EXHIBIT 10.3
AMENDMENT NO. 7 TO NOTE AGREEMENT
This Amendment No. 7 to Note Agreement (the "Amendment") is
made as of July 22, 1994 by and between PLM International, Inc., a
Delaware corporation ("Company"), and Principal Mutual Life
Insurance Company ("Purchaser"), and amends that certain Note
Agreement dated as of January 15, 1989, as amended by Amendment No.
1 to Note Agreement dated as of May , 1989, by Amendment No. 2
to Note Agreement dated as of June 1, 1989, by Amendment No. 3 to
Note Agreement dated as of August 6, 1990, by Amendment No. 4 to
Note Agreement dated as of June 21, 1991, by Amendment No. 5 to
Note Agreement dated as of December 16, 1991, and Amendment No. 6
to Note Agreement dated as of October 30, 1992 by and between the
Company and the Purchaser (as so amended, the "Note Agreement").
RECITALS
A. The Company and the Purchaser have entered into the Note
Agreement and the Company has issued and delivered to Purchasers
the Notes (as defined in the Note Agreement).
B. The Company and Purchaser now desire to amend the Note
Agreement and the Notes.
C. As of the date hereof, the Purchaser is the holder of
100% in aggregate principal amount of the Notes.
D. Subject to the terms and conditions hereinafter set
forth, the Company and Purchaser are willing to amend the Note
Agreement and the Notes.
NOW, THEREFORE, the Company and the Purchaser hereby agree as
follows:
1. Section 5.5. Section 5.5 of the Note Agreement is
hereby amended to read in its entirety as follows:
"5.5. Nature of Business. The Company,
its Restricted Subsidiaries and Special
Subsidiaries will engage only in (i) the
business of or a business relating to (a) the
ownership, operation, maintenance or leasing
of transportation equipment, (b) the financing
of transportation equipment and (c) the
management of transportation equipment
portfolios and (ii) any other business
provided that, as a result of engaging in such
business, the general nature of the business,
taken on a consolidated basis, which would
then be engaged in by the Company, its
Restricted Subsidiaries and Special
Subsidiaries would not be substantially
changed from the general nature of the
business engaged in by the Company, its
Restricted Subsidiaries and Special
Subsidiaries on the date of this Agreement.
The Company shall cause no more than 50% of
its Equipment (as defined in Section 5.14)
determined on the basis of market value to be
in any one transportation sector (e.g.
aircraft, marine vessels, marine containers,
storage containers, railcars or trailers).
Without limiting the foregoing, the Company
shall ensure that each category of Equipment
listed below shall not exceed the percentages
set forth opposite its category (determined on
the basis of market value) of the aggregate
Equipment of the Company:
Type of Equipment Maximum Percentage
Any one item of Equipment 15%
Marine containers 10%"
2. Section 5.8(b). Section 5.8(b) is hereby amended to read
in its entirety as follows:
"(b) Directly or indirectly, or through
any Subsidiary, purchase, redeem or retire any
shares of capital stock of any class or any
warrants, rights or options to purchase or
acquire any shares of its capital stock
(except purchases, redemptions or retirement
of up to $3,500,000 in the aggregate of common
shares of the Company);"
3. Section 5.8(c). Section 5.8(c) is hereby amended to read
in its entirety as follows:
"(c) Directly or indirectly, or through
any Subsidiary, purchase, redeem, retire or
make any prepayment (other than mandatory
payments) on Subordinated Debt other than: (i)
on the Notes; (ii) on the Existing
Subordinated Notes;"
4. Section 5.11. The second paragraph set forth in Section
5.11 of the Note Agreement is hereby amended to read in its
entirety to read as follows:
"As used in this Sec. 5.11, "Management
Change" shall mean (i) a Restricted Management
Change, (ii) a Special Restricted Management
Change or (iii) the discontinuance of
employment with the Company for any reason
including death or disability of four (4) of
any of the five (5) following individuals: J.
Michael Allgood, Stephen M. Bess, Douglas P.
Goodrich, Allen V. Hirsch, or Robert N.
Tidball, provided that in the case of death or
disability the Substitute Officer (as defined
below) shall replace the individual on the
foregoing list the position of whom such
Substitute Officer assumes."
The third paragraph set forth in Section 5.11 of the Note
Agreement is hereby amended to read in its entirety as follows:
"As used in this Sec. 5.11, the term
"Restricted Management Change" shall mean (i)
the discontinuance of employment with the
Company of four (4) of any of the five (5)
following individuals: J. Michael Allgood,
Stephen M. Bess, Allen V. Hirsch, Douglas P.
Goodrich, or Robert N. Tidball, to positions
designated as, and having responsibilities
customarily associated with, the respective
offices held by such individuals on June 30,
1994 for any reason other than death or
disability or (ii) the failure of any four (4)
of such individuals for any reason other than
death or disability (a) to actively discharge
the duties customarily associated with their
respective offices, or (b) to actively
participate in the management and operations
of the Company in substantially equal or
greater capacities to those engaged in by such
individuals on June 30, 1994."
5. Section 5.13. Section 5.13 of the Note Agreement is
hereby deleted in its entirety. Hereafter Section 5.13 shall be
intentionally left blank.
6. Section 5.14. Section 5.14 of the Note Agreement is
hereby amended to read in its entirety as follows:
"5.14. Equipment Off-Lease. The Company
shall not permit as at the end of any two
consecutive calendar months the Invoice Price
of all Equipment (other than Designated
Trailers) then Off-lease to exceed twenty
percent (20%) of the sum of (A) the Invoice
Price of all Equipment, plus (B) the amount
then on deposit in any Sold Equipment Cash
Collateral Account. For purposes of this
Sec. 5.14 and Exhibit E, "Designated Trailers"
means any and all Equipment constituting
trailers designated by the Company for use
through rental yards for short-term rentals or
for rail-car revenue sharing agreements;
"Invoice Price" means, with respect to any
item or items of Equipment, the aggregate
manufacturer's or seller's invoice price(s)
for such Equipment (including any reasonable
costs directly incurred as a result of the
acquisition of such Equipment), net of any
acquisition or other fees payable (or paid) by
the Company (or its predecessor) to FSI or any
Affiliate of the Company of FSI; "Off-lease"
means not subject to a Lease or subject to a
Lease under which the lessee is an Affiliate
of the Company, a Subsidiary of the Company or
the Company, unless the Equipment subject to
such a Lease has been subleased by any such
Affiliate, any such Subsidiary or the Company
(as applicable) to a person that is not an
Affiliate of the Company, a Subsidiary of the
Company or the Company; "Equipment " means all
items of transportation-related equipment
acquired, by purchase, lease or otherwise, by
the Company or by PLM Rental, Inc. for lease
at anytime, and shall include items of
equipment legal or record title to which is
held by any trustee of a trust in which the
Company holds any beneficial interest or by a
wholly-owned Subsidiary of the Company
organized for the purpose of holding legal or
record title to a single marine vessel (a
"Marine Subsidiary");
"Sold Equipment Cash Collateral Account" means
any cash collateral account maintained for the
benefit of any holder of Senior Debt for the
purpose of holding proceeds received in
connection with the sale of Equipment."
7. Section 5.18. Section 5.18 of the Note Agreement is
hereby amended to reletter certain paragraphs and for such
paragraphs to read in their entirety as follows:
"(k) investment by the Company or a
Restricted Subsidiary in joint ventures which
provided services to or complement the
Company's or such Restricted Subsidiary's
operating businesses, provided that such
investments do not exceed ten percent (10%) of
the Borrowing Base at the time any such
investment is made;
(l) Investments listed on Schedule
5.18(l), provided, however, that only ESOP
Cash Collateral may be invested pursuant to
Schedule 5.18(l). For purposes of this
Sec. 5.18(l), the term "ESOP Cash Collateral" and
all definitions related thereto shall have the
meanings given in (a) Amendment No. 1 to
Second Amended and Restated Loan Agreement
dated as of December 9, 1991, attached hereto
in Exhibit "A", (b) Second Amended and
Restated Loan Agreement dated as of December
9, 1991, attached hereto in Exhibit "A", (c)
Second Amended and Restated Security Agreement
dated December 9, 1991, and attached hereto a
Exhibit "A", as each of such documents listed
in (a), (b) and (c) is in effect on December
16, 1991; provided, however, that any
references to any documents in such
definitions for purposes hereof will be to the
documents in effect on December 16, 1991,
whether or not such documents are subsequently
modified, altered, amended, or supplemented;
and
(m) Restricted Investments made within
the limitations of Sec. 5.8"
8. Section 5.20(f) is hereby amended to read in its entirety
as follows:
"(f) Officers' Certificates. Within the
periods provided in paragraphs (a) and (b)
above, a certificate of the chief financial
officer of the Company and an executive vice
president or the chief executive officer of
the Company stating that they have reviewed
the provisions of this Agreement and setting
forth: (i) the information and computations
(in sufficient detail) required in order to
establish whether the Company was in
compliance with the requirements of Sec. 5.5
through Sec. 5.14, inclusive, at the end of the
period covered by the financial statements
then being furnished, and (ii) whether there
existed as of the date of such financial
statements and whether, to the best of their
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;"
9. Amendment Fee. In consideration of the Purchaser's
agreement to execute and deliver this Amendment, the Company agrees
to pay the Purchaser, upon the Company's receipt of a copy of this
Amendment executed by the Purchaser a fee in the amount of
$200,000, provided however, that this Amendment shall not become
effective for any purpose until Purchaser has received said
$200,000.
10. Effectiveness. Subject to, and only after compliance
with, the provisions of paragraph 8 hereof, this Amendment and each
of its terms shall be effective as of June 30, 1994 and will apply
to all periods from and after June 30, 1994.
11. Express Amendment. Except as specifically provided
herein, the Note Agreement shall continue in full force and effect.
No provision of this Amendment shall be construed to limit any
obligation of the Company under the Note Agreement or any right of
the Purchaser under the Note Agreement.
12. Counterparts. This Amendment may be signed in any number
of counterparts with the same effect as if the signatures to each
such counterpart were upon a single instrument. All counterparts
shall be deemed an original of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date first written above.
COMPANY: PURCHASER:
PLM INTERNATIONAL, INC. PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By: /s/ J. Michael Allgood By: /s/ Jon C. Heiny
Its: Vice President & CFO Its: Counsel
By: /s/ Annette Masterson
Its: Assistant Director
Securities Investment