each of the officers, directors, employees and agents of AFG
and its Subsidiaries against any and all costs and expenses arising out of
third-party claims (including but not limited to attorneys' fees, interest,
penalties and costs of investigation or preparation for defense), judgments,
fines, losses, damages, liabilities, demands, assessments and amounts paid in
settlement (collectively, "Losses"), in each case, based on, arising out of,
------
resulting from or in connection with any claim, action, cause of action, suit,
proceeding or investigation, whether civil, criminal, administrative,
investigative or other (collectively, "Actions"), based on, arising out of,
-------
pertaining to or in connection with any breach by PLMI of this Agreement.
(b) AFG agrees to indemnify and hold harmless each member of the PLMI
Affiliated Group and each of the officers, directors, employees and agents of
each member of the PLMI Affiliated Group against any and all Losses, in each
case, based on, arising out of, resulting from or in connection with any Actions
based on, arising out of, pertaining to or in connection with (i) any
activities, action or inaction on the part of AFG or any of its Subsidiaries or
any of their officers, directors, employees, affiliates (other than a member of
the PLMI Affiliated Group), fiduciaries or agents, (ii) any breach by AFG of
this Agreement or any other agreement between AFG or any of its Subsidiaries and
any member of the PLMI Affiliated Group or (iii) any Keepwell.
The indemnity agreement contained in this Section 8.1 shall be
applicable whether or not any Action or the facts or transactions giving rise to
such Action arose prior to, on or subsequent to the date of this Agreement.
SECTION VIII.2 Registration Statement Indemnification.
--------------------------------------
(a) AFG agrees to indemnify and hold harmless each member of the PLMI
Affiliated Group, each Person to whom registration rights will have been
26
transferred pursuant to Section 7.9 hereof and each person, if any, who controls
any of the foregoing within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the "Registration Indemnitees")
------------------------
from and against any and all Losses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such Losses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission that has been made
therein or omitted therefrom in reliance upon and in conformity with information
relating to a Registration Indemnitee furnished in writing to AFG by or on
behalf of a Registration Indemnitee expressly for use in connection therewith.
(b) Each Registration Indemnitee agrees, severally and not jointly,
to indemnify and hold harmless AFG, its directors, its officers who sign any
Registration Statement, and any person who controls AFG within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from AFG to each Registration Indemnitee, but
only with respect to information relating to such Registration Indemnitee
furnished in writing by or on behalf of such Registration Indemnitee expressly
for use in any Registration Statement or Prospectus. If any Action will be
brought against AFG, any of its directors, any such officer or any such
controlling person based on any Registration Statement or Prospectus and in
respect of which indemnity may be sought against a Registration Indemnitee
pursuant to this paragraph (b), PLMI shall have the rights and duties given to
AFG by Section 8.4 hereof (except that if AFG shall have assumed the defense
thereof such Registration Indemnitee shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Registration Indemnitee's
expense), and AFG, its directors, any such officer and any such controlling
person shall have the rights and duties given to such Registration Indemnitee by
Section 8.4 hereof.
SECTION VIII.3 Contribution.
------------
(a) If the indemnification provided for in this Article VIII is
unavailable to an indemnified party under Section 8.2 hereof in respect of any
Losses referred to therein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by AFG on the one hand and
the applicable Registration Indemnitee
27
on the other hand from the offering of the securities covered by the applicable
Registration Statement and Prospectus or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of AFG on the one hand and the applicable
Registration Indemnitee on the other in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by AFG on the one hand and a
Registration Indemnitee on the other shall be deemed to be in the same
proportion as the total net proceeds from the applicable securities offering
(before deducting expenses) received by AFG bear to the total net proceeds from
such offering (before deducting expenses) received by such Registration
Indemnitee. The relative fault of AFG on the one hand and the applicable
Registration Indemnitee on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by AFG on the one hand or by such Registration Indemnitee
on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(b) AFG and each Registration Indemnitee agree that (i) it would not
be just and equitable if contribution pursuant to this Section 8.3 were
determined by a pro rata allocation or by any other method of allocation that
--- ----
does not take account of the equitable considerations referred to in paragraph
(a) above and (ii) the amount paid or payable by an indemnified party as a
result of the Losses referred to in paragraph (a) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any related claim or defending any related Action. Notwithstanding the
provisions of this Section 8.3, a Registration Indemnitee shall not be required
to contribute any amount in excess of the amount by which the proceeds to such
Registration Indemnitee exceeds the amount of any damages that Registration
Indemnitee has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission; provided, however,
-------- -------
that the limitation on required contribution set forth in this sentence shall
not apply to Losses referred to in paragraph (a) above and related to the
Initial Public Offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION VIII.4 Procedure. If any Action shall be brought against a
---------
Registration Indemnitee or any other person entitled to indemnification pursuant
to this
28
Article VIII (collectively with the Registration Indemnitees, the
"Indemnitees") in respect of which indemnity may be sought against AFG, such
------------
Indemnitee shall promptly notify AFG, and AFG shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Indemnitee shall have the right to employ separate counsel in any such action,
suit or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such person unless (i) AFG
has agreed in writing to pay such fees and expenses, (ii) AFG has failed to
assume the defense and employ counsel, or (iii) the named parties to an Action
(including any impleaded parties) include both an Indemnitee and AFG and such
Indemnitee shall have been advised by its counsel that representation of such
indemnified party and AFG by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case AFG shall not have the right to assume the
defense of such Action on behalf of such Indemnitee). It is understood,
however, that AFG shall, in connection with any one such Action or separate but
substantially similar or related Actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnitees not having actual or potential
differing interests among themselves, and that all such fees and expenses shall
be reimbursed as they are incurred. AFG shall not be liable for any settlement
of any such Action effected without its written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such Action, AFG agrees to indemnify and hold harmless each Indemnitee, to the
extent provided in the preceding paragraph, from and against any Losses by
reason of such settlement or judgment.
SECTION VIII.5 Other Matters.
-------------
(a) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened Action
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Action.
(b) Any Losses for which an indemnified party is entitled to
indemnification or contribution under this Article VIII shall be paid by the
indemnifying party to the indemnified party as such Losses are incurred. The
indemnity and contribution agreements contained in this Article VIII shall
remain operative and in full
29
force and effect, regardless of (i) any investigation made by or on behalf of
any Indemnitee, AFG, its directors or officers, or any person controlling AFG,
and (ii) any termination of this Agreement.
(c) The parties hereto shall, and shall cause their respective
Subsidiaries to, cooperate with each other in a reasonable manner with respect
to access to unprivileged information and similar matters in connection with any
Action. The provisions of this Article VIII are for the benefit of, and are
intended to create third-party beneficiary rights in favor of, each of the
indemnified parties referred to herein.
ARTICLE IX
OTHER PROVISIONS
SECTION IX.1 Intercompany Borrowings. From and after the effective
-----------------------
date of the Warehouse Credit Facility, no member of the PLMI Affiliated Group
shall be obligated to make advances to AFG or any Subsidiary of AFG pursuant to,
or to permit AFG or any Subsidiary of AFG to otherwise participate in, the Old
Warehouse Credit Facility. To the extent that any member of the PLMI Affiliated
Group makes any such advances or otherwise allows such use of the Old Warehouse
Credit Facility by AFG or any Subsidiary of AFG, AFG agrees that (i) AFG shall
pay any and all costs, fees and expenses (including an appropriate charge for
interest) associated with or incurred under the Old Warehouse Credit Facility on
a basis that is consistent with the past cost allocation practices of the
members of the PLMI Affiliated Group, (ii) AFG shall, and shall cause each of
its Subsidiaries to, comply with all of the terms and conditions of the Old
Warehouse Credit Facility and (iii) the continued use of the Old Warehouse
Credit Facility by AFG or any Subsidiary of AFG shall be subject to the
continuing consent of PLMI, which may be revoked by PLMI at any time, in whole
or in part, in the sole and absolute discretion of PLMI.
SECTION IX.2 Keepwell Payments. AFG agrees to reimburse any member
-----------------
of the PLMI Affiliated Group who has provided a Keepwell for any and all amounts
paid or payable (including all fees, costs and expenses incurred) by such member
of the PLMI Affiliated Group in connection with the performance by such member
of its obligations under any Keepwell.
ARTICLE X
MISCELLANEOUS
30
SECTION X.1 Notices. All notices and other communications provided
-------
for hereunder shall be dated and in writing and shall be deemed to have been
given (a) when delivered, if delivered personally, sent by confirmed telecopy or
sent by registered or certified mail, return receipt requested, postage prepaid,
(b) on the next Business Day, if sent by overnight courier and (c) when
received, if delivered otherwise. Such notices shall be delivered to the
address set forth below, or to such other address as a party shall have
furnished to the other party in accordance with this Section.
If to PLMI or any other member of the PLMI Affiliated Group, to:
PLM International, Inc.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to AFG, to:
American Finance Group, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION X.2 Binding Nature of Agreement. This Agreement shall be
---------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto or their successors in interest, except as expressly otherwise provided
herein.
SECTION X.3 Descriptive Headings. The descriptive headings of the
--------------------
several articles and sections of this Agreement are inserted for reference only
and shall not limit or otherwise affect the meaning hereof.
SECTION X.4 Remedies. Without limiting the rights of each party
--------
hereto to pursue any and all other legal and equitable rights available to such
party for the other party's failure to perform its obligations under this
Agreement, the parties
31
hereto acknowledge and agree that the remedy at law for any failure to perform
their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure. Without limiting the
generality of the foregoing, AFG acknowledges and agrees that (a) its covenants
and obligations hereunder are special, unique and relate to matters of
extraordinary importance to PLMI, that in the event AFG fails to perform,
observe or discharge any of its obligations under this agreement, PLMI will be
irreparably harmed and that no remedy at law will provide adequate relief to
PLMI and (b) PLMI shall be entitled to a temporary restraining order and
temporary and permanent injunctive and other equitable relief in case of any
failure by AFG to perform, observe or discharge any of its covenants or
obligations hereunder and without the necessity of proving actual damages. The
remedies provided herein shall be cumulative and shall not preclude assertion by
either party hereto of any other rights or the seeking of any other remedies,
either legal or equitable, against the other party hereto.
SECTION X.5 Governing Law. This Agreement shall be construed and
-------------
enforced in accordance with, and the rights and duties of the parties shall be
governed by, the laws of the State of Delaware, without regard to its principles
of conflicts of law.
SECTION X.6 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION X.7 Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of such provision in every other respect
and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
SECTION X.8 Amendment and Modification. Subject to applicable law,
--------------------------
this Agreement may be amended, modified or supplemented only by written
agreement executed by each of the parties hereto.
SECTION X.9 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement, including any schedules or exhibits annexed hereto, constitutes the
entire agreement and understanding of the parties hereto in respect of the
transactions
32
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, written or oral, between
the parties hereto in respect thereof other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to such subject matter.
This Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
SECTION X.10 No Assignment. Except as otherwise provided in Section
-------------
7.9 hereof, neither this Agreement nor any of the rights, interests or
obligations of either party hereto may be assigned by such party without the
prior written consent of the other party hereto; provided, however, that PLMI
-------- -------
may assign all or part of its rights or obligations hereunder to one or more
other members of the PLMI Affiliated Group without the prior consent of AFG.
SECTION X.11 Recapitalization, Dilution Adjustments, etc. In the event
--------------------------------------------
that any capital stock or other securities are issued in respect of, in exchange
for, or in substitution of, any shares of Common Stock by reason of any
reorganization, recapitalization, reclassification, merger, consolidation, spin-
off, partial or complete liquidation, stock dividend, split-up, sale of assets,
distribution to stockholders or combination of the shares of Common Stock, then,
in each such case, appropriate adjustments shall be made so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement.
SECTION X.12 Further Assurances. Each party hereto shall, on notice
------------------
of request from the other party hereto, take such further action not
specifically required hereby at the expense of the requesting party, as the
requesting party may reasonably request for the implementation of the
transactions contemplated hereby.
33
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized representatives as of
the day and year first above written.
AMERICAN FINANCE GROUP, INC.
By:
------------------------------
Name:
Title:
PLM INTERNATIONAL, INC.
By:
-----------------------------
Name:
Title:
34
EXHIBIT A
CORPORATE SERVICES
ACCOUNTING SERVICES
(1) Processing of payroll (annual fee does not include direct [ADP] costs,
which will be charged directly to AFG)
(2) Processing of all accounts payable
(3) Cash management, including cash forecasts and reconciliations
(4) Debt compliance for the [bridge facility] and management of all drawdowns
and fundings on the [bridge]
(5) Filing of all debt compliance related to the Securitization Facility,
including the "waterfall". (PLM accounting will continue to complete the
agreed upon procedure review with KPMG, with the cost of KPMG's review to
be charged directly to AFG)
(6) Access to ▇.▇. ▇▇▇▇▇▇▇ accounting software program
(7) Assistance in preparation of annual budget
(8) Assistance in preparation of any required forecasts
(9) Maintenance of Eagle software system, including completion of Phase 2
programming project
(10) Performance of all general ledger work, including:
(a) lease classifications and recording of income
(b) monthly reconciliation of all balance sheet accounts
(c) detailed reconciliation between Eagle detail reports and general
ledger
(d) recording and reconciling cash applications
(e) production of monthly budget versus actual reports
(f) preparation of all audit schedules required on a quarterly and annual
basis
(11) Preparation of 10-Q's and 10-K's
(12) Collaboration with KPMG on all audit matters (KPMG audit fees to be charged
directly to AFG)
(13) Assistance in UBK matters such as monthly transfer of rents and sales tax
payments
(14) Preparation of all state and federal income tax return for AFG each
Subsidiary of AFG
(15) Planning with respect to state and federal income taxes
(16) Consulting services on tax issues, as required
A-1
HUMAN RESOURCES SERVICES
(17) Performance of all administrative functions related to hiring new
employees, including:
(1) preparation of employment letters
(2) insurance enrollment
(3) new employee orientation
(18) Negotiation of insurance coverage on an annual basis; administer any health
plan changes and assist in insurance claims. Process premium payments
(19) Administration of Flexible Spending Plan enrollment and processing monthly
flex plan claims and reconciling claims to reimbursements
(20) Administration of Vision Service Plan enrollment
(21) Updating employee handbook and communicating any changes as dictated by
regulatory changes. Keeping abreast of all federal and state labor laws
affecting AFG employees
(22) Updating job descriptions as required by ADA
(23) Administration of termination documentation to include information on
COBRA, HIPPA, certificate of coverage as required by law, letter re: right
to apply for unemployment as required by law. Termination documentation
also includes separate correspondence to spouses regarding the above same
information.
(24) Administration of 401(k) enrollment and communication of performance of and
changes to the plan. Processing of 401(k) loan requests. Also includes
any requirement for discrimination tests to ensure compliance with ERISA
regulations.
(25) Processing of payroll on the human resources side[?]
(26) Processing of any office services requests (e.g. business cards, stationery
and office supplies/equipment)
(27) Handling of any worker's compensation claims and any unemployment claims
contested by former AFG employees
(28) Processing of all leave of absence correspondence and monitoring
(29) Miscellaneous responsibilities related to employment verification requests,
company policy inquiries, training requests and enrollment, potential
vacation/personal/sick day discrepancy inquiries, overtime/pay check
questions, etc.
(30) Continued implementation and monitoring of Ergonomics program
A-2
LEGAL SERVICES
(31) General corporate services, including corporate filings, powers [?], by-law
and charter maintenance and other services required to maintain good
standing of AFG and its Subsidiaries
(32) Legal, contract and litigation overview
(33) Consulting on all legal matters, new transactions and other issues
(34) All outside legal invoices, for work performed by non-PLMI attorneys, to be
billed directly to AFG
MIS SERVICES
(35) Access to programs and data files on PLMI's AS/400 computer
(36) Weekly backup of LAAMS and Eagle programs and data files
(37) Offsite storage of LAAMS and Eagle programs and data files
(38) Disaster recovery services to ensure uninterrupted access to programs and
data files
(39) Loading of monthly Vertex tapes
(40) Programming of enhancements to the LAAMS system (not to exceed 50 hours per
week during any peak period; not to exceed 25 hours per week on average)
(41) Maintenance and enhancement (as necessary) to the LAAMS-Eagle interface
(42) Maintenance of suitable text environments necessary to development of
improvements in programs, restatement of data, etc.
(43) Technical support for maintaining an acceptably fast and secure data
network from the AFG's Boston-based network into PLMI's San Francisco-based
network
(44) Network access to the ▇.▇. ▇▇▇▇▇▇▇ system (upgrades to JDE to be provided
so that AFG accounting software is kept current)