PLM EQUIPMENT GROWTH FUND
NOTE AGREEMENT
Dated as of September 1, 1995
Re: $23,000,000 Adjustable Rate Senior Secured Notes
Due December 31, 1998
TABLE OF CONTENTS
(Not a Part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT...............1
Section 1.1. Description of Notes..........................1
Section 1.2. Commitment, Closing Date......................2
Section 1.3. Other Agreements..............................3
Section 1.4. Security for the Notes........................3
SECTION 2. PREPAYMENT OF NOTES...............................3
Section 2.1. Required Prepayments..........................3
Section 2.2. Optional Prepayments..........................4
Section 2.3. Prepayment in Certain Extraordinary Events....4
Section 2.4. Prepayment of the Notes Upon Sale of Assets...6
Section 2.5. Notice of Prepayments.........................6
Section 2.6. Allocation of Prepayments.....................7
Section 2.7. Direct Payment................................7
SECTION 3. REPRESENTATIONS...................................8
Section 3.1. Representations of the Company................8
Section 3.2. Representations of the Purchasers.............8
SECTION 4. CLOSING CONDITIONS................................9
Section 4.1. Closing Certificate...........................9
Section 4.2. Legal Opinions................................9
Section 4.3. Existence and Authority.......................10
Section 4.4. Security Agreement............................10
Section 4.5. UCC Filing....................................10
Section 4.6. Payment of Bank Indebtedness..................10
Section 4.7. Private Placement Number......................10
Section 4.8. Related Transactions..........................10
Section 4.9. Insurance Certificate.........................10
Section 4.10. Rating........................................10
Section 4.11. Funding Instructions..........................11
Section 4.12. Satisfactory Proceedings......................11
Section 4.13. Waiver of Conditions..........................11
SECTION 5. COMPANY COVENANTS.................................11
Section 5.1. Existence, Etc................................11
Section 5.2. Insurance.....................................11
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws.......................12
Section 5.4. Maintenance, Etc..............................12
Section 5.5. Nature of Business............................12
Section 5.6. Special Provisions for Marine Vessels and
Aircraft...................................13
Section 5.7. Fixed Charge Coverage.........................14
Section 5.8. Sale and Leaseback............................14
Section 5.9. Limitations on Indebtedness...................14
Section 5.10. Limitation on Liens...........................14
Section 5.11. Distributions, Certain Payments...............16
Section 5.12. Limitation on Purchase Options Relating to
Equipment..................................16
Section 5.13. Mergers, Consolidations and Sales of Assets...16
Section 5.14. Guaranties....................................18
Section 5.15. Repurchase of Notes...........................18
Section 5.16. Transactions with Affiliates and Affiliated
Partnerships...............................18
Section 5.17. Investments...................................18
Section 5.18. Termination of Pension Plans..................20
Section 5.19. Reports and Rights of Inspection..............20
Section 5.20. Certain Appraisals............................24
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR...........24
Section 6.1. Events of Default.............................24
Section 6.2. Notice to Holders.............................26
Section 6.3. Acceleration of Maturities....................26
Section 6.4. Rescission of Acceleration....................27
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS..................27
Section 7.1. Consent Required..............................27
Section 7.2. Solicitation of Noteholders...................28
Section 7.3. Effect of Amendment or Waiver.................28
SECTION 8. INTERPRETATION OF AGREEMENT.......................28
Section 8.1. Definitions...................................28
Section 8.2. Accounting Principles.........................40
Section 8.3. Directly or Indirectly........................41
SECTION 9. MISCELLANEOUS.....................................41
Section 9.1. Registered Notes..............................41
Section 9.2. Exchange of Notes.............................41
Section 9.3. Loss, Theft, Etc. of Notes....................41
Section 9.4. Expenses, Stamp Tax Indemnity.................42
Section 9.5. Powers and Rights Not Waived..................42
Section 9.6. Notices.......................................43
Section 9.7. Successors and Assigns........................43
Section 9.8. Survival of Covenants and Representations.....43
Section 9.9. Severability..................................43
Section 9.10. Governing Law.................................43
Section 9.11. Submission to Jurisdiction....................43
Section 9.12. Captions......................................43
Section 9.13. Limitation of Liability.......................44
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names and Addresses of Purchasers
Schedule II -- Names of Appraisers
Schedule III -- Names of Underwriters, Protection and Indemnity Clubs
and Insurers relating to Extensions and Renewals of
Insurance Policies
Exhibit A -- Form of Adjustable Rate Senior Secured Note due December 31, 1998
Exhibit B -- Closing Certificate of the Company Exhibit C -- Description of
Special Counsel's Closing Opinion Exhibit D -- Description of Closing Opinion of
Counsel to the Company
PLM EQUIPMENT GROWTH FUND
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NOTE AGREEMENT
Re: $23,000,000 Adjustable Rate Senior Secured Notes
Due December 31, 1998
--------------------
Dated as of
September 1, 1995
To the Purchaser named in
Schedule I which is a signatory
to this Agreement
Ladies and Gentlemen:
The undersigned, PLM EQUIPMENT GROWTH FUND, a California limited
partnership (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
SECTION 1.DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1.Description of Notes. ~Section1.1.Description of Notes. (a) The
Company will authorize the issue and sale of $23,000,000 aggregate principal
amount of its Adjustable Rate Senior Secured Notes (the "Notes") to be dated the
date of issue, to bear interest from such date at the Adjustable Rate, payable
quarterly in arrears on the last day of each March, June, September, and
December in each year (commencing December 31, 1995) and at maturity and to bear
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate after
maturity, whether by acceleration or otherwise, until paid, to be expressed to
mature on December 31, 1998, and to be substantially in the form attached hereto
as Exhibit A. Interest on the Notes shall be computed on the basis of a 360-day
year and actual days elapsed. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the premium, if
any, set forth in ss.2 of this Agreement. The term "Notes" as used herein shall
include each Note delivered pursuant to this Agreement and the separate
agreements with the other purchasers named in Schedule I. You and the other
purchasers named in Schedule I are hereinafter sometimes referred to as the
"Purchasers".
(b) (1) The Indexing Agent shall, as soon as practicable after 11:00
a.m., London, England time two (2) Business Days prior to the commencement of
each Interest Period, determine the Adjustable Rate applicable to the
outstanding principal amount of the Notes and inform the Company and each of the
holders of the Notes of the Adjustable Rate so determined. Such Adjustable Rate
shall be applicable to the outstanding principal amount of the Notes during such
Interest Period. Neither the Indexing Agent nor any holder of the Notes shall be
under any duty or obligation to notify the Company that the Interest Period then
applicable to the outstanding principal amount of the Notes is about to expire.
(2) Notwithstanding any other provisions of this Agreement or
any Note, if at any time after the date hereof any change in any applicable law,
rule, regulation or treaty or in the interpretation thereof makes it, in the
judgment of the Requisite Holders, unlawful for the holders of the Notes to
continue to maintain the loan evidenced by the Notes based upon a LIBO Rate or
to give effect to the obligations of the holders as contemplated thereby and
hereby, the Requisite Holders shall promptly give notice thereof to the Company
(and the Company shall then and thereupon promptly notify each other holder of
the Notes in the manner provided in ss.9.6). The obligations of the holders of
the Notes to maintain the loan evidenced by the Notes based upon a LIBO Rate
shall thereupon terminate, effective on and as of the expiration date of the
then current Interest Period, and the Company and the Requisite Holders shall
negotiate in good faith in order to arrive at a mutually satisfactory method of
computing the interest rate applicable to the Notes. If no substitute rate is
agreed upon between the Company and the Requisite Holders, the Company shall, on
the expiration date of such Interest Period, prepay the outstanding principal
amount of the Notes, together with all interest accrued thereon and all other
amounts then due and payable to such holder under this Agreement.
(3) If on or prior to the Business Day next preceding any
Interest Period (i) the Indexing Agent shall have determined that U.S. Dollar
deposits for a period equal to such Interest Period and in an amount comparable
to the outstanding principal amount of the Notes are not being offered by prime
banks in the London interbank market, or (ii) the Requisite Holders advise the
Indexing Agent that the method of computing the rate applicable to the Notes
does not accurately reflect the cost to the holders of the Notes of funding the
outstanding balance of the Notes, the Indexing Agent shall on such Business Day
next preceding such Interest Period give notice of such determination to the
Company and each holder of the Notes, and the Company and the Requisite Holders
shall negotiate in good faith in order to arrive at a mutually satisfactory
method of computing the interest rate applicable to the Notes. If no substitute
rate is agreed upon between the Company and the Requisite Holders, the Company
shall on the expiration date of the Interest Period then expiring prepay the
outstanding principal amount of the Notes, together with all interest accrued
thereon and all other amounts then due and payable to the holders of the Notes
under this Agreement.
Section 1.2.Commitment, Closing Date~Section1.2.Commitment, Closing Date.
Subject to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the Company agrees to
issue and sell to you, and you agree to purchase from the Company, Notes of the
Company in the aggregate principal amount set forth opposite your name in
Schedule I, at a price of 100% of the principal amount thereof on the Closing
Date hereinafter mentioned.
Delivery of the Notes will be made at the offices of ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, against payment
therefor in Federal or other funds current and immediately available at the
principal office of Unibank, AS, New York, New York, ABA Routing No. ▇▇▇▇▇▇▇▇▇,
in the amount of the purchase price for credit to the Account of Den Norske
Bank, New York Branch, #▇▇▇▇▇▇▇, referencing the Company, at 10:00 A.M., Chicago
time, on September 28, 1995 or such later date (not later than September 29,
1995) as shall be mutually agreed upon by the Company and the Purchasers (the
"Closing Date"). The Notes delivered to you on the Closing Date will be
delivered to you in the form of a single registered Note for the full amount of
your purchase (unless different denominations are specified by you), registered
in your name or in the name of such nominee as you may specify and in
substantially the form attached hereto as Exhibit A, all as you may specify at
any time prior to the date fixed for delivery.
Section 1.3.Other Agreements~Section1.3.Other Agreements. Simultaneously with
the execution and delivery of this Agreement, the Company is entering into
similar agreements with the other Purchasers under which such other Purchasers
agree to purchase from the Company the principal amount of Notes set opposite
such Purchasers' name in Schedule I, and your obligation and the obligations of
the Company hereunder are subject to the execution and delivery of the similar
agreements by the other Purchasers. The obligations of each Purchaser shall be
several and not joint and no Purchaser shall be liable or responsible for the
acts of any other Purchaser.
Section ▇.▇.▇▇▇▇▇▇▇▇ for the Notes~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇ for the Notes. The Notes
will be secured by and have the benefit of the Security Agreement dated as of
the date of this Agreement which will be in form and substance satisfactory to
you and your special counsel (the "Security Agreement").
SECTION 2. PREPAYMENT OF NOTESSECTION 2.PREPAYMENT OF NOTES.
Section 2.1.Required Prepayments~Section2.1.Required Prepayments. The Company
agrees that on each of the dates set forth in the table below, it will prepay
and apply and there shall become due and payable on the principal indebtedness
evidenced by the Notes the lesser of (a) the amount set opposite such date in
the table below and (b) the then outstanding aggregate principal amount of the
Notes:
REQUIRED PREPAYMENT DATES PRINCIPAL PREPAYMENT
March 31, 1996 $7,000,000
December 31, 1997 $6,000,000
The entire unpaid principal amount of the Notes shall become due and
payable on December 31, 1998. No premium shall be payable in connection with any
required prepayment made pursuant to this ss.2.1 or ss.2.2, ss.2.3 or ss.2.4.
For the purposes of this ss.2.1, any prepayment of less than all of the
outstanding Notes (1) if made pursuant to ss.2.2 shall be deemed to be applied
to the scheduled principal payments in chronological order, or (2) if made
pursuant to ss.2.3 or ss.2.4 shall be deemed to be applied pro rata to the
payment of all remaining principal payments required by this ss.2.1, so that
each such remaining payment of principal shall thereupon be reduced in the same
proportion that the principal amount of Notes outstanding immediately preceding
the payment pursuant to ss.2.3 or ss.2.4, as the case may be, was reduced by
such prepayment.
Section 2.2.Optional Prepayments~Section2.2.Optional Prepayments. (a) In
addition to the payments required by ss.2.1, upon compliance with ss.2.5, but
subject always to the limitations expressed in clause (b) of this ss.2.2, the
Company shall have the privilege on each Interest Rate Adjustment Date, of
prepaying the outstanding Notes, either in whole or in part (but if in part,
then in units in excess of $100,000) by payment of the principal amount of the
Notes, or portion thereof to be prepaid, and accrued interest thereon to the
date of such prepayment, but without premium.
(b) Anything contained in this Agreement, including without
limitation this ss.2.2, to the contrary notwithstanding, upon the occurrence of
any Change Event or Withdrawal Event, the Company may only prepay the Notes
pursuant to and within the limitations of ss.2.3(a) or ss.2.3(b), as the case
may be, and not pursuant to this ss.2.2.
Section 2.3.Prepayment in Certain Extraordinary Events~Section2.3.Prepayment in
Certain Extraordinary Events. (a) In the event that any Material Agreement shall
be canceled or terminated for any reason whatsoever or shall be modified or
amended in a manner materially adverse to the rights of the Company thereunder
(herein a "Change Event") and the Company has knowledge of a Change Event or an
impending Change Event, the Company will give written notice (herein called a
"Change Notice") of such fact to all holders of the Notes then outstanding. Said
Change Notice shall be delivered at least 60 days and no more than 90 days prior
to the occurrence of such Change Event; provided, however that if the Company
shall not then have knowledge of such fact, such Change Notice shall be
delivered within two Business Days after receipt of such knowledge by the
Company. In addition to notifying the holders of the Notes of a Change Event or
a proposed Change Event, the Change Notice shall state that the occurrence of
such Change Event entitles said holders to declare the Notes held by them to
become due and payable pursuant to this ss.2.3(a) and the date by which said
holders must respond to such Change Notice pursuant to clause (ii) of the next
succeeding paragraph if they desire to waive such right. The Company shall not
be required to prepay any Notes pursuant to this ss.2.3(a) unless and until such
Change Event shall be consummated.
Upon the receipt of such Change Notice or, if no Change Notice is
given, upon the occurrence of a Change Event, any holder of Notes shall have the
privilege, upon written notice (the "Declaration Notice") to the Company, of
either (i) declaring all Notes held by such holder serving such Declaration
Notice due and payable or (ii) waiving the right of such holder to declare the
Notes held by it to be due and payable. In the event that a Change Notice is
given and a holder of the Notes fails to waive such right in accordance with
this ss.2.3(a), the Notes held by such holder shall irrevocably be deemed to be
and the same shall on the Payment Date (as hereinafter defined) become due and
payable as a result of such Change Event. All Notes declared due and payable
shall become due and payable and paid on such date (the "Payment Date") as the
Company shall specify in a written notice delivered to the holder or holders
which have declared their Notes due and payable (which notice shall be delivered
by the Company to such holder or holders not later than 10 days prior to the
Payment Date) and the Payment Date shall be not later than 10 days after the
consummation of such Change Event, in the event that such Declaration Notice is
served on or prior to the date of the consummation of such Change Event or 10
days after the date such Declaration Notice is served, if such Declaration
Notice is not served on or prior to the date of such Change Event. The Company
covenants and agrees to prepay in full on the Payment Date all Notes held by
such holder serving such Declaration Notice to the Company declaring such Notes
due and payable.
In the event that any holder of the Notes shall have declared all of
the Notes held by it to become due and payable pursuant to ss.2.3(a), then the
Company shall promptly, but in any event within five days after the receipt of
the Declaration Notice, deliver written notice of such declaration (the
"Notification of Declaration") to each other holder of the Notes and,
notwithstanding anything to the contrary contained in this Agreement, each such
other holder which has previously waived its right to declare the Notes held by
it to be due and payable pursuant to ss.2.3(a)(ii) shall then have the right to
declare all of the Notes held by it to become due and payable pursuant to
ss.2.3(a)(i) until the later to occur of (x) 60 days after receipt by such
holders of the Change Notice or (y) 20 days after receipt by such holders of a
Notification of Declaration, with respect to a Declaration Notice made by
holders of Notes.
(b) In the event that PLM Financial Services, Inc., a Delaware
corporation, or PLM Investment Management, Inc., a California corporation, or
any successor to either such entity shall resign or withdraw or be removed or
transfer its interest as General Partner or Fund Manager, as the case may be
(such event being herein referred to as a "Withdrawal Event"), then, in such
event, the Company will promptly, but in any event within 10 days, give written
notice thereof (a "Withdrawal Notice") to the holders of all outstanding Notes,
which notice shall make specific reference to this Section and to the rights of
the holders hereunder. If, within 90 days after the Withdrawal Notice, the
Company procures a successor entity qualified and experienced in performing
functions such as those performed by the General Partner or Fund Manager, as the
case may be, the Company shall promptly, but in any event within five days, send
notice thereof to the holders of all outstanding Notes. Should the holders of
33-1/3% or more in aggregate principal amount of the Notes then outstanding
object to such successor entity within 10 days of the receipt of such notice, or
should the Company not be able to procure such successor within such 90-day
period, each holder of outstanding Notes shall have the right by written notice
to the Company given not earlier than five days nor later than 45 days after the
expiration of such period (the "Withdrawal Event Prepayment Election Period"),
to either (i) demand that the Company prepay all of the Notes then held by such
holder or (ii) notify the Company that such holder has waived its right to have
the Notes held by it prepaid. In the event that a Withdrawal Notice is given and
a holder of the Notes fails to provide such written notice within the Withdrawal
Event Prepayment Election Period, the Notes held by such holder shall
irrevocably be deemed to be and the same shall on a date five days following the
expiration of the Withdrawal Event Prepayment Election Period become due and
payable. With respect to any prepayment, the prepayment date shall be specified
in writing to each holder by the Company and shall be the same date as the date
established for the prepayment of Notes held by all holders exercising their
rights under this ss.2.3(b) by reason of the occurrence of the Withdrawal Event.
The Company will also promptly notify the holders of the Notes of the
receipt of any demand by any Note holder for the prepayment of its Note pursuant
to thisss.2.3(b).
(c) All prepayments on the Notes pursuant to this ss.2.3 shall be
made by the payment of the aggregate principal amount remaining unpaid on the
Notes to be prepaid and accrued interest thereon to the date of such prepayment,
and if such prepayment is to be made on any date other than an Interest Rate
Adjustment Date, then together with a premium equal to the Breakage Cost Amount,
determined as of two Business Days prior to the date of such prepayment pursuant
to this ss.2.3.
Section 2.4.Prepayment of the Notes Upon Sale of Assets~Section2.4.Prepayment of
the Notes Upon Sale of Assets. (a) Subject to clause (b) of this ss.2.4, in the
event that the Company or a Restricted Subsidiary shall sell or otherwise
dispose of any of its assets, then and in such event, upon compliance with
ss.2.5, the Company shall on the Interest Rate Adjustment Date established
pursuant to ss.2.5, prepay the outstanding Notes in an amount equal to the
aggregate Asset Sale Prepayment Amount accumulated in the Cash Reserve Account,
together with accrued interest thereon to the date of such prepayment, but
without premium; provided that so long as no Default or Event of Default shall
have occurred and be continuing, the Company shall not be required to prepay the
Notes pursuant to this ss.2.4 until at least $500,000 shall have accumulated in
the Cash Reserve Account. The amount of any net sale proceeds in excess of the
amount required to be applied to the prepayment of the Notes pursuant to this
ss.2.4 shall be distributed by the Company as provided in ss.5.13(a)(4).
(b) Notwithstanding clause (a) of this ss.2.4, if at the time of any
sale or other disposition of assets by the Company or a Restricted Subsidiary,
Consolidated Assets are for any reason whatsoever less than $20,000,000, then
and in such event 100% of the net sales proceeds arising from any such sale or
other disposition shall on the Interest Rate Adjustment Date established
pursuant to ss.2.5 be applied to the prepayment of the Notes, together with
accrued interest thereon to the date of such prepayment, but without premium.
Section 2.5.Notice of Prepayments.~Section2.5.Notice of Prepayments. The Company
will give notice of any prepayment of the Notes pursuant to ss.2.2 or ss.2.4 to
each holder thereof not less than 30 days nor more than 60 days before the
Interest Rate Adjustment Date fixed for such optional or required prepayment
specifying (a) such date, (b) the section of this Agreement under which the
prepayment is to be made, and (c) the principal amount of the holder's Notes to
be prepaid on such date. Such notice of prepayment shall also certify all facts
which are conditions precedent to any such prepayment and, in the case of any
prepayment pursuant to ss.2.2, shall contain (i) the certification of the
Company that it is not prepaying the Notes with the proceeds of any Indebtedness
or Equity Capital of the Company or any of its Restricted Subsidiaries or
Affiliates and (ii) the covenant of the Company to the effect that neither the
Company nor any of its Restricted Subsidiaries will incur any Indebtedness from
and after the date of prepayment of the Notes pursuant to said ss.2.2. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice and accrued interest thereon shall become due and
payable on such Interest Rate Adjustment Date.
Section 2.6.Allocation of Prepayments.~Section2.6.Allocation of Prepayments. (a)
Except for prepayment of less than all of the Notes at the time outstanding
pursuant to ss.2.3 or ss.2.4 and except as otherwise provided in clause (b) of
this ss.2.6, all partial prepayments shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof but only in
units of $10,000, and to the extent that such ratable application shall not
result in an even multiple of $10,000, adjustment may be made by the Company to
the end that successive applications shall result in substantially ratable
payments. Partial prepayments made pursuant to ss.2.2 shall be credited in each
case in chronological order against the required prepayments provided for by
ss.2.1.
(b) Notwithstanding the provisions of ss.2.6(a), the first $3,000,000
of any payment or prepayment of the Notes made by the Company, whether pursuant
to the required prepayment to be made by the Company on March 31, 1996 or any
other payment or prepayment made by the Company prior to March 31, 1996 pursuant
to ss.2.2, shall be applied to the prepayment of the Notes held by The North
Atlantic Life Insurance Company of America, by Northwestern National Life
Insurance Company and by Northern Life Insurance Company ratably in accordance
with the unpaid principal amounts thereof.
Section ▇.▇.▇▇▇▇▇▇ Payment.~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇ Payment. Notwithstanding anything
to the contrary in this Agreement or the Notes, in the case of any Note owned by
a Purchaser or its nominee or owned by any other institutional holder who has
given written notice to the Company requesting that the provisions of this
Section shall apply, the Company will promptly and punctually pay when due the
principal thereof and premium, if any, and interest thereon, without any
presentment thereof directly to such Purchaser or such subsequent holder at the
address of such Purchaser set forth in Schedule I or at such other address as
such Purchaser or such subsequent holder may from time to time designate in
writing to the Company or, if a bank account is designated for such Purchaser on
Schedule I hereto or in any written notice to the Company from such Purchaser or
any such subsequent holder, the Company will make such payments in immediately
available funds to such bank account no later than 12:00 Noon Chicago, Illinois
time on the date due, marked for attention as indicated, or in such other manner
or to such other account of such Purchaser or such holder in any bank in the
United States as the Purchaser or any such subsequent holder may from time to
time direct in writing. If for any reason whatsoever the Company does not make
any such payment by such 12:00 Noon Chicago, Illinois time on the date due, such
payment shall be deemed to have been made on the next following Business Day and
such payment shall bear interest at the Overdue Rate. With respect to Notes to
which this Section applies, the Company shall be entitled to presume
conclusively that the original or such subsequent institutional holder as shall
have requested the provisions hereof to apply to its Notes remains the holder of
such Notes until (a) the Company shall have received notice of the transfer of
such Notes, and of the name and address of the transferee, or (b) such Notes
shall have been presented to the Company as evidence of the transfer.
SECTION 3. REPRESENTATIONSSECTION3.REPRESENTATIONS.
Section 3.1.Representations of the Company~Section3.1.Representations of the
Company. The Company represents and warrants that all representations set forth
in the form of certificate attached hereto as Exhibit B are true and correct as
of the date hereof and are incorporated herein by reference with the same force
and effect as though herein set forth in full.
Section 3.2.Representations of the Purchasers.~Section3.2.Representations of the
Purchasers. (a) You represent, and in entering into this Agreement the Company
understands, that (i) you are an "accredited investor" within the meaning of
Regulation D promulgated by the Securities and Exchange Commission and (ii) you
are acquiring the Notes for the purpose of investment and not with a view to the
distribution thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes; provided that the disposition
of your Property shall at all times be and remain within your control.
(b) You further represent that at least one of the following
statements concerning each source of funds to be used by you to purchase the
Notes is accurate as of the Closing Date:
(i) the source of funds to be used by you to pay the purchase
price of the Notes is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption 95-60
("PTE") (issued July 12, 1995) and the purchase of the Notes by you is
eligible for and satisfies the requirements of PTE 95-60;
(ii) all or a part of such funds constitute assets of one or
more separate accounts, trusts or a commingled pension trust maintained
by you, and you have disclosed to the Company names of such employee
benefit plans whose assets in such separate account or accounts or
pension trusts exceed 10% of the total assets or are expected to exceed
10% of the total assets of such account or accounts or trusts as of the
date of such purchase (for the purpose of this clause (ii), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(iii) all or part of such funds constitute assets of a bank
collective investment fund maintained by you, and you have disclosed to
the Company names of such employee benefit plans whose assets in such
collective investment fund exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such fund as of the date
of such purchase (for the purpose of this clause (iii), all employee
benefit plans maintained by the same employer or employee organization
are deemed to be a single plan);
(iv) all or part of such funds constitute assets of one or
more employee benefit plans, each of which has been identified to the Company in
writing;
(v) you are acquiring the Notes for the account of one or more
pension funds, trust funds or agency accounts, each of which is a
"governmental plan" as defined in Section 3(32) of ERISA;
(vi) the source of funds is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V
of PTE 84-14, issued March 13, 1984), provided that no other party to
the transactions described in this Agreement and no "affiliate" of such
other party (as defined in Section V(c) of PTE 84-14) has at this time,
and during the immediately preceding one year has exercised the
authority to appoint or terminate said QPAM as manager of the assets of
any plan identified in writing pursuant to this clause (vi) or to
negotiate the terms of said QPAM's management agreement on behalf of
any such identified plans; or
(vii) if you are other than an insurance company, all or a
portion of such funds consists of funds which do not constitute "plan
assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (A) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended),
with respect to any plan identified pursuant to paragraphs (ii), (iii) or (iv)
above, or (B) with respect to any plan identified pursuant to paragraph (vi)
above, neither it nor any "affiliate" (as defined in Section V(c) of PTE 84-14)
is described in the proviso to said paragraph (vi). As used in this ss.3.2(b),
the terms "separate account" and "employee benefit plan" shall have the
respective meanings assigned to them in ERISA and the term "plan assets" shall
have the meaning assigned to it in Department of Labor Regulation 29 C.F.R.
ss.2510.3-101.
(c) You acknowledge that the Company and First Union National Bank of
North Carolina, as Collateral Agent, are entering into the Security Agreement
for your benefit and that you shall be bound by the terms thereof.
SECTION 4. CLOSING CONDITIONS.SECTION4.CLOSING CONDITIONS.
Your obligation to purchase the Notes on the Closing Date shall be
subject to the performance by the Company of its agreements hereunder which by
the terms hereof are to be performed at or prior to the time of delivery of the
Notes and to the following further conditions precedent:
Section 4.1.Closing Certificate.~Section4.1.Closing Certificate. Concurrently
with the delivery of Notes to you on the Closing Date, you shall have received a
certificate dated the Closing Date, signed by an authorized officer of the
General Partner substantially in the form attached hereto as Exhibit B, the
truth and accuracy of which shall be a condition to your obligation to purchase
the Notes proposed to be sold to you.
Section ▇.▇.▇▇▇▇▇ Opinions~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇ Opinions. Concurrently with the
delivery of Notes to you on the Closing Date, you shall have received from
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, who are acting as your special counsel in this transaction,
and from ▇▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel of the Company, their respective
opinions dated the Closing Date, in form and substance satisfactory to you, and
covering the matters set forth in Exhibits C and D, respectively, hereto.
Section 4.3.Existence and Authority~Section4.3.Existence and Authority. On or
prior to the Closing Date, you shall have received, in form and substance
reasonably satisfactory to you and your special counsel, such documents and
evidence with respect to the Company and the General Partner as you may
reasonably request in order to establish to the existence and good standing of
the Company and the General Partner and the authorization of the transactions
contemplated by this Agreement and the Security Agreement.
Section ▇.▇.▇▇▇▇▇▇▇▇ Agreement~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇ Agreement. The Security
Agreement shall be in form and substance satisfactory to you and your special
counsel, shall have in duly executed and delivered by the Company and shall be
in full force and effect and you shall have received a true, correct and
complete copy thereof.
Section 4.5.UCC Filing~Section4.5.UCC Filing. A Uniform Commercial Code
statement shall have been filed for record with the Secretary of State of the
State of California in order to perfect the Lien and security interest granted
or conveyed by the Security Agreement to the extent that a Lien and security
interest may be perfected under the Uniform Commercial Code by such filing.
Section 4.6.Payment of Bank Indebtedness~Section4.6.Payment of Bank
Indebtedness. You shall have received, in form and substance reasonably
satisfactory to you and your special counsel, evidence that the Indebtedness in
the aggregate principal amount of $28,000,000 due and owing by the Company to
Den norske Bank AS. has been paid and discharged in full.
Section 4.7.Private Placement Number~Section4.7.Private Placement Number. A
Private Placement Number relating to the Notes shall have been duly ordered from
Standard & Poor's Corporation.
Section 4.8.Related Transactions~Section4.8.Related Transactions. Prior to or
concurrently with the issuance and sale of Notes to you, the Company shall have
consummated the sale of the entire principal amount of the Notes scheduled to be
sold on the Closing Date pursuant to this Agreement and the other agreements
referred to in ss.1.3.
Section ▇.▇.▇▇▇▇▇▇▇▇▇ Certificate~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇▇ Certificate. Prior to or
concurrently with the issuance and sale of the Notes to you, the Company will
furnish to you and to your special counsel a report signed by an independent
insurance broker satisfactory to you with respect to the insurance maintained
under this Agreement (including, without limitation, as to each policy, its
number, the amount, the insurer, the named assureds, the type of risk, the loss
payees and the expiration date) and stating the opinion of said broker that such
insurance is in such amounts, against such risks, and with such insurers as to
adequately protect the Company.
Section 4.10.Rating~Section4.10.Rating. The Notes shall have received a
preliminary rating of "2" or better from the National Association of Insurance
Commissioners.
Section 4.11.Funding Instructions~Section4.11.Funding Instructions. At least
three Business Days prior to the Closing Date, you shall have received written
instructions executed by an authorized officer of the General Partner directing
the manner of payment of funds and setting forth (1) the name of the transferee
bank, (2) such transferee bank's ABA number, (3) the account name and number
into which the purchase price for the Notes is to be deposited, and (4) the name
and telephone number of the account representative responsible for verifying the
receipt of the funds.
Section 4.12.Satisfactory Proceedings.~Section4.12.Satisfactory Proceedings. All
proceedings taken in connection with the transactions contemplated by this
Agreement, and all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special counsel, and you
shall have received a copy (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the consummation of said
transactions.
Section 4.13.Waiver of Conditions.~Section4.13.Waiver of Conditions. If on the
Closing Date the Company fails to tender to you the Notes to be issued to you on
such date or if the conditions specified in this ss.4 have not been fulfilled,
you may thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in this
ss.4 have not been fulfilled, you may waive compliance by the Company with any
such condition to such extent as you may in your sole discretion determine.
Nothing in this ss.4.13 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
SECTION 5. COMPANY ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇ COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1.Existence, Etc~Section5.1.Existence, Etc. The Company will preserve
and keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, its existence and all licenses and
permits necessary to the proper conduct of its business, provided that the
foregoing shall not prevent any transaction permitted by ss.5.1.
Section ▇.▇.▇▇▇▇▇▇▇▇▇~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇▇. The Company will maintain, or cause
to be maintained, and will cause each Restricted Subsidiary to maintain, or
cause to be maintained, insurance coverage on the Equipment by financially sound
and reputable hull and other underwriters or protection and indemnity clubs, or
Lloyds of London or a foreign insurer certified by a reputable insurance broker
as a financially sound insurance carrier or domestic insurers accorded a rating
by A.M. Best Company, Inc. of A+ or better at the time of issuance of any policy
(other than renewals or extensions of policies maintained with underwriters,
protection and indemnity clubs or insurers identified on Schedule III hereto,
provided that at the time of any such renewal or extension, such underwriter,
protection or indemnity club or insurer is rated A or better by A.M. Best
Company, Inc. in the case of any such underwriter, club or insurer other than
Pacific Insurance Company and in the case of Pacific Insurance Company, it shall
be rated A- or better by A.M. Best Company, Inc. at the time of any such renewal
or extension) in such forms and amounts and against such risks as are customary
for businesses of established reputation engaged in the same or a similar
business and owning and operating similar Properties. Without limiting the
foregoing, the Company will maintain, or cause to be maintained, insurance
coverage against third-party bodily injury and property damage liability in
connection with equipment ownership and operation and will also maintain or
cause to be maintained, insurance coverage with a limit of liability of not less
than $500,000 per occurrence, to insure the Company and its Subsidiaries against
loss caused by the fraud or dishonesty of any of its employees and the employees
of the General Partner and its Affiliates.
Section 5.3.Taxes, Claims for Labor and Materials, Compliance with
Laws~Section5.3.Taxes, Claims for Labor and Materials, Compliance with Laws. (a)
The Company will promptly pay and discharge, and will cause each Restricted
Subsidiary promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon the Company or such Restricted
Subsidiary, respectively, or upon or in respect of all or any part of the
Property or business of the Company or such Restricted Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien or
charge upon any Property of the Company or such Restricted Subsidiary; provided
the Company or such Restricted Subsidiary shall not be required to pay any such
tax, assessment, charge, levy, account payable or claim if (i) the validity,
applicability or amount thereof is being contested in good faith by appropriate
actions or proceedings which will prevent the forfeiture or sale of any Property
of the Company or such Restricted Subsidiary or any material interference with
the use thereof by the Company or such Restricted Subsidiary, and (ii) the
Company or such Restricted Subsidiary shall set aside on its books, reserves
deemed by it to be adequate with respect thereto.
(b) The Company will promptly comply and will cause each Subsidiary
to comply with all laws, ordinances or governmental rules and regulations to
which it is subject, including, without limitation, the Occupational Safety and
Health Act of 1970, ERISA and any Environmental Law, the violation of which
would materially and adversely affect the properties, business, prospects,
profits or condition of the Company and its Subsidiaries, taken as a whole, or
would result in any Lien or charge upon any Property of the Company or any
Subsidiary not permitted by ss.5.10.
Section 5.4.Maintenance, Etc~Section5.4.Maintenance, Etc. The Company will
maintain, preserve and keep, or cause to be maintained, preserved and kept, all
Properties which are used or useful in the conduct of the business of the
Company and its Restricted Subsidiaries (whether owned in fee or a leasehold
interest) in good repair and working order and from time to time will make all
necessary repairs, replacements, renewals and additions so that at all times the
efficiency thereof shall be maintained.
Section 5.5.Nature of Business~Section5.5.Nature of Business. The Company and
its Restricted Subsidiaries taken as a whole will not engage in any business
other than the business of owning and leasing a diversified equipment portfolio
consisting primarily of used transportation and transportation-related equipment
all as more fully described in Section 1.05 of the Partnership Agreement as in
effect on the date hereof.
Section 5.6.Special Provisions for Marine Vessels and
Aircraft~Section5.6.Special Provisions for Marine Vessels and Aircraft. Without
limiting the foregoing provisions of ss.5.2 and ss.5.4, the Company shall cause
any Vessels or Aircraft owned by it or in which it has an ownership interest to
be maintained and insured as provided in this ss.5.6.
(a) Maintenance of Marine Vessels. The Company will at all times
cause any Vessel to be maintained and preserved in good condition, working order
and repair as will entitle her to retain the highest classification and rating
for vessels of the same age and type in the American Bureau of Shipping, Det
Norske Veritas, Bureau Veritas, Lloyds Register, Nippon Kaiji Kyokai,
Germanischer ▇▇▇▇▇ or classification societies of similar stature.
(b) Insurance on Marine Vessels. The Company will at all times cause
the following insurance to be carried and maintained with respect to any Vessel:
(i) Marine insurance in an amount at least equal to the
Equipment Value of such Vessel covering the hull and all equipment and
appurtenances of the Vessel, against all usual marine risks;
(ii) Insurance covering the customary protection and indemnity
risks in an amount equal to the higher of (1) an amount customary with
operations conducted by any such Vessel and (2) the Equipment Value of
such Vessel;
(iii) Insurance against liability arising out of pollution,
spillage or leakage in connection with operations conducted by any
Vessel in an amount not less than the usual and customary coverage
amounts carried in the international shipping industry for comparable
marine vessels handling or transporting similar cargo; provided that in
no event shall such insurance be maintained in an amount less than that
required by the laws of any jurisdiction in which any such Vessel is
operated for so long as such Vessel is operated under the laws of such
jurisdiction; and
(iv) War risk insurance, if available at commercially
reasonable rates.
(c) Certificate of Financial Responsibility. When required for access
to U.S. ports, the Company shall obtain a Certificate of Financial
Responsibility issued by the United States pursuant to the Federal Water
Pollution Control Act to the extent that the same may be required by law or
regulation.
(d) Maintenance and Servicing of Aircraft. The Company will at all
times cause:
(i) any Aircraft to be serviced, repaired, maintained, tested
and overhauled so as to keep such Aircraft in such operating condition
as may be necessary to enable the airworthiness certification of the
Aircraft to be maintained in good standing at all times under the
Federal Aviation Act or the governmental authority having jurisdiction
over such Aircraft;
(ii) all records, logs and other materials required to be
maintained by the Federal Aviation Administration, or the governmental
authority having jurisdiction over any Aircraft, to be maintained in
respect of each Aircraft (including any item of Equipment included
therein); and
(iii) any Aircraft to comply with all airworthiness directives
issued by any governmental authority having jurisdiction over any
Aircraft.
(e) Public Liability and Property Damage Liability Insurance for
Aircraft. The Company will at all times cause third party aircraft liability
insurance, passenger legal liability insurance, if applicable, and property
damage liability insurance to be carried with respect to any Aircraft.
(f) Insurance Against Loss or Damage to the Aircraft. The Company
shall at all times cause the following to be maintained with respect to any
Aircraft: (i) all-risk ground and flight aircraft hull insurance covering the
airframe and engines of any such Aircraft; (ii) fire, transit and extended
coverage with respect to any engines or parts while removed from such Aircraft;
and (iii) war risk insurance, including, hijacking (air piracy), governmental
confiscation and expropriation insurance.
Section 5.7.Fixed Charge Coverage~Section5.7.Fixed Charge Coverage. The Company
will keep and maintain as of the end of each fiscal quarter the ratio of
Consolidated Cash Flow Available for Fixed Charges for the Four-Quarter Period
then ended to Consolidated Fixed Charges for such Four-Quarter Period at not
less than 3.00 to 1.00 (it being understood that any such failure to comply with
this covenant at the end of any fiscal quarter shall be deemed to continue until
such time as the Company shall be in full compliance with this covenant at the
end of a subsequent fiscal quarter).
Section ▇.▇.▇▇▇▇ and Leaseback~▇▇▇▇▇▇▇▇.▇.▇▇▇▇ and Leaseback. The Company will
not, and will not permit any Restricted Subsidiary to, enter into any
arrangement whereby the Company or any Restricted Subsidiary shall sell or
transfer any Property owned by the Company or any Restricted Subsidiary to any
Person other than the Company or a Restricted Subsidiary and thereupon the
Company or any Restricted Subsidiary shall lease or intend to lease, as lessee,
the same Property.
Section 5.9.Limitations on Indebtedness~Section5.9.Limitations on Indebtedness.
(a) The Company will not, and will not permit any Restricted Subsidiary to,
create, assume or incur or in any manner be or become liable in respect of any
Debt (including, without limitation, any extension, renewal or replacement
thereof), except in the case of the Company, the Notes.
(b) The Company will not at any time permit Consolidated Debt to
exceed the lesser of (i) $23,000,000 or (ii) 45% of Consolidated Assets.
Section 5.10.Limitation on Liens~Section5.10.Limitation on Liens. The Company
will not, and will not permit any Restricted Subsidiary to, create or incur, or
suffer to be incurred or to exist, any mortgage, pledge, security interest,
encumbrance, Lien or charge of any kind on its or their Property or assets,
whether now owned or hereafter acquired, or assigned, or upon any income or
profits therefrom, or transfer any Property for the purpose of subjecting the
same to the payment of obligations in priority to the payment of its or their
general creditors, or acquire or agree to acquire, or permit any Restricted
Subsidiary to acquire, any Property or assets upon conditional sales agreements
or other title retention devices, except:
(a) Liens for Property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required
by ss.5.3;
(b) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured; provided,
however, that (i) the Company or such Restricted Subsidiary shall have
made adequate reserves for said judgment or award in their financial
statements and (ii) such Liens shall not cause interference with the
use of any Equipment;
(c) Liens incidental to the conduct of business or the
ownership of Properties and assets (including warehousemen's and
attorneys' Liens and statutory landlords' Liens) and deposits, pledges
or Liens to secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money, provided in
each case, the obligation secured is not overdue or, if overdue, (i) is
being contested in good faith by appropriate actions or proceedings,
(ii) adequate reserves therefor have been set up on the financial
statements of the Company or a Restricted Subsidiary, and (iii) such
Liens shall not cause interference with the use of any Equipment;
(d) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real Properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(e) Liens in favor of lessees consisting of, or granted to
secure purchase options contained in or related to leases of Equipment
owned by the Company or a Restricted Subsidiary (including any
extension or renewal of such Lien); provided that consideration payable
pursuant to any such option shall in no event be less than the Current
Fair Market Value of the Equipment subject thereto;
(f) the Lien of the Security Agreement; and
(g) Liens existing as of the Closing Date and described on
Schedule II hereto.
Section 5.11.Distributions, Certain Payments.~Section5.11.Distributions, Certain
Payments. The Company will not directly or indirectly, or through any
Subsidiary, make any payment to the General Partner or any Affiliate or
Affiliated Partnership on account of management fees pursuant to the Partnership
Agreement or equipment management fees pursuant to the Equipment Management
Agreement in each case in excess of the amount provided for in the Partnership
Agreement or the Equipment Management Agreement as each such agreement is in
effect on the Closing Date, or make or declare any Partnership Distribution, if
in each such case, after giving effect thereto, a Default or an Event of Default
shall have occurred and be continuing.
The Company will not, directly or indirectly, or through any
Subsidiary, pay any Subordinated Incentive Fee (as defined in the Partnership
Agreement as in effect on the Closing Date) unless and until, among other
things, all liabilities of the Company, including any and all liability on the
Notes, shall have been fully paid, all as provided in the Partnership Agreement
as in effect on the Closing Date.
Section 5.12.Limitation on Purchase Options Relating to
Equipment~Section5.12.Limitation on Purchase Options Relating to Equipment. The
Company will not, and will not permit any Restricted Subsidiary to, create or
otherwise permit or suffer to exist on or with respect to any Equipment any
purchase option other than purchase options in favor of the lessees of such
Equipment for consideration payable which is not less than the Current Fair
Market Value of the related Equipment.
Section 5.13.Mergers, Consolidations and Sales of Assets~Section5.13.Mergers,
Consolidations and Sales of Assets. (a) The Company will not, and will not
permit any Restricted Subsidiary to: (i) consolidate with or be a party to a
merger with any other Person or (ii) license, transfer, sell or otherwise
dispose of (herein a "Disposition") all or any part of the assets of the Company
and its Restricted Subsidiaries, provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with
or into the Company, any Wholly-owned Restricted Subsidiary or any
other Person so long as in any merger or consolidation involving the
Company, the Company shall be the surviving or continuing entity and in
the case of any merger or consolidation with any other Person, such
Person shall, after giving effect to such merger or consolidation, be a
Wholly-owned Restricted Subsidiary;
(2) any Restricted Subsidiary may sell or otherwise dispose
of all or any part of its assets to the Company or any Wholly-owned Restricted
Subsidiary;
(3) the Company may consolidate or merge with or into any
other Person if (i) the Person which results from such consolidation or
merger (the "surviving entity") is organized under the laws of any
state of the United States or the District of Columbia, (ii) the due
and punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the due and
punctual performance and observation of all of the covenants in the
Notes and this Agreement and the Security Agreement to be performed or
observed by the Company are expressly assumed in writing by the
surviving entity and the surviving entity shall furnish to the holders
of the Notes an opinion of counsel satisfactory to such holders to the
effect that the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid and binding
contract and agreement of the surviving entity enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles, and (iii) at the time of such
consolidation or merger and immediately after giving effect thereto, no
Default or Event of Default would exist;
(4) subject always to clause (b) of ss.2.4, the Company or
any Restricted Subsidiary may sell or otherwise dispose of any of its
assets in the ordinary course of business for fair value and, in each
such case, if (A) an amount equal to the Asset Sale Prepayment Amount
with respect to such Disposition is promptly deposited into the Cash
Reserve Account and (B) in accordance with ss.2.4, the Company shall
prepay the Notes on the Interest Rate Adjustment Date in the amount
required by said ss.2.4.
Any excess amounts remaining in the Cash Reserve Account after all
amounts due with respect to the Notes have been paid in full may be applied by
the Company in the ordinary course of business.
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any Equity Capital of such Restricted Subsidiary to any Person other than
the Company or a Wholly-owned Restricted Subsidiary, except for the purpose of
qualifying directors or the equivalent thereof, or except in satisfaction of the
validly pre-existing preemptive rights of minority shareholders or the
equivalent thereof in connection with the simultaneous issuance of Equity
Capital to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
Equity Capital in any Restricted Subsidiary (except to qualify directors or the
equivalent thereof) or any Indebtedness of any Restricted Subsidiary, and will
not permit any Restricted Subsidiary to sell, transfer or otherwise dispose of
(except to the Company or a Wholly-owned Restricted Subsidiary) any Equity
Capital or any Indebtedness of any other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition,
all shares of Equity Capital and all Indebtedness of such Restricted
Subsidiary at the time owned by the Company and by every other
Subsidiary shall be sold, transferred or disposed of as an entirety;
(2) the General Partner shall have determined, as evidenced
by a resolution of the Board of Directors thereof, that the retention
of such Equity Capital and Indebtedness is no longer in the best
interests of the Company;
(3) such Equity Capital and Indebtedness is sold, transferred
or otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the General Partner to be adequate and
satisfactory;
(4) the proceeds from such disposition shall be utilized in
accordance with the requirements of clauses (A), (B) and/or (C) of
ss.5.13(a)(4); and
(5) the Restricted Subsidiary being disposed of shall not
have any continuing investment in the Company or any other Subsidiary
not being simultaneously disposed of.
Section 5.14.Guaranties.~Section5.14.Guaranties. The Company will not, and will
not permit any Restricted Subsidiary, to become or be liable in respect of any
Guaranty except Guaranties by the Company of the obligations of any Restricted
Subsidiary as a lessor of Aircraft or Vessels so long as the obligation of the
Company as Guarantor is not in excess of that which the Company would have were
it the lessor of such Aircraft or Vessels.
Section 5.15.Repurchase of Notes.~Section5.15.Repurchase of Notes. Neither the
Company nor any Restricted Subsidiary or Affiliate, directly or indirectly, may
repurchase or make any offer to repurchase any Notes unless the offer has been
made to repurchase Notes, pro rata, from all holders of the Notes at the same
time and upon the same terms. In case the Company repurchases any Notes, such
Notes shall thereafter be cancelled and no Notes shall be issued in substitution
therefor.
Section 5.16.Transactions with Affiliates and Affiliated
Partnerships~Section5.16.Transactions with Affiliates and Affiliated
Partnerships. The Company will not, and will not permit any Restricted
Subsidiary to, enter into or be a party to any transaction or arrangement with
any Affiliate or Affiliated Partnership (including, without limitation, the
purchase from, sale to or exchange of Property with, or the rendering of any
service by or for, any Affiliate or Affiliated Partnership), except in the
ordinary course of, and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's, business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than it would obtain
in a comparable arm's-length transaction with a Person other than an Affiliate
or Affiliated Partnership; provided, however, that nothing contained in this
ss.5.16 shall prohibit any transaction or arrangement otherwise permitted under
Section 2.02(q) of the Partnership Agreement as in effect on the Closing Date.
Section ▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇~▇▇▇▇▇▇▇▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇. The Company will not, and will
not permit any Restricted Subsidiary to, make any investments in or loans,
advances or extensions of credit to, any Person, except:
(a) investments, loans and advances by the Company and its
Restricted Subsidiaries in and to Restricted Subsidiaries, including
any investment in a Person which, after giving effect to such
investment, will become a Restricted Subsidiary;
(b) investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is accorded the highest rating by
Standard & Poor's Ratings Group, ▇▇▇▇▇'▇ Investors Service, Inc. or
other nationally recognized credit rating agency of similar standing;
(c) investments in direct obligations of the United States of
America, or any agency thereof, maturing in three months or less from
the date of acquisition thereof, which are in each such case backed by
the full faith and credit of the United States of America and which, at
all times, are rated "AA-" or better by Standard & Poor's Corporation
or "Aa3" or better by ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) investments in direct obligations of the federal
government of Canada, or any agency thereof, maturing in three months
or less from the date of acquisition thereof, which are in each such
case backed by the full faith and credit of the federal government of
Canada and which, at all times, are rated "AA-" or better by Standard &
Poor's Ratings Group or "Aa3" or better by ▇▇▇▇▇'▇ Investors Service,
Inc.;
(e) investments in demand deposits and/or certificates of
deposit maturing within three months from the date of acquisition
thereof issued by a bank or trust company organized under the laws of
the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000 and substantially
all of whose assets are located in the United States; provided that at
all times, the senior unsecured long-term deposits of such bank or
trust company or the senior unsecured long-term debt of the holding
company of such bank or trust company (in the event no such rating
exists for such bank or trust company) is rated "A" or better by
Standard & Poor's Ratings Group or "A2" or better by ▇▇▇▇▇'▇ Investors
Service, Inc.;
(f) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including
moving expenses related to a transfer) incidental to carrying on the
business of the Company or any Restricted Subsidiary;
(g) receivables arising from the sale of Equipment in the
ordinary course or liquidation of business of the Company and its
Restricted Subsidiaries; and
(h) investments by the Company and its Restricted
Subsidiaries in Property and Equipment to be used in the ordinary
course of business.
In valuing any investments, loans and advances for the purpose of
applying the limitations set forth in this ss.5.17, such investments, loans and
advances shall be taken at the original cost thereof, without allowance for any
subsequent write-offs or appreciation or depreciation therein, but less any
amount repaid or recovered on account of capital or principal.
For purposes of this ss.5.17, at any time when a corporation or a
partnership becomes a Restricted Subsidiary, all investments of such corporation
or partnership at such time shall be deemed to have been made by such
corporation or such partnership, as a Restricted Subsidiary, at such time.
Section 5.18.Termination of Pension Plans~Section5.18.Termination of Pension
Plans. The Company will not and will not permit any Subsidiary to permit any
employee benefit plan maintained by it to be terminated in a manner which could
result in the imposition of a lien on any Property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA.
Section 5.19.Reports and Rights of Inspection~Section5.19.Reports and Rights of
Inspection. The Company will keep, and will cause each Subsidiary to keep,
proper books of record and account in which full and correct entries will be
made of all dealings or transactions of or in relation to the business and
affairs of the Company or such Subsidiary, in accordance with generally accepted
principles of accounting consistently maintained (except for changes disclosed
in the financial statements furnished to you pursuant to this ss.5.19 and
concurred with by the independent public accountants referred to in ss.5.19(b)
hereof), and will furnish to you so long as you are the holder of any Note and
to each other institutional holder of the then outstanding Notes (in duplicate
if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any
event within 60 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, duplicate copies of:
(1) a consolidated balance sheet of the Company and
its Restricted Subsidiaries as of the close of such quarter
setting forth in comparative form the consolidated figures for
the end of the preceding fiscal year,
(2) consolidated statements of income and
partnership equity of the Company and its Restricted
Subsidiaries for such quarterly period and for the portion of
the fiscal year ending with such quarter, setting forth in
comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
(3) consolidated statements of cash flows of the
Company and its Restricted Subsidiaries for such quarterly
period and for the portion of the fiscal year ending with such
quarter, setting forth in comparative form the consolidated
figures for the corresponding period of the preceding fiscal
year, and
(4) a list of all Equipment, all sales of Equipment,
all purchases of additional Equipment and of any Equipment
which has become the subject of a total loss, in any such case
during such quarterly period,
all in reasonable detail and certified as complete and correct, by an
authorized financial officer of the Company or the General Partner;
(b) Annual Statements. As soon as available and in any event
within 105 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) a consolidated balance sheet of the Company and
its Restricted Subsidiaries as of the close of such fiscal
year,
(2) consolidated statements of income and
partnership equity and cash flows of the Company and its
Restricted Subsidiaries for such fiscal year, and
(3) a list of all Equipment, all sales of Equipment,
all purchases of additional Equipment and of any Equipment
which has become the subject of a total loss, in any such case
during the last quarterly fiscal period of such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by a report thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect that
the consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and present fairly, in
all material respects, the financial condition of the Company and its
Restricted Subsidiaries and that the examination of such accountants in
connection with such financial statements has been made in accordance
with generally accepted auditing standards and accordingly includes
such tests of the accounting records and such other auditing procedures
as were considered necessary to provide a reasonable basis for the
opinion expressed in the report;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Company to limited partners generally and
of each regular or periodic report, and any registration statement or
prospectus filed by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the
Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) Requested Information. With reasonable promptness, all
such information which at the time you or any successor qualified
institutional buyer (as defined in Rule 144A of the General Rules and
Regulations of the Securities and Exchange Commission) may need to
comply with said Rule 144A upon a sale of Notes pursuant to said Rule
as well as such other data and information as you or any such
institutional holder may reasonably request;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company or the General Partner stating that such officer
has reviewed the provisions of this Agreement and setting forth: (i)
the information and any computations (in sufficient detail) required in
order to establish whether the Company was in compliance with the
requirements of ss.5.7 through ss.5.18, inclusive, at the end of the
period covered by the financial statements then being furnished, (ii)
whether there existed as of the date of such financial statements and
whether, to the best of such officer's knowledge, there exists on the
date of the certificate or existed at any time during the period
covered by such financial statements any Default or Event of Default
and, if any such condition or event exists on the date of the
certificate, specifying the nature and period of existence thereof and
the action the Company is taking and proposes to take with respect
thereto, and (iii) the Equipment Value of Aggregate Equipment as of the
end of such period;
(g) Accountants Certificates. Within the period provided in
paragraph (b) above, a report of the accountants who render an opinion
with respect to such financial statements, stating that they have
reviewed ss.ss.5.7, 5.8, 5.9, 5.11, 5.12 and ss.5.17 of this Agreement
and stating further whether, in making their audit, such accountants
have become aware of any Default or Event of Default under any of the
terms or provisions of this Agreement insofar as any of such terms or
provisions pertain to or involve accounting matters or determinations,
and if any such condition or event then exists, specifying the nature
and period of existence thereof;
(h) Unrestricted Subsidiaries. Within the respective periods
provided in paragraph (b) above, financial statements of the character
and for the dates and periods as in said paragraph (b) provided
covering each Unrestricted Subsidiary (or groups of Unrestricted
Subsidiaries on a consolidated basis);
(i) Reports to Partners. Promptly upon their becoming
available copies of all financial statements and reports other than tax
reports sent by the Company to its Partners generally; and
(j) Annual Insurance Certificates. Within 90 days after the
end of each fiscal year of the Company, a certificate signed by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ of California, Inc. or any other independent insurance
broker satisfactory to the Requisite Holders containing a statement of
the insurance maintained by the Company pursuant to ss.5.6 (including
as to each policy, its number, the amount, the insurer, the named
assureds, the type of risk, the loss payees and the expiration date)
and a statement that such insurance is in such amounts, against such
risks and with such insurers as to adequately protect the Company; and
(k) Accounting Controls. Promptly upon becoming available,
and in any event within three Business Days after receipt, copies of
any report outlining any material inadequacies in the accounting
controls of the Company submitted by independent accountants in
connection with any audit of the Company or any Restricted Subsidiary.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each institutional holder of 10% or more of
the aggregate principal amount of the then outstanding Notes (or such Persons as
either you or such holder may designate), to visit and inspect, under the
Company's guidance, any of the properties of the Company or any Subsidiary, to
examine all their books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss with you the finances and affairs of the Company and its Subsidiaries)
all at such reasonable times and as often as may be reasonably requested;
provided, however, that any inspections of Equipment shall only be permitted to
be conducted at such times and in such manner as shall not interfere with the
normal and customary use of such Equipment by the lessee thereof. The Company
shall not be required to pay or reimburse you or any such holder for expenses
which you or any such holder may incur in connection with any such visitation or
inspection unless a Default or Event of Default shall have occurred and be
continuing, in which case, any such visitation or inspection shall be at the
sole expense of the Company.
You agree that all non-public information furnished to you pursuant to
this Agreement shall be treated as confidential information by you and that you
will use reasonable efforts to refrain from disclosing such information to any
other Person (excluding any of your officers, employees, agents, auditors and
counsel), provided that (a) you shall not be liable to the Company or any other
Person in damages for any failure to comply with the foregoing covenant except
in any case involving gross negligence, wilful misconduct or fraudulent
misconduct on your part, (b) you may disclose any or all of such information if
in your judgment such disclosure is necessary or advisable in connection with
the preservation or protection of your interests as a holder of any Notes or in
connection with selling, or otherwise realizing upon your interest in, the
Notes, and (c) you may disclose any such information to, or in response to the
order or request of, any governmental agency, regulatory or supervisory
authority (including for this purpose the National Association of Insurance
Commissioners) or court or any nationally recognized rating agency in connection
with its rating of the holder of the Notes. The restrictions contained herein
shall not apply to information which (i) is or becomes generally available to
the public other than as a result of a disclosure by you or your
representatives, (ii) becomes available to you on a non-confidential basis from
a source other than the Company or one of its agents or (iii) was known to you
on a non-confidential basis prior to its disclosure to you by the Company or one
of its agents.
The foregoing provisions of this ss.5.19 notwithstanding, the Company
shall not be required to furnish any of the above information which is not
otherwise generally available to the public to any holder of the Notes which is
engaged in the transportation equipment leasing or service business.
Section 5.20.Certain Appraisals~Section5.20.Certain Appraisals. (a) On or before
December 31, 1995 (but not earlier than September 1, 1995) (the "1995
Appraisal") and again on or before June 30, 1997 (but not earlier than April 1,
1997) (the "1997 Appraisal"), the Company shall, at the Company's expense, cause
appraisals to be made of the Current Fair Market Value of the Equipment (the
"Appraised Current Fair Market Value") each in accordance with the Appraisal
Procedure set forth below.
(b) "Appraisal Procedure" shall mean the following procedure for
determining the Current Fair Market Value of any Equipment: On or prior to (1)
October 15, 1995, in the case of the 1995 Appraisal, and (2) March 1, 1997, in
the case of the 1997 Appraisal, the Company shall designate which appraiser(s)
listed on Schedule II hereto shall conduct the Appraisal Procedure. The
Requisite Holders shall have the right to cause any appraiser listed on Schedule
II to be removed from such Schedule II if such Requisite Holders shall indicate
their objection to any such appraiser to the Company and state a reasonable
basis therefor. If the Company shall seek to designate any appraiser other than
one listed on Schedule II, the Company and such requesting Requisite Holders
shall consult for the purpose of appointing a qualified independent appraiser
skilled in the valuation of Property such as the Equipment by mutual agreement.
If no such appraiser is so appointed within 15 days after such notice is given,
the Company and such holders shall each appoint a qualified independent
appraiser within 20 days after such notice is given. If one party appoints an
appraiser pursuant to the preceding sentence, the appraisal shall be made by
such appraiser if the other party fails to appoint a second appraiser within the
applicable time limit. If both parties appoint appraisers, the two appraisers so
appointed shall within 30 days after such notice is given, appoint a third
independent appraiser. If no such third appraiser is appointed within 30 days
after such notice is given, either party may apply to the American Arbitration
Association to make such appointment, and both parties shall be bound by any
such appointment. If the parties shall have appointed a single appraiser, his
determination of Current Fair Market Value shall be final. If three appraisers
shall be appointed, the Current Fair Market Value determined by the three
appraisers shall be averaged, the determination which differs most from such
average shall be excluded, the remaining two determinations shall be averaged
and such average shall be final and shall constitute the Appraised Current Fair
Market Value.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFORSECTION
▇.▇▇▇▇▇▇ OF DEFAULT AND REMEDIES THEREFOR.
Section ▇.▇.▇▇▇▇▇▇ of Default~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇ of Default. Any one or more of
the following shall constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any
Note when the same shall have become due and such default shall
continue for more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in ss.2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or any Breakage Cost Amount thereon at the
expressed or any accelerated maturity date or at any date fixed for
prepayment; or
(d) Default shall be made in the payment of the principal of
or interest or premium, if any, on any Indebtedness of the Company or
any Restricted Subsidiary for borrowed money aggregating in excess of
$1,000,000, as and when the same shall become due and payable by the
lapse of time, by declaration, by call for redemption or otherwise, and
such default shall continue beyond the grace period, if any, allowed
with respect thereto; provided however, this ss.6.1(d) shall not apply
to alleged defaults under contracts or leases (other than relating to
Indebtedness for borrowed money) that are being contested in good
faith; or
(e) Default or the happening of any event shall occur under
any indenture, agreement, or other instrument under which any
Indebtedness of the Company or any Restricted Subsidiary for borrowed
money aggregating in excess of $1,000,000 may be issued and such
default or event shall continue for a period of time sufficient to
permit the acceleration of the maturity of any Indebtedness of the
Company or any Restricted Subsidiary outstanding thereunder; provided
however, this ss.6.1(e) shall not apply to alleged defaults under
contracts or leases (other than relating to Indebtedness for borrowed
money) that are being contested in good faith; or
(f) Default shall occur in the observance or performance of
any covenant or agreement contained in ss.5.7, ss.5.8, ss.5.9 and
ss.5.11 through ss.5.16, inclusive hereof; or
(g) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within 30
days after any officer of the General Partner shall have received
actual knowledge of such Default; or
(h) Any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with the consummation of the
issuance and delivery of the Notes or furnished by the Company pursuant
hereto, is untrue in any material respect as of the date of the
issuance or making thereof; or
(i) an event of default (as such term is defined in the
Security Agreement) or event which with the lapse of time or the giving
of notice, or both, would constitute an event of default (as such term
is defined in the Security Agreement) under the Security Agreement
shall occur and be continuing; or
(j) The Company or any Restricted Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as they become
due or makes an assignment for the benefit of creditors, or the Company
or any Restricted Subsidiary applies for or consents to the appointment
of a custodian, trustee or receiver for the Company or such Restricted
Subsidiary or for the major part of the Property of either; or
(k) A custodian, trustee or receiver is appointed for the
Company or any Restricted Subsidiary or for the major part of the
Property of either and is not discharged within 30 days after such
appointment; or
(l) Final judgment or judgments for the payment of money
aggregating in excess of $500,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any Property or assets
of either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 30 days
from the date of its entry; or
(m) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Restricted Subsidiary and, if instituted
against the Company or any Restricted Subsidiary, are consented to or
are not dismissed within 60 days after such institution; or
(n) Any of the Events of Dissolution described in clauses (a)
through (d) of Section 10.01 of the Partnership Agreement as in effect
on the Closing Date shall occur or the Partnership shall be terminated.
Notwithstanding the foregoing, if any one or more of the events
described in (j), (k), (l) or (m) above shall have occurred and be continuing
involving one or more Restricted Subsidiaries, it shall not be deemed to
constitute an Event of Default unless the Restricted Subsidiary or Subsidiaries
so involved own, in the aggregate, 5% or more of the Tangible Assets at the time
owned by the Company and its Restricted Subsidiaries.
Section 6.2.Notice to Holders~Section6.2.Notice to Holders. When any Event of
Default described in the foregoing ss.6.1 has occurred, or if the holder of any
Note or of any other evidence of Indebtedness of the Company gives any notice or
takes any other action with respect to a claimed default, the Company agrees to
give notice within three Business Days of such event to all holders of the Notes
then outstanding, such notice to be in writing and sent by registered or
certified mail or by telegram.
Section 6.3.Acceleration of Maturities.~Section6.3.Acceleration of Maturities.
When any Event of Default described in paragraph (a), (b) or (c) of ss.6.1 has
happened and is continuing, any holder of any Note may, and when any Event of
Default described in paragraphs (d) through (l), inclusive, of said ss.6.1 has
happened and is continuing, the holder or holders of 40% or more of the
principal amount of Notes at the time outstanding may, by notice in writing sent
by registered or certified mail to the Company, declare the entire principal and
all interest accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraph (m) or (n) of ss.6.1 has occurred, then all
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith pay to
the holders of the Notes the entire principal and interest accrued on the Notes
and if such payment is not made on an Interest Rate Adjustment Date, to the
extent permitted by law, an amount, payable as liquidated damages and not as a
penalty, equal to the Breakage Cost Amount, if any, determined as of the date on
which the Notes shall become so due and payable. No course of dealing on the
part of any Noteholder nor any delay or failure on the part of any Noteholder to
exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. The Company further agrees,
to the extent permitted by law, to pay to the holder or holders of the Notes all
costs and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such holder's
or holders' attorneys for all services rendered in connection therewith.
Section 6.4.Rescission of Acceleration~Section6.4.Rescission of Acceleration The
provisions of ss.6.3 are subject to the condition that if the principal of and
accrued interest on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default described in
paragraphs (a) through (l), inclusive, of ss.6.1, the Requisite Holders may, by
written instrument filed with the Company, waive such default and rescind and
annul such declaration and the consequences thereof, provided that at the time
such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under ss.6.3) shall have
been duly paid; and
(c) each and every Default and Event of Default shall have
been made good, cured or waived pursuant to ss.7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTSSECTION7.AMENDMENTS,
WAIVERS AND CONSENTS.
Section 7.1.Consent Required. ~Section7.1.Consent Required. Any term, covenant,
agreement or condition of this Agreement or the Security Agreement may, with the
consent of the Company, be amended or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), if the Company shall have obtained the consent in writing of the
Requisite Holders; provided that without the written consent of the holders of
all of the Notes then outstanding, no such waiver, modification, alteration or
amendment shall be effective (a) which will change the time of payment
(including any prepayment required by ss.2.1) of the principal of or the
interest on any Note or reduce the principal amount thereof or change the rate
of interest thereon, or (b) which will change any of the provisions with respect
to optional prepayments, (c) which will change any of the provisions of ss.6, or
(d) which will change the percentage of holders of the Notes required to consent
to any such amendment, alteration or modification or any of the provisions of
this ss.7.
Section 7.2.Solicitation of Noteholders.~Section7.2.Solicitation of Noteholders.
The Company will not solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of this Agreement or the
Notes unless each holder of the Notes (irrespective of the amount of Notes then
owned by it) shall be informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any waiver or consent effected
pursuant to the provisions of this ss.7.2 shall be delivered by the Company to
each holder of outstanding Notes forthwith following the date on which the same
shall have been executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of the Notes in
consideration for or as an inducement to any waiver or amendment of any of the
terms and provisions of this Agreement unless such remuneration is concurrently
paid, on the same terms, ratably to the holders of all of the Notes then
outstanding.
Section 7.3.Effect of Amendment or Waiver~Section7.3.Effect of Amendment or
Waiver. Any such amendment or waiver shall apply equally to all of the holders
of the Notes and shall be binding upon them, upon each future holder of any Note
and upon the Company, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall extend to
or affect any obligation not expressly amended or waived or impair any right
consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONSSECTION
8.INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1.Definitions.~Section8.1.Definitions. Unless the context otherwise
requires, the terms hereinafter set forth when used herein shall have the
following meanings and the following definitions shall be equally applicable to
both the singular and plural forms of any of the terms herein defined:
"Adjustable Rate" shall mean a rate per annum equal to the sum of (i)
1.35%, plus (ii) the LIBO Rate for the applicable Interest Period.
"Affiliate" shall mean any Person (other than an Affiliated Partnership
or a Wholly-owned Restricted Subsidiary) (a) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, the Company, (b) which beneficially owns or holds 5% or
more of any class of the Equity Capital of the Company, (c) 5% or more of the
Voting Equity Capital of which is beneficially owned or held by the Company or a
Subsidiary, or (d) Officers and members of the Board of Directors of the General
Partner. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Equity Capital, by contract or
otherwise.
"Affiliated Partnerships" shall mean all partnerships of which the
General Partner is a controlling general partner or with respect to which the
general partner is controlled by the Company and any other Affiliated
Partnership and, in either such case, which are engaged in the business of
owning and leasing a diversified equipment portfolio consisting primarily of
used transportation and transportation related equipment with a secondary
emphasis on new equipment.
"Agreement" shall mean this Note Agreement dated as of September 1,
1995 between the Company and the Purchasers, as the same may from time to time
be supplemented or amended.
"Aircraft" shall mean any corporate, commuter, or commercial aircraft
or helicopters, purchased, owned and leased or held for lease to others or
otherwise used by or on behalf of the Company or any Restricted Subsidiary as
described in the Partnership Agreement, together with all modifications (as
applicable) and replacement or spare parts used in connection therewith,
including, without limitation, engines, rotables or propellers, and any engines,
rotables and propellers used on a stand-alone basis, title to which vests in the
Company or any Restricted Subsidiary or in a trust or other entity of which the
Company or any Restricted Subsidiary is the sole or a participating beneficiary
or owner.
"Appraisal Procedure" shall have the meaning ascribed thereto in
ss.5.20(b).
"Appraised Current Fair Market Value" shall have the meaning ascribed
thereto in ss.5.20(a).
"Asset Class" shall mean any of the following categories of Equipment
owned by the Company or any of the Restricted Subsidiaries: (a) the Aircraft;
(b) the Containers; (c) the Vessels; (d) the Mobile Offshore Drilling Units; (e)
the Railroad Rolling Stock; and (f) the Tractor Trailers.
"Asset Sale Prepayment Amount" shall mean, with respect to each and
every sale of assets of the Company, an amount equal to the greater of (a) 45%
of the Equipment Value designated on Annex C to Exhibit C hereto for any item of
Equipment sold or otherwise disposed of and (b) 60% of the net sales proceeds
arising from such sale or other disposition.
"Breakage Cost Amount" means any amount as any of the holders of the
Notes shall deem reasonably necessary in the ordinary course of such holder's
business in order to compensate such holder for costs, losses, or expenses
incurred by such holder in connection with a payment or prepayment of the Notes,
in whole or in part, whether voluntarily or involuntarily, on a date which is
not an Interest Payment Date.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in San Francisco, California or Chicago, Illinois, are
required by law to close or are customarily closed and if the applicable
"Business Day" relates to the determination of the LIBO Rate, a day on which
banks are dealing in U.S. Dollar deposits in the Interbank Market in London,
England.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of the
lessee in accordance with generally accepted accounting principles.
"Capitalized Rentals" shall mean as of the date of any determination
the amount at which the aggregate Rentals due and to become due under all
Capitalized Leases under which the Company or any Restricted Subsidiary is a
lessee would be reflected as a liability on a consolidated balance sheet of the
Company and its Restricted Subsidiaries.
"Cash Equivalents" shall mean those investments described in clauses
(b) and (c) of ss.5.17.
"Cash Reserve Account" shall mean an account of the Company maintained
with a financial institution and which is segregated from all other accounts and
funds of the Company and invested in cash or Cash Equivalents.
"Change Event" shall have the meaning ascribed thereto in ss.2.3(a).
"Change Notice" shall have the meaning ascribed thereto in ss.2.3(a).
"Closing Date" shall have the meaning ascribed thereto in ss.1.2.
"Company" shall have the meaning ascribed thereto in the Preamble.
"Consolidated Assets" as of any date of determination shall mean the
sum of (a) cash, (b) Cash Equivalents and (c) Equipment Value of Aggregate
Equipment.
"Consolidated Cash Flow Available for Fixed Charges" for any period
shall mean the sum of (a) Consolidated Net Income during such period plus (to
the extent deducted in determining Consolidated Net Income), (b) all provisions
for any Federal, state or other income taxes made by the Company and its
Restricted Subsidiaries during such period, (c) all provisions for depreciation
and amortization made during such period, (d) any loss arising as the result of
revaluation of Equipment during such period, and (e) Consolidated Fixed Charges
during such period.
"Consolidated Debt" shall mean all Debt of the Company and the
Restricted Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Fixed Charges" for any period shall mean on a
consolidated basis the sum of (a) all Rentals (other than Rentals on Capitalized
Leases) payable during such period by the Company and its Restricted
Subsidiaries, and (b) all Interest Charges on all Indebtedness (including the
imputed interest applicable to Capitalized Rentals) of the Company and its
Restricted Subsidiaries.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Restricted Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied and after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) the proceeds of any life insurance policy;
(b) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(c) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner, realized by such other corporation prior to the
date of such acquisition;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted
Subsidiary shall have consolidated or which shall have merged into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation or merger;
(e) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings shall
have actually been received by the Company or such Subsidiary in the
form of cash distributions;
(f) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
to the Company or any other Restricted Subsidiary;
(g) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(h) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary;
(i) any gain arising from the acquisition of any Securities
of the Company or any Restricted Subsidiary; and
(j) any reversal of any contingency reserve (other than
maintenance reserves and engine reserves paid by lessees of Equipment
into restricted accounts which, upon the occurrence of a default under,
or expiration of, the related lease, such reserves are paid to the
Company), except to the extent that provision for such contingency
reserve shall have been made from income arising during such period.
"Container" shall mean any (i) dry van container, (ii)
temperature-controlled unit (refrigerated and insulated containers), (iii) tank
container, and (iv) "special" container - flat, folding flat or platform
container, bulk container and open-top container, purchased, owned and leased or
held for lease to others or otherwise used by or on behalf of the Company or any
Restricted Subsidiary as described in the Partnership Agreement, together with
all appliances, parts, instruments, appurtenances, accessories, furnishings or
other equipment included therein and all substitutions, renewals or replacements
of, and all additions, improvements and accessions to, any and all thereof,
title to which vests in the Company or any Restricted Subsidiary or in a trust
or other entity of which the Company or any Restricted Subsidiary is the sole or
a participating beneficiary or owner.
"Current Fair Market Value" with respect to any item of Equipment shall
mean the fair market value thereof as determined by an equally willing and
informed buyer and seller, neither under a short time constraint or compulsion
to buy or sell, for a single unit cash transaction with no hidden value or
liability, as adjusted by prevailing market conditions (whether at, above or
below fair market value), including without limitation: the status of the
economy in which such item of Equipment is used, the status of supply and demand
for items of equipment which are the same as such item of Equipment, the value
of recent transactions involving similar items of equipment and the opinions of
informed buyers and sellers with no immediate constraint or compulsion to buy or
sell.
"Debt" of any Person shall mean and be limited to Indebtedness of such
Person for and in respect of money borrowed, as well as Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition of
Indebtedness set forth below.
"Declaration Notice" shall have the meaning ascribed thereto in
ss.2.3(a).
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default as defined inss.6.1.
"Disposition" shall have the meaning ascribed thereto in ss.5.13(a).
"Environmental Law" shall mean any current or future treaty,
convention, statute, law, regulation, ordinance, permit, governmental approval,
injunction, judgment, order, consent decree or other legal requirement
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement, removal,
remediation or handling of, or exposure to, any hazardous material (including
asbestos and crude oil or any fraction thereof) or (e) pollution (including any
release to air, land, surface water and groundwater), and includes, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. ss.ss.9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. ss.ss.6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. ss.ss.1251 et
seq., Clean Air Act of 1966, as amended, 42 U.S.C. ss.ss.7401 et seq., Toxic
Substances Control Act of 1976, 15 U.S.C. ss.ss.2601 et seq., Hazardous
Materials Transportation Act, 49 U.S.C. App. ss.ss.1801 et seq., Occupational
Safety and Health Act of 1970, as amended, 29 U.S.C. ss.ss.651 et seq., Oil
Pollution Act of 1990, 33 U.S.C. ss.ss.2701 et seq., Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss.11001 et seq., National
Environmental Policy Act of 1969, 42 U.S.C. ss.ss.4321 et seq., Safe Drinking
Water Act of 1974, as amended, 42 U.S.C. ss.ss.300(f) et seq., any similar,
implementing or successor law, and any amendment, rule, regulation, order or
directive issued thereunder.
"Equipment" shall mean each item of and all of the transportation
equipment and other personal Property purchased, owned, and leased or held for
lease to others or otherwise used by or on behalf of the Company or any
Restricted Subsidiary as described in the Partnership Agreement, together with
all appliances, parts, instruments, appurtenances, accessories, furnishings or
other equipment included therein (including any and all engines originally
installed thereon), and all substitutions, renewals or replacements of, and all
additions, improvements and accessions to, any and all thereof, title to which
vests in the Company or any Restricted Subsidiary or in a trust or other entity
of which the Company or any Restricted Subsidiary is the sole or a participating
beneficiary or owner.
"Equipment Management Agreement" shall mean the Equipment Management
Agreement made as of March 17, 1986 entered into on behalf of the Company by the
General Partner with its Affiliate, PLM Investment Management, Inc., pursuant to
Section 2.05(f) of the Partnership Agreement.
"Equipment Value" when used with reference to an item of Equipment
shall mean, as of any date of determination thereof, the Current Fair Market
Value (determined in good faith by the General Partner or, if an appraisal shall
have been made within one year of the date of determination pursuant to ss.5.20,
the Appraised Current Fair Market Value) of such item of Equipment owned and
leased or available for lease (as lessor) by the Company and its Restricted
Subsidiaries.
"Equipment Value of Aggregate Equipment" shall mean, as of any date of
determination thereof, the Current Fair Market Value (determined in good faith
by the General Partner or, if an appraisal shall have been made within one year
of the date of determination pursuant to ss.5.20, the Appraised Current Fair
Market Value) of all of the Equipment owned and leased or available for lease
(as lessor) by the Company and its Restricted Subsidiaries and, with respect to
any Equipment owned jointly, the pro rata share thereof, it being understood and
agreed that nothing contained in this definition of "Equipment Value of
Aggregate Equipment" shall be deemed or construed to relieve the Company of its
obligation pursuant to ss.5.6 to maintain the full amount of insurance required
pursuant thereto in respect of Vessels, Mobile Offshore Drilling Units and
Aircraft notwithstanding that the Company and its Subsidiaries may own less than
100% of any such item of Equipment. For the purposes of all computations of
Equipment Value of Aggregate Equipment pertaining to ss.5.9(b), there shall be
excluded therefrom the Equipment Value of any item of Equipment which at the
time of the computation of Equipment Value of Aggregate Equipment has not been
subject to a lease with a Person which is not an Affiliate or an Affiliated
Partnership for more than 120 days.
"Equity Capital" shall mean in the case of a corporation, shares of
stock of any class, including as stock any warrants, rights or options to
purchase or otherwise acquire stock or other Securities exchangeable for or
convertible into stock, and in the case of any partnership or other entity shall
mean any partnership interest or like interest constituting equity, and in the
case of each of the foregoing, any part or portion thereof.
"ERISA" is defined in ss.3.2.
"Event of Default" shall have the meaning ascribed thereto in ss.6.1.
"Four-Quarter Period" shall mean a period of four, full, consecutive
quarter-annual fiscal periods, taken together as one accounting period.
"Fund Manager" shall mean PLM Investment Management, Inc., a California
corporation, or any Person or Persons who, at the time of reference thereto,
shall have been appointed as successor to PLM Investment Management, Inc.
"General Partner" shall mean PLM Financial Services, Inc., a Delaware
corporation, or any Person or Persons who, at the time of reference thereto, has
become the General Partner of the Company pursuant to the Partnership Agreement
and if there is more than one such General Partner, the General Partner of the
Company vested under the provisions of the Partnership Agreement with the
responsibility and authority for the management and direction of its business
and operations shall be the General Partner.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation, (ii)
to maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (c) to lease Property or to purchase Securities or other Property
or services primarily for the purpose of assuring the owner of such Indebtedness
or obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with generally accepted accounting principles
shall be classified upon a balance sheet of such Person as liabilities of such
Person, and in any event shall include, without duplication, all (a) obligations
of such Person for borrowed money or which has been incurred in connection with
the acquisition of Property or assets, (b) obligations secured by any Lien or
other charge upon Property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations,
excluding, however, any Lien which is being contested in good faith and the
continued existence thereof shall not cause any material interference with the
use of the Property, (c) obligations created or arising under any conditional
sale or other title retention agreement with respect to Property acquired by
such Person, notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of Property, excluding, however, any arrangement
for the acquisition of Property by such Person where the risk of loss of such
Property has not passed to such Person, (d) Capitalized Rentals under any
Capitalized Lease and (e) Guarantees. For the purpose of computing the
"Indebtedness" of any Person, there shall be excluded any particular
Indebtedness to the extent that, upon or prior to the maturity thereof, there
shall have been deposited with the proper depositary in trust the necessary
funds (or evidences of such Indebtedness, if permitted by the instrument
creating such Indebtedness) for the payment, redemption or satisfaction of such
Indebtedness; and thereafter such funds and evidences of Indebtedness so
deposited shall not be included in any computation of the assets including cash
or Cash Equivalents of such Person.
"Indexing Agent" shall mean First Union National Bank of North
Carolina, or any other Person or Persons who, at the time of reference thereto,
shall have been appointed as successor to the Indexing Agent by the Requisite
Holders.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Debt for which such
calculations are being made and shall include the imputed interest portion of
Capitalized Rentals. Computations of Interest Charges on a pro forma basis for
Debt having a variable interest rate shall be calculated at the rate in effect
on the date of any determination.
"Interest Periods" with respect to the Notes shall mean in the case of
the first Interest Period, the period commencing on the Closing Date to and
including December 31, 1995 and thereafter shall mean each three-month period
commencing with the three-month period ending on March 31, 1996 and each June
30, September 30, December 31 and March 31 thereafter through and including the
March 31, June 30, September 30, or December 31 date on which the Notes are paid
in full; provided that:
(a) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided, however, that, if such extension would cause the last day of
such Interest Period to occur in the following calendar month, the last
day of such Interest Period shall be the immediately preceding Business
Day;
(b) a month means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month; provided, however, that if there is no numerically
corresponding day in the month in which such an Interest Period is to
end or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last
Business Day of the calendar month in which such Interest Period is to
end;
(c) the interest rate to be applicable for each Interest
Period shall apply from and including the first day of such Interest
Period to but excluding the last day thereof; and
(d) if any such Interest Period would otherwise end after
December 31, 1998, such Interest Period shall end on December 31, 1998.
"Interest Rate Adjustment Date" shall mean the last day of each
Interest Period.
"LIBO Rate" means, with respect to each Interest Period which occurs
while any principal amount of the Notes remains outstanding; the rate of
interest (expressed as an annual rate) determined by the Indexing Agent equal to
the offered rate for three-month deposits in U.S. Dollars that appears on the
display designated as page "LIBOR03M" on the Bloomberg Service, or on such other
display on the Bloomberg Service as shall then replace or succeed page
"LIBOR03M" and contains the British Bankers Association market quote of current
London Interbank offered rates for deposits in Dollars quoted by selected banks
(page "LIBOR03M" or such other display being herein referred to as the
"Bloomberg LIBOR Screen"), for delivery on the first day of such Interest
Period, such rate to be established from the quote on the Bloomberg LIBOR Screen
at (or as near to as practicable to) 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period (which shall be a Business
Day); provided, that, if no such offered rate appears on the Bloomberg LIBOR
Screen, the LIBO Rate in respect of that Interest Period will be the composite
offered rate of interest per annum shown on Page 3750 of the Dow ▇▇▇▇▇ Company
Telerate screen or any successor page as the composite offered rate for London
Interbank deposits and with a period equal to the Interest Period of such loan
as shown under the heading "USD" as of 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period. As used herein, "Bloomberg
Service" shall mean Bloomberg Financial Markets Services.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting Property but shall not include the interests
of any Affiliated Partnership, or any subsidiary of the General Partner in any
Equipment owned jointly by the Company, such Affiliated Partnership and any
subsidiary of the General Partner through a trust or a partnership. For the
purposes of this Agreement, the Company or a Restricted Subsidiary shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement, Capitalized Lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall constitute a Lien.
"Material Agreement" shall mean the Equipment Management Agreement and
the Partnership Agreement.
"Minority Interests" shall mean any Equity Capital of a Restricted
Subsidiary (other than directors' qualifying shares of stock as required by law)
that are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing (a) Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, (b) Minority
Interests constituting common stock at the book value of capital and surplus
applicable thereto adjusted, if necessary, to reflect any changes from the book
value of such common stock required by the foregoing method of valuing Minority
Interests in preferred stock and (c) Minority Interests constituting limited or
general partnership interests at the book value thereof determined in accordance
with generally accepted accounting principles in the United States.
"Mobile Offshore Drilling Unit" shall mean any ▇▇▇▇-up rig,
semi-submersible rig or platform drilling rig, purchased, owned and leased or
held for lease to others or otherwise used by or on behalf of the Company or any
Restricted Subsidiary as described in the Partnership Agreement, together with
all appliances, parts, instruments, appurtenances, accessories, furnishings or
other equipment included therein and all substitutions, renewals or replacements
of, and all additions, improvements and accessions to, any and all thereof,
title to which vests in the Company or any Restricted Subsidiary or in a trust
or other entity of which the Company or any Restricted Subsidiary is the sole or
a participating beneficiary or owner.
"Notes" shall have the meaning ascribed thereto in ss.1.1(a).
"Notification of Declaration" shall have the meaning ascribed thereto
in ss.2.3(a).
"Officer" shall mean any officer as provided in the by-laws of the
General Partner.
"Overdue Rate" shall mean the Adjustable Rate plus 2% for each Interest
Period for so long as any payment or prepayment remains due and owing after the
due date thereof, whether or not any Event of Default has been declared
hereunder.
"Partner" shall mean any limited or general partner, of any class or
kind, of the Company or, if indicated by the context in which such terms are
used, any Subsidiary which is a Partnership.
"Partnership Agreement" shall mean the Second Amended and Restated
Limited Partnership Agreement dated as of May 6, 1986 by and among PLM Financial
Services, Inc., a Delaware corporation, as the General Partner, and the Limited
Partners named therein.
"Partnership Capital" at the time of any determination thereof shall
mean the aggregate amount of all capital accounts of the Partners of the Company
determined in accordance with generally accepted accounting principles.
"Partnership Distribution" shall mean and include (a) any payment or
distribution of income or profits of the Company (other than payments of
management fees pursuant to the Equipment Management Agreement), (b) any other
payment or other distribution of Property (including, without limitation, cash
distributions) made by or on behalf of the Company to any of its Partners
(general or limited) which under generally accepted accounting principles would
be required to be deducted from the capital account for such Partner on the
books of the Company, and (c) any payment or other distribution to any Person to
purchase, redeem or retire any warrant, option or other right to acquire an
interest as a partner, general or limited, in the Company.
"Payment Date" shall have the meaning ascribed thereto in ss.2.3(a).
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"Prohibited Transferee" shall mean Bank of America National Trust &
Savings Association and its direct subsidiaries.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Purchasers" shall have the meaning ascribed thereto in ss.1.1(a).
"Railroad Rolling Stock" shall mean any open top gondola car, open top
▇▇▇▇▇▇ car, covered ▇▇▇▇▇▇ car, pressure tank car, non-pressure tank car,
intermodal car, box car, flatcar, locomotive, or maintenance-of-way equipment,
purchased, owned and leased or held for lease to others or otherwise used by or
on behalf of the Company or any Restricted Subsidiary as described in the
Partnership Agreement, together with all appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment included therein and
all substitutions, renewals or replacements of, and all additions, improvements
and accessions to, any and all thereof, title to which vests in the Company or
any Restricted Subsidiary or in a trust or other entity of which the Company or
any Restricted Subsidiary is the sole or a participating beneficiary or owner.
"Rentals" shall mean and include all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the Property) payable by the Company or a Restricted
Subsidiary, as lessee or sublessee under a lease of real or personal Property,
but shall be exclusive of any amounts required to be paid by the Company or a
Restricted Subsidiary (whether or not designated as rents or additional rents)
on account of maintenance, repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"Requisite Holders" shall mean as of any date of determination thereof
the holders of not less than 66-2/3% in aggregate principal amount of
outstanding Notes.
"Restricted Subsidiary" shall mean (a) those Subsidiaries designated as
such on the Closing Date and whose names are set forth on Annex A to Exhibit B,
(b) any Subsidiary designated as such by the General Partner in a written notice
to the holders of the Notes, and (c) unless designated an Unrestricted
Subsidiary by the General Partner in a written notice to the holders of the
Notes, any Subsidiary (i) which is organized under the laws of the United States
or any State thereof; (ii) which conducts substantially all of its business and
has substantially all of its assets within the United States; and (iii) of which
more than 50% (by number of votes) of the Voting Equity Capital, is owned by the
Company and/or one or more Restricted Subsidiaries. Any Subsidiary which has
been designated as a Restricted Subsidiary may not thereafter be designated as
an Unrestricted Subsidiary. The Company shall, notwithstanding the foregoing
definition of "Restricted Subsidiary", include any profits or losses of any
Affiliated Partnership in any computation pursuant to ss.5.7 to the extent of,
but only to the extent of, the Equity Capital of such Affiliated Partnership
owned by the Company, provided that any such computation pursuant to said ss.5.7
shall so include such profits and losses to the extent of the Equity Capital of
such Affiliated Partnership so owned by the Company for so long as 100% of the
Equity Capital of such Affiliated Partnership is owned by the Company and other
Affiliated Partnerships.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning ascribed thereto in ss.1.4.
The term "subsidiary" shall mean, as to any particular parent entity,
any corporation, partnership or other entity of which more than 50% of the
Voting Equity Capital, and more than 50% of the Equity Capital shall be owned by
such parent entity and/or one or more entities which are themselves subsidiaries
of such parent entity. The term "Subsidiary" shall mean a subsidiary of the
Company.
"Tangible Assets" shall mean, as of the date of any determination
thereof, the total amount of all assets of the Company and its Restricted
Subsidiaries determined in accordance with generally accepted accounting
principles (less depreciation, depletion and other properly deductible valuation
reserves), after deducting goodwill, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets other than prepaid insurance and
prepaid taxes, the excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as "intangible assets"
in accordance with generally accepted accounting principles.
"Tractor Trailer" shall mean any piggyback trailer or over-the-road
trailer purchased, owned and leased or held for lease to others or otherwise
used by or on behalf of the Company or any Restricted Subsidiary as described in
the Partnership Agreement, together with all appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment included therein and
all substitutions, renewals or replacements of, and all additions, improvements
and accessions to, any and all thereof, title to which vests in the Company or
any Restricted Subsidiary or in a trust or other entity of which the Company or
any Restricted Subsidiary is the sole or a participating beneficiary or owner.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not a
Restricted Subsidiary.
"U.S. Dollars" shall mean the lawful currency of the United States of
America.
"Vessel" shall mean any marine dry or liquid bulk carrier or tanker
purchased, owned and leased or held for lease to others or otherwise used by or
on behalf of the Company or any Restricted Subsidiary as described in the
Partnership Agreement, together with all appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment included therein
(including any and all engines installed thereon), and all substitutions,
renewals or replacements of, and all additions, improvements and accessions to,
any and all thereof, title to which vests in the Company or any Restricted
Subsidiary or in a trust or other entity of which the Company or any Restricted
Subsidiary is the sole or a participating beneficiary or owner.
"Voting Equity Capital" shall mean Securities or partnership interests
of any class or classes, the owners or holders of which are entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding Equity Capital (except
shares of stock required as directors' qualifying shares) and all Indebtedness
for borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
"Withdrawal Event" shall have the meaning ascribed thereto in
ss.2.3(b).
"Withdrawal Event Prepayment Election Period" shall have the meaning
ascribed thereto in ss.2.3(b).
"Withdrawal Notice" shall have the meaning ascribed thereto in
ss.2.3(b).
Section 8.2.Accounting Principles.~Section8.2.Accounting Principles. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, the same shall be
done in accordance with generally accepted accounting principles in the United
States, to the extent applicable, except where such principles are inconsistent
with the requirements of this Agreement.
Section 8.3.Directly or Indirectly.~Section8.3.Directly or Indirectly. Where any
provision in this Agreement refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUSSECTION 9.MISCELLANEOUS.
Section 9.1.Registered Notes.~Section9.1.Registered Notes. The Company shall
cause to be kept at its principal office a register for the registration and
transfer of the Notes, and the Company will register or transfer or cause to be
registered or transferred, as hereinafter provided and under such reasonable
regulations as it may prescribe, any Note issued pursuant to this Agreement.
At any time and from time to time the holder of any Note which has been
duly registered as hereinabove provided may transfer such Note to any Person
other than a Prohibited Transferee upon surrender thereof at the principal
office of the Company duly endorsed or accompanied by a written instrument of
transfer duly executed by the holder of such Note or its attorney duly
authorized in writing.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on any
Note shall be made to or upon the written order of such holder.
Section ▇.▇.▇▇▇▇▇▇▇▇ of Notes~▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇ of Notes. At any time and from
time to time, upon not less than ten days' notice to that effect given by the
holder of any Note initially delivered or of any Note substituted therefor
pursuant to ss.9.1, this ss.9.2 or ss.9.3, and, upon surrender of such Note at
its office, the Company will deliver in exchange therefor, without expense to
the holder, except as set forth below, a Note for the same aggregate principal
amount as the then unpaid principal amount of the Note so surrendered or Notes
for the same aggregate principal amount as the then unpaid principal amount of
the Note so surrendered in minimum denominations of $1,000,000 (or such lesser
amount as shall constitute 100% of the Notes of such holder) or any amount in
excess thereof as such holder shall specify, dated as of the date to which
interest has been paid on the Note so surrendered or, if such surrender is prior
to the payment of any interest thereon, then dated as of the date of issue,
payable to such Person or Persons, or registered assigns, as may be designated
by such holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3.Loss, Theft, Etc. of Notes.~Section9.3.Loss, Theft, Etc. of Notes.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Note, and in the case of any such loss, theft
or destruction upon delivery of a bond of indemnity to the Company in such form
and amount as shall be reasonably satisfactory to the Company, or in the event
of such mutilation upon surrender and cancellation of the Note, the Company will
make and deliver without expense to the holder thereof, a new Note, of like
tenor, in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent institutional holder is the owner of any such lost,
stolen or destroyed Note, then the affidavit of an authorized officer of such
owner, setting forth the fact of loss, theft or destruction and of its ownership
of the Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 9.4.Expenses, Stamp Tax Indemnity.~Section9.4.Expenses, Stamp Tax
Indemnity. Whether or not the transactions herein contemplated shall be
consummated, the Company agrees to pay directly all of your out-of-pocket
expenses in connection with the preparation, execution and delivery of this
Agreement and the Security Agreement and the transactions contemplated hereby or
thereby, including but not limited to the reasonable charges and disbursements
of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, your special counsel, the initial and ongoing reasonable
charges and disbursements of the Indexing Agent, duplicating and printing costs
and charges for shipping the Notes, adequately insured to you at your home
office or at such other place as you may designate, and all such expenses
relating to any amendment, waivers or consents pursuant to the provisions
hereof, including, without limitation, any amendments, waivers or consents
resulting from any work-out, restructuring or similar proceedings relating to
the performance by the Company of its obligations under this Agreement, the
Security Agreement and the Notes. The Company agrees that it will pay the
charges and disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ not later than fifteen Business
Days from the date of presentation of an invoice therefor subsequent to the
Closing Date. Without limiting the foregoing, the Company also agrees to pay,
within fifteen Business Days of receipt thereof, supplemental statements of
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ for disbursements unposted or not incurred as of the Closing
Date. The Company further agrees that it will pay and save you harmless against
any and all liability with respect to stamp and other taxes, if any (other than
taxes measured by income), which may be payable or which may be determined to be
payable in connection with the execution and delivery of this Agreement or the
Notes, whether or not any Notes are then outstanding. The Company agrees to
protect and indemnify you against any liability for any and all brokerage fees
and commissions payable or claimed to be payable to any Person in connection
with the transactions contemplated by this Agreement.
Section 9.5.Powers and Rights Not Waived; Remedies Cumulative~Section9.5.Powers
and Rights Not Waived; Remedies Cumulative. No delay or failure on the part of
the holder of any Note in the exercise of any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of the same preclude
any other or further exercise thereof, or the exercise of any other power or
right, and the rights and remedies of the holder of any Note are cumulative to
and are not exclusive of any rights or remedies any such holder would otherwise
have, and no waiver or consent, given or extended pursuant to ss.7 hereof, shall
extend to or affect any obligation or right not expressly waived or consented
to.
Section 9.6.Notices~Section9.6.Notices. All communications provided for
hereunder shall be in writing and, if to you, delivered or mailed by registered
or certified mail, by overnight air courier, or by facsimile transmission (in
which case, such communication shall be concurrently sent by registered or
certified mail or overnight air courier) in each case prepaid and addressed to
you at your address appearing on Schedule I to this Agreement or such other
address as you or the subsequent holder of any Note initially issued to you may
designate to the Company in writing, and if to the Company, delivered or mailed
by registered or certified mail, by overnight air courier, or by facsimile
transmission (in which case, such communication shall be concurrently sent by
registered or certified mail or overnight air courier) in each case prepaid and
addressed to the Company at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Vice President - Chief Financial Officer,
or to such other address as the Company may in writing designate to you or to a
subsequent holder of the Note initially issued to you.
Section 9.7.Successors and Assigns~Section9.7.Successors and Assigns. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to your benefit and to the benefit of your successors and assigns,
including each successive holder or holders of any Notes.
Section 9.8.Survival of Covenants and Representations.~Section9.8.Survival of
Covenants and Representations. All covenants, representations and warranties
made by the Company herein and in any certificates delivered pursuant hereto,
whether or not in connection with the Closing Date, shall survive the closing
and the delivery of this Agreement and the Notes.
Section 9.9.Severability.~Section9.9.Severability. Should any part of this
Agreement for any reason be declared invalid, such decision shall not affect the
validity of any remaining portion, which remaining portion shall remain in force
and effect as if this Agreement had been executed with the invalid portion
thereof eliminated.
Section 9.10.Governing Law~Section9.10.Governing Law. This Agreement and the
Notes issued and sold hereunder shall be governed by and construed in accordance
with Illinois law.
Section 9.11.Submission to Jurisdiction.~Section9.11.Submission to Jurisdiction.
Any legal action or proceeding with respect to this Agreement or the Notes or
any document related thereto shall be brought in the courts of the State of
Illinois or of the United States of America for the Northern District of
Illinois and in no other courts, and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Company hereby irrevocably and unconditionally waives any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of forum non conveniens which it may now or hereafter have to the bringing of
any action or proceeding in such respective jurisdiction.
Section 9.12.Captions.~Section9.12.Captions. The descriptive headings of the
various Sections or parts of this Agreement are for convenience only and shall
not affect the meaning or construction of any of the provisions hereof.
Section 9.13.Limitation of Liability.~Section9.13.Limitation of Liability.
Except in the event of fraud on the part of the General Partner or any of its
Affiliates in connection with the transactions contemplated by this Agreement,
no holder of any Note shall have any right at any time to seek recovery of the
Indebtedness evidenced by the Notes from the assets of the General Partner.
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
PLM EQUIPMENT GROWTH FUND
By: PLM FINANCIAL SERVICES, INC.,
Its General Partner
By
Name:
Title:
Accepted as of _________________
[VARIATION]
By
Its
SCHEDULE I
(to Note Agreement)
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE NORTH ATLANTIC LIFE INSURANCE $3,000,000
COMPANY OF AMERICA
c/o Washington Square Capital
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Department
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "PLM
Equipment Growth Fund I, Adjustable Rate Senior Secured Notes due December 31,
1998, PPN 69343@AA7, principal, premium or interest") to:
Northern Trust Company (ABA #071-000-152)
for credit to: The North Atlantic Life
Insurance Company
Account Number 5186041000
Notices
All notices with respect to interest rate changes to be addressed as first
provided above, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Bond Administration,
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇.
All other notices and communications to be addresses as first provided above,
except notices of payments on or in respect of the Notes and written
confirmation of each such payment to be addressed Attention:
Securities Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHERN LIFE INSURANCE COMPANY $5,000,000
▇/▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Department
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "PLM
Equipment Growth Fund, Adjustable Rate Senior Secured Notes due December 31,
1998, PPN 69343@AA7, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #▇▇▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Securities Accounting
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices with respect to interest rate changes to be addressed as first
provided above, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Bond Administration,
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇.
All other notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHWESTERN NATIONAL LIFE INSURANCE $5,000,000
COMPANY
▇/▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Department
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "PLM
Equipment Growth Fund, Adjustable Rate Senior Secured Notes, due December 31,
1998, PPN 69343@AA7, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #▇▇▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Accounting
for credit to: Northwestern National Life Insurance Company
Account Number 1102-4001-4461
Notices
All notices with respect to interest rate changes to be addressed as first
provided above, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Bond Administration,
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇.
All other notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE MINNESOTA MUTUAL LIFE INSURANCE $10,000,000
COMPANY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MIMLIC Asset Management Company
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each "PLM
Equipment Growth Fund, Adjustable Rate Senior Secured Notes due
December 1, 1998, PPN 69343@AA7, principal or interest") to:
The Federal Reserve Bank of Minneapolis for the account of: The First
Bank National Association (ABA #▇▇▇▇▇▇▇▇▇) Minneapolis, Minnesota
BNF The Minnesota Mutual Life Insurance Company
Account Number 1801-10-00600-4
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be addressed
as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
SCHEDULE II
(to Note Agreement)
NAMES OF APPRAISERS
List of Approved Appraisal Firms:
GENERAL
1. American Appraisal Associates
2. Marshal & ▇▇▇▇▇▇▇
3. Valuation Research
4. Manufacturers Appraisal
5. Strategis Asset Valuation & Management
(Alexander & Alexander - Appraisal Division)
6. Valuation Engineering Associates
CONTAINERS
1. Independent Equipment Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
2. International Equipment Marketing, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
3. Unicon
TRAILERS
1. ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.
MARINE VESSELS
1. ▇.▇. ▇▇▇▇▇▇▇ - Fort ▇▇▇, New Jersey
2. American Marine Advisers
3. Bassoe - Oslo, Norway
4. Fearnleys - Oslo, Norway
5. Clarkson - London, England
6. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Sons - New York, NY
7. Victoria Ships Brokers - Hong Kong
8. ▇.▇. ▇▇▇▇▇▇ (USA) Co. - Houston, Texas
9. ▇.▇. ▇▇▇▇▇▇ A/S - Oslo, Norway
AIRCRAFT
1. Aircraft Information Service, Inc.
as successor to
Airclaims Information Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
2. Avitas Aviation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
3. USA Air Leasing and Services
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
ROLLING STOCK
1. Arrow Truck Sales, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
2. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Railmark, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
3. ▇▇▇▇▇ ▇. Husband
▇.▇. ▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
4. ▇▇▇▇▇ ▇. ▇▇▇▇▇ - President
Railmark, Ltd.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ "▇"
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
5. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
MOBILE OFFSHORE DRILLING UNITS
1. Bassoe Offshore Consultants
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
2. ▇.▇. ▇▇▇▇▇▇ (USA) Inc.
▇▇▇▇ ▇▇▇▇▇ - President
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
3. Normarine Offshore Consultants A.S.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
47 22 55 44 55
4. Normarine Offshore Consultants, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Weslayan Tower, Suite 1620
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE III
(to Note Agreement)
NAMES OF UNDERWRITERS, PROTECTION AND INDEMNITY CLUBS
AND INSURERS RELATING TO EXTENSIONS AND RENEWALS
OF INSURANCE POLICIES
(Domestic insurers with a Best's rating less than A+)
INSURER BEST'S RATING
Reliance Insurance Company A-
COVERAGE
Directors & Officers and General Partner Liability
A-
EXHIBIT A
(to Note Agreement)
PLM EQUIPMENT GROWTH FUND
Adjustable Rate Senior Secured Note
Due December 31, 1998
No. R- ___________, 1995
$ PPN 69343@AA7
PLM EQUIPMENT GROWTH FUND, a California limited partnership (the
"Company"), for value received, hereby promises to pay to
or registered assigns,
on the last day of December, 1998
the principal amount of
DOLLARS ($________)
and to pay interest (computed on the basis of a 360-day year and actual days
elapsed) on the principal amount from time to time remaining unpaid hereon at
the Adjustable Rate from the date hereof until maturity, payable quarterly on
the last day of each March, June, September, and December in each year
commencing December 31, 1995, and at maturity. The Company agrees to pay
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the Overdue Rate after
maturity, whether by acceleration or otherwise, until paid.
For purposes of this Note, the terms hereinafter set forth when used
herein shall have the following meanings:
"Adjustable Rate" shall mean a rate per annum equal to the sum of (i)
1.35%, plus (ii) the LIBO Rate for the applicable Interest Period.
"Indexing Agent" shall mean First Union National Bank of North
Carolina, or any other Person or Persons who, at the time of reference thereto,
shall have been appointed as successor to the Indexing Agent by the Requisite
Holders.
"Interest Periods" with respect this Note shall mean in the case of the
first Interest Period, the period commencing on the Closing Date to and
including December 31, 1995 and thereafter shall mean each three-month period
commencing on March 31, 1996 and each June 30, September 30, December 31 and
March 31 thereafter through and including the March 31, June 30, September 30,
or December 31 date on which this Note is paid in full; provided that:
(a) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be the immediately preceding Business Day;
(b) a month means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month; provided, however, that if there is no numerically
corresponding day in the month in which such an Interest Period is to
end or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last
Business Day of the calendar month in which such Interest Period is to
end;
(c) the interest rate to be applicable for each Interest
Period shall apply from and including the first day of such Interest
Period to but excluding the last day thereof; and
(d) if any such Interest Period would otherwise end after
December 31, 1998, such Interest Period shall end on December 31, 1998.
"Interest Rate Adjustment Date" shall mean the last day of each
Interest Period.
"LIBO Rate" means, with respect to each Interest Period which occurs
while any principal amount of this Note remains outstanding; the rate of
interest (expressed as an annual rate) determined by the Indexing Agent equal to
the offered rate for three-month deposits in U.S. Dollars that appears on the
display designated as page "LIBOR03M" on the Bloomberg Service, or on such other
display on the Bloomberg Service as shall then replace or succeed page
"LIBOR03M" and contains the British Bankers Association market quote of current
London Interbank offered rates for deposits in Dollars quoted by selected banks
(page "LIBOR03M" or such other display being herein referred to as the
"Bloomberg LIBOR Screen"), for delivery on the first day of such Interest
Period, such rate to be established from the quote on the Bloomberg LIBOR Screen
at (or as near to as practicable to) 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period (which shall be a Business
Day); provided, that, if no such offered rate appears on the Bloomberg LIBOR
Screen, the LIBO Rate in respect of that Interest Period will be the composite
offered rate of interest per annum shown on Page 3750 of the Dow ▇▇▇▇▇ Company
Telerate screen or any successor page as the composite offered rate for London
Interbank deposits and with a period equal to the Interest Period of such loan
as shown under the heading "USD" as of 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period. As used herein, "Bloomberg
Service" shall mean Bloomberg Financial Markets Services.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in San Francisco, California in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of principal,
premium, if any, or interest on or in respect of this Note becomes due and
payable on any day which is not a Business Day, such amount shall be payable on
the immediately succeeding Business Day, provided that interest shall be due and
payable through and including such succeeding Business Day. "Business Day" shall
mean any day other than a Saturday, Sunday or other day on which banks in San
Francisco, California or Chicago, Illinois, are required by law to close or are
customarily closed and if the applicable "Business Day" relates to the
determination of the LIBO Rate, a day on which banks are dealing in U.S. Dollar
deposits in the Interbank Market in London, England.
This Note is one of the Adjustable Rate Senior Secured Notes of the
Company in the aggregate principal amount of $23,000,000 issued or to be issued
under and pursuant to the terms and provisions of separate and several Note
Agreements, each dated as of September 1, 1995 (the "Note Agreements", words and
phrases not otherwise defined in this Note having the meanings ascribed thereto
in said Note Agreements) entered into by the Company with the original
purchasers therein referred to and this Note and the holder hereof are entitled
equally and ratably with the holders of all other Notes outstanding under the
Note Agreements to all the benefits and security provided for thereby or
referred to therein, to which Note Agreements reference is hereby made for the
statement thereof.
This Note and the holder hereof are also entitled equally and ratably
with the holders of all other Notes to the rights and benefits provided pursuant
to the terms and provisions of the Security Agreement (as such term is defined
in the "Note Agreements"). Reference is hereby made to each of the foregoing for
a statement of the nature and extent of the benefits and security for the Notes
afforded thereby and the rights of the holders of the Notes and the Company in
respect thereof.
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
Except in the event of fraud on the part of the General Partner or any
of its Affiliates in connection with the transaction contemplated by the Note
Agreements, no holder of this Note shall have any right at any time to seek
recovery of the Indebtedness evidenced by this Note from the assets of the
General Partner.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the Breakage Cost Amount, if any, set
forth in Section 2 of the Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, Breakage Cost Amount, if any, and
interest on this Note shall be made only to or upon the order in writing of the
registered holder.
This Note and said Agreements are governed by and construed in
accordance with the laws of the State of Illinois.
PLM EQUIPMENT GROWTH FUND
By: PLM FINANCIAL SERVICES, INC.,
Its General Partner
By
Its
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR ANY EXEMPTION THEREFROM UNDER SAID ACT.
UNDER THE TERMS OF THE NOTE AGREEMENTS, THE COMPANY IS NOT REQUIRED TO
DELIVER CERTAIN FINANCIAL INFORMATION TO NOTEHOLDERS ENGAGED IN THE
TRANSPORTATION EQUIPMENT LEASING OR SERVICING BUSINESS.
UNDER THE TERMS OF THE NOTE AGREEMENTS, THIS NOTE MAY NOT BE
TRANSFERRED TO CERTAIN PROHIBITED TRANSFEREES.
EXHIBIT B
(to Note Agreement)
PLM EQUIPMENT GROWTH FUND
CLOSING CERTIFICATE
To the Parties listed on the
Schedule attached hereto
Ladies and Gentlemen:
This certificate is delivered to you in compliance with the
requirements of the separate and several Note Agreements, each dated as of
September 1, 1995 (the "Agreements"), entered into by the undersigned, PLM
Equipment Growth Fund, a California limited partnership (the "Company"), with
each of you, and as an inducement to and as part of the consideration for your
purchase on this date aggregating $23,000,000 principal amount of the Adjustable
Rate Senior Secured Notes due December 31, 1998 (the "Notes") of the Company
pursuant to the Agreements. The terms which are capitalized herein shall have
the same meanings as in the Agreements.
The Company represents and warrants to each of you as follows:
1. Subsidiaries. Annex A attached hereto states the name of
each of the Company's Restricted Subsidiaries, its jurisdiction of
organization and the percentage of its Voting Equity Capital or other
Equity Capital owned by the Company and/or its Subsidiaries. The
Company and each Restricted Subsidiary has good and marketable title to
all of the Voting Equity Capital or other Equity Capital it purports to
own of each Restricted Subsidiary, free and clear in each case of any
Lien. All such Voting Equity Capital and other Equity Capital has been
duly issued and are fully paid and non-assessable. The Company has no
Subsidiary which is not a Restricted Subsidiary.
2. Organization and Authority. (a) The Company is a limited
partnership duly organized, validly existing and in good standing under
the laws of the State of California. The Company's sole general partner
is PLM Financial Services, Inc. The General Partner and each Subsidiary
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation.
(b) The Company, the General Partner and each Subsidiary
(i) has all requisite power and authority
and all necessary licenses and permits to own and
operate its properties and to carry on its business
as now conducted and as presently proposed to be
conducted; and
(ii) is duly licensed or qualified and is in
good standing in each jurisdiction wherein the nature
of the business transacted by it or the nature of the
Property owned or leased by it makes such licensing
or qualification necessary, except where the failure
to be duly licensed or qualified or to be in good
standing would not have a materially adverse effect
on the business or financial condition of the
Company.
3. Business and Property. You have heretofore been furnished
with a copy of the Private Placement Offering Memorandum dated July,
1995 (the "Memorandum") prepared by the Company with assistance from
First Union Investment Banking which generally sets forth the business
conducted and proposed to be conducted by the Company and its
Subsidiaries and the principal properties of the Company and its
Subsidiaries. As disclosed in the Prospectus of the Company dated May
20, 1986, it is and has been since the inception of the Company the
intention of the Company to incur Indebtedness in order to finance in
part the purchase of Equipment to be held for lease by the Company. The
issue and sale of the Notes constitutes an incurrence of Indebtedness
which is consistent with the business of the Company as described in
the Partnership Agreement and such Prospectus.
Under the terms of the Partnership Agreement, the Company is
not permitted to pay, directly or indirectly, or through any
Subsidiary, any Subordinated Incentive Fee (as defined in the
Partnership Agreement) unless and until, among other things, all
liabilities of the Company, including any and all liability on the
Notes, shall have been fully paid.
4. Financial Statements. (a) The consolidated balance sheet
of the Company and its Subsidiaries as of December 31, 1994, and the
statement of operations and changes in partners' capital and the
statement of cash flows for the fiscal year ended on said date
accompanied by a report thereon containing an opinion unqualified as to
scope limitations imposed by the Company and otherwise without
qualification except as therein noted, by KPMG Peat Marwick, have been
prepared in accordance with generally accepted accounting principles
consistently applied except as therein noted, are correct and complete
and present fairly the financial position of the Company and its
Subsidiaries as of such date and the results of their operations and
changes in partners' capital and cash flows for such period. The
unaudited consolidated balance sheets of the Company and its
Subsidiaries as of June 30, 1995, and the unaudited statement of
operations and changes in partners' capital and the statement of cash
flows for the six-month period ended on said date prepared by the
Company have been prepared in accordance with generally accepted
accounting principles consistently applied, are correct and complete
and present fairly the financial position of the Company and its
Subsidiaries as of said date and the results of their operations and
changes in partners' capital and cash flows for such period.
(b) Since December 31, 1994, there has been no change
in the condition, financial or otherwise, of the Company and its
Subsidiaries as shown on the consolidated balance sheet as of such date
except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse.
5. Indebtedness. Annex B attached hereto correctly describes
all Debt, including without limitation Debt secured by Liens within the
limitations of ss.5.10, and Capitalized Leases of the Company and its
Restricted Subsidiaries outstanding on the Closing Date.
6. Equipment. Annex C attached hereto correctly describes
all Equipment of the Company and its Restricted Subsidiaries existing
on the Closing Date and the corresponding Equipment Value attributable
to each such item of Equipment as of August 31, 1995.
7. Full Disclosure. The financial statements referred to in
paragraph 4 do not, nor does the Memorandum or any other written
statement furnished by the Company to you in connection with the
negotiation of the sale of the Notes (including the Memorandum),
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company or its
Subsidiaries which the Company has not disclosed to you in writing
which materially affects adversely nor, so far as the Company can now
foresee, will materially affect adversely the properties, business,
prospects, profits or condition (financial or otherwise) of the Company
and its Subsidiaries.
8. Pending Litigation. There are no proceedings pending or,
to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary in any court or before any governmental
authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of
the Company and its Subsidiaries. Neither the Company nor any
Subsidiary is in default with respect to any order of any court or
governmental authority or arbitration board or tribunal.
9. Title to Properties. The Company and each Subsidiary has
good and marketable title in fee simple (or its equivalent under
applicable law) to all the real Property and has good title to all the
other Property it purports to own, including that reflected in the most
recent balance sheet referred to in paragraph 4, except as sold or
otherwise disposed of in the ordinary course of business and except for
material liens disclosed in notes to the financial statements referred
to in paragraph 4 hereof or otherwise permitted by the Agreements.
10. Patents and Trademarks. The Company and each Subsidiary
owns or possesses all the patents, trademarks, trade names, service
marks, copyrights, licenses and rights with respect to the foregoing
necessary for the present and planned future conduct of its business,
without any known conflict with the rights of others.
11. Sale is Legal and Authorized. The sale of the Notes and
the execution and delivery of, and performance by the Company and the
General Partner of their respective obligations under, the Agreements,
the Security Agreement and the Notes have been duly authorized by all
requisite partnership and corporate action, as the case may be, and
will not violate any provision of law, any order, judgment or decree of
any court or other agency of corporate or other government, the
Partnership Agreement, the corporate charter or by-laws of the General
Partner, or any indenture, agreement or other instrument to which the
Company or the General Partner is a party, or by which the Company or
the General Partner is bound, or be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a
default under, or result in the creation or imposition of any Lien of
any nature whatsoever upon any of the Property or assets of the Company
or the General Partner pursuant to, any such indenture, agreement or
instrument except as permitted by the Agreements.
12. No Defaults. No Default or Event of Default as defined in
the Agreements has occurred and is continuing. The Company is not in
default in the payment of principal or interest on any Indebtedness for
borrowed money and is not in default under any instrument or
instruments or agreements under and subject to which any Indebtedness
for borrowed money has been issued and no event has occurred and is
continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
13. Governmental Consent. No approval, consent or withholding
of objection on the part of any regulatory body, state, Federal or
local, is necessary in connection with the execution and delivery by
the Company of the Agreements, the Security Agreement or the Notes or
compliance by the Company with any of the provisions of the Agreements,
the Security Agreement or the Notes.
14. Taxes. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have, in fact, been
filed, and all taxes, assessments, fees and other governmental charges
upon the Company or any Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable
in such returns have been paid, except any such returns for the failure
to file would not have a material adverse effect on the business or
financial condition of the Company and its Restricted Subsidiaries,
taken as a whole. The Company does not know of any proposed additional
tax assessment against it for which adequate provision has not been
made in its accounts, and no material controversy in respect of
additional Federal or state income taxes is pending or to the knowledge
to the Company threatened. The provisions for taxes on the books of the
Company and each Subsidiary are adequate for all open years, and for
its current fiscal period.
15. Use of Proceeds. The net proceeds from the sale of the
Notes will be used to pay in full Debt outstanding under the Loan
Agreement dated as of August 29, 1989, as heretofore amended, among Den
Norske Bank (as successor to Bergen Bank A/S), as Agent, the Banks
listed in Schedule I thereto as lenders, the Company and the General
Partner. None of the transactions contemplated in the Agreements
(including, without limitation thereof, the use of proceeds from the
issuance of the Notes) will violate or result in a violation of Section
7 of the Securities Exchange Act of 1934, as amended, or any regulation
issued pursuant thereto, including, without limitation, Regulations G,
T and X of the Board of Governors of the Federal Reserve System, 12
C.F.R., Chapter II. Neither the Company nor any Subsidiary owns or
intends to carry or purchase any "margin stock" within the meaning of
said Regulation G. None of the proceeds from the sale of the Notes will
be used to purchase, or refinance any borrowing, the proceeds of which
were used to purchase any "security" within the meaning of the
Securities Exchange Act of 1934, as amended.
16. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer
to acquire the Notes or any similar Security from or has otherwise
approached or negotiated or will approach or negotiate in respect of
the Notes or any similar Security with any Person other than you and
not more than 25 other institutional investors, each of whom was
offered a portion of the Notes at private sale for investment. Neither
the Company, directly or indirectly, nor any agent on its behalf has
offered or will offer the Notes or any similar Security or has
solicited or will solicit an offer to acquire the Notes or any similar
Security from any Person so as to bring the issuance and sale of the
Notes within the provisions of Section 5 of the Securities Act of 1933,
as amended.
17. Employee Retirement Income Security Act of 1974. The
consummation of the transactions provided for in the agreement and
compliance by the Company with the provisions thereof and the Notes
issued thereunder will not involve any prohibited transaction within
the meaning of the Employee Retirement Income Security Act of 1974
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended. The Company does not maintain any "employee pension benefit
plans", as defined in ERISA.
18. Compliance with Law. Neither the Company nor any
Restricted Subsidiary (a) is in violation of any law, ordinance,
franchise, governmental rule or regulation to which it is subject; or
(b) has failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its Property
or to the conduct of its business, which violation or failure to obtain
could materially adversely affect the business, prospects, profits,
properties or condition (financial or otherwise) of the Company and its
Restricted Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations contained in the Agreements, the
Security Agreement or the Notes.
19. Compliance with Environmental Laws. The Company is not in
violation of any applicable Environmental Law which violation could
have a material adverse effect on the business, prospects, profits,
properties or condition (financial or otherwise) of the Company and its
Restricted Subsidiaries, taken as a whole. The Company does not know of
any liability or class of liability of the Company or any Restricted
Subsidiary under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.),
or the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. Section 6901 et seq.).
20. Fungible Securities. When issued, the Notes will
constitute "securities" within the meaning of the Securities Exchange
Act of 1934 (the "Exchange Act") and will not be of the same class as
securities listed on a national security exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system, and will not be convertible or
exchangeable into any such securities.
21. Investment Company Act. Neither the Company nor any of
its Subsidiaries is an "investment holding company" or "affiliated
company" or a company "controlled by" an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
22. Lien Recordation. A Uniform Commercial Code financing
statement has been filed for record with the Secretary of State of the
State of California and the Security Agreement creates a valid and
perfected first security interest in such collateral effective as
against creditors of and purchasers from the Company and its
Subsidiaries to the extent that a Lien and security interest may be
perfected under the Uniform Commercial Code by such filing, subject
only to encumbrances expressly permitted by the terms of the Agreement
and the Security Agreement.
Dated:
PLM EQUIPMENT GROWTH FUND
By PLM FINANCIAL SERVICES, INC.,
Its General Partner
By
Its
ANNEX A
(to Closing Certificate)
SUBSIDIARIES OF THE COMPANY
RESTRICTED SUBSIDIARIES:
Percentage of Voting Equity Capital
Owned by Company and Each Other
Restricted Subsidiary
Name of Vessel/Mobile Offshore Jurisdiction of
(a) Drilling Unit Subsidiaries Incorporation
Cabrillo Offshore Inc. California 55%
▇▇▇▇▇▇▇ Vessel Inc. California 50%
ANNEX B
(to Closing Certificate)
DESCRIPTION OF DEBT AND LEASES
1. Unsecured Debt as of the Closing Date:
None
2. Debt Secured by Liens within the Limitations of ss.5.10, other than
Capitalized Leases, as of the Closing Date:
None
3. Capitalized Leases as of the Closing Date:
None
ANNEX C
(to Closing Certificate)
DESCRIPTION OF EQUIPMENT
AND EQUIPMENT VALUES AS OF AUGUST 31, 1995
[See Attached]
EXHIBIT C
(to Note Agreement)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the
Purchasers, called for by ss.4.2 of the Note Agreement, shall be dated the
Closing Date and addressed to the Purchasers, and shall be satisfactory in form
and substance to the Purchasers and shall be to the effect that:
(1) The Company is a limited partnership, duly organized and
validly existing under the laws of the State of California, has the
power and the authority to execute and deliver the Note Agreements and
to issue the Notes.
(2) The Note Agreements have been duly authorized by all
necessary partnership action on the part of the Company, have been duly
executed and delivered by an authorized officer of the General Partner
and constitute the legal, valid and binding contracts of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
(3) The Notes have been duly authorized by all necessary
partnership action on the part of the Company, have been duly executed
and delivered by an authorized officer of the General Partner and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
(4) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements does not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall also state that the opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq. is satisfactory in scope and form to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and
that, in their opinion, the Purchasers are justified in relying thereon and
shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request.
In rendering the opinion set forth in paragraph 1 above, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Amended and Restated Limited Partnership Agreement certified
by an authorized officer of the General Partner and the Certificate of Limited
Partnership and all amendments thereto certified by the Secretary of State of
the State of California. The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is limited to the
laws of the State of Illinois and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the Notes.
DESCRIPTION OF CLOSING OPINION OF GENERAL COUNSEL TO THE COMPANY
The closing opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., general counsel of the
General Partner, which is called for by ss.4.2 of the Note Agreement, shall be
dated the Closing Date, shall be addressed to the Purchasers and shall be
satisfactory in form and substance to the Purchasers to the effect that:
(1) The Company is a limited partnership, duly organized and
validly existing under the laws of the State of California, has all
requisite power and authority and is duly authorized to enter into and
perform the Note Agreements and to issue the Notes and incur the
Indebtedness to be evidenced thereby and has full power and authority
to conduct the activities in which it is now engaged and is duly
licensed or qualified and is in good standing as a foreign limited
partnership in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary,
except where the failure to be duly licensed or qualified or to be in
good standing would not have a materially adverse effect on the
business or financial condition of the Company.
(2) Each Restricted Subsidiary that is a corporation or a
partnership is a corporation or partnership, as the case may be, duly
organized, legally existing and in good standing under the laws of its
jurisdiction of organization and is duly licensed or qualified and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary,
except where the failure to be duly licensed or qualified or to be in
good standing would not have a materially adverse effect on the
business or financial condition of the Company; and all of the issued
and outstanding shares of capital stock of each such Restricted
Subsidiary that is a corporation have been duly issued, are fully paid
and non-assessable and are owned by the Company, by one or more
Restricted Subsidiaries, or by the Company and one or more Restricted
Subsidiaries or an Affiliated Partnership.
(3) The Note Agreements have been duly authorized by all
necessary partnership action on the part of the Company, have been duly
executed and delivered by an authorized officer of the General Partner
and constitute the legal, valid, binding and enforceable contracts of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
(4) The Notes have been duly authorized by all necessary
partnership action on the part of the Company, have been duly executed
and delivered by an authorized officer of the General Partner and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
(5) The Security Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
(6) The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreements do not
(i) conflict with or contravene any law, rule or regulation applicable
to the Company or (ii) conflict with or result in any breach of any of
the provisions of or constitute a default under or result in the
creation or imposition of any lien or encumbrance upon any of the
property of the Company pursuant to the provisions of the Partnership
Agreement or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company may be bound
except as permitted by the Note Agreements.
(7) The Security Agreement (or financing statements or
similar notices thereof to the extent permitted or required by
applicable law) have been filed for record or recorded in all public
offices wherein such filing or recordation is necessary to perfect the
security interest granted by the Security Agreement in the collateral
therein described as against creditors of and purchasers from the
Company and its Subsidiaries and the Security Agreement creates a valid
and perfected first security interest in such collateral effective as
against creditors of and purchasers from the Company and its
Subsidiaries subject only to encumbrances expressly permitted by the
terms of such Security Agreement.
(8) The courts of the State of California will give effect to
those provisions of the Note Agreements, the Security Agreement and the
Notes which stipulate that such documents shall be governed, and
construed in accordance with, the laws of the State of Illinois.
(9) The execution and delivery of the Note Agreements and the
Security Agreement and the issue and sale of the Notes does not
conflict with or violate any of the provisions of the Partnership
Agreement.
(10) The payment by the Company of all amounts required to be
paid with respect to the Notes in accordance with the terms and
conditions of the Note Agreements and the Security Agreement will not
violate the provisions of any applicable state or federal law limiting
or regulating the payment of interest on obligations.
(11) Neither the Company nor any of its Subsidiaries is an
"investment holding company" or "affiliated company" or a company
"controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(12) The transaction contemplated by the Note Agreements
(including, without limitation, the use of the proceeds of the Notes)
will not violate Section 7 of the Securities and Exchange Act of 1934
or the provisions of Regulation G, Regulation T or Regulation U
promulgated by the Board of Governors of the Federal Reserve System.
(13) In reliance upon certain factual representations made by
First Union National Bank of North Carolina, the Placement Agent, the
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Agreements is an exempt transaction under the
Securities Act of 1933, as amended, and does not under existing law, as
at the date of closing, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture in respect thereof under the Trust Indenture Act of 1939.
(14) To the knowledge of such counsel, there are no actions,
suits or proceedings pending or threatened against or affecting the
Company, the General Partner or any Subsidiary, at law or in equity or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which are likely to result, either individually or
collectively, in any material adverse change in the business,
Properties, operations or condition, financial or otherwise, of the
Company or of the Company and its Restricted Subsidiaries taken as a
whole, impair the ability of the Company and its Restricted
Subsidiaries to carry on their business substantially as now conducted,
impair the ability of the Company to perform its obligations under the
Note Agreements, under the Security Agreement or under the Notes.
(15) No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any
governmental body, Federal, State or local, is necessary in connection
with the execution and delivery of the Note Agreements, the Security
Agreement or the Notes.
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq. shall cover such other matters
relating to the sale of the Notes as the Purchasers may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and officers of
the Company.