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Exhibit 10.6
EXECUTION COPY
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMONG
THE LENDERS PARTY HERETO
FLEET NATIONAL BANK, AS AGENT
AND
LEASECOMM CORPORATION
Dated: August 22, 2000
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TABLE OF CONTENTS
PAGE
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SECTION I DEFINITIONS.......................................................1
1.1 Definitions..........................................................1
1.2 Rules of Interpretation.............................................19
SECTION II DESCRIPTION OF CREDIT............................................19
2.1 Revolving Credit Loans..............................................19
2.2 Swing Line Advances.................................................20
2.3 The Notes...........................................................21
2.4 Notice and Manner of Borrowing or Conversion of Loans...............21
2.5 Funding of Loans....................................................22
2.6 Interest Rates and Payments of Interest.............................24
2.7 Fees................................................................25
2.8 Payments and Prepayments of the Loans; Conversion Term Loan.........26
2.9 Method of Payment and Allocation of Payments........................27
2.10 Indemnity...........................................................28
2.11 Computation of Interest and Fees; Due Date..........................29
2.12 Changed Circumstances; Illegality...................................29
2.13 Increased Costs.....................................................30
2.14 Capital Requirements................................................30
SECTION III CONDITIONS OF LOANS..............................................31
3.1 Conditions Precedent to Initial Loans...............................31
3.2 Conditions Precedent to all Loans...................................32
SECTION IV REPRESENTATIONS AND WARRANTIES...................................33
4.1 Organization; Qualification; Business...............................33
4.2 Corporate Authority.................................................33
4.3 Valid Obligations...................................................33
4.4 Consents or Approvals...............................................34
4.5 Title to Properties; Absence of Encumbrances........................34
4.6 Financial Statements................................................34
4.7 Changes.............................................................34
4.8 Solvency............................................................34
4.9 Defaults............................................................34
4.10 Taxes...............................................................35
4.11 Litigation..........................................................35
4.12 Subsidiaries........................................................35
4.13 Investment Company Act..............................................35
4.14 Compliance..........................................................35
4.15 ERISA...............................................................36
4.16 Environmental Matters...............................................36
4.17 Restrictions on the Borrower........................................37
4.18 Labor Relations.....................................................37
4.19 Margin Rules........................................................37
4.20 Disclosure..........................................................37
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TABLE OF CONTENTS
(continued)
PAGE
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SECTION V AFFIRMATIVE COVENANTS...........................................38
5.1 Financial Statements................................................38
5.2 Conduct of Business.................................................39
5.3 Maintenance and Insurance...........................................39
5.4 Taxes...............................................................39
5.5 Inspection..........................................................40
5.6 Maintenance of Books and Records....................................40
5.7 Use of Proceeds.....................................................40
5.8 Further Assurances..................................................40
5.9 Notification Requirements...........................................41
5.10 ERISA Reports.......................................................41
5.11 Environmental Compliance............................................42
SECTION VI FINANCIAL COVENANTS.............................................42
6.1 Debt to Worth Ratio.................................................42
6.2 Consolidated Tangible Net Worth.....................................42
6.3 Bad Debt Allowance..................................................42
6.4 Fixed Charge Ratio..................................................42
SECTION VII NEGATIVE COVENANTS..............................................43
7.1 Indebtedness........................................................43
7.2 Contingent Liabilities..............................................43
7.3 Encumbrances........................................................43
7.4 Merger; Consolidation; Sale or Lease of Assets......................45
7.5 Subsidiary Stock; Guarantees........................................45
7.6 Restricted Payments.................................................45
7.7 Payments on Subordinated Debt.......................................45
7.8 Investments; Purchases of Assets....................................46
7.9 ERISA Compliance....................................................47
7.10 Transactions with Affiliates........................................47
7.11 Fiscal Year.........................................................47
7.12 Underwriting Procedures.............................................47
SECTION VIII DEFAULTS........................................................48
8.1 Events of Default...................................................48
8.2 Remedies............................................................50
SECTION IX ASSIGNMENT; PARTICIPATION.......................................50
9.1 Assignment..........................................................50
9.2 Participations......................................................52
9.3 Increased Total Commitment..........................................52
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TABLE OF CONTENTS
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SECTION X THE AGENT.........................................................53
10.1 Appointment of Agent; Powers and Immunities.........................53
10.2 Actions by Agent....................................................54
10.3 Indemnification.....................................................55
10.4 Reimbursement.......................................................55
10.5 Non-Reliance on Agent and Other Lenders.............................55
10.6 Resignation or Removal of Agent.....................................56
SECTION XI MISCELLANEOUS.....................................................56
11.1 Notices.............................................................56
11.2 Expenses............................................................57
11.3 Indemnification.....................................................58
11.4 Survival of Covenants, Etc..........................................58
11.5 Set-Off.............................................................58
11.6 No Waivers..........................................................59
11.7 Amendments, Waivers, Etc............................................59
11.8 Binding Effect of Agreement.........................................60
11.9 Captions; Counterparts..............................................60
11.10 Entire Agreement, Etc...............................................60
11.11 Waiver of Jury Trial................................................60
11.12 Governing Law.......................................................60
11.13 Severability........................................................61
11.14 Confidentiality.....................................................61
11.15 Lost Note, Etc......................................................61
SCHEDULE 1 - Commitments of the Lenders
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B Form of Notice of Borrowing or Conversion
EXHIBIT C Disclosure
EXHIBIT D Form of Report of Chief Financial Officer
EXHIBIT E Assignment and Joinder Agreement
EXHIBIT F-1 Form of Dealer Agreement
EXHIBIT F-2 Form of Security Monitoring Agreement
EXHIBIT G Instrument of Adherence
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FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
August 22, 2000 by and among LEASECOMM CORPORATION, a Massachusetts corporation
having its chief executive office at 950 Winter Street, Waltham, Massachusetts
02451 (the "BORROWER"); FLEET NATIONAL BANK, a national bank having its head
office at 100 Federal Street, Boston, Massachusetts 02110 (together with its
successors, "FLEET"); the other financial institutions from time to time party
hereto (together with Fleet, the "LENDERS"); and FLEET NATIONAL BANK, as agent
for the Lenders (in such capacity, the "AGENT").
WHEREAS, the Borrower, the Agent and certain of the Lenders are parties to
a Third Amended and Restated Revolving Credit Agreement dated as of December 21,
1999 (the "EXISTING AGREEMENT").
WHEREAS, certain other financial institutions wish to become parties to the
Existing Agreement, as amended and restated hereby.
WHEREAS, the parties hereto wish to amend the Existing Agreement and to
restate the Existing Agreement as so amended.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree that the Existing Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION I
DEFINITIONS
1.1 DEFINITIONS.
All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
ADJUSTED COST. The Original Cost less any dealer reserve, hold backs and
discounts to the Borrower, sales taxes, insurance, shipping, delivery, handling
and other similar charges applicable to any Equipment or Security Monitoring
Agreement.
AFFECTED LOANS. See Section 2.12(a).
AFFILIATE. With reference to any Person, (including an individual, a
corporation, a partnership, a trust and a governmental agency or
instrumentality), (i) any director, officer or employee of that Person, (ii) any
other person controlling, controlled by or under direct or indirect common
control of that person, (iii) any other Person directly or indirectly holding 5%
or more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person and
(iv) any other Person 5% or more of
0
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any class of whose capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) is held directly or
indirectly by that Person.
AGENT. See Preamble.
AGREEMENT. This Third Amended and Restated Revolving Credit Agreement,
including the Exhibits and Schedules hereto, as the same may be supplemented or
amended from time to time.
ALTERNATE BASE RATE. The greater of (i) the rate of interest announced from
time to time by the Agent at its head office as its "Base Rate", and (ii) the
Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%). The Base Rate is a reference rate and does
not necessarily represent the lowest or best rate being charged to any customer.
Any change in the Base Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change.
ASSIGNEE. See Section 9.1.
BASE RATE LOAN. Any Loan bearing interest determined with reference to the
Alternate Base Rate.
BORROWER. See Preamble.
BORROWER'S ACCOUNTANTS. Deloitte & Touche LLP or such other independent
certified public accountants as are selected by the Borrower and reasonably
acceptable to the Agent.
BORROWING BASE. As at the date of any determination thereof, an amount
equal to the sum of:
(a) in the case of Eligible Leases which are Finance Leases
(other than Eligible Security Monitoring Agreements) or in the case of Eligible
Installment Sales Contracts, the lesser of (x) 100% of the Adjusted Cost of the
Eligible Equipment subject to such Eligible Leases or Eligible Installment Sales
Contracts, or (y) 75% of the aggregate amount of all Eligible Lease Receivables
relating to all such Eligible Leases or Eligible Installment Sales Contracts,
discounted to present value by a percentage equal to the Discount Rate (which
calculation shall not take into account rental payments due or payable under
such Eligible Leases or Eligible Installment Sales Contracts beyond 60 months
after the commencement date of such Eligible Leases or Eligible Installment
Sales Contracts); PLUS
(b) in the case of Eligible Leases which are Operating Leases
(other than Rental Contracts or Eligible Security Monitoring Agreements), the
lesser of (x) 75% of the aggregate Net Book Value of the Eligible Equipment
subject to such Operating Leases or (y) 75% of the aggregate amount of all
Eligible Lease Receivables relating to all such Eligible Leases, discounted to
present value by a percentage equal to the Discount Rate (which calculation
shall not take into account rental payments due or payable under such Eligible
Leases beyond 60 months after the commencement date of such Eligible Leases);
PLUS
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(c) in the case of Eligible Rental Contracts (other than
Eligible Security Monitoring Agreements), an amount equal to 85% of the
aggregate Net Book Value of all Eligible Equipment subject to such Eligible
Rental Contracts, PROVIDED that the portion of the Borrowing Base determined
pursuant to this subparagraph (c) shall not exceed 17.5% of the Total
Commitment; PLUS
(d) in the case of Eligible Security Monitoring Agreements, an
amount equal to 75% of the Adjusted Cost of the security system and/or
monitoring services subject to such Agreement, PROVIDED that solely for purposes
of the foregoing calculation the Adjusted Cost shall not, unless otherwise
approved by the Agent, exceed 35 times the so-called "recurring monthly
revenues" from any such Agreement; PLUS
(e) in the case of Eligible Installment Finance Contracts, an
amount equal to 75% of the aggregate amount of all Eligible Lease Receivables
relating to all such Eligible Installment Finance Contracts, discounted to
present value by a percentage equal to the Discount Rate (which calculation
shall not take into account payments due or payable under such Eligible
Installment Finance Contracts beyond 60 months after the commencement date of
such Eligible Installment Finance Contracts); PLUS
(f) 50% of the aggregate Net Book Value of all Eligible
Inventory, PROVIDED that the portion of the Borrowing Base determined pursuant
to this subparagraph (f) shall not exceed $2,000,000; MINUS
(g) Borrowing Base Reserves, if any, at the date of
determination of the Borrowing Base;
PROVIDED, HOWEVER, that notwithstanding the foregoing, there shall be excluded
from the Borrowing Base (x) any Lease or Eligible Installment Finance Contract
to the extent that the Receivables due pursuant to such Lease or Eligible
Installment Finance Contract, when added to the Receivables due pursuant to all
other Leases and Eligible Installment Finance Contracts with lessees and account
debtors in the same state would exceed 20% of Gross Lease Installments, and (y)
any Lease or Eligible Installment Finance Contract to the extent that the
Receivables due pursuant to such Lease or Eligible Installment Finance Contract,
when added to all other Receivables due from the same account debtor, would
exceed the lesser of (i) $5,000,000, or (ii) two and one-half percent (2.5%) of
the Commitments at such time. For purposes hereof, determination of the
calculation shall be made on a lease by lease and contract by contract basis but
the Borrowing Base shall include the aggregate of all such calculations.
BORROWING BASE MATURITY DATE. September 30, 2002.
BORROWING BASE REPORT. A report of a Borrowing Computation in form
satisfactory to the Agent and signed by any Responsible Officer.
BORROWING BASE RESERVES. At the time of any determination of the Borrowing
Base, such reserves as the Agent may from time to time determine to establish,
in the exercise of its reasonable credit judgment based upon its review of the
financial information delivered pursuant to Section 5.1, the results of
inspection and reviews of books and records as contemplated by
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Section 5.5 and other information concerning the business, operations and
prospects of the Borrower.
BORROWING COMPUTATION. See Section 2.4(c).
BUSINESS DAY. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are open for the conduct of a substantial part of their
commercial banking business; and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
LIBOR Loans, any day that is a Business Day described in clause (i) and that is
also a day for trading by and between banks in U.S. Dollar deposits in the
interbank Eurodollar market.
CAPITAL EXPENDITURES. For any period, the aggregate amount of all payments
made by any Person directly or indirectly for the purpose of acquiring,
constructing or maintaining fixed assets, real property or equipment which, in
accordance with GAAP, would be added as a debit to the fixed asset account of
such Person, including, without limitation, Capitalized Lease Obligations, but
excluding therefrom the purchase of Equipment as inventory for the purpose of
being leased under an Operating Lease.
CAPITALIZED LEASE OBLIGATIONS. As to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP, consistently applied.
CLOSING DATE. The first date on which the conditions set forth in Sections
3.1 and 3.2 have been satisfied and any Loans are to be made hereunder.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
COLLATERAL. All of the property, rights and interests of the Borrower and
its Subsidiaries that are or are intended to be subject to the security
interests and liens created by the Security Documents.
COMMITMENT. With respect to any Lender, the maximum dollar amount which
such Lender has agreed to loan to the Borrower upon the terms and subject to the
conditions of this Agreement, initially as set forth on SCHEDULE 1 attached
hereto, as such Lender's Commitment may be modified from time to time as
provided in this Agreement, including termination or reduction of such
Commitment in accordance with Sections 2.1 and 8.2 hereof. SCHEDULE 1 shall be
amended from time to time to reflect any changes in the Commitments of the
Lenders.
COMMITMENT FEE. See Section 2.7(a).
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CONSOLIDATED EARNINGS. For any fiscal period, an amount equal to
Consolidated Net Income for such period, plus the following to the extent
deducted in computing such Consolidated Net Income: (a) all provisions on the
consolidated statement of operations of the Parent and its Subsidiaries for any
federal, state or other taxes; (b) interest on Indebtedness (including payments
on Capitalized Lease Obligations in the nature of interest); and (c) any
extraordinary non-cash loss; all as determined in accordance with GAAP.
CONSOLIDATED INDEBTEDNESS. The consolidated Indebtedness (excluding
Subordinated Debt but including Non-Recourse Indebtedness) of the Parent and its
Subsidiaries, including the Borrower, determined in accordance with GAAP.
CONSOLIDATED NET INCOME (DEFICIT). With respect to any period, the
consolidated net income (or deficit) of the Parent and its Subsidiaries,
including the Borrower, for such period, as determined in accordance with GAAP;
PROVIDED, HOWEVER, that Consolidated Net Income shall not include: (i) any gain
or loss arising from any write-up of assets and (ii) any extraordinary or
nonrecurring gains.
CONSOLIDATED TANGIBLE CAPITAL FUNDS. The sum, with respect to the Parent
and its Subsidiaries, including the Borrower, on a consolidated basis, of (a)
the capital stock, (b) additional paid-in capital, (c) retained earnings and (d)
Subordinated Debt LESS (x) net organizational costs and net good will, (y)
treasury stock and (z) 25% of Debt Issue Costs.
CONSOLIDATED TANGIBLE NET WORTH. The sum, with respect to the Parent and
its Subsidiaries, including the Borrower, on a consolidated basis, of (a)
capital stock, (b) additional paid-in capital and (c) retained earnings, LESS
the sum of (x) net organizational costs and net good will, (y) treasury stock
and (z) 25% of Debt Issue Costs.
CONSUMER FINANCE LEASE. A Finance Lease between the Borrower, as lessor,
and a lessee who is an individual and who takes under the Lease primarily for
personal, family or household purposes.
CONVERSION TERM LOAN. See Section 2.8(a).
CONVERSION TERM LOAN MATURITY DATE. If the Revolving Credit Loans are
converted into the Conversion Term Loan, as provided in Section 2.8(a), the date
which is the third anniversary of the Borrowing Base Maturity Date.
DEALER. A Person who (i) is domiciled in the United States of America, (ii)
is not the subject of and has not taken any action described in subsections (f)
and (g) of Section 8.1 and (iii) is engaged in the business of selling,
servicing and installing security/alarm monitoring and related equipment in the
United States of America.
DEALER AGREEMENT. An agreement between the Borrower and a Dealer,
substantially in the form of EXHIBIT F-1 hereto, setting forth the rights and
obligations of each with respect to a Security Monitoring Agreement or other
agreement that has been assigned by such Dealer to the Borrower and which has
not been modified, amended, restated or otherwise rewritten in any material
respect more than two times.
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DEBT ISSUE COSTS. Those amounts characterized as "debt issue costs" in
accordance with GAAP on the Initial Financial Statements or the most recent
financial statements delivered pursuant to Section 5.1(a) or (b) hereof.
DEFAULT. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
DERIVATIVE EXPOSURE. The aggregate potential exposure of a Lender under all
outstanding Eligible Interest Rate Contracts, as determined by such Lender in
its reasonable discretion. Such Lender shall determine its potential exposure
under each Eligible Interest Rate Contract and notify the Agent and the Borrower
of such determination at the time the Borrower enters into such Eligible
Interest Rate Contract and such determination shall not be changed so long as
such Eligible Interest Rate Contract remains in effect.
DISCOUNT RATE. The Alternate Base Rate, which rate shall change
contemporaneously with any change in the Alternate Base Rate.
DRAWDOWN DATE. The Business Day on which any Loan is made or is to be made.
ELIGIBLE EQUIPMENT. Equipment:
(a) To which the Borrower has good and marketable title;
(b) Which is not subject to any Encumbrance other than that in favor of
the Agent for the benefit of the Lenders and in which (other than
with respect to security systems subject to a Security Monitoring
Agreement) the Agent has a duly perfected first priority security
interest under the UCC or other similar law if (x) required under
the Security Documents, or (y) required by the Agent by written
notice to the Borrower in the case of any Equipment with an Original
Cost of more than $35,000;
(c) Which is to be used primarily for personal, family or household
purposes or in the ordinary course of business by the Borrower's
lessees;
(d) Which is subject to an Eligible Lease or Eligible Rental Contract;
and
(e) Which is insured by either the Borrower in accordance with current
practice or the lessee thereof in accordance with industry standards.
ELIGIBLE INSTALLMENT SALES CONTRACT. Any installment sales contract,
purchase money security agreement or other similar chattel paper (including any
and all schedules, supplements and amendments thereto and modifications thereof)
entered into by the Borrower or its predecessor in interest as seller and a
third party as buyer in connection with a sale of Equipment.
ELIGIBLE INSTALLMENT FINANCE CONTRACT. An Installment Finance Contract:
(a) which is in full force and effect;
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(b) the creditor under which is the Borrower;
(c) to which the Borrower has good and marketable title, and
which is assignable by the Borrower;
(d) which is non-cancelable and provides that the third party
obligor's obligations thereunder are absolute and unconditional, and not subject
to defense, deduction, setoff or claim and as to which no defenses, setoffs,
claims or counterclaims exist or have been asserted;
(e) which is not subject to any Encumbrance other than that in
favor of the Agent for the benefit of the Lenders and in which the Agent has a
duly perfected first priority security interest under the UCC;
(f) the third party obligor under which (i) is domiciled in
the United States of America, (ii) is not the subject of and has not taken any
action described in subsections (f) and (g) of Section 8.1 and (iii) is not
otherwise been determined by the Agent to be unacceptable;
(g) which is in a form approved by the Agent;
(h) under which no payment is more than 90 days past due;
(i) under which no default has occurred other than to the
extent permissible under clause
(h) immediately above; and
(j) which has not been modified, amended, restated or
otherwise rewritten more than two times.
ELIGIBLE INTEREST RATE CONTRACTS. Interest rate swap agreements, interest
rate collar agreements, options on any of the foregoing and any other agreements
or arrangements designed to provide protection against fluctuations in interest
rates, in each case purchased by the Borrower from a Lender with respect to
Loans and approved by the Agent.
ELIGIBLE INVENTORY. Equipment:
(a) to which the Borrower has good and marketable title;
(b) which is not subject to any Encumbrance other than in favor of the
Agent for the benefit of the Lenders and in which the Agent has a duly perfected
first priority security interest under the UCC;
(c) which is to be used primarily for personal, family or household
purposes or in the ordinary course of business by the Borrower's lessees;
(d) which is held by the Borrower pending leasing to the Borrower's
lessees under an Eligible Lease or Eligible Rental Contract; and
(e) which is insured by the Borrower in accordance with its current
practices.
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ELIGIBLE LEASE. A Lease:
(a) Which is in full force and effect;
(b) The lessor under which is the Borrower;
(c) Which is assignable by the lessor thereunder;
(d) Which is non-cancelable and provides that the lessee's obligations
thereunder are absolute and unconditional, and not subject to
defense, deduction, set-off or claim and as to which no defenses,
set-offs, claims or counterclaims exist or have been asserted;
(e) Which is not subject to any Encumbrance other than that in favor of
the Agent for the benefit of the Lenders and in which the Agent has
a duly perfected first priority security interest under the UCC;
(f) Which is a Finance Lease or Operating Lease;
(g) The lessee under which (i) is domiciled in the United States of
America, (ii) is not the subject of and has not taken any action
described in subsections (f) and (g) of Section 8.1 and (iii) has not
otherwise been determined by the Agent to be unacceptable;
(h) Which is in a form approved by the Agent;
(i) Under which no payment is more than 90 days past due;
(j) Under which no default has occurred other than to the extent
permissible under clause (i) immediately above;
(k) Which covers Eligible Equipment;
(l) Which, if an Operating Lease, has a present value of all Fixed
Rentals thereunder as of the date such Operating Lease is to be
included in the Borrowing Base of at least 70% of the Original Cost
of the Equipment leased thereunder; or which is an Eligible Security
Monitoring Agreement; and
(m) which has not been modified, amended, restated or otherwise rewritten
with respect to terms of payment or in any other material respect
more than two times.
ELIGIBLE LEASE RECEIVABLES. As at the date of determination thereof,
Receivables then due and unpaid with respect to an Eligible Lease, an Eligible
Installment Sales Contract or an Eligible Installment Finance Contract.
ELIGIBLE RENTAL CONTRACT. A Rental Contract:
(a) Which is in full force and effect;
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(b) The lessor under which is the Borrower;
(c) Which is assignable by the lessor thereunder;
(d) Which provides that the lessee's obligations thereunder are absolute
and unconditional, and not subject to defense, deduction, set-off or
claim and as to which no defenses, set-offs, claims or counterclaims
exist or have been asserted;
(e) Which is not subject to any Encumbrance other than that in favor of
the Agent for the benefit of the Lenders and in which the Agent has
a duly perfected first priority security interest under the UCC;
(f) The lessee under which (i) is domiciled in the United States of
America, (ii) is not the subject of and has not taken any action
described in subsections (f) and (g) of Section 8.1 and (iii) has not
otherwise been determined by the Agent to be unacceptable;
(g) Which is in a form approved by the Agent;
(h) Under which no payment is more than 90 days past due;
(i) Under which no default has occurred other than to the extent
permissible under clause (h) immediately above;
(j) Which covers Eligible Equipment; and
(k) Which has not been modified, amended, restated or otherwise rewritten
with respect to terms of payment or in any other material respect
more than two times.
ELIGIBLE SECURITY MONITORING AGREEMENT. A Security Monitoring Agreement:
(a) Which is in full force and effect;
(b) Which is assignable by the Dealer thereunder;
(c) Which provides that the customer's obligations thereunder (solely as
to any equipment covered thereby) are absolute and unconditional,
and not subject to defense, deduction, set-off or claim and as to
which no defenses, set-offs, claims or counterclaims exist or have
been asserted;
(d) Which is not subject to any Encumbrance other than that in favor of
the Agent on behalf of the Lenders and in which the Agent has a duly
perfected first priority security interest under the UCC;
(e) Under which no payment is more than 90 days past due;
(f) Under which no default has occurred other than to the extent
permissible under clause (e) immediately above;
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(g) Which is the subject of a Dealer Agreement which is in full force
and effect, under which no default shall have occurred by either
party thereto and which is not subject to any Encumbrance other than
in favor of the Agent on behalf of the Lenders and in which the Agent
has a duly perfected first priority security interest under the UCC;
and
(h) With respect to which the monitoring services are being provided by
the Dealer under the applicable Dealer Agreement or by a Servicer
which is acceptable to the Agent, which acceptance shall not be
unreasonably withheld.
ENCUMBRANCES. See Section 7.3.
ENVIRONMENTAL LAWS. Any and all applicable federal, state and local
environmental, health or safety statutes, laws, regulations, rules and
ordinances (whether now existing or hereafter enacted or promulgated), of all
governmental agencies, bureaus or departments to the extent the foregoing may
now or hereafter have jurisdiction over the Borrower or any of its Subsidiaries
and all applicable judicial and administrative and regulatory decrees, judgments
and orders, including common law rulings and determinations, relating to injury
to, or the protection of, real or personal property or human health or the
environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of such Hazardous
Materials.
EQUIPMENT. Tangible equipment having an Original Cost not exceeding $75,000
and reasonably acceptable to the Agent, whether now or hereafter owned and
leased to third party users by the Borrower; PROVIDED, HOWEVER, that in no event
shall Equipment include (i) stand-alone software, (ii) fixtures (other than
electronic signs or security systems subject to a Security Monitoring
Agreement), or (iii) any equipment (other than electronic signs or security
systems subject to a Security Monitoring Agreement) custom designed for any
Person.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.
ERISA AFFILIATE. Any trade or business, whether or not incorporated, that
is treated as a single employer with the Borrower under Section 414(b), (c), (m)
or (o) of the Code and Section 4001(a)(14) of ERISA.
ERISA EVENT. (a) Any "reportable event," as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the
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<PAGE> 15
incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the Borrower
or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (g) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the imposition of
Withdrawal Liability (as defined in Part I of Subtitle E of Title IV of ERISA)
with respect to any Multiemployer Plan or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; (h) the occurrence of a "prohibited transaction"
with respect to which the Borrower or any of the Subsidiaries is a "disqualified
person" (within the meaning of Section 4975 of the Code) or with respect to
which the Borrower or any such Subsidiary could otherwise be liable; and (i) any
other event or condition with respect to a Plan or Multiemployer Plan that could
reasonably be expected to result in liability of the Borrower.
EVENT OF DEFAULT. Any event described in Section 8.1.
EXISTING AGREEMENT. See Preamble.
FEDERAL FUNDS EFFECTIVE RATE. For any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent.
FINANCE LEASE. A Lease characterized as a "finance lease" in accordance
with GAAP.
FIXED CHARGE RATIO. The ratio of Consolidated Earnings for any fiscal
quarter to Fixed Charges payable during such quarter.
FIXED CHARGES. On a consolidated basis for the Parent and its Subsidiaries,
including the Borrower, all payments of interest on all Indebtedness (including
all payments on capitalized lease obligations in the nature of interest).
FIXED RENTALS. The periodic rental payments under a Lease, the amounts of
which are fixed and do not vary from time to time based on usage, cash flow or
any other factor.
GAAP. Generally accepted accounting principles, consistently applied.
GROSS LEASE INSTALLMENTS. The aggregate Receivables due to the Borrower
from all leases of equipment.
GUARANTEES. As applied to the Parent and its Subsidiaries, all guarantees,
endorsements or other contingent or surety obligations with respect to
obligations of others whether or not reflected on the consolidated balance sheet
of the Borrower and their Subsidiaries, including any obligation to furnish
funds, directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or
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<PAGE> 16
by way of stock purchase, capital contribution, advance or loan, or to enter
into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
HAZARDOUS MATERIAL. Any substance (i) the presence of which requires or may
hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "pollutant" or "contaminant"
under any present or future Environmental Law or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 ET SEQ.) and any applicable local statutes
and the regulations promulgated thereunder; (iii) which is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and which is or becomes regulated pursuant to any
Environmental Law by any governmental authority, agency, department, commission,
board, agency or instrumentality of the United States, any state of the United
States, or any political subdivision thereof to the extent any of the foregoing
has or had jurisdiction over the Borrower; or (iv) without limitation, which
contains gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls ("PCB's").
INCREASING LENDER. See Section 9.3.
INDEBTEDNESS. As applied to any Person, all (i) liabilities or obligations,
direct and contingent, which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person at the date as of which Indebtedness is to be determined,
including, without limitation, lease obligations required to be shown as a
liability on the balance sheet of the lessee in accordance with generally
accepted accounting principles; (ii) liabilities or obligations of others for
which such Person is directly or indirectly liable, by way of guaranty (whether
by direct guaranty, suretyship, discount, endorsement, take-or-pay agreement,
agreement to purchase or advance or keep in funds or other agreement having the
effect of a guaranty) or otherwise; (iii) liabilities or obligations secured by
liens on any assets of such person, whether or not such liabilities or
obligations shall have been assumed by it; and (iv) non-cancelable liabilities
under all Operating Leases.
INITIAL FINANCIAL STATEMENTS. See Section 4.6.
INSTALLMENT FINANCE CONTRACT. Any agreement (including any and all
schedules, supplements and amendments thereto and modifications thereof) entered
into by the Borrower or its predecessor in interest as a service provider and a
third party as buyer in connection with the rendering of services to such third
party.
INSTRUMENT OF ADHERENCE. See Section 9.3.
INTEREST EXPENSE. For any period, the consolidated interest expense
(including imputed interest on capitalized lease obligations) and amortized debt
discount on Indebtedness of the Parent and its Subsidiaries for such period.
INTEREST PERIOD. With respect to (a) each LIBOR Loan, the period commencing
on the date of the making or continuation of or conversion to such LIBOR Loan
and ending one (1), two (2), three (3), six (6) or, subject to the consent of
all Lenders, twelve (12) months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing or Conversion, and (b) each
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<PAGE> 17
Money Market Loan, the period commencing on the date of the making such Money
Market Loan and ending not more than seven (7) days thereafter, as the Borrower
may elect (subject to availability) in the applicable Notice of Borrowing or
Conversion; PROVIDED that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day,
except that with respect to any Interest Period for a LIBOR Loan, if such
Business Day falls in the next calendar month, such Interest Period shall
end on the immediately preceding Business Day;
(ii) any Interest Period for a LIBOR Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the last
Business Day of a calendar month;
(iii) any Interest Period with respect to a Revolving Credit Loan that
would otherwise end after the Borrowing Base Maturity Date shall end on the
Borrowing Base Maturity Date;
(iv) any Interest Period with respect to a Conversion Term Loan that
would otherwise end after the Conversion Term Loan Maturity Date shall end
on the Conversion Term Loan Maturity Date; and
(v) notwithstanding clauses (iii) and (iv) above, no Interest Period
for a LIBOR Loan shall have a duration of less than one month, and if any
Interest Period applicable to a LIBOR Loan would be for a shorter period,
such Interest Period shall not be available hereunder.
INVESTMENT. As applied to the Borrower and its Subsidiaries, the purchase
or acquisition of any share of capital stock, partnership interest, evidence of
indebtedness or other equity security of any other Person (including any
Subsidiary), any loan, advance or extension of credit (excluding Accounts
Receivable arising in the ordinary course of business) to, or contribution to
the capital of, any other Person (including any Subsidiary), any real estate
held for sale or investment, any securities or commodities futures contracts
held, any other investment in any other Person (including any other Borrower or
any Subsidiary), and the making of any commitment or acquisition of any option
to make an Investment.
LEASE. Any lease agreement, installment sales contract or other agreement
(including any and all schedules, supplements and amendments thereon and
modifications thereof) entered into by the Borrower as lessor or seller with
respect to Equipment.
LENDERS. Fleet, the other financial institutions parties hereto and listed
on Schedule 1 attached hereto and each other Person that may after the date
hereof become an Assignee and, thereby, a party to this Agreement as a "Lender"
hereunder, but from and after the effective date that any Person shall have
assigned its entire Commitment pursuant to Section 9.1, "Lenders" shall no
longer include such Person.
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<PAGE> 18
LIBOR LOAN. Any Loan bearing interest at a rate determined with reference
to the LIBOR Rate.
LIBOR RATE. With respect to any LIBOR Loan for any Interest Period, the
rate per annum (rounded upward, if necessary, to the nearest 1/32 of one
percent) as determined by the Agent on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to such Interest
Period, which appears on the Telerate page 3750 as of 11:00 a.m. London time on
the day that is two London Banking Days preceding the Drawdown Date of such
LIBOR Loan; provided, however, that if the rate described above does not appear
on the Telerate System on any applicable interest determination date, the LIBOR
Rate shall be the rate (rounded upwards as described above, if necessary) for
deposits in dollars for a period substantially equal to such Interest Period on
the Reuters Page "LIBO" (or such other page as may replace the LIBO Page on that
service for the purpose of displaying such rates), as of 11:00 a.m. (London
Time), on the day that is two (2) London Banking Days prior to the beginning of
such Interest Period. If both the Telerate and Reuters system are unavailable,
then the LIBOR Rate for that date will be determined on the basis of the offered
rates for deposits in U.S. dollars for a period of time comparable to such
Interest Period which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2)
London Banking Days preceding the first day of such Interest Period as selected
by the Agent. The principal London office of each of the four major London banks
will be requested to provide a quotation of its U.S. dollar deposit offered
rate. If at least two such quotations are provided, the LIBOR Rate for that date
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. New York City time, on the day that is two
London Banking Days preceding the first day of such Interest Period.
LIBOR RESERVE PERCENTAGE. For any Interest Period, the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority,
domestic or foreign, to which any Lender is subject with respect to
"Eurocurrency Liabilities" (as defined in regulations issued from time to time
by such Board of Governors). The LIBOR Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any such reserve
percentage.
LOAN DOCUMENTS. This Agreement, the Notes, the Security Documents, the
Parent Guarantee and the Subsidiary Guarantees, together with any agreements,
instruments or documents executed and delivered pursuant to or in connection
with any of the foregoing.
LOANS. The Loans made or to be made by the Lenders to the Borrower pursuant
to Section II of this Agreement, including Revolving Credit Loans, Swing Line
Advances and the Conversion Term Loan.
LONDON BANKING DAYS. Any day other than a Saturday, Sunday or legal holiday
on which banks in London, England are open for the conduct of a substantial part
of their commercial
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<PAGE> 19
banking business and that is also a day for trading by and between banks in U.S.
Dollar deposits in the interbank Eurodollar market.
MAJORITY LENDERS. As of any date, the holders of sixty percent (60%) of the
outstanding principal amount of the Loans on such date; and if no such principal
is outstanding, the holders of sixty percent (60%) of the Total Commitment.
MONEY MARKET LOAN. Subject to availability, any Swing Line Advance bearing
interest at a rate determined with reference to the Money Market Rate.
MONEY MARKET RATE. With respect to any Swing Line Advance, subject to
availability, the interest rate per annum determined by Fleet in its sole and
absolute discretion plus 2.00%.
MULTIEMPLOYER PLAN. Any plan which is a Multiemployer Plan as defined in
Section 4001(a)(3) of ERISA.
NET BOOK VALUE. At a particular date, as to any Eligible Equipment or
Eligible Inventory, the Original Cost of such Eligible Equipment or Eligible
Inventory less aggregate depreciation thereon calculated from the date of
acquisition thereof in accordance with the Borrower's standard accounting and
depreciation practices using the straight line method over the estimated life of
such Eligible Equipment or Eligible Inventory, with salvage value determined by
the Borrower in accordance with such practices.
NEW LENDER. See Section 9.3.
NON-RECOURSE INDEBTEDNESS. Indebtedness of the Borrower or the Parent, as
the case may be, for which the remedy for nonpayment or non-performance of any
obligation or any default in respect thereof is strictly and absolutely limited
to any collateral securing such Indebtedness and in respect of which neither the
Borrower nor the Parent is subject to any personal liability.
NOTE RECORD. Any internal record, including a computer record, maintained
by any Lender with respect to any Loan.
NOTES. The Revolving Credit Notes.
NOTICE OF BORROWING OR CONVERSION. The notice, substantially in the form of
EXHIBIT B hereto, to be given by the Borrower to the Agent to request a Loan or
to convert an outstanding Loan of one Type into a Loan of another Type, in
accordance with Section 2.4.
OBLIGATIONS. Any and all obligations of the Borrower to the Agent and the
Lenders of every kind and description pursuant to or in connection with the Loan
Documents (including, without limitation, in connection with Revolving Credit
Loans and the Conversion Term Loan) and Eligible Interest Rate Contracts, direct
or indirect, absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising, regardless of how they arise or by what
agreement or instrument, if any, and including obligations to perform acts and
refrain from taking action as well as obligations to pay money.
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<PAGE> 20
OPERATING LEASE. A Lease characterized as an "operating lease" in
accordance with GAAP.
ORIGINAL COST. The Borrower's purchase price for (i) any Equipment as
invoiced by the supplier thereof or (ii) any Security Monitoring Agreement or
for the security system and/or monitoring services subject thereto.
PARENT. MicroFinancial Incorporated (f/k/a Boyle Leasing Technologies,
Inc.), a Massachusetts corporation, and the sole stockholder of the Borrower.
PARENT GUARANTEE. The Fourth Amended and Restated Guaranty made by the
Parent in favor of the Agent for the benefit of the Lenders, dated the Closing
Date and guaranteeing all Obligations.
PARTICIPANT. See Section 9.2.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
PENSION PLAN. Any Plan which is an "employee pension benefit plan" (as
defined in ERISA).
PERMITTED ACQUISITIONS. See Section 7.8.
PERMITTED ENCUMBRANCES. See Section 7.3.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business or other legal entity, any government or governmental
agency or political subdivision thereof, a court, and any other legal entity,
whether acting in an individual, fiduciary or other capacity.
PLAN. Any "employee pension benefit plan" or "employee welfare benefit
plan" (each as defined in ERISA) maintained by the Borrower or any Subsidiary.
PROHIBITED TRANSACTION. Any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
QUALIFIED INVESTMENTS. As applied to the Borrower and its Subsidiaries,
investments in (i) notes, bonds or other obligations of the United States of
America or any agency thereof that as to principal and interest constitute
direct obligations of or are guaranteed by the United States of America; (ii)
certificates of deposit, demand deposit accounts or other deposit instruments or
accounts maintained in the ordinary course of business with banks or trust
companies organized under the laws of the United States or any state thereof
that have capital and surplus of at least $100,000,000, (iii) commercial paper
that is rated not less than prime-one or A-1 or their equivalents by Moody's
Investors Service, Inc. or Standard & Poor's Corporation, respectively, or their
successors, (iv) any repurchase agreement secured by any one or more of the
foregoing, and (v) advances to employees for business related expenses to be
incurred in the ordinary course of business and consistent with past practices
in an amount not to exceed $500,000 in the
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<PAGE> 21
aggregate outstanding at any one time, PROVIDED that no advances to any single
employee shall exceed $100,000 in the aggregate.
RECEIVABLES. Any of the Borrower's accounts, accounts receivable, notes,
bills, drafts, acceptances, instruments, documents, chattel paper and other
debts, obligations and liabilities in whatever form owing to the Borrower from
any Person for goods sold or leased or for services rendered by the Borrower or
its predecessor in interest, or however otherwise established or created, all
guaranties and security therefor, any right, title and interest of the Borrower
in the goods or services which gave rise thereto, including rights to
reclamation and stoppage in transit and any rights of an unpaid seller of goods
or services; whether any of the foregoing be now existing or hereafter arising,
now or hereafter received by or owing or belonging to the Borrower.
RENTAL CONTRACT. An Operating Lease which is month-to-month and which is
cancelable.
RESPONSIBLE OFFICER. The chief financial officer of the Borrower and any
other officer of the Borrower designated by the chief financial officer to sign
Borrowing Base Reports and Notices of Borrowing or Conversion.
RESTRICTED PAYMENT. Any dividend, distribution, loan, advance, guaranty,
extension of credit or other payment, whether in cash or property to or for the
benefit of any Person who holds an equity interest in the Borrower or any of its
Subsidiaries, whether or not such interest is evidenced by a security, and any
purchase, redemption, retirement or other acquisition for value of any capital
stock of the Borrower or any of its Subsidiaries, whether now or hereafter
outstanding, or of any options, warrants or similar rights to purchase such
capital stock or any security convertible into or exchangeable for such capital
stock.
REVOLVING CREDIT ASSIGNMENT OF LEASES. A fourth amended and restated
assignment of leases, dated the Closing Date, by the Borrower in favor of the
Agent for the benefit of the Lenders, as amended, supplemented and in effect
from time to time, and any supplement thereto in the form of Exhibit A to the
Revolving Credit Assignment of Leases as executed and delivered by the Borrower
and the Agent from time to time.
REVOLVING CREDIT LOAN. See Section 2.1(a) hereof.
REVOLVING CREDIT NOTES. See Section 2.3(a).
SECURITY AGREEMENT. A fourth amended and restated security agreement, dated
the Closing Date, between the Borrower and the Agent, as amended, supplemented
and in effect from time to time, and any supplement thereto in the form of
Exhibit A to the Security Agreement as executed and delivered by the Borrower
and the Agent from time to time.
SECURITY DOCUMENTS. The Revolving Credit Assignment of Leases, the Security
Agreement and any additional documents evidencing or perfecting the Agent's lien
on the Collateral.
SECURITY MONITORING AGREEMENT. An agreement between a Dealer and a
customer, substantially in the form of EXHIBIT F-2 hereto, which provides for
(i) the selling, servicing and
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<PAGE> 22
installation by the Dealer of central station security/alarm monitoring
equipment and related monitoring services or (ii) only monitoring services with
respect to such equipment.
SERVICER. A Person engaged in the business of providing monitoring services
for central alarm systems.
SPECIAL PURPOSE SUBSIDIARY. A Subsidiary which is a special purpose
corporation for the securitization and financing of lease receivables, none of
the assets of which constitutes any part of the Collateral.
SUBORDINATED DEBT. Indebtedness of the Parent or any of its Subsidiaries,
including the Borrower, which is expressly subordinated and made junior to the
payment and performance in full of the Obligations and the Guaranteed
Obligations (as defined in the Parent Guaranty) on terms and conditions
satisfactory to the Agent and the Majority Lenders.
SUBSIDIARY. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Parent, the
Borrower or a Subsidiary of the Parent or Borrower; or any other such
organization the management of which is directly or indirectly controlled by the
Parent, the Borrower or a Subsidiary of the Parent or Borrower through the
exercise of voting power or otherwise; or any joint venture, whether
incorporated or not, in which the Parent or Borrower has a 50% ownership
interest.
SUBSIDIARY GUARANTEES. Guarantees of all Obligations, in form and substance
satisfactory to the Agent, made by each Subsidiary of the Borrower other than a
Special Purpose Subsidiary.
SWING LINE ADVANCES. See Section 2.2.
TOTAL COMMITMENT. The sum of the Commitments of the Lenders as in effect
from time to time, which as of the Closing Date shall be $192,000,000, as such
Commitments may be modified from time to time as provided in this Agreement,
including termination or reduction of such amount in accordance with Sections
2.1 and 8.2 hereof, and increase of such amount in accordance with Section 9.3
hereof.
TOTAL OUTSTANDINGS. At any time, the aggregate outstanding principal
balance of the Loans at the time.
TYPE. A Base Rate Loan, a LIBOR Loan or a Money Market Loan.
UCC. The Uniform Commercial Code as enacted in any state of the United
States or in the District of Columbia or the United States Virgin Islands
insofar as any such statute, as in effect from time to time, may be relevant to
the creation, perfection, continuation and enforcement of Encumbrances on
Collateral.
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<PAGE> 23
1.2 RULES OF INTERPRETATION.
(a) All terms of an accounting character used herein but not
defined herein shall have the meanings assigned thereto by GAAP applied on a
consistent basis. All calculations for the purposes of Section VI hereof shall
be made in accordance with GAAP.
(b) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented and in effect
from time to time in accordance with its terms and the terms of this Agreement.
(c) The singular includes the plural and the plural includes
the singular. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) The words "include", "includes" and "including" are not
limiting.
(f) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
(g) All terms not specifically defined herein or by GAAP,
which terms are defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts, have the meanings assigned to them in such
Uniform Commercial Code.
SECTION II
DESCRIPTION OF CREDIT
2.1 REVOLVING CREDIT LOANS.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, and in reliance upon the representations, warranties and
covenants of the Borrower herein, each of the Lenders agrees, severally and not
jointly, to make revolving credit loans (the "REVOLVING CREDIT LOANS") to the
Borrower at the Borrower's request from time to time from and after the Closing
Date and prior to the Borrowing Base Maturity Date, PROVIDED that the Total
Outstandings (after giving effect to all requested Revolving Credit Loans and
Swing Line Advances) shall not at any time exceed the lesser of (i) the
Borrowing Base and (ii) the Total Commitment, and PROVIDED, FURTHER that the sum
of the aggregate principal amount of outstanding Revolving Credit Loans made by
each Lender shall not at any time (after giving effect to all requested
Revolving Credit Loans and Swing Line Advances) exceed such Lender's Commitment,
and PROVIDED, FURTHER, that the sum of the aggregate principal amount of
outstanding Revolving Credit Loans based on Eligible Leases having original
terms of more than 60 months shall not at any time (after giving effect to all
requested Revolving Credit Loans) exceed 10% of the aggregate principal amount
of all outstanding Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, the Borrower may borrow, repay and
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<PAGE> 24
prepay amounts, up to the limits imposed by this Section 2.1, from time to time
between the Closing Date and the Borrowing Base Maturity Date upon request given
to the Agent pursuant to Section 2.4. Each request for a Revolving Credit Loan
hereunder shall constitute a representation and warranty by the Borrower that
the conditions set forth in Section 3.1, in the case of the initial Revolving
Credit Loans to be made on the Closing Date, and Section 3.2 in the case of all
other Revolving Credit Loans, have been satisfied as of the date of such
request.
(b) No LIBOR Loan shall be requested or made for less than
$500,000 in principal amount and in integral multiples of $100,000 in excess of
such minimum amount. No more than 8 LIBOR Loans may be outstanding at any time.
(c) Upon the terms and subject to the conditions of this
Agreement, the Borrower may convert all or any part (in integral multiples of
$500,000) of any outstanding Loan into a Loan of another Type on any Business
Day (which, in the case of a conversion of an outstanding LIBOR Loan shall be
the last day of the Interest Period applicable to such LIBOR Loan), PROVIDED,
HOWEVER that only Swing Line Advances may be made as or converted into Money
Market Loans. The Borrower shall give the Agent prior notice of each such
conversion (which notice shall be effective upon receipt) in accordance with
Section 2.4.
(d) All Commitments shall automatically terminate at 2:30 p.m.
Boston time on the Borrowing Base Maturity Date. Subject to the provisions of
Section 2.8 regarding mandatory payments, the Borrower shall have the right at
any time and from time to time upon five (5) Business Days' prior written notice
to the Agent to reduce by $5,000,000, and in integral multiples of $1,000,000 if
in excess thereof, the Total Commitment or to terminate entirely the Lenders'
Commitments to make Revolving Credit Loans hereunder, whereupon the Commitments
of the Lenders shall be reduced PRO RATA in accordance with their respective
Commitments by the aggregate amount specified in such notice or shall, as the
case may be, be terminated entirely. No such reduction or termination of any
Commitment may be reinstated.
2.2 SWING LINE ADVANCES.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, and in reliance upon the representations, warranties and covenants of
the Borrower herein, Fleet may, in its sole discretion, make short term advances
("SWING LINE ADVANCES") to the Borrower from time to time from and after the
Closing Date and prior to the Borrowing Base Maturity Date, PROVIDED that the
Total Outstandings (after giving effect to all requested Revolving Credit Loans
and Swing Line Advances) shall not at any time exceed the lesser of (i) the
Borrowing Base and (ii) the Total Commitment, PROVIDED, FURTHER that the
aggregate outstanding principal amount of Swing Line Advances shall not exceed
$10,000,000, and PROVIDED, FURTHER that the aggregate principal amount of
Revolving Credit Loans and Swing Line Advances made by Fleet shall not at any
time exceed Fleet's Commitment. Each Swing Line Advance shall be due and payable
on such Business Day (not more than seven (7) days after the making thereof) as
the Borrower shall specify in the Notice of Borrowing or Conversion requesting
such Swing Line Advance. Each request for a Swing Line Advance hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in Section 3.1, in the case of any Swing Line Advance to be made on the
Closing Date, and Section 3.2 in the case of all other Swing Line Advances, have
been satisfied as of the date of such request.
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(b) Each Swing Line Advance shall be either a Base Rate Loan or, subject to
availability, a Money Market Loan; no Swing Line Advance shall be a LIBOR Loan.
No Swing Line Advance shall be requested or made for less than $100,000 in
principal amount.
(c) Subject to the limitations set forth above, Swing Line Advances of one
Type may be converted into a Loan of another Type in accordance with Section
2.4. No Revolving Credit Loan may be converted into a Swing Line Advance.
2.3 THE NOTES. The Revolving Credit Loans shall be evidenced by separate
promissory notes for each Lender, each such note to be in substantially the form
of EXHIBIT A hereto, dated as of the Closing Date and completed with appropriate
insertions (each such note being referred to herein as a "Revolving Credit Note"
and collectively as the "Revolving Credit Notes"). One Revolving Credit Note
shall be payable to the order of each Lender in a principal amount equal to such
Lender's highest possible Commitment. The Borrower irrevocably authorizes each
of the Lenders to make or cause to be made, at or about the time of the Drawdown
Date of any Revolving Credit Loan or at the time of receipt of any payment of
principal on the Revolving Credit Notes, an appropriate notation on its Note
Record reflecting the making of such Revolving Credit Loan or (as the case may
be) the receipt of such payment. The outstanding amount of the Revolving Credit
Loans set forth on the Note Records shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Lenders, but the failure to
record, or any error in so recording, any such amount on any Lender's Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note to make payments of principal of or
interest on any Revolving Credit Note when due.
2.4 NOTICE AND MANNER OF BORROWING OR CONVERSION OF LOANS.
(a) Whenever the Borrower desires to obtain or continue a Loan
hereunder or convert an outstanding Loan of one Type into a Loan of another
Type, the Borrower shall give the Agent a written Notice of Borrowing or
Conversion (or a telephonic notice promptly confirmed by a written Notice of
Borrowing or Conversion), which Notice shall be irrevocable and which must be
received no later than 2:00 p.m. Boston time (i) one Business Day before the day
on which the requested Loan is to be made or continued as or converted to a Base
Rate Loan, (ii) three Business Days before the day on which the requested Loan
is to be made or continued as or converted to a LIBOR Loan, and (iii) the same
Business Day on which a requested Swing Line Advance is to be made. Such Notice
shall specify (A) the effective date and amount of each such Loan or portion
thereof requested to be made, continued or converted, subject to the limitations
set forth in this Agreement, (B) the interest rate option requested to be
applicable thereto, (C) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of the term "Interest Period") and
(D) in the case of a requested Swing Line Advance, the maturity date thereof
(which maturity date shall be a Business Day no later than seven (7) days after
the date such Swing Line Advance is requested to be made). If such Notice fails
to specify the interest rate option to be applicable to the requested Loan, then
the Borrower shall be deemed to have requested a Base Rate Loan. If such written
confirmation of any telephonic notification differs in any material respect from
the action taken by the Agent, the records of the Agent shall control absent
manifest error, and shall be accompanied by a Borrowing Base
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Report. If the Agent receives a Notice of Borrowing or Conversion after the time
specified in subsection (a) above, such Notice shall not be effective.
(b) Subject to the provisions of the definition of the term
"Interest Period" herein, the duration of each Interest Period for a LIBOR Loan
shall be as specified in the applicable Notice of Borrowing or Conversion. If no
Interest Period is specified in a Notice of Borrowing or Conversion with respect
to a requested LIBOR Loan or Money Market Loan, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration for a
requested LIBOR Loan or one day's duration for a Money Market Loan. If the Agent
does not receive an effective Notice of Borrowing or Conversion with respect to
an outstanding LIBOR Loan, or if, when such Notice must be given prior to the
end of the Interest Period applicable to such outstanding Loan, the Borrower
shall have failed to satisfy any of the conditions hereof, the Borrower shall be
deemed to have elected to convert such outstanding LIBOR Loan in whole into a
Base Rate Loan on the last day of the then current Interest Period with respect
thereto.
(c) Each Notice of Borrowing or Conversion requesting
borrowing of a Revolving Credit Loan shall be accompanied by a Borrowing Base
Report containing a computation by the Borrower in form satisfactory to the
Agent (hereinafter referred to as a "BORROWING COMPUTATION") certified by a
Responsible Officer, setting forth (i) a complete description of the Equipment
to be acquired or financed with respect to which such Revolving Credit Loan has
been requested, (ii) the Original Cost and Adjusted Cost of such Equipment,
(iii) a complete description of the Leases covering such Equipment, (iv) the
name of the lessees under such Leases, (v) a statement that such Equipment and
Leases, subject to the acceptance by the Agent of such Equipment or the
applicable lessee, satisfy the conditions to qualify as Eligible Equipment
Leases or Eligible Rental Contracts, respectively, and (vi) such other
information with respect to such Equipment and Leases as is requested by the
Agent in the Borrowing Computation or otherwise. Within two Business Days after
receipt of such information in the form indicated above, the Agent shall notify
the Borrower if any of such Equipment or lessees are unacceptable to the Agent.
In the event the Agent does not so notify the Borrower, the Agent shall be
deemed to have accepted such Equipment and lessees. The acceptance or deemed
acceptance of any lessee under any Lease at any one time by the Agent shall not
operate as an acceptance of such lessee at any future time.
2.5 FUNDING OF LOANS.
(a) PRO RATA FUNDING. All Loans (other than Swingline
Advances) shall be made by the Lenders PRO RATA in accordance with their
respective Commitments, PROVIDED, HOWEVER that the failure of any Lender to make
any Loan shall not relieve any other Lender of its obligation to lend hereunder
(it being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made by such other
Lender).
(b) NOTICE. The Agent shall promptly notify the Lenders of
each Notice of Borrowing or Conversion received pursuant to Section 2.4 (other
than a Notice requesting a Swing Line Advance) and of each Lender's portion of
the requested Loan. Not later than 1:00 p.m. (Boston time) on the proposed
Drawdown Date of such Loan, each Lender will make available to the Agent, at its
head office, in immediately available funds, the amount of such Lender's PRO
RATA share of the amount of such requested Loan. Upon receipt by the Agent of
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such amount, and upon receipt of the documents required by Section 3 and the
satisfaction of the other conditions set forth therein (to the extent
applicable) the Agent may first pay to Fleet on behalf of the Borrower, out of
such funds, an amount equal to the aggregate principal balance of any
outstanding Swing Line Advances, and then shall make available to the Borrower
the balance of such Loan. The failure or refusal of any Lender to make available
to the Agent at the aforesaid time and place on any Drawdown Date the amount of
its PRO RATA share of any requested Loans shall not relieve any other Lender
from its several obligation hereunder to make available to the Agent the amount
of such other Lender's PRO RATA share of any requested Loans.
(c) ADVANCE BY AGENT. The Agent may, unless notified to the
contrary by any Lender prior to a Drawdown Date, assume that each Lender has
made available to the Agent on such Drawdown Date the amount of such Lender's
PRO RATA share of the Loans to be made on such Drawdown Date, and the Agent may
(but it shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any Lender makes available
to the Agent such amount on a date after such Drawdown Date, such Lender shall
pay to the Agent on demand an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, TIMES (ii) the amount of such Lender's
PRO RATA share of any such Loans TIMES (iii) a fraction, the numerator of which
is the number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Lender's PRO RATA share of such Loans shall
become immediately available to the Agent, and the denominator of which is 365.
A statement of the Agent submitted to such Lender with respect to any amounts
owing under this paragraph shall be PRIMA FACIE evidence of the amount due and
owing to the Agent by such Lender. If the amount of such Lender's PRO RATA share
of such Loans is not made available to the Agent by such Lender within three (3)
Business Days following such Drawdown Date, the Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Revolving Credit Loans made on such Drawdown
Date.
(d) SWING LINE ADVANCES. Upon the satisfaction of the
conditions set forth in Section 3, to the extent applicable, Fleet will make
available to the Borrower the amount of any Swing Line Advance that Fleet
determines, in its sole discretion, to make. If any Swing Line Advance is not
repaid when due, upon written demand by Fleet given to the Agent and each other
Lender, each other Lender shall purchase from Fleet, and Fleet shall sell and
assign to each such Lender, such other Lender's PRO RATA share (based on its
Commitment) of such unpaid Swing Line Advance as of the date of such advance, by
making available to the Agent, at its head office, in immediately available
funds, an amount equal to the PRO RATA portion of outstanding principal amount
of such Swing Line Advance to be purchased by such other Lender. The Borrower
hereby agrees to each such sale and assignment. Each such Lender agrees to make
such purchase of its share of the unpaid Swing Line Advance on (i) the Business
Day on which such demand is made by Fleet, PROVIDED that notice of such demand
is given not later than 12:00 noon (Boston time) on such Business Day, or (ii)
the first Business Day next succeeding such demand if notice of such demand is
given after such time. Upon any such assignment, Fleet represents and warrants
to each such other Lender that Fleet is the legal and beneficial owner of the
interest in such Swing Line Advance being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Swing Line Advance. If any such other Lender makes available to the Agent such
amount on a date after the
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date such interest is to be assigned to it, such Lender shall pay to Fleet on
demand an amount equal to the product of (i) the average, computed for the
period referred to in clause (iii) below, of the weighted average interest rate
paid by Fleet for federal funds acquired by Fleet during each day included in
such period, TIMES (ii) the amount to have been paid by such Lender on such
purchase date, TIMES (iii) a fraction, the numerator of which is the number of
days that elapse from and including the date scheduled for such purchase to the
date on which the amount of such Lender's Commitment Percentage of such unpaid
Swing Line Advance shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to such Lender
with respect to any amounts owing under this paragraph shall be PRIMA FACIE
evidence of the amount due and owing to Fleet by such Lender, absent manifest
error. When such Lender shall pay such amount to the Agent for the account of
Fleet, such amount so paid in respect of principal shall constitute a Revolving
Credit Loan which is a Base Rate Loan made by such Lender on such date for
purposes of this Agreement.
2.6 INTEREST RATES AND PAYMENTS OF INTEREST.
(a) BASE RATE LOANS. Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof at a rate per annum equal to the
Alternate Base Rate minus 0.25%, which rate shall change contemporaneously with
any change in the Alternate Base Rate. Such interest shall be payable monthly in
arrears on the first Business Day of each month, commencing September 1, 2000,
and when such Loan is due (whether at maturity, by reason of acceleration or
otherwise).
(b) LIBOR LOANS. Each LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the LIBOR Rate plus 1.75%. Such interest
shall be payable for such Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof.
(c) MONEY MARKET LOANS. Each Money Market Loan shall bear
interest on the outstanding principal amount thereof at the Money Market Rate.
Interest on each Money Market Loan shall be payable at the end of the Interest
Period applicable thereto.
(d) CONVERSION TERM LOAN. Any Conversion Term Loan shall bear
interest on the outstanding principal amount thereof at the following rates: (x)
to the extent such Loan is a Base Rate Loan, at a rate per annum equal to the
Alternate Base Rate, plus .50% and (y) to the extent such Loan is a LIBOR Loan,
at a rate per annum equal to the LIBOR Rate, plus 2.50%.
(e) DEFAULT INTEREST. If a material Event of Default shall
occur, then at the option of the Agent the unpaid balance of Loans shall bear
interest, to the extent permitted by law, compounded daily at an interest rate
equal to 2% per annum above the interest rate applicable to each such Loan in
effect on the day such Event of Default occurs, until such Event of Default is
cured or waived.
(f) ADDITIONAL INTEREST. So long as any Lender shall be
required under regulations of the Board of Governors of the Federal Reserve
System (or any other banking authority, domestic or foreign, to which such
Lender is subject) to maintain reserves with respect
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to liabilities or assets consisting of or including "Eurocurrency Liabilities"
(as defined in regulations issued from time to time by such Board of Governors),
the Borrower shall pay to the Agent for the account of each such Lender
additional interest on the unpaid principal amount of each LIBOR Loan made by
such Lender from the date of such Loan until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder
(rounded, if necessary, to the nearest 1/8 of 1%) obtained by subtracting (i)
the LIBOR Rate for the Interest Period for such LIBOR Loan from (ii) the rate
obtained by dividing such LIBOR Rate by a percentage equal to 100% minus the
Eurodollar Reserve Percentage of such Lender for such Interest Period. Such
additional interest shall be determined by such Lender and notified to the
Borrower through the Agent, and shall be payable on each date on which interest
is payable on such LIBOR Loan.
(g) MAXIMUM INTEREST. All agreements between the Borrower and
the Lenders are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the Obligations or
otherwise, shall the amount paid or agreed to be paid to the Lenders for the use
or the forbearance of the Obligations exceed the maximum permissible under
applicable law. As used herein, the term "applicable law" shall mean the law of
The Commonwealth of Massachusetts in effect as of the date hereof provided,
however, that in the event there is a change in the law which results in a
higher permissible rate of interest, then the Loan Documents shall be governed
by such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of Borrower and the Lenders in the execution, delivery and
acceptance of the Loan Documents to contract in strict compliance with the laws
of The Commonwealth of Massachusetts from time to time in effect. If, under or
from any circumstances whatsoever, fulfillment of any provision of any of the
Loan Documents at the time of performance of such provision shall be due, shall
involve transcending the limit of such validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or from circumstances whatsoever the Lenders
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance of the Obligations and not to the payment of
interest. This provision shall control every other provision of all Loan
Documents.
2.7 FEES.
(a) The Borrower shall pay to the Agent for the benefit of the
Lenders a commitment fee (the "COMMITMENT FEE"), computed on a daily basis and
payable quarterly in arrears on the first Business Day of each calendar quarter,
equal to 0.275% per annum of the excess of (i) the Total Commitment at the time
over (ii) the Total Outstandings from time to time, PROVIDED, HOWEVER that for
purposes of the foregoing, Total Outstandings shall not include outstanding
Swing Line Advances.
(b) Without limiting any of the Lenders' other rights
hereunder or by law, if any Loan or any portion thereof or any interest thereon
is not paid within fifteen (15) days after its due date, the Borrower shall pay
to the Agent for the benefit of the Lenders on demand a late payment charge
equal to 5% of the amount of the total payment due.
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(c) The Borrower shall pay to the Lenders such other standard
charges imposed by the Lenders on the Borrower as are customarily imposed by the
Lenders in the ordinary course of business on borrowers generally (e.g., charges
for returned checks, cashier's checks, wire transfers, letters of credit,
foreign exchange transactions, and other operational services).
(d) The Borrower shall pay to the Agent, solely for the
account of the Agent, such other fees as the Borrower and the Agent shall agree.
(e) The Borrower authorizes the Agent and the Lenders to
charge to their Note Records or to any deposit account which the Borrower may
maintain with any of them the interest, fees, charges, taxes and expenses
provided for in this Agreement, the other Loan Documents or any other document
executed or delivered in connection herewith or therewith.
2.8 PAYMENTS AND PREPAYMENTS OF THE LOANS; CONVERSION TERM LOAN.
(a) On the Borrowing Base Maturity Date, if the Lenders shall
not have offered to extend such date and if no Default shall have occurred and
be continuing, then at the option of the Borrower the unpaid principal balance
of the Revolving Credit Loans shall be converted into a term loan (the
"CONVERSION TERM LOAN") which shall be payable in thirty six (36) equal
consecutive monthly installments on the first Business Day of each calendar
month, commencing with the first day of the month following the Borrowing Base
Maturity Date, with the unpaid principal balance of the Conversion Term Loan,
together with all unpaid interest thereon and all fees and other amounts due
with respect thereto, due and payable in full on the Conversion Term Loan
Maturity Date. If the Lenders shall have offered to extend the Borrowing Base
Maturity Date but the Borrower shall not have agreed to such extension or if any
Default shall have occurred and be continuing on such date, then notwithstanding
the existence of any Eurodollar or Money Market Loan and notwithstanding any
other provision of the Loan Documents, the Borrower shall pay in full on such
date the unpaid principal balance of the Revolving Credit Loans, together with
all unpaid interest thereon and all fees and other amounts due with respect
thereto.
(b) LIBOR Loans and Money Market Loans may be prepaid at any
time, subject to the provisions of Section 2.10, upon three (3) Business Days'
notice, and Base Rate Loans may be prepaid at any time, without premium or
penalty, upon one Business Day's notice. Upon the written request of the
Borrower in conjunction with any such prepayment of a Revolving Credit Loan, the
Agent shall, simultaneously with receipt of such prepayment, release the
Eligible Equipment, Eligible Leases and Eligible Rental Contracts to which such
prepaid Loan relates from the Agent's Encumbrance on such items of Collateral
granted to the Agent pursuant to the Security Documents, PROVIDED that (i) no
Default shall have occurred and be continuing, (ii) the Agent shall have
received from the Borrower a Borrowing Base Report demonstrating that upon such
release the Borrower shall be in compliance with the terms of Section 2.1
hereof, and (iii) the Agent shall have received a certification from a
Responsible Officer certifying that no Default has occurred and is continuing,
that the Borrower has complied with the provisions of Section 7.4 hereof and
Section 2(b)(ii) of the Security Agreement and that upon such release and after
giving effect thereto the Borrower shall be in compliance with Section 2.1
hereof and no Default shall have occurred and be continuing.
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(c) If at any time the Total Outstandings exceed the lesser of
(i) the Borrowing Base and (ii) the Total Commitment, then the Borrower shall
immediately pay the amount of any such excess to the Agent for application to
the Loans.
2.9 METHOD OF PAYMENT AND ALLOCATION OF PAYMENTS.
(a) All payments by the Borrower hereunder and under any of
the other Loan Documents shall be made in lawful money of the United States in
immediately available funds, without set-off or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents, the Borrower will pay to each Lender
such additional amount in Dollars as shall be necessary to enable such Lender to
receive the same net amount which such Lender would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to each Lender certificates or other valid vouchers or other
evidence of payment reasonably satisfactory to the Agent for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document. The Lenders may, and the Borrower
hereby authorizes the Lenders to, debit the amount of any payment not made by
such time to the demand deposit accounts of the Borrower with the Lenders or to
their Note Records.
(b) All payments of principal of and interest in respect of
Revolving Credit Loans, the Conversion Term Loan and the Commitment Fee shall be
made to the Agent, for the benefit of the Lenders, PRO RATA in accordance with
their respective Commitments, and payments of any other amounts due hereunder
shall be made to the Agent to be allocated among the Agent and the Lenders as
their respective interests appear. All such payments shall be made at the
Agent's head office or at such other location that the Agent may from time to
time designate, in each case in immediately available funds.
(c) If the Commitments shall have been terminated or the
Obligations shall have been declared immediately due and payable pursuant to
Section 8.2, all funds received from or on behalf of the Borrower (including as
proceeds of Collateral) by any Lender in respect of Obligations (except funds
received by any Lender as a result of a purchase of a participant interest
pursuant to Section 2.9(d) below) shall be remitted to the Agent, and all such
funds, together with all other funds received by the Agent from or on behalf of
the Borrower (including proceeds of Collateral) in respect of Obligations, shall
be applied by the Agent in the following manner and order: (i) first, to
reimburse the Agent and the Lenders, in that order, for any amounts payable
pursuant to Sections 11.2 and 11.3 hereof; (ii) second, to the payment of the
Commitment Fee and any other fees payable hereunder; (iii) third, to the payment
of interest due on the Revolving Credit Loans and the Conversion Term Loan; (iv)
fourth, to the payment of the outstanding principal balance of any Swing Line
Advances; (v) fifth, to the payment of the outstanding principal balance of the
Revolving Credit Loans and the Conversion Term Loan; (vi) sixth, to the payment
of any other Obligations payable by the Borrower; and (vii) any remaining
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funds shall be paid to whoever shall be entitled thereto or as a court of
competent jurisdiction shall direct.
(d) Each of the Lenders and the Agent hereby agrees that if it
should receive any amount (whether by voluntary payment, by realization upon
security, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents, or otherwise) in respect of principal of, or interest on, the
Revolving Credit Loans or the Conversion Term Loan or any fees which are to be
shared PRO RATA among the Lenders, which, as compared to the amounts theretofore
received by the other Lenders with respect to such principal, interest or fees,
is in excess of such Lender's PRO RATA share of such principal, interest or
fees, such Lender shall share such excess, less the costs and expenses
(including, reasonable attorneys' fees and disbursements) incurred by such
Lender in connection with such realization, exercise, claim or action, PRO RATA
with all other Lenders in proportion to their respective Commitments, and such
sharing shall be deemed a purchase (without recourse) by such sharing party of
participant interests in the Loans or such fees, as the case may be, owed to the
recipients of such shared payments to the extent of such shared payments;
provided, however, that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
2.10 INDEMNITY. If the Borrower for any reason (including, without
limitation, pursuant to Sections 2.8(b), 2.12 and 8.2 hereof) makes any payment
of principal with respect to any LIBOR or Money Market Loan on any day other
than the last day of an Interest Period applicable to such Loan, or fails to
borrow or continue or convert to a LIBOR Loan or Money Market Loan, as the case
may be, after giving a Notice of Borrowing or Conversion thereof pursuant to
Section 2.4, or fails to prepay a LIBOR Loan after having given notice thereof,
the Borrower shall pay to the Agent for the benefit of the Lenders any amount
required to compensate the Lenders for any additional losses, costs or expenses
which they may reasonably incur as a result of such payment or failure,
including, without limitation, any loss (including loss of anticipated profits),
costs or expense incurred by reason of the liquidation or re-employment of
deposits or other funds required by the Lenders to fund or maintain such Loan.
Without limiting the foregoing, the Borrower shall pay to the Agent a "yield
maintenance fee" in an amount computed as follows: the current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the expiration date of the
Interest Period of the Loan as to which the prepayment is made, shall be
subtracted from the interest rate applicable (pursuant to Section 2.6(b) or (c))
to each LIBOR Loan or Money Market Loan, as the case may be, in effect at the
time of prepayment. If the result is zero or a negative number, there shall be
no yield maintenance fee. If the result is a positive number, then the resulting
percentage shall be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by 360 and multiplied by the
number of days remaining in the Interest Period of the Loan as to which the
prepayment is made. Said amount shall be reduced to present value calculated by
using the above referenced United States Treasury securities rate and the number
of days remaining in the Interest Period of the Loan as to which prepayment is
made. The resulting amount shall be the yield maintenance fee due to the Lenders
upon the payment of a Loan under the circumstances described in the first
sentence of this Section. The Borrower shall pay such amount upon presentation
by the Agent of a statement setting forth the amount and the Agent's (or the
affected Lenders') calculation
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thereof pursuant hereto, which statement shall be deemed true and correct absent
manifest error. If the Obligations are declared immediately due and payable
pursuant to Section 8.2, then any amount provided for in this Section shall be
due and payable in the same manner as though the Borrower had made a prepayment
of the Loans.
2.11 COMPUTATION OF INTEREST AND FEES; DUE DATE.
(a) Interest and all fees payable hereunder shall be computed
daily on the basis of a year of 360 days and paid for the actual number of days
for which due.
(b) If the due date for any payment of principal is extended
by operation of law, interest shall be payable for such extended time. If any
payment required by this Agreement becomes due on a day that is not a Business
Day such payment may be made on the next succeeding Business Day (subject to
clause (i) of the definition of the term "Interest Rate Period"), and such
extension shall be included in computing interest and fees in connection with
such payment.
2.12 CHANGED CIRCUMSTANCES; ILLEGALITY.
(a) Notwithstanding any other provision of this Agreement, in the
event that:
(i) on any date on which the LIBOR Rate would otherwise be set the
Agent shall have determined in good faith (which determination shall be
final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Rate, or
(ii) at any time the Agent or any Lender shall have determined in good
faith (which determination shall be final and conclusive and, if made by
any Lender, shall have been communicated to the Agent in writing) that:
(A) the making or continuation of or conversion of any Loan to a LIBOR
Loan has been made impracticable or unlawful by (1) the occurrence of a
contingency that materially and adversely affects the interbank Eurodollar
market or (2) compliance by the Agent or such Lender in good faith with any
applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged with
the interpretation or administration thereof or with any request or
directive of any such governmental authority (whether or not having the
force of law); or
(B) the LIBOR Rate shall no longer represent the effective cost to the
Agent or such Lender for U.S. dollar deposits in the interbank market for
deposits in which it regularly participates;
then, and in any such event, the Agent shall forthwith so notify the Borrower
thereof. Until the Agent notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the obligation of the Lenders to allow
selection by the Borrower of the Type of Loan affected by the contingencies
described in this Section (herein called "AFFECTED LOANS") shall be suspended.
If, at the time the Agent so notifies the Borrower, the Borrower has previously
given the Agent a Notice of Borrowing or Conversion with respect to one or more
Affected Loans but such Loans
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have not yet gone into effect, such notification shall be deemed to be a request
for Base Rate Loans.
(b) In the event of a determination of illegality pursuant to
subsection (a)(ii)(A) above, the Borrower shall, with respect to the outstanding
Affected Loans, prepay the same, together with interest thereon and any amounts
required to be paid pursuant to Section 2.10, on such date as shall be specified
in such notice (which shall not be earlier than the date such notice is given)
and may, subject to the conditions of this Agreement, borrow a Loan of another
Type in accordance with Section 2.1 hereof by giving a Notice of Borrowing or
Conversion pursuant to Section 2.4 hereof.
2.13 INCREASED COSTS. In case any change in law, regulation, treaty or
official directive or the interpretation or application thereof by any court or
by any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):
(i) subjects any Lender to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the
Borrower or otherwise with respect to the transactions contemplated hereby
(except for taxes on the overall net income of such Lender imposed by the
United States of America or any political subdivision thereof), or
(ii) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, any Lender (other than such
requirements as are already included in the determination of the LIBOR
Rate), or
(iii) imposes upon any Lender any other condition with respect to its
obligations or performance under this Agreement,
and the result of any of the foregoing is to increase the cost to the Lender,
reduce the income receivable by such Lender or impose any expense upon such
Lender with respect to any Loans or its obligations under this Agreement, such
Lender shall notify the Borrower and the Agent thereof. The Borrower agrees to
pay to such Lender the amount of such increase in cost, reduction in income or
additional expense as and when such cost, reduction or expense is incurred or
determined, upon presentation by such Lender of a statement in the amount and
setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based, which statement shall be
deemed true and correct absent manifest error.
2.14 CAPITAL REQUIREMENTS. If after the date hereof any Lender reasonably
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a
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consequence of such Lender's commitment to make Loans hereunder to a level below
that which such Lender or such holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or such
holding company's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed by
such Lender to be material, then such Lender shall notify the Borrower thereof.
The Borrower agrees to pay to such Lender the amount of such reduction of
capital as and when such reduction is determined, payable within 30 days after
presentation by such Lender of a statement in the amount and setting forth in
reasonable detail such Lender's calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error) unless within such 30 day period the Borrower
shall have prepaid in full all obligations to such Lender, in which event no
amount shall be payable to such Lender under this Section. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
SECTION III
CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS. The obligation of the Lenders to
make any additional Revolving Credit Loans is subject to the satisfaction, on or
prior to the Closing Date, of the following conditions:
(a) The Agent shall have received the following agreements,
documents, certificates and opinions in form and substance satisfactory to the
Agent and duly executed and delivered by the parties thereto:
(i) This Agreement;
(ii) The Revolving Credit Notes;
(iii) The Security Documents;
(iv) The Parent Guarantee;
(v) UCC-3 Financing Statement Amendments;
(vi) Borrowing Base Report as of a date within five (5)
Business Days of the Closing Date;
(vii) Notice of Borrowing or Conversion as of the Closing
Date;
(viii) A certificate of the Clerk or an Assistant Clerk of the
Borrower with respect to resolutions of the Board of Directors authorizing
the execution and delivery of the Loan Documents and identifying the
officer(s) authorized to execute, deliver and take all other actions
required under this Agreement, and providing specimen signatures of such
officers, and certifying that neither the Articles of Organization nor
the Bylaws of the Borrower has been amended since the date the same were
delivered to Fleet pursuant to the Existing Credit Agreement;
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(ix) A certificate of the Secretary of State of the Borrower's
jurisdiction of incorporation as to legal existence and good standing of
the Borrower in such state;
(x) An opinion addressed to the Lenders from Edwards & Angell, counsel
to the Borrower; and
(xi) Such other documents, instruments, opinions and certificates and
completion of such other matters, as the Agent may reasonably deem
necessary or appropriate.
(b) No litigation, arbitration, proceeding or investigation shall be
pending or threatened which questions the validity or legality of the
transactions contemplated by any Loan Document or seeks a restraining order,
injunction or damages in connection therewith, or which, in the judgment of the
Agent, might adversely affect the transactions contemplated hereby or except as
disclosed on Exhibit C hereto, might have a materially adverse affect on the
assets, business, financial condition or prospects of the Borrowers.
(c) All necessary filings and recordings against the Collateral shall have
been completed and the Agent's liens on the Collateral shall have been
perfected, as contemplated by the Security Documents.
(d) The Borrower shall have paid to the Agent all fees to be paid hereunder
(including pursuant to Section 2.7(d) hereof) on or prior to the Closing Date.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Lenders to
make any Loan, including the initial Loans, or continue or convert Loans of one
Type to Loans of another Type is further subject to the following conditions:
(a) timely receipt by the Agent of the Notice of Borrowing or
Conversion and a Borrowing Base Report with respect to any Loan;
(b) the representations and warranties contained in Section IV shall
be true and accurate in all material respects on and as of the date of such
Notice of Borrowing or Conversion and on the effective date of the making,
continuation or conversion of each Loan as though made at and as of each such
date (except to the extent that such representations and warranties expressly
relate to an earlier date);
(c) no Default shall have occurred and be continuing at the time of,
and immediately after the making of, such requested Loans;
(d) the resolutions referred to in Section 3.1 shall remain in full
force and effect; and
(e) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for any Lender, would
make it illegal or against the policy of any governmental agency or authority
for such Lender to make Loans hereunder.
The making, continuation or conversion of each Loan shall be deemed to be a
representation and warranty by the Borrower on the date of the making,
continuation or
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conversion of such Loan as to the accuracy of the facts referred to in
subsection (b) of this Section 3.2 and of the satisfaction of all of the
conditions set forth in this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants to the Agent
and the Lenders that except as set forth on EXHIBIT C attached hereto:
4.1 ORGANIZATION; QUALIFICATION; BUSINESS.
(a) Each of the Borrower and its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, (ii) has all requisite corporate power to
own its property and conduct its business as now conducted and as presently
contemplated and (iii) is duly qualified and in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction (all of
which are listed on EXHIBIT C attached hereto) where the nature of its
properties or business requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the business,
financial condition, assets or properties of the Borrower or of the Borrower and
its Subsidiaries taken as a whole.
(b) Since the date of the Initial Financial Statements, the
Borrower has continued to engage in substantially the same business as that in
which it was then engaged and is engaged in no unrelated business.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance of the
Loan Documents and the transactions contemplated hereby are within the corporate
power and authority of the Borrower and have been authorized by all necessary
corporate proceedings, and do not and will not (a) contravene any provision of
the charter documents or by-laws of the Borrower or any law, rule or regulation
applicable to the Borrower, (b) contravene any provision of, or constitute an
event of default or event that, but for the requirement that time elapse or
notice be given, or both, would constitute an event of default under, any other
agreement, instrument, order or undertaking binding on the Borrower, or (c)
result in or require the imposition of any Encumbrance on any of the properties,
assets or rights of the Borrower, except in favor of the Agent and the Lenders.
4.3 VALID OBLIGATIONS. The Loan Documents and all of their respective terms
and provisions are the legal, valid and binding obligations of the Borrower,
enforceable in accordance with their respective terms except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and except as the remedy of specific
performance or of injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought. The Security Documents have
effectively created in favor of the Agent and the Lenders legal, valid and
enforceable security interests in the Collateral and such security interests are
fully perfected first priority security interests.
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4.4 CONSENTS OR APPROVALS. The execution, delivery and performance of the
Loan Documents and the transactions contemplated herein do not require any
approval or consent of, or filing or registration with, any governmental or
other agency or authority, or any other Person, except under or as contemplated
by the Security Documents.
4.5 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of the Borrower and
its Subsidiaries has good and marketable title to all of the properties, assets
and rights of every name and nature now purported to be owned by it, including,
without limitation, such properties, assets and rights as are reflected in the
Initial Financial Statements (except such properties, assets or rights as have
been disposed of in the ordinary course of business since the date thereof),
free from all Encumbrances except Permitted Encumbrances, and, except as so
disclosed, free from all defects of title that might materially adversely affect
such properties, assets or rights, taken as a whole. All real property owned or
leased by the Borrower is described in EXHIBIT C hereto.
4.6 FINANCIAL STATEMENTS. The Borrower has furnished to the Lenders the
Parent's consolidated and consolidating balance sheets as of December 31, 1999
and its consolidated and consolidating statements of income, changes in
stockholders' equity and cash flow for the fiscal year then ended and related
footnotes, audited and certified by the Borrower's Accountants. The Borrower has
also furnished to the Lenders the Parent's unaudited consolidated balance sheet
as of March 31, 2000 and consolidated statement of income for the three months
ended March 31, 2000 (the "INITIAL FINANCIAL STATEMENTS") in each case certified
by the principal financial officer of the Borrower, subject to normal, recurring
year-end adjustments that shall not in the aggregate be material in amount. All
such financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods specified and present fairly the
financial position of the Parent and its Subsidiaries as of such dates and the
results of the operations of the Parent and its Subsidiaries for such periods.
At the date hereof, the Borrower has no Indebtedness or other material
liabilities, debts or obligations, whether accrued, absolute, contingent or
otherwise, and whether due or to become due, including, but not limited to,
liabilities or obligations on account of taxes or other governmental charges,
that are not set forth on the Initial Financial Statements or on EXHIBIT C
hereto.
4.7 CHANGES. Since the date of the Initial Financial Statements, there have
been no changes in the assets, liabilities, financial condition, business or
prospects of the Parent or any of its Subsidiaries other than changes in the
ordinary course of business, the effect of which has not, in the aggregate, been
materially adverse to the Parent and its Subsidiaries taken as a whole.
4.8 SOLVENCY. The Borrower has and, after giving effect to the Loans, will
have, assets (both tangible and intangible) having a fair saleable value in
excess of the amount required to pay the probable liability on its then-existing
debts (whether matured or unmatured, liquidated or unliquidated, fixed or
contingent); the Borrower has and will have access to adequate capital for the
conduct of its business and the discharge of its debts incurred in connection
therewith as such debts mature; the Borrower was not insolvent immediately prior
to the making of the Loans and immediately after giving effect thereto, the
Borrower will not be insolvent.
4.9 DEFAULTS. As of the date of this Agreement, no Default exists.
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4.10 TAXES. The Borrower and each Subsidiary has filed all federal, state
and other tax returns required to be filed, and all taxes, assessments and other
governmental charges due from the Borrower and each Subsidiary have been fully
paid, except for such taxes, assessments or charges that are being contested in
good faith by appropriate proceedings and with respect to which (a) adequate
reserves have been established and are being maintained in accordance with GAAP
and (b) no lien has been filed to secure such taxes, assessments or charges. All
such contests at the date hereof are described on EXHIBIT C hereto. The Borrower
and its Subsidiaries have not executed any waiver that would have the effect of
extending the applicable statute of limitations in respect of tax liabilities.
The federal and state income tax returns of the Borrower and each Subsidiary
have not been audited or otherwise examined by any federal or state taxing
authority. The Borrower and each Subsidiary have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.
4.11 LITIGATION. There is no litigation, arbitration, proceeding or
investigation pending, or, to the knowledge of the Borrower's or any
Subsidiary's officers, threatened, against the Borrower or any Subsidiary that,
if adversely determined, may reasonably be expected to result in a material
judgment not fully covered by insurance, may reasonably be expected to result in
a forfeiture of all or any substantial part of the property of the Borrower or
their Subsidiaries, or may reasonably be expected to have a material adverse
effect on the assets, business or prospects of the Borrower and its Subsidiaries
taken as a whole.
4.12 SUBSIDIARIES. As of the date of this Agreement, all Special Purpose
Subsidiaries and all other Subsidiaries of the Borrower are listed on EXHIBIT C
hereto. The Borrower or a Subsidiary of the Borrower is the owner, free and
clear of all liens and encumbrances, of all of the issued and outstanding stock
of each Subsidiary. All shares of such stock have been validly issued and are
fully paid and nonassessable, and no rights to subscribe to any additional
shares have been granted, and no options, warrants or similar rights are
outstanding.
4.13 INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.
4.14 COMPLIANCE. The Borrower has all necessary permits, approvals,
authorizations, consents, licenses, franchises, registrations and other rights
and privileges (including patents, trademarks, trade names and copyrights) to
allow it to own and operate its business without any violation of law or the
rights of others except to the extent that any such violation would not have a
material adverse effect on the business, financial condition or operation of the
Borrower and its Subsidiaries taken as a whole; and the Borrower and each
Subsidiary are duly authorized, qualified and licensed under and in compliance
with all applicable laws, regulations, authorizations and orders of public
authorities, including, without limitation, Environmental Laws, except to the
extent that any such failure to be so authorized, qualified, licensed or in
compliance would not have a material adverse effect on the business, financial
condition or operation of the Borrower and its Subsidiaries taken as a whole.
The Borrower and each Subsidiary have performed all obligations required to be
performed by it under, and is not in default under or in violation of, its
Certificate of Incorporation or By-Laws, or any agreement, lease, mortgage,
note, bond, indenture, license or other instrument or undertaking to which it is
a party or by which any of it or any of its properties are bound, except for
violations none of which, either individually or in the aggregate, would have
any material adverse effect on the
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business, condition (financial or otherwise) or assets of the Borrower and its
Subsidiaries taken as a whole.
4.15 ERISA. The Borrower and each of its Affiliates are in compliance in
all material respects with ERISA and the provisions of the Code applicable to
the Plans; neither the Borrower nor any of its Affiliates have engaged in a
Prohibited Transaction which would subject the Borrower, any of its Affiliates
or any Plan to a material tax or penalty imposed on a Prohibited Transaction; no
Plan has incurred any "accumulated funding deficiency" (as defined in ERISA);
except as set forth in the Initial Financial Statements, the aggregate fair
market value of all assets of the Plans which are single-employer plans is at
least equal to the aggregate present value of all accrued benefits under such
Plans, both as determined in the most recent actuarial reports for such Plans
using the actuarial assumptions used for funding purposes therein; neither the
Borrower nor any of its Affiliates has incurred any liability to the Pension
Benefit Guaranty Corporation over and above premiums required by law; and
neither the Borrower nor any of its Affiliates has terminated any Plan in a
manner which could result in the imposition of a lien on the property of the
Borrower or any of its Affiliates.
4.16 ENVIRONMENTAL MATTERS.
(a) The Borrower and each of its Subsidiaries have obtained
all permits, licenses and other authorizations which are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial condition or operations of the Borrower or any of its
Subsidiaries. The Borrower and each of its Subsidiaries are in compliance with
the terms and conditions of all such permits, licenses and authorizations, and
are also in compliance with all applicable orders, decrees, judgments and
injunctions, issued, entered, promulgated or approved under any Environmental
Law, except to the extent failure to comply would not have a material adverse
effect on the business, financial condition or operations of the Borrower and
its Subsidiaries.
(b) No written notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the best of the Borrower's knowledge, threatened by any governmental or
other entity with respect to any alleged failure by the Borrower or any of its
Subsidiaries to have any permit, license or authorization required in connection
with the conduct of its business or to comply with any Environmental Laws.
(c) To the best of the Borrower's knowledge no material oral
or written notification of a release of a Hazardous Material has been filed by
or on behalf of the Borrower or any of its Subsidiaries and no property now or
previously owned, leased or used by the Borrower or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or on any similar state list of sites requiring investigation or
clean-up.
(d) There are no liens or Encumbrances arising under or
pursuant to any Environmental Laws on any of the real property or properties
owned, leased or used by the Borrower or any of its Subsidiaries and no
governmental actions have been taken or, to the best
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of the Borrower's knowledge, are in process which could subject any of such
properties to such liens or Encumbrances or, as a result of which the Borrower
or any of its Subsidiaries would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any property owned by it in
any deed to such property.
4.17 RESTRICTIONS ON THE BORROWER. The Borrower is not party to or bound by
any contract, agreement or instrument, nor subject to any charter or other
corporate restriction which will, under current or foreseeable conditions,
materially and adversely affect the business, property, assets, operations or
conditions, financial or otherwise of the Borrower or any of its Subsidiaries.
4.18 LABOR RELATIONS. There is (i) no unfair labor practice complaint
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened, except for
such complaints, grievances and arbitration proceedings which, if adversely
decided, would not have a material and adverse effect on the condition
(financial or otherwise), properties, business or results of operations of the
Borrower or any of its Subsidiaries, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries, except for any such labor action as would not have a material and
adverse effect on the condition (financial or otherwise), properties, business
or results of operations of the Borrower or any of its Subsidiaries and (iii) to
the best knowledge of the Borrower, no union representation question existing
with respect to the employees of the Borrower or any of its Subsidiaries and, to
the best knowledge of the Borrower, no union organizing activities are taking
place, except for any such question or activities as would not have a material
and adverse effect on the condition (financial or otherwise), properties,
business or results of operations the Borrower or any of its Subsidiaries.
4.19 MARGIN RULES. The Borrower does not own or have any present intention
of purchasing or carrying, and no portion of any Loan shall be used for
purchasing or carrying, any "margin security" or "margin stock" as such terms
are used in Regulations G, U or X of the Board of Governor's of the Federal
Reserve System.
4.20 DISCLOSURE. No representation or warranty made by the Borrower in any
Loan Document and no document or information furnished to the Lenders by or on
behalf of or at the request of the Borrower in connection with any of the
transactions contemplated by the Loan Documents contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements contained therein not misleading in light of the circumstances in
which they are made.
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SECTION V
AFFIRMATIVE COVENANTS
So long as the Lenders have any obligation to lend hereunder or any Loan or
other Obligation remains outstanding, the Borrower covenants as follows:
5.1 FINANCIAL STATEMENTS. The Borrower shall furnish to the Lenders:
(a) as soon as available to the Borrower, but in any event
within 90 days after the end of each of fiscal year, the Parent's consolidated
and consolidating balance sheets as of the end of, and related consolidated and
consolidating statements of income and retained earnings and consolidated
statement of cash flow for, such year, audited and certified by the Borrower's
Accountants in the case of such consolidated statements, and certified by the
chief financial officer of the Borrower in the case of such consolidating
statements; and, concurrently with such financial statements, a copy of the
Borrower's Accountants management report and a written statement by the
Borrower's Accountants that, in the making of the audit necessary for their
report and opinion upon such financial statements they have obtained no
knowledge of any Default or, if in the opinion of such accountants any such
Default exists, they shall disclose in such written statement the nature and
status thereof;
(b) as soon as available to the Borrower, but in any event
within 45 days after the end of each quarter, the Parent's consolidated balance
sheet as of the end of, and related consolidated statements of income, retained
earnings and cash flow for, the quarter then ended and portion of the year then
ended, certified by a Responsible Officer of the Borrower, subject to normal,
recurring year-end adjustments that shall not in the aggregate be material in
amount;
(c) as soon as available, but in any event within 15 days
after the end of each month, a Borrowing Base Report, together with such other
information regarding Eligible Lease Receivables as the Agent may require;
(d) as soon as available, but in any event within 30 days
after the first day of each fiscal year, the Parent's and the Borrower's
projections for such fiscal year, prepared on a monthly basis and including
consolidated and consolidating balance sheets and statements of income, retained
earnings and cash flows;
(e) concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.1, a report in
substantially the form of EXHIBIT D hereto signed on behalf of the Borrower by a
Responsible Officer;
(f) promptly after the receipt thereof by the Parent or the
Borrower, copies of any reports (including any so-called management letters)
submitted to the Parent or the Borrower by independent public accountants in
connection with any annual or interim review of the accounts of the Parent or
the Borrower made by such accountants;
(g) promptly after the same are delivered to its stockholders
or the Securities and Exchange Commission, copies of all proxy statements,
financial statements and reports as the Parent or the Borrower shall send to its
stockholders or as the Parent or the Borrower may
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file with the Securities and Exchange Commission or any governmental authority
at any time having jurisdiction over the Parent or the Borrower or their
Subsidiaries;
(h) at least 30 days prior to the date any amendments or
modifications are made to the agreements and other instruments evidencing
Indebtedness for borrowed money of the Borrower (other than Obligations) which
is not Subordinated Debt, notification setting forth in detail the proposed
amendments or modifications;
(i) promptly after the date on which the aggregate amount of
Receivables due from any individual account debtor exceeds the lesser of (i) one
and one-half percent (1.5%) of the lesser of (x) the Borrowing Base at such time
and (y) the Total Commitment at such time or (ii) $3,000,000, a detailed
breakdown of the obligations due from such account debtor in form satisfactory
to the Agent; and
(j) from time to time, such other financial data and
information about the Parent, the Borrower or their Subsidiaries (including,
without limitation, a report in substantially the form of EXHIBIT D hereto) as
the Agent or the Lenders may reasonably request.
5.2 CONDUCT OF BUSINESS. The Borrower and each of its Subsidiaries shall:
(a) duly observe and comply in all material respects with all
applicable laws, regulations, decrees, orders, judgments and valid requirements
of any governmental authorities relative to its corporate existence, rights and
franchises, to the conduct of its business and to its property and assets
(including without limitation all Environmental Laws and ERISA), and shall
maintain and keep in full force and effect and comply with all licenses and
permits necessary in any material respect to the proper conduct of its business;
(b) maintain its corporate existence and remain or engage
substantially in the same business as that in which it is now engaged and in no
unrelated business.
5.3 MAINTENANCE AND INSURANCE. The Borrower shall maintain its properties
in good repair, working order and condition as required for the normal conduct
of its business. The Borrower shall maintain, or cause its lessees to maintain,
with responsible insurance companies such insurance on such of its properties,
in such amounts and against such risks as are customarily maintained by similar
businesses; PROVIDED, that the Borrower may continue to self-insure Equipment in
the manner in which it is currently conducting its business until the Agent
notifies the Borrower otherwise; and PROVIDED, FURTHER, that the Borrower shall
(x) not materially change the manner in which it self-insures Equipment without
the prior written consent of the Agent; (y) file with the Agent upon the request
of the Agent a detailed list of the insurance then in effect, stating, as
applicable, the names of the insurance companies, the amounts and rates of the
insurance, dates of expiration thereof and the properties and risks covered
thereby; and (z) within 45 days after notice in writing from the Agent, obtain
such additional insurance as the Agent may reasonably request.
5.4 TAXES. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when they become due; except
for any tax, assessment or charge that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
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have been established and are being maintained in accordance with GAAP if no
Encumbrance shall have been filed to secure such tax, assessment or charge.
5.5 INSPECTION. The Borrower shall permit the Agent, any Lender and their
designees, at any reasonable time and at reasonable intervals of time, and upon
reasonable notice (or if a Default shall have occurred and is continuing, at any
time and without prior notice), to (i) visit and inspect the properties of the
Borrower and its Subsidiaries, (ii) examine and make copies of and take
abstracts from the books and records of the Borrower and its Subsidiaries, and
(iii) discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with their appropriate officers and (following the occurrence and
during the continuance of a Default hereunder) accountants, all at the
reasonable expense of the Borrower. Without limiting the generality of the
foregoing, the Borrower will permit periodic reviews (as determined by the
Agent) of the books and records of the Borrower and its Subsidiaries to be
carried out by the Agent's commercial finance examiners, provided that in the
absence of a Default or unless requested or required by regulatory authorities
or by official policy of any Lender, such reviews shall not be conducted more
than once per year; and the Agent may, in its sole discretion, in lieu of such
reviews by its own commercial finance examiners accept reports of examinations
of such books and records performed by commercial finance examiners acting on
behalf of other lenders to the Borrower to minimize examination expense. The
Borrower shall also permit the Agent to arrange for verification of Eligible
Lease Receivables, under reasonable procedures, directly with any account
debtors or by other methods.
5.6 MAINTENANCE OF BOOKS AND RECORDS. The Borrower and each of its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with GAAP consistently
applied and applicable law.
5.7 USE OF PROCEEDS.
(a) The Borrower will use the proceeds of Loans solely to
finance or refinance Receivables arising from Eligible Leases and Eligible
Rental Contracts, for the working capital needs of the Borrower, to finance
Permitted Acquisitions and for ongoing general corporate purposes.
(b) No portion of any Loan shall be used for the "purpose of
purchasing or carrying" any "margin stock" or "margin security" as such terms
are used in Regulations G, U and X of the Board of Governors of the Federal
Reserve System, or otherwise in violation of such regulations.
5.8 FURTHER ASSURANCES. At any time and from time to time the Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Agent to effect the purposes of the Loan Documents.
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5.9 NOTIFICATION REQUIREMENTS. The Borrower shall furnish to the Agent:
(a) immediately upon becoming aware of the existence of any
condition or event that constitutes a Default, written notice thereof specifying
the nature and duration thereof and the action being or proposed to be taken
with respect thereto;
(b) promptly upon becoming aware of any material litigation
seeking damages in excess of $250,000 or of any investigative proceedings by a
governmental agency or authority commenced or threatened against the Borrower or
any of its Subsidiaries of which they have notice, the outcome of which would or
might have a materially adverse effect on the assets, business or prospects of
the Borrower alone or the Borrower and its Subsidiaries on a consolidated basis,
written notice thereof and the action being or proposed to be taken with respect
thereto;
(c) promptly upon becoming aware of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any of its Subsidiaries regarding any potential
violation of Environmental Laws or any spill, release, discharge or disposal of
any Hazardous Material and promptly after receipt of any notice of the type
referred to in Section 4.16, written notice thereof (together with a copy of any
such notice) and the action being or proposed to be taken with respect thereto;
and
(d) promptly after any occurrence or after becoming aware of
any condition affecting the Borrower or any Subsidiary which might constitute a
material adverse change in or which might have a material adverse effect on the
business, properties or condition (financial or otherwise) of the Borrower alone
or the Borrower and its Subsidiaries, taken as a whole, written notice thereof.
5.10 ERISA REPORTS.
(a) Each Plan shall comply in all material respects with ERISA
and the Code, except to the extent failure to comply in any instance would not
have a material adverse effect on the business, financial condition or
operations of the Borrower and its Subsidiaries taken as a whole.
(b) With respect to any Plan, the Borrower shall, or shall
cause its ERISA Affiliates to, furnish to the Agent promptly (i) as soon as
possible and in any event within 10 days after the Borrower or any of its ERISA
Affiliates knows that any ERISA Event has occurred or is expected to occur, a
statement of the chief financial officer of the Borrower describing such ERISA
Event, including copies of any notice concerning such ERISA Event received from
the PBGC, a plan administrator, or from a Multiemployer Plan sponsor, and the
action, if any, the Borrower or such ERISA Affiliate proposes to take with
respect thereto; and (ii) promptly after filing thereof, a copy of the annual
report of each Pension Plan (Form 5500 or comparable form) required to be filed
with the IRS and/or the Department of Labor. Promptly after the adoption of any
Pension Plan, the Borrower shall notify the Agent of such adoption.
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5.11 ENVIRONMENTAL COMPLIANCE.
(a) The Borrower and its Subsidiaries will comply in all
material respects with all applicable Environmental Laws in all jurisdictions in
which any of them operates now or in the future, and the Borrower and its
Subsidiaries will comply in all material respects with all such Environmental
Laws that may in the future be applicable to the Borrower's or any Subsidiary's
business, properties and assets.
(b) If the Borrower or any Subsidiary shall (i) receive notice
that any material violation of any Environmental Law may have been committed or
is about to be committed by the Borrower or any Subsidiary, (ii) receive notice
that any administrative or judicial complaint or order has been filed or is
about to be filed against the Borrower or any Subsidiary alleging a material
violation of any Environmental Law requiring the Borrower or any Subsidiary to
take any action in connection with the release of Hazardous Materials into the
environment or (iii) receive any notice from a federal, state or local
government agency or private party alleging that the Borrower or any Subsidiary
may be liable or responsible for any material amount of costs associated with a
response to or cleanup of a release of Hazardous Materials into the environment
or any damages caused thereby, the Borrower or such Subsidiary shall provide the
Agent with a copy of such notice within five (5) days after the Borrower or such
Subsidiary's receipt thereof. Within fifteen (15) days after the Borrower or any
Subsidiary has learned of the enactment or promulgation of any Environmental Law
which may result in any material adverse change in the condition, financial or
otherwise, of the Borrower or any Subsidiary, the Borrower or such Subsidiary
shall provide the Agent with notice thereof.
SECTION VI
FINANCIAL COVENANTS
So long as any Loan or other Obligation remains outstanding or the Lenders
have any obligation to make any Loan hereunder, the Borrower covenants as
follows:
6.1 DEBT TO WORTH RATIO. The ratio of Consolidated Indebtedness to
Consolidated Tangible Capital Funds shall not exceed six and one-half (6.5) to
one (1) at any time.
6.2 CONSOLIDATED TANGIBLE NET WORTH. The Borrower shall at all times
maintain a Consolidated Tangible Net Worth of not less than the sum of (i)
$77,500,000 and (ii) 50% of the aggregate amount of Consolidated Net Income of
the Parent and its Subsidiaries, including the Borrower, for each of the fiscal
quarters ending after June 30, 2000, but without deducting therefrom any amount
of Consolidated Net Deficit for any of such fiscal quarters;
6.3 BAD DEBT ALLOWANCE. The Borrower shall at all times maintain a balance
sheet allowance for bad debt of the Parent and its Subsidiaries, including the
Borrower, of at least 7% of Gross Lease Installments.
6.4 FIXED CHARGE RATIO. The Borrower shall have, as of the end of each
fiscal quarter, a Fixed Charge Ratio of the Parent and its Subsidiaries,
including the Borrower, of not less than 1.30 to 1.00.
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SECTION VII
NEGATIVE COVENANTS
So long as any Loan or other Obligation remains outstanding or the Lenders
have any obligation to make any Loan hereunder, the Borrower covenants as
follows:
7.1 INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, guarantee or be or remain liable with respect to any
Indebtedness other than the following:
(a) Obligations;
(b) Indebtedness existing as of the date of this Agreement
and disclosed on EXHIBIT C hereto and renewals and refinancings thereof, but not
any increase in the principal amounts thereof;
(c) Indebtedness for taxes, assessments or governmental
charges to the extent that payment therefor shall at the time not be required to
be made in accordance with Section 5.4;
(d) current liabilities on open account for the purchase price
of services, materials and supplies incurred by the Borrower in the ordinary
course of business (not as a result of borrowing), so long as all of such open
account Indebtedness shall be promptly paid and discharged when due or in
conformity with customary trade terms and practices, except for any such open
account Indebtedness which is being contested in good faith by the Borrower, as
to which adequate reserves required by GAAP have been established and are being
maintained and as to which no Encumbrance has been placed on any property of the
Borrower or any of its Subsidiaries;
(e) Guarantees permitted under Section 7.2 hereof;
(f) Subordinated Debt;
(g) Indebtedness of a Subsidiary of the Borrower secured by
Leases, Equipment and Receivables relating to such Leases and Equipment, none of
which constitutes any part of the Collateral; and
(h) Indebtedness in connection with Permitted Acquisitions
to the extent permitted by Section 7.8(f)(iii).
7.2 CONTINGENT LIABILITIES. Neither the Borrower nor any of its
Subsidiaries shall create, incur, assume, guarantee or be or remain liable with
respect to any Guarantees other than (i) Guarantees existing on the date of this
Agreement and disclosed on EXHIBIT C hereto, and (ii) Guarantees resulting from
the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.
7.3 ENCUMBRANCES. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or
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encumbrance, including the lien or retained security title of a conditional
vendor upon or with respect to any of its property or assets ("ENCUMBRANCES"),
or assign or otherwise convey any right to receive income, including the sale or
discount of accounts receivable with or without recourse, except the following
("PERMITTED ENCUMBRANCES"):
(a) Encumbrances in favor of the Agent or any of the Lenders
to secure Obligations;
(b) Encumbrances existing as of the date of this Agreement
and disclosed in EXHIBIT C hereto;
(c) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', warehouseman's, laborers' and materialmen's and similar liens, if
the obligations secured by such liens are not then delinquent; liens securing
the performance of bids, tenders, contracts (other than for the payment of
money); and liens securing statutory obligations or surety, indemnity,
performance, or other similar bonds incidental to the conduct of the Borrower's
or a Subsidiary's business in the ordinary course and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) judgment liens securing judgments that (i) are not fully
covered by insurance, and (ii) shall not have been in existence for a period
longer than 10 days after the creation thereof or, if a stay of execution shall
have been obtained, for a period longer than 10 days after the expiration of
such stay;
(f) rights of lessors under capital leases;
(g) easements, rights of way, restrictions and other similar
charges or Encumbrances relating to real property and not interfering in a
material way with the ordinary conduct of the Borrower' business;
(h) any Encumbrance on any Eligible Lease, Eligible Rental
Contract and Eligible Equipment created by the sale, transfer, assignment or
disposition of such Eligible Lease, Eligible Rental Contract or Eligible
Equipment in compliance with Section 7.4(ii) hereof;
(i) liens constituting a renewal, extension or replacement of
any Permitted Encumbrance; and
(j) Encumbrances granted with respect to any Indebtedness
permitted under Section 7.1(g), PROVIDED that no such Encumbrance attaches to
any part of the Collateral.
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7.4 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Without the prior
written consent of the Agent, neither the Borrower nor any of its Subsidiaries
shall liquidate, merge or consolidate into or with any other person or entity,
or sell, lease or otherwise dispose of any assets or properties, other than
(i) the disposition of scrap, waste and obsolete or unusable items and
Qualified Investments, in each case in the ordinary course of business;
(ii) the sale, transfer, assignment or disposition of any Eligible
Leases, Eligible Rental Contracts and Eligible Equipment, PROVIDED that the
net proceeds thereof are sufficient to prepay and are applied
simultaneously to prepay any related Revolving Credit Loan or Conversion
Term Loan in accordance with Section 2.9 hereof; and
(iii) Permitted Acquisitions.
7.5 SUBSIDIARY STOCK; GUARANTEES. The Borrower shall not permit any of its
Subsidiaries to issue any additional shares of its capital stock or other equity
securities, any options therefor or any securities convertible thereto other
than to the Borrower. Neither the Borrower nor any of its Subsidiaries shall
sell, transfer or otherwise dispose of any of the capital stock or other equity
securities of a Subsidiary, except to the Borrower or any of its wholly-owned
Subsidiaries. The Borrower shall not create or acquire any Subsidiary, except a
Special Purpose Subsidiary, unless such Subsidiary shall execute and deliver a
Subsidiary Guarantee to the Agent.
7.6 RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
shall pay, make, declare or authorize any Restricted Payment other than:
(a) compensation paid to employees, officers and directors
in the ordinary course of business and consistent with prudent business
practices;
(b) dividends payable solely in common stock;
(c) dividends paid by any Subsidiary to the Borrower;
(d) cash dividends paid by the Borrower to the Parent not to
exceed, in the aggregate in any fiscal year, an amount equal to fifty percent
(50%) of Consolidated Net Income for the immediately preceding fiscal year,
PROVIDED that both at the time such cash dividend is declared or paid, and after
giving effect to the payment thereof, no Default shall have occurred and be
continuing.
7.7 PAYMENTS ON SUBORDINATED DEBT. The Borrower shall not make any payment
or prepayment of principal of or interest on or any other payment in respect of
Subordinated Debt, except (i) regularly scheduled payments of principal and
interest thereon at the rates and times specified in the instruments evidencing
the Subordinated Debt as delivered to the Agent along with the agreements
pursuant to which such Indebtedness is subordinated to the Obligations (but not
any amendments thereof without the consent of the Majority Lenders) and (ii)
prepayments of principal of, and accrued and unpaid interest on, any
Subordinated Debt, provided that the aggregate principal amount of all
Subordinated Debt so prepaid by the Borrower during any fiscal year of the
Borrower may not exceed $100,000; PROVIDED that in the case of both clause (i)
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and clause (ii), both immediately prior to making any such payment and after
giving effect thereto there shall not have occurred and be continuing any
Default.
7.8 INVESTMENTS; PURCHASES OF ASSETS. Neither the Borrower nor any of its
Subsidiaries shall make or maintain any Investments or purchase or otherwise
acquire any material amount of assets other than:
(a) Investments existing on the date hereof in Subsidiaries;
(b) Qualified Investments;
(c) Capital Expenditures;
(d) purchases of Equipment, Installment Finance Contracts, Leases,
Security Monitoring Agreements and inventory in the ordinary course of business;
(e) normal trade credit extended in the ordinary course of business
and consistent with prudent business practice;
(f) the purchase of all or substantially all of the assets or
outstanding equity securities of any other Person and the merger or
consolidation of any other Person with or into the Borrower or a Subsidiary of
the Borrower, in each case if all of the following conditions are satisfied (a
"PERMITTED ACQUISITION"):
(i) if the proposed transaction involves a merger or consolidation, at
the completion of such merger or consolidation the surviving party shall be
the Borrower or a wholly-owned Subsidiary of the Borrower;
(ii) the total consideration (excluding assumed Indebtedness) paid by
the Borrower (x) in connection with any single Permitted Acquisition shall
not exceed $10,000,000 and (y) in connection with all Permitted
Acquisitions during any fiscal year shall not exceed $20,000,000 in the
aggregate;
(iii) the total Indebtedness (other than Subordinated Debt) assumed or
incurred by the Borrower in connection with all Permitted Acquisitions
(including any Indebtedness to which any Permitted Acquisition is subject)
during any fiscal year shall not exceed $30,000,000 in the aggregate unless
the Majority Lenders otherwise approve;
(iv) the assets, business or Person acquired in any Permitted
Acquisition must be in the same or a substantially similar line of business
as that of the Borrower;
(v) both immediately before and immediately after the consummation of
any Permitted Acquisition no Default shall have occurred and be continuing;
(vi) immediately after consummation of each Permitted Acquisition, the
Borrowing Base shall exceed Total Outstandings by at least $7,500,000; and
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(vii) the proposed transaction is accomplished by mutual agreement
between the Borrower and the Person to be acquired or whose assets or
business is to be acquired and not as a result of a tender offer or other
type of so-called "hostile takeover" transaction; and
(g) Investments in outstanding equity securities of any other
Person, PROVIDED that (i) the total consideration paid by the Borrower in
connection with all such Investments during any fiscal year shall not exceed
$5,000,000 in the aggregate, (ii) after giving effect to any such Investment,
the Borrower and/or its Subsidiaries and Affiliates would not have a majority or
controlling interest in such Person, and (iii) both immediately before and
immediately after giving effect to any such Investment, no Default shall have
occurred and be continuing.
7.9 ERISA COMPLIANCE. Neither the Borrower nor any of its ERISA Affiliates
nor any Plan shall (i) engage in any Prohibited Transaction which would have a
material adverse effect on the business, financial condition or operations of
the Borrower and its Subsidiaries taken as a whole, (ii) incur any "accumulated
funding deficiency" (within the meaning of Section 412(a) of the Code and
Section 302 of ERISA), whether or not waived, (iii) permit to exist any material
amount of "unfunded benefit liabilities" (within the meaning of Section
4001(a)(18) of ERISA), (iv) terminate any Pension Plan in a manner which could
result in the imposition of a lien on any property of the Borrower or any of its
Subsidiaries, (v) fail to make any required contribution to any Multiemployer
Plan or (vi) completely or partially withdraw from a Multiemployer Plan if such
complete or partial withdrawal will result in any material withdrawal liability
under Title IV of ERISA.
7.10 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into any
purchase, sale, lease or other transaction with any Affiliate except (i)
transactions in the ordinary course of business on terms that are no less
favorable to the Borrower than those which might be obtained at the time in a
comparable arm's-length transaction with any Person who is not an Affiliate and
(ii) employment contracts with senior management of the Borrower entered into in
the ordinary course of business and consistent with prudent business practices.
Notwithstanding the foregoing, the Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, pay any management, consulting, overhead,
indemnity, guarantee or other similar fee or charge to any Affiliate.
7.11 FISCAL YEAR. The Borrower and its Subsidiaries shall not change their
fiscal years without the prior written consent of the Agent.
7.12 UNDERWRITING PROCEDURES. The Borrower shall not make any material
change in its underwriting and credit approval procedures without the prior
written consent of the Majority Lenders.
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SECTION VIII
DEFAULTS
8.1 EVENTS OF DEFAULT. There shall be an Event of Default hereunder if any
of the following events occurs:
(a) the Borrower shall fail to pay any principal of any Loan,
or any interest, fees or other amounts owing under any Loan Document or in
respect of any Obligation when the same shall become due and payable, whether at
maturity or at any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to perform or comply with any
term, covenant or agreement applicable to it contained in Sections 5.1, 5.2(b),
5.5, 5.6, 5.7, 5.9, 5.11, 6 and 7 of this Agreement; or
(c) the Borrower shall fail to perform any term, covenant or
agreement (other than as specified in subsections 8.1(a) or (b) hereof)
contained in this Agreement or any other Loan Document and such default shall
continue for 30 days; or
(d) any representation or warranty of the Borrower made in
this Agreement or any other Loan Document or in any certificate delivered
hereunder or thereunder shall prove to have been false in any material respect
upon the date when made deemed to have been made; or
(e) the Borrower, the Parent or any of their Subsidiaries
shall fail to pay when due (after any applicable period of grace) any amount
payable under any Indebtedness exceeding $100,000 in principal amount or under
any agreement for the use of real or personal property requiring aggregate
payments in excess of $100,000 in any twelve month period, or fail to observe or
perform any term, covenant or agreement evidencing or securing such Indebtedness
or relating to such agreement for the use of real or personal property; or
(f) the Borrower, the Parent or any of its Subsidiaries shall
(i) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, liquidator or similar official of itself or of
all or a substantial part of its property, (ii) be generally not paying its
debts as such debts become due, (iii) make a general assignment for the benefit
of its creditors, (iv) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect), (v) take any action or commence
any case or proceeding under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, or any other
law providing for the relief of debtors, (vi) fail to contest in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the United States Bankruptcy Code or other law, (vii)
take any action under the laws of its jurisdiction of incorporation or
organization similar to any of the foregoing, or (viii) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced against the
Borrower, the Parent or any of its Subsidiaries, without the application or
consent of the Borrower, the Parent or such Subsidiary in any court or competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding
up, or composition or readjustment of its debts, (ii) the appointment of a
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trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets, or (iii) similar relief in respect of it, under
any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts or any other law providing for the relief of
debtors, and such proceeding or case shall continue undismissed, or unstayed and
in effect, for a period of 30 days; or an order for relief shall be entered in
an involuntary case under the Federal Bankruptcy Code, against the Borrower, the
Parent or such Subsidiary; or action under the laws of the jurisdiction of
incorporation or organization of the Borrower, the Parent or any of its
Subsidiaries similar to any of the foregoing shall be taken with respect to the
Borrower, the Parent or such Subsidiary and shall continue unstayed and in
effect for a period of 30 days; or
(h) a judgment or order for the payment of money shall be
entered against the Borrower or any of its Subsidiaries by any court, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of the Borrower or such Subsidiary, that in the aggregate
exceeds $500,000 in value, the payment of which is not fully covered by
insurance in excess of any deductibles not exceeding $500,000 in the aggregate,
and such judgment, order, warrant or process shall continue undischarged or
unstayed for 30 days; or
(i) the Borrower or any Affiliate shall fail to pay when due
any material amount that they shall have become liable to pay to the PBGC or to
a Plan under Title IV of ERISA, unless such liability is being contested in good
faith by appropriate proceedings, the Borrower or the Affiliate, as the case may
be, has established and is maintaining adequate reserves in accordance with GAAP
and no lien shall have been filed to secure such liability; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree adjudicating
that any such Plan or Plans must be terminated; or
(j) any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded otherwise then in accordance with the express terms thereof
or with the express prior written agreement, consent or approval of the Lenders,
or any action at law or in equity or other legal proceeding to cancel, revoke or
rescind any Loan Document shall be commenced by or on behalf of the Borrower, or
any court or other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents is
illegal, invalid or unenforceable in accordance with the terms thereof; or
(k) the occurrence of any material change in the condition or
affairs (financial or otherwise) of the Borrower or any of its Subsidiaries or
of any endorser, guarantor or surety for any Obligation which causes the Lenders
to deem themselves insecure; or
(l) any failure of Peter R. von Bleyleben to be at all times
the duly elected and acting chief executive officer of the Borrower or the
imposition of any material restriction on his right to exercise the powers and
authority of such office and to manage the business of the Borrower in a manner
consistent with past practices, unless, in the event of his ceasing to act as
such chief executive officer, a replacement reasonably acceptable to the Agent
is appointed within 60 days of such cessation; or
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(m) any failure of Richard F. Latour to be at all times the
duly elected and acting chief operating officer and chief financial officer of
the Borrower or the imposition of any material restriction on his right to
exercise the powers and authority of such office and to manage the financial
affairs of the Borrower in a manner consistent with past practices, unless, in
the event of his ceasing to act as such chief financial officer, a replacement
reasonably acceptable to the Agent is appointed within 60 days of such
cessation; or
(n) more than one-third of the members of the Board of
Directors of the Parent or of the Borrower at the beginning of any year fail to
remain in office throughout such year, unless such former members of the Board
of Directors are replaced with Persons reasonably acceptable to the Agent within
60 days.
8.2 REMEDIES. Upon the occurrence of an Event of Default described in
subsections 8.1(f) and (g), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Agent or the Majority
Lenders and upon the Agent's declaration:
(a) the obligation of the Lenders to make any further Loans
shall terminate;
(b) the unpaid principal amount of the Loans together with
accrued interest and all other Obligations shall become immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived; and
(c) the Agent and the Lenders may exercise any and all rights
they have under this Agreement, the other Loan Documents or at law or in equity,
and proceed to protect and enforce their respective rights by any action at law
or in equity or by any other appropriate proceeding.
No remedy conferred upon the Agent and the Lenders in the Loan Documents is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be an addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or by any other
provision of law. Without limiting the generality of the foregoing or of any of
the terms and provisions of any of the Security Documents, (i) if and when the
Agent exercises remedies under the Security Documents with respect to the
Collateral, the Agent may, in its sole discretion, determine which items and
types of Collateral to dispose of and in what order and may dispose of
Collateral in any order the Agent shall select in its sole discretion, and the
Borrower consents to the foregoing and waives all rights of marshalling with
respect to all Collateral.
SECTION IX
ASSIGNMENT; PARTICIPATION
9.1 ASSIGNMENT.
(a) Each Lender shall have the right to assign at any time any
portion of its Commitment hereunder and its interests in the risk relating to
the Revolving Credit Loans or the Conversion Term Loan in an amount equal to or
greater than $5,000,000 to other Lenders or to
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banks or financial institutions approved by the Agent (such approval not to be
unreasonably withheld or delayed) (each an "ASSIGNEE"), provided that any Lender
which proposes to assign less than its total Commitment must retain a Commitment
of at least $5,000,000, and provided, further, that if no Default or Event of
Default shall have occurred and be continuing, each such Assignee which is not a
Lender, an Affiliate of a Lender or a Federal Reserve Bank shall be subject to
prior approval by the Borrower (such approval not to be unreasonably withheld or
delayed). Each such Assignee shall execute and deliver to the Agent and the
Borrower a counterpart joinder in the form of EXHIBIT E hereto and shall pay to
the Agent, solely for the account of the Agent, an assignment fee of $3,500.
Upon the execution and delivery of such counterpart joinder, (a) such Assignee
shall, on the date and to the extent provided in such counterpart joinder,
become a "Lender" party to this Agreement and the other Loan Documents for all
purposes of this Agreement and such other Loan Documents and shall have all
rights and obligations of a "Lender" with a Commitment as set forth in such
counterpart joinder, and the transferor Lender shall, on the date and to the
extent provided in such counterpart joinder, be released from its obligations
hereunder and under the other Loan Documents to a corresponding extent (and, in
the case of an assignment covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such transferor shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Section 11.3 and to any fees accrued for its account hereunder and not yet
paid); (b) the assigning Lender, if it holds any Revolving Credit Notes, shall
promptly surrender such Revolving Credit Notes to the Agent for cancellation and
delivery to the Borrower, provided that if the assigning Lender has retained any
Commitment, the Borrower shall execute and deliver to the Agent for delivery to
such assigning Lender a new Revolving Credit Note in the amount of the assigning
Lender's retained Commitment; (c) the Borrower shall issue to such Assignee a
Revolving Credit Note in the amount of such Assignee's Commitment dated the
Closing Date or such other date as may be specified by such Assignee and
otherwise completed in substantially the form of EXHIBIT A; (d) this Agreement
shall be deemed appropriately amended to reflect (i) the status of such Assignee
as a party hereto and (ii) the status and rights of the Lenders hereunder; and
(e) the Borrower shall take such action as the Agent may reasonably request to
perfect any security interests or mortgages in favor of the Lenders, including
any Assignee which becomes a party to this Agreement.
(b) If the Assignee, or any Participant pursuant to Section
9.2 hereof, is organized under the laws of a jurisdiction other than the United
States or any state thereof, such Assignee shall execute and deliver to the
Borrower, simultaneously with or prior to such Assignee's execution and delivery
of the counterpart joinder described above in Section 9.1(a), and such
Participant shall execute and deliver to the Lender granting the participation,
a United States Internal Revenue Service Form 4224 or Form 1001 (or any
successor form), appropriately completed, wherein such Assignee or Participant
claims entitlement to complete exemption from United States Federal Withholding
Tax on all interest payments hereunder and all fees payable pursuant to any of
the Loan Documents. The Borrower shall not be required to pay any increased
amount to any Assignee or other Lender on account of taxes to the extent such
taxes would not have been payable if the Assignee or Participant had furnished
one of the Forms referenced in this Section 9.1(b) unless the failure to furnish
such a Form results from (i) a condition or event affecting the Borrower or an
act or failure to act of the Borrower or (ii) the adoption of or change in any
law, rule, regulation or guideline affecting such Assignee or
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Participant occurring (x) after the date on which any such Assignee executes and
delivers the counterpart joinder, or (y) after the date such Assignee shall
otherwise comply with the provisions of Section 9.1(a), or (z) after the date a
Participant is granted its participation.
(c) Any Lender may at any time pledge all or any portion of
its rights under the Loan Documents, including any portion of any Note, to any
of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or any enforcement
thereof shall release such Lender from its obligations under any of the Loan
Documents.
9.2 PARTICIPATIONS. Each Lender shall have the right at any time and from
time to time, without the consent of or notice to the Borrower, to grant
participations to one or more banks or other financial institutions (each a
"PARTICIPANT") in all or any part of any Loans owing to such Lender and the Note
held by such Lender. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents, PROVIDED that the documents evidencing any such
participation may provide that, except with the consent of such Participant,
such Lender will not consent to (a) the reduction in or forgiveness of the
stated principal of or rate of interest on or commitment fee with respect to the
portion of any Loan subject to such participation, (b) the extension or
postponement of any stated date fixed for payment of principal or interest or
commitment fee with respect to the portion of any Loan subject to such
participation, (c) the waiver or reduction of any right to indemnification of
such Lender hereunder, or (d) except as otherwise permitted hereunder, the
release of any Collateral. Notwithstanding the foregoing, no participation shall
operate to increase the Total Commitment hereunder or otherwise alter the
substantive terms of this Agreement. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under
this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
such Note for all purposes under this Agreement and the Borrower and Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.
9.3 INCREASED TOTAL COMMITMENT.
(a) The Borrower may, at any time prior to the Borrowing Base
Maturity Date by written notice to the Agent, provided no Default shall have
occurred and be continuing, request an increase in the Total Commitment to such
amount (in integral multiples of $5,000,000 up to a maximum of $225,000,000) as
the Borrower shall request. The Agent shall promptly notify the existing Lenders
of such request and if and to the extent the Majority Lenders shall have
approved such request within 30 days after the Agent's receipt thereof, each
existing Lender shall have the option, but not the obligation, to increase its
Commitment by its PRO RATA share (based on the proportion of its Commitment to
the Total Commitment) of the approved increase in the Total Commitment. To the
extent that any existing Lender declines to exercise such option, the remaining
existing Lenders shall have the additional options to increase their respective
Commitments by their PRO RATA shares of the portion of the approved increase in
the Total Commitment which such existing Lender has declined (each existing
Lender who so increases its Commitment is herein referred to as an "INCREASING
LENDER").
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(b) To the extent that the entire approved increase in the
Total Commitment is not provided by the Increasing Lenders pursuant to Section
9.3(a), any other bank or financial institution selected by the Agent with the
approval of the Borrower (such approval not to be unreasonably withheld) may,
prior to the Borrowing Base Maturity Date, become a "Lender" party to this
Agreement for all purposes of this Agreement and the other Loan Documents with
respect to a specified additional Commitment hereunder (each such Lender being
referred to herein as a "NEW LENDER"), PROVIDED that the sum of the aggregate
Commitments of the existing Lenders (after giving effect to any increases in
such Commitments pursuant to Section 9.3(a)) and the aggregate Commitments of
the New Lenders do not exceed the lesser of (i) the increased amount of the
Total Commitment as requested by the Borrower and (ii) $225,000,000.
(c) Each Increasing Lender, each New Lender, the Agent and the
Borrower shall execute and deliver to the Agent an instrument of adherence in
the form of EXHIBIT G hereto (the "INSTRUMENT OF ADHERENCE"), which Instrument
of Adherence shall specify the new Commitment of each Increasing Lender or New
Lender, as the case may be, and pursuant to which each New Lender, if any, shall
agree to be bound as a Lender by the terms and conditions hereof and the other
Loan Documents. Upon the execution and delivery of such Instrument of Adherence,
(i) each New Lender shall, on the effective date thereof, become a "Lender"
party to this Agreement and the other Loan Documents and shall have all rights
and obligations of a "Lender" with a Commitment as set forth in such Instrument
of Adherence , (ii) each Increasing Lender shall have a new Commitment as
specified in such Instrument of Adherence, (iii) the Total Commitment shall be
increased accordingly, (iv) each Lender shall be deemed to have consented to
such increase in the Total Commitment, such increases in the Commitments of the
Increasing Lenders and the addition of such new Lender or Lenders as parties to
this Agreement and the other Loan Documents with such new Commitments, (v) this
Agreement (including Schedule 1 hereto) shall be deemed appropriately amended to
reflect such changes in Commitments and the status and rights of the Lenders
hereunder, (vi) the Agent shall notify the Lenders of such increases and shall
furnish the Lenders and the Borrower with a new Schedule 1 hereto, (vii) the
Borrower shall receive any Notes surrendered pursuant to the Instrument of
Adherence, and (viii) the Borrower shall issue replacement Notes to the
Increasing Lenders and new Notes to the New Lenders, in each case in the amount
of such Lender's Commitment, dated the Closing Date or such other date as may be
specified by such Lender and otherwise completed in substantially the form of
EXHIBIT A hereto. In addition, concurrent with the execution and delivery of
such Instrument of Adherence and as a condition to the effectiveness thereof,
the Borrower shall deliver to the Agent such evidence of corporate proceedings,
opinions of counsel and other certificates, instruments and documents as the
Agent shall reasonably request.
SECTION X
THE AGENT
10.1 APPOINTMENT OF AGENT; POWERS AND IMMUNITIES.
(a) Each Lender hereby irrevocably appoints and authorizes the
Agent to act as its agent hereunder and under the other Loan Documents and to
execute such Loan Documents (other than this Agreement) and all other
instruments relating thereto. Each Lender irrevocably authorizes the Agent to
take such action on behalf of each of the Lenders and to
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exercise all such powers as are expressly delegated to the Agent hereunder and
in the other Loan Documents and all related documents, together with such other
powers as are reasonably incidental thereto. The obligations of the Agent
hereunder are only those expressly set forth herein. The Agent shall not have
any duties or responsibilities or any fiduciary relationship with any Lender
except those expressly set forth in this Agreement.
(b) Neither the Agent nor any of its directors, officers,
employees or agents shall be responsible for any action taken or omitted to be
taken by any of them hereunder or in connection herewith, except for their own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, neither the Agent nor any of its Affiliates shall be responsible to
the Lenders for or have any duty to ascertain, inquire into or verify: (i) any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries or any other Person whether contained herein or otherwise;
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein; (iii) any failure by the Borrower
or any of its Subsidiaries or any other Person to perform its obligations under
any of the Loan Documents; (iv) the satisfaction of any conditions specified in
Section III hereof, other than receipt of the documents, certificates and
opinions specified in Section 3.1 hereof; (v) the existence, value,
collectibility or adequacy of the Collateral or any part thereof or the
validity, effectiveness, perfection or relative priority of the liens and
security interests of the Lenders therein; or (vi) the filing, recording,
re-filing, continuing or re-recording of any financing statement or other
document or instrument evidencing or relating to the security interests or liens
of the Lenders in the Collateral.
(c) The Agent may employ agents, attorneys and other experts,
shall not be responsible to any Lender for the negligence or misconduct of any
such agents, attorneys or experts selected by it with reasonable care and shall
not be liable to any Lender for any action taken, omitted to be taken or
suffered in good faith by it in accordance with the advice of such agents,
attorneys and other experts. Fleet, in its separate capacity as a Lender shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise or refrain from exercising the same as though it were not the
Agent, and Fleet and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower as if it were not the
Agent.
10.2 ACTIONS BY AGENT.
(a) The Agent shall be fully justified in failing or refusing
to take any action under this Agreement as it reasonably deems appropriate
unless it shall first have received such advice or concurrence of the Lenders
and shall be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any of the Loan Documents in accordance with a request of the Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Lenders and all future holders of the Notes.
(b) Whether or not an Event of Default shall have occurred,
the Agent may from time to time exercise such rights of the Agent and the
Lenders under the Loan Documents
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as it determines may be necessary or desirable to protect the Collateral and the
interests of the Agent and the Lenders therein and under such Loan Documents. In
addition, the Agent may, without the consent of the Lenders, release Collateral
valued by the Agent, in its sole discretion, of not more than $1,000,000 in any
fiscal year.
(c) Neither the Agent nor any of its directors, officers,
employees or agents shall incur any liability by acting in reliance on any
notice, consent, certificate, statement or other writing (which may be a bank
wire, telex, facsimile or similar writing) reasonably believed by any of them to
be genuine or to be signed by the proper party or parties.
10.3 INDEMNIFICATION. Without limiting the obligations of the Borrower
hereunder or under any other Loan Document, the Lenders agree to indemnify the
Agent ratably in accordance with their respective Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other documents; PROVIDED, THAT no Lender shall be liable
for any of the foregoing to the extent they result from the gross negligence or
willful misconduct of the Agent.
10.4 REIMBURSEMENT. Without limiting the provisions of Section 10.3, the
Lenders and the Agent hereby agree that the Agent shall not be obliged to make
available to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined that it has received that
sum. The Agent may, however, disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent if the Agent wishes to do so. If and to the extent that the Agent does
disburse funds and it later becomes apparent that the Agent did not then receive
a payment in an amount equal to the sum paid out, then any Person to whom the
Agent made the funds available shall, on demand from the Agent refund to the
Agent the sum paid to that Person. If the Agent in good faith reasonably
concludes that the distribution of any amount received by it in such capacity
hereunder or under the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and distributed by
the Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
10.5 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender represents that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of the financial condition and affairs of the Borrower and
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decision in taking or not
taking action under this Agreement or any other Loan Document. The Agent shall
not be required to keep informed
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as to the performance or observance by the Borrower of this Agreement, the other
Loan Documents or any other document referred to or provided for herein or
therein or by any other Person of any other agreement or to make inquiry of, or
to inspect the properties or books of, any Person. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning any Person which may come into the possession of the Agent or any of
its affiliates. Each Lender shall have access to all documents relating to the
Agent's performance of its duties hereunder at such Lender's request. Unless any
Lender shall promptly object to any action taken by the Agent hereunder (other
than actions to which the provisions of Section 11.7(b) are applicable and other
than actions which constitute gross negligence or willful misconduct by the
Agent), such Lender shall conclusively be presumed to have approved the same.
10.6 RESIGNATION OR REMOVAL OF AGENT. The Agent may resign at any time by
giving 30 days prior written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Lenders shall have the right to appoint a
successor Agent which, provided that no Default or Event of Default has occurred
and is continuing, shall be reasonably acceptable to the Borrower and shall be a
financial institution having a combined capital and surplus in excess of
$150,000,000. If no successor Agent shall have been so appointed by the Lenders
and shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which, provided that no Default or
Event of Default has occurred and is continuing, shall be reasonably acceptable
to the Borrower and shall be a financial institution having a combined capital
and surplus in excess of $150,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation, the
provisions of this Agreement shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as Agent.
SECTION XI
MISCELLANEOUS
11.1 NOTICES. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given when
delivered by hand, or when sent by electronic facsimile transmission or by
telex, answer back received, or on the first Business Day after delivery to any
overnight delivery service, freight pre-paid, or three days after being sent by
certified or registered mail, return receipt requested, postage pre-paid, and
addressed to such party at its address indicated below:
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If to the Borrower, at
Leasecomm Corporation
950 Winter Street
Waltham, Massachusetts 02451
Attention: President and Chief Financial Officer
with a copy to:
Gerald P. Hendrick, Esq.
Edwards & Angell
101 Federal Street
Boston, MA 02110
Facsimile: (617) 439-4170
If to Agent or Fleet, at
100 Federal Street
Boston, Massachusetts 02110
Attention: Jeffrey G. Millman, Vice President,
or Division Executive
(New England Corporate Banking)
Facsimile: (617) 434-1226
with a copy to:
William A. Levine, Esq.
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Facsimile: (617) 338-2880
if to any other Lender, to its address set forth on Schedule 1 attached hereto;
or at any other address specified by such party in writing.
11.2 EXPENSES. Whether or not the transactions contemplated herein shall be
consummated, the Borrower hereby promises to reimburse the Agent and the Lenders
for all reasonable out-of-pocket fees and disbursements (including all
reasonable attorneys' fees and collateral evaluation costs) incurred or expended
in connection with the preparation, filing or recording, or interpretation of
this Agreement and the other Loan Documents, or any amendment, modification,
approval, consent or waiver hereof or thereof, or with the enforcement of any
Obligations or the satisfaction of any indebtedness of the Borrower hereunder or
thereunder, or in connection with any litigation, proceeding or dispute in any
way related to the credit hereunder. The Borrower will pay any taxes (including
any interest and penalties in respect thereof) other than the Lenders' federal
and state income taxes, payable on or with respect to the transactions
contemplated by the Loan Documents (the Borrower hereby agreeing to indemnify
the Agent and the Lenders with respect thereto). The Borrower will also
reimburse
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the Agent for all syndication expenses in connection with the transactions
contemplated hereby incurred by the Agent and approved by the Borrower, such
approval not to be unreasonably withheld or delayed.
11.3 INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and the Lenders, as well as their respective shareholders, directors,
agents, officers, subsidiaries and affiliates, from and against all damages,
losses, settlement payments, obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands, judgments, actions or causes of
action, whether statutorily created or under the common law, and reasonable
costs and expenses incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the transactions contemplated
hereby, except any of the foregoing which result from the gross negligence or
willful misconduct of the indemnified party. In any investigation, proceeding or
litigation, or the preparation therefor, the Lenders shall select their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. In the event of the
commencement of any such proceeding or litigation, the Borrower shall be
entitled to participate in such proceeding or litigation with counsel of its
choice at its own expense, provided that such counsel shall be reasonably
satisfactory to the Agent. The covenants of this Section 11.3 shall survive
payment or satisfaction of payment of all amounts owing with respect to the
Notes or any other Loan Document.
11.4 SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein, all
covenants, agreements, representations and warranties made herein, in the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower pursuant hereto shall be deemed to have been relied upon by the
Agent and the Lenders, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Lenders of the Loans as
herein contemplated, and shall continue in full force and effect so long as any
amount due under any Loan Document remains outstanding and unpaid or any Lender
has any obligation to make any Loans hereunder. All statements contained in any
certificate or other paper delivered by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.
11.5 SET-OFF. Regardless of the adequacy of any Collateral or other means
of obtaining repayment of the Obligations, any deposits, balances or other sums
credited by or due from the head office of any Lender or any of its branch
offices to the Borrower may, at any time and from time to time after the
occurrence of an Event of Default hereunder, without notice to the Borrower or
compliance with any other condition precedent now or hereafter imposed by
statute, rule of law, or otherwise (all of which are hereby expressly waived) be
set off, appropriated, and applied by such Lender against any and all
Obligations of the Borrower to such Lender or any of its affiliates in such
manner as the head office of such Lender or any of its branch offices in its
sole discretion may determine, and the Borrower hereby grants each such Lender a
continuing security interest in such deposits, balances or other sums for the
payment and performance of all such Obligations. ANY AND ALL RIGHTS TO REQUIRE
ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHTS OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, BALANCES, OTHER SUMS AND PROPERTY OF THE
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BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
11.6 NO WAIVERS. No failure or delay by the Agent or any Lender in
exercising any right, power or privilege hereunder or under the Notes or under
any other Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. No waiver shall extend to
or affect any Obligation not expressly waived or impair any right consequent
thereon. No course of dealing or omission on the part of the Agent or the
Lenders in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances. The rights and remedies herein and in the Notes and the other
Loan Documents are cumulative and not exclusive of any rights or remedies
otherwise provided by agreement or law.
11.7 AMENDMENTS, WAIVERS, ETC.
(a) Neither this Agreement nor the Revolving Credit Notes nor
any other Loan Documents nor any provision hereof or thereof may be amended,
waived, discharged or terminated except by a written instrument signed by the
Agent on behalf of the Lenders or, as the case may be, by the Lenders or the
Majority Lenders, and, in the case of amendments, by the Borrower.
(b) Except where this Agreement or any of the other Loan
Documents authorizes or permits the Agent to act alone and except as otherwise
expressly provided in this Section 11.7(b), any action to be taken (including
the giving of notice) by the Lenders may be taken, and any consent or approval
required or permitted by this Agreement or any other Loan Document to be given
by the Lenders may be given, and any term of this Agreement, any other Loan
Document or any other instrument, document or agreement related to this
Agreement or such other Loan Documents or mentioned therein may be amended, and
the performance or observance by any of the Borrower or any other Person of any
of the terms thereof and any Default or Event of Default (as defined in any of
the above-referenced documents or instruments) may be waived (either generally
or in a particular instance and either retroactively or prospectively), in each
case only with the written consent of the Majority Lenders; PROVIDED, HOWEVER,
that no such consent or amendment which affects the rights, duties or
liabilities of the Agent shall be effective without the written consent of the
Agent. Notwithstanding the foregoing, no amendment, waiver or consent shall do
any of the following unless in writing and signed by ALL of the Lenders: (i)
increase the Total Commitment (or subject the Lenders to any additional
obligations) (ii) reduce the principal of or interest on any of the Revolving
Credit Notes (including, without limitation, interest on overdue amounts) or any
fees payable hereunder, (iii) postpone any date (including the Borrowing Base
Maturity Date) fixed for any payment in respect of principal of or interest
(including, without limitation, interest on overdue amounts) on the Revolving
Credit Notes, or any fees payable hereunder, (iv) change the definition of
"Majority Lenders" or the number of Lenders which shall be required for the
Lenders or any of them to take any action under the Loan Documents; (v) change
the definition of "Borrowing Base" set forth in Section 1.1, amend Section
2.1(a) or waive the limitations set forth in Section 2.1(a); (vi) amend this
Section 11.7(b); (vii) change the Commitment of any
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Lender, except as permitted under Section IX hereof; (viii) except as permitted
by Section 10.2(b) hereunder, release any Collateral; or (ix) amend Sections 2.6
or 2.7 hereof.
11.8 BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lenders and their respective
successors and assigns; PROVIDED that the Borrower may not assign or transfer
its rights or obligations hereunder.
11.9 CAPTIONS; COUNTERPARTS. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof. This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
11.10 ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements (including the Existing Agreement and all term sheets) with
respect to the subject matter hereof, except for the letter agreements of even
date herewith between the Borrower and the Agent with respect to fees payable to
the Agent and to the Lenders, which letter agreements shall continue in full
force and effect and shall not be superseded by this Agreement or any of the
other Loan Documents.
11.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDERS HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF
THE BORROWER AND THE LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE BORROWER (a) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (b) ACKNOWLEDGES THAT THE LENDERS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH EACH IS A PARTY BECAUSE OF,
AMONG OTHER THINGS, THE BORROWER'S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
11.12 GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR
ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER CONSENTS TO THE JURISDICTION OF ANY OF THE FEDERAL OR
-60-
<PAGE> 65
STATE COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY
SUIT TO ENFORCE THE RIGHTS OF THE LENDERS UNDER THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION BROUGHT IN THE
COURTS REFERRED TO IN THE PRECEDING SENTENCE AND IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
11.13 SEVERABILITY. The provisions of this Agreement are severable and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
11.14 CONFIDENTIALITY. The Agent and the Lenders shall hold all
confidential information delivered by the Borrower to the Agent or any Lender
pursuant to this Agreement relating to the Borrower or its business in
accordance with such entity's customary procedures for handling confidential
information of this nature and in accordance with safe and sound business
practices and in any event may make disclosure to such of its respective
Affiliates, officers, directors, employees, agents and representatives as need
to know such information in connection with the Loans. If the Agent or any
Lender is otherwise a creditor of Borrower, the Agent or such Lender, as the
case may be, may use the information in connection with its other credits. The
Agent or any Lender may also make disclosure reasonably required by any bona
fide Participant, potential Assignee or potential Participant (each, a
"TRANSFEREE"), or as required or requested by any governmental authority or
representative thereof, or pursuant to legal process, or to its accountants,
lawyers and other advisors, and shall require any Transferee to agree, in a
writing to which the Borrower shall be the third party beneficiary, to hold all
such information as confidential to the extent required by the first sentence of
this Section 11.14.
11.15 LOST NOTE, ETC. Upon receipt of an affidavit of an officer of any
Lender as to the loss, theft, destruction or mutilation of any Note or any
Security Document which is not a public record and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or
Security Document, if available, the Borrowers will issue, in lieu thereof, a
replacement Note or other Security Document in the same principal amount thereof
and otherwise of like tenor.
[Remainder of Page Intentionally Blank]
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<PAGE> 66
IN WITNESS WHEREOF, the undersigned have duly executed this Fourth Amended
and Restated Revolving Credit Agreement under seal as of the date first set
above.
LEASECOMM CORPORATION FLEET NATIONAL BANK, individually
and as Agent
By:_____________________________ By:______________________________
Richard F. Latour Jeffrey G. Millman
Chief Financial Officer Vice President
UNION BANK OF CALIFORNIA, N.A. EUROPEAN AMERICAN BANK
By:______________________________ By:______________________________
Title: Title:
NATIONAL CITY BANK CITIZENS BANK OF MASSACHUSETTS
By:______________________________ By:______________________________
Title: Title:
KEYBANK NATIONAL ASSOCIATION FIRSTAR BANK
By:______________________________ By:______________________________
Title: Title:
PEOPLES HERITAGE BANK, N.A. BROWN BROTHERS HARRIMAN & CO.
By:_____________________________ By:_____________________________
Title: Title:
<PAGE> 67
SCHEDULE 1
COMMITMENTS OF THE LENDERS
LENDER COMMITMENT
------ ----------
FLEET NATIONAL BANK $35,000,000
Union Bank of California, N.A. $15,000,000
Leasing and Transportation Division
350 California Street, 6th Floor
San Francisco, CA 94104
Attention: Ms. Alison Mason, Vice President
Telephone: (415) 705-7452
Facsimile: (415) 705-7566
European American Bank $12,000,000
400 Oak Street
Garden City, NY 11530
Attention: Mr. Anthony Nocera, Vice President
Telephone: (516) 357-1206
Facsimile: (516) 357-1784
National City Bank $20,000,000
One South Broad Street, 13th Floor
LOC #01-5997
Philadelphia, PA 19107
Attention: Ms. Theresa Smith, Vice President
Telephone: (267) 256-4084
Facsimile: (267) 256-4001
Citizens Bank of Massachusetts $25,000,000
100 Summer Street
Boston, MA 02110
Attention: Mr. Michael G. Ouellet, Assistant Vice President
Telephone: (617) 422-8396
Facsimile: (617) 422-8533
Key Bank $25,000,000
One Canal Plaza
Portland, ME 04101
Attention: Ms. Karen Cummings, Vice President
Telephone: (207) 874-7022
Facsimile: (207) 874-7220
<PAGE> 68
with a copy to:
Key Bank
176 Federal Street
Boston, MA 02110
Attention: Mr. Mitch Feldman, Senior Vice President
Telephone: (617) 748-5004
Facsimile: (617) 748-5017
Firstar Bank $30,000,000
777 East Wisconsin Avenue, JS-3S
Milwaukee, WI 53202
Attention: Mr. Jon Beggs, Vice President
Telephone: (414) 765-4411
Facsimile: (414) 765-6236
Peoples Heritage Bank, N.A. $20,000,000
7 New England Executive Park
Suite 700
Burlington, MA 01803
Attention: Mr. Jeffrey R. Westling, Senior Vice President
Telephone: (781) 229-6890
Facsimile: (781) 229-5663
Brown Brothers Harriman & Co. $10,000,000
40 Water Street
Boston, MA 02109
Attention: Timothy T. Telman, Vice President
Telephone: (617) 772-1150
Facsimile: (617) 772-1138
$192,000,000
============
<PAGE> 69
EXHIBIT A
REVOLVING CREDIT NOTE
$_______________ August __, 2000
FOR VALUE RECEIVED, the undersigned (the "Borrower") absolutely and
unconditionally promises to pay to the order of [LENDER]("Payee") at the head
office of Fleet National Bank, as Agent, at 100 Federal Street, Boston,
Massachusetts 02110;
(a) on the Borrowing Base Maturity Date (as defined in the
Revolving Credit Agreement referred to below), the principal amount of
____________________ ($___________) or, if less, the aggregate unpaid principal
amount of Revolving Credit Loans advanced by the Payee to the Borrower pursuant
to the Fourth Amended and Restated Revolving Credit Agreement dated as of August
__, 2000, as amended or supplemented from time to time (the "Revolving Credit
Agreement"), by and among the Borrower, the Agent and the Lenders; PROVIDED,
HOWEVER that if the Lenders shall not have offered to extend the Borrowing Base
Maturity Date and if no material Default shall have occurred and be continuing
on the Borrowing Base Maturity Date, then at the option of the Borrower the
unpaid principal balance of the Revolving Credit Loans shall be payable in
thirty six (36) equal consecutive monthly installments on the first day of each
month, commencing on the first day of the month following the Borrowing Base
Maturity Date, with the unpaid principal balance of the Conversion Term Loan,
together with all unpaid interest thereon and all fees and other amounts due
with respect thereto, due and payable in full on the Conversion Term Loan
Maturity Date; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on which such
principal amount is paid in full, at the times and at the rates provided in the
Revolving Credit Agreement.
This Revolving Credit Note evidences borrowings under, is subject to
the terms and conditions of and has been issued by the Borrower in accordance
with the terms of the Revolving Credit Agreement and is one of the Revolving
Credit Notes referred to therein. The Payee and any holder hereof is entitled to
the benefits and subject to the conditions of the Revolving Credit Agreement and
may enforce the agreements of the Borrower contained therein, and any holder
hereof may exercise the respective remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the respective terms
thereof. This Revolving Credit Note is secured by the Security Documents
described in the Revolving Credit Agreement.
[TO BE INCLUDED IN NOTES OF EXISTING LENDERS]. This Revolving Credit
Note amends, restates and supersedes that certain Amended and Restated Revolving
Credit Note dated December 21, 1999, as amended, made by the Borrower, payable
to the order of Payee, in the original principal face amount of $___________
(the "OLD NOTE"). Borrower confirms that the indebtedness outstanding under and
evidenced by the Old Note has not been repaid, satisfied or discharged, but for
all purposes has been amended and extended as provided herein and that
<PAGE> 70
the indebtedness evidenced by this Revolving Credit Note constitutes, in part,
the same indebtedness that was outstanding under the Old Note prior to such
amendment and extension.
All capitalized terms used in this Revolving Credit Note and not
otherwise defined herein shall have the same meanings herein as in the Revolving
Credit Agreement.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to repay or prepay the whole or part of the
principal of this Revolving Credit Note on the terms and conditions specified in
the Revolving Credit Agreement.
If any Default shall occur, the entire unpaid principal amount of this
Revolving Credit Note and all of the unpaid interest accrued thereon may become
or be declared due and payable in the manner and with the effect provided in the
Revolving Credit Agreement.
The Borrower and every endorser and guarantor of this Revolving Credit
Note or the obligation represented hereby waive presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Revolving Credit Note,
assent to any extension or postponement of the time of payment or any other
indulgence, to any substitution, exchange or release of collateral and to the
addition or release of any other party or Person primarily or secondarily
liable.
This Revolving Credit Note shall be deemed to take effect as a sealed
instrument under the laws of The Commonwealth of Massachusetts and for all
purposes shall be construed in accordance with such laws (without regard to
conflicts of laws rules).
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be signed under seal by its duly authorized officer as of the day and year
first above written.
LEASECOMM CORPORATION
By:___________________________
Title:
A-2
<PAGE> 71
EXHIBIT B
Fleet National Bank,
as Agent
100 Federal Street
Boston, MA 02110
Re: Fourth Amended and Restated Revolving Credit Agreement Dated as of
August __, 2000 (the "Agreement")
Ladies and Gentlemen:
Pursuant to Section 2.4 of the Agreement the undersigned hereby
confirms its request made on ____________ for a [Alternate Base Rate]
[Eurodollar] [Money Market] Loan in the amount of
$ on __________________.
[The Interest Period applicable to said Loan will be
[one][two][three][six][twelve] months.]*
[Said Loan represents a conversion of the [Alternate Base Rate]
[Eurodollar] Loan in the same amount made on .**
The representations and warranties contained or referred to in Section
IV of the Agreement are true and accurate on and as of the effective date of the
Loan as though made at and as of such date (except to the extent that such
representations and warranties expressly relate to an earlier date); and no
Default has occurred and is continuing or will result from the Loan.
LEASECOMM CORPORATION
By:______________________
Title:
___________________
Date
* To be inserted in any request for a LIBOR Loan.
**To be inserted in any request for a conversion.
<PAGE> 72
EXHIBIT C
DISCLOSURE
Section 4.11 MICROFINANCIAL INCORPORATED LEGAL PROCEEDINGS
Management believes, after consultation with counsel, that the
allegations against the Company included in the lawsuits described below are
without merit, and the Company is vigorously defending each of the allegations.
Four (4) of the first five (5) actions described below have been filed by the
same attorney, on behalf of various plaintiffs. The Company also is subject to
claims and suits arising in the ordinary course of business. At this time, it is
not possible to estimate the ultimate loss or gain, if any, related to these
lawsuits, nor if any such loss will have a material adverse effect on the
Company's results of operations or financial position.
I. On August 24, 1999, a purported class action lawsuit was filed in
Middlesex Superior Court for The Commonwealth of Massachusetts against the
Company and its wholly-owned subsidiary Leasecomm Corporation ("Leasecomm").
The complaint has been amended four times, most recently by the Fourth
Amended Complaint and Jury Claim filed on or about November 4, 1999 (as amended,
the "Clark Complaint").
The purported class consists of individuals and businesses that have
been sued by Leasecomm in a Massachusetts court for allegedly breaching
Leasecomm's Non Cancellable Equipment Lease Agreement or Non Cancellable Lease
Agreement (the "Lease Agreements") containing a forum selection clause. The
forum selection clause is an agreement between the parties to the Lease
Agreements to submit to the jurisdiction of the courts of The Commonwealth of
Massachusetts for the bringing of any suit or other proceeding. The purported
class would be limited to individuals and businesses that: have no place of
business or residence in New England; have been sued in a Massachusetts court
for breach of the Lease Agreements; had no more than three employees as of the
date of the Lease Agreement; had been in existence for no more than three years
as of the date of the Lease Agreement; and had entered into Lease Agreements
with scheduled monthly lease payments which aggregated to less than $5,000.
The Clark Complaint alleges that enforcement of the forum selection
clause is not fair or reasonable because, among other things, litigation in
Massachusetts is prohibitively costly and time consuming for purported class
members, purported class members have no choice but to enter into the Lease
Agreement because of Leasecomm's greater bargaining power, and purported class
members allegedly have valid defenses to the claims asserted against them by
Leasecomm. The Plaintiffs seek: a declaration that the forum selection clause is
not fair or reasonable as to purported class members and that the Massachusetts
courts lack personal jurisdiction over purported class members; dismissal
without prejudice of all cases pending in Massachusetts against purported class
members; a permanent injunction preventing Leasecomm and its affiliates from
bringing suit in Massachusetts against purported class members; a permanent
injunction preventing Leasecomm or its affiliates from entering into Lease
Agreements containing the forum selection clause; unspecified monetary damages
against Leasecomm and the Company in favor of purported class members equal to
double or treble the
<PAGE> 73
moneys collected in connection with lawsuits filed against purported class
members in Massachusetts courts, together with attorneys' fees and costs.
The parties have filed various motions with the Court. Two of these
motions, namely Leasecomm and the Company's motions to Dismiss the Fourth
Amended Complaint, have been heard by the Court and are awaiting decision. The
Plaintiffs' Motion for Class Certification is pending, and the Court has not yet
scheduled a hearing.
Since this matter is in an early stage, there can be no assurance as to
its eventual outcome. However, the forum selection clause at issue in this
litigation has been enforced in other cases.
II. On June 3, 1999 a purported class action lawsuit was filed in
Middlesex Superior Court in the Commonwealth of Massachusetts against Leasecomm.
The complaint was amended on or about July 26, 1999 (as amended, the
"McKenzie-Pollock Complaint"). On September 3, 1999 Leasecomm removed the action
to the United States District Court for the District of Massachusetts.
The purported class consists of individuals who entered into a Lease
Agreement with Leasecomm between June 4, 1993 and the date of the
McKenzie-Pollock Complaint.
Plaintiffs allege: that Leasecomm causes individuals to enter into
non-cancellable, long-term leases when there is no reasonable expectation that
most of the individuals would need or use the equipment for the duration of the
lease term; that Leasecomm conceals or misrepresents the nature of the terms of
its Lease Agreements; that the Lease Agreements are non-negotiable adhesion
contracts which are oppressive and unfair; that the cost of acquiring the
equipment through Leasecomm is often double or triple the retail cost of the
equipment; that Leasecomm violates state usury laws; that Leasecomm engages in
unfair debt collection practices; that Leasecomm brings lawsuits against
purported class members in Massachusetts even though it has no jurisdiction over
them in Massachusetts courts; that Leasecomm fails to make proper service and
then files pleadings which state that proper service was made, thereby obtaining
default judgments against certain members of the purported class; that Leasecomm
conspired with its salespersons to cause members of the purported class to enter
into unconscionable leases by concealing and misrepresenting their terms; that
Leasecomm failed to comply with the Truth in Lending Act and the Massachusetts
Consumer Credit Cost Disclosure Act; and that Leasecomm has engaged in unfair
trade practices in violation of the Massachusetts consumer protection statute.
Plaintiffs and the members of the purported class seek: unspecified
damages for monetary losses allegedly sustained by them as a result of this
conduct by Leasecomm and reimbursement of costs and attorneys' fees; treble
damages and other punitive damages; rescission of the Lease Agreements, or a
declaration that they are void, and return of all moneys paid to Leasecomm; and
damages for unjust enrichment.
The parties have filed various motions with the Court. In December,
1999, the Court granted Leasecomm's motion to dismiss in part, and ordered that
the federal Truth in Lending and Fair Debt Collection Practices claims be
dismissed. The Court then ordered the remaining
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claims to be remanded to the Middlesex Superior Court for further proceedings,
including decisions on the balance of Leasecomm's motion to dismiss, since all
federal claims in the case had been dismissed. Leasecomm subsequently filed a
renewed motion to dismiss in the Superior Court, again asserting that the
remaining non-federal claims are legally insufficient and should have been
presented in earlier court proceedings. The Court has heard argument on
Leasecomm's motion to dismiss, but has not yet issued a ruling.
Since this matter is in an early stage, there can be no assurance as to
its eventual outcome.
III. On October 25, 1999, a purported class action lawsuit was filed in
Middlesex Superior Court in The Commonwealth of Massachusetts against Leasecomm
(the "Lamar Complaint"). The purported class consists of all individuals and
businesses who, on or after September 28, 1996, signed a Leasecomm agreement
which states that it is "non-cancelable" and/or contains certain standard
provisions relating to delivery and acceptance of the leased equipment and
warranties and servicing for the equipment. The Plaintiffs contend that these
particular lease terms are contrary to Article 2A of the Uniform Commercial Code
as adopted in Massachusetts and that Leasecomm's use of these terms constitutes
an unfair and deceptive trade practice under Chapter 93A of the Massachusetts
General Laws. The Plaintiffs seek a declaration that the lease terms in question
are unfair and deceptive and that Leasecomm's use of those terms is unfair and
deceptive. The Plaintiffs also seek a Court order requiring Leasecomm to notify
all purported class members of the Court's ruling in the case; to stop using the
lease terms or similar lease terms which allegedly misstate lessees' rights
under Massachusetts law; to refrain from enforcing those lease terms against any
of the purported class members; to refrain from providing or communicating
incorrect information regarding lessees' rights under Massachusetts law; and to
include in every lease agreement language which conspicuously describes the
rights of lessees under Massachusetts law. Finally, the Plaintiffs seek
reimbursement of their costs and attorneys' fees.
The parties have filed various motions with the Court. After the Court
denied Leasecomm's Motion to Dismiss without prejudice to its being re-filed at
a later time, plaintiffs filed a Second Amended Complaint voluntarily
withdrawing one plaintiff and substituting a new plaintiff. Leasecomm has filed
an answer to the Second Amended Complaint, and the Plaintiffs have filed a
motion for class certification. Leasecomm's opposition to the motion for class
certification will be due in August, and the Court has not yet scheduled a
hearing.
Since this matter is in an early stage, there can be no assurance as to
its eventual outcome.
IV. On or about June 16, 2000, a purported class action lawsuit was
filed in Middlesex Superior Court in the Commonwealth of Massachusetts against
Leasecomm, the Company, John Gregory Hines, Richard F. Latour, Peter R. von
Bleyleben, Cardservice International, Inc., Autorize.net Corporation, and
Humboldt Bank (the "Bradford Complaint").
The purported class consists of individuals and businesses who have
executed or will in the future execute, as lessee or guarantor, a four-year
Leasecomm "non-cancellable" lease of an
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<PAGE> 75
Authorize.net Corporation "virtual terminal" marketed by Cardservice
International, Inc. (the "Lease Agreements"), and the lease provides for a "base
payment" of at least $39.99 per month.
Plaintiffs allege: that the Lease Agreements are, in fact, loans that
are subject to state usury laws; that the Lease Agreements are usurious; that
Leasecomm's use of the Lease Agreements constitutes an unfair and deceptive
trade practice in violation of Massachusetts General Laws Chapter 93A; that
various of the defendants have conspired with one another to defraud the members
of the purported class and have violated Massachusetts General Laws Chapter 93A;
and that the Company is liable for any damages that might be entered in favor of
the Plaintiffs and the purported class members and against Leasecomm.
Plaintiffs and the members of the purported class seek: unspecified
damages for monetary losses allegedly sustained by them and reimbursement of
costs and attorneys' fees; treble damages; a declaration that the Lease
Agreements are loans rather than leases and that the Lease Agreements are
usurious; rescission of the Lease Agreements, or reformation of the Lease
Agreements to conform with the limitations on interest rates set forth in the
Massachusetts usury statute, and return of all moneys paid to Leasecomm, or all
monies paid in excess of amounts that would be allowable under the Massachusetts
usury statute; declarations that the alleged conduct of the defendants
constitutes unfair and deceptive trade practices in violation of Massachusetts
General Laws Chapter 93A; injunctive relief requiring Leasecomm to notify any
credit bureaus to which it may have reported Plaintiffs or purported class
members as delinquent that their accounts are in good standing, prohibiting
Leasecomm from charging usurious interest rates, prohibiting Leasecomm from
referring to the Lease Agreements as "leases," requiring Leasecomm to display
the annual percentage rate and total finance charges on all of the Lease
Agreements, and prohibiting the Company from participating in or benefiting from
any transactions by Leasecomm involving the financing of "virtual terminals".
The defendants' responses to the Bradford Complaint are presently due
in late August, 2000.
Since this matter is in an early stage, there can be no assurance as to
its eventual outcome.
V. On or about June 16, 2000, a purported class action lawsuit was
filed in Middlesex Superior Court in the Commonwealth of Massachusetts against
Leasecomm, the Company, John Gregory Hines, Richard F. Latour, Peter R. von
Bleyleben, E-Commerce Exchange, LLC, Creditcards.com, and Humboldt Bank (the
"Okougbo Complaint").
The purported class consists of individuals and businesses who have
executed or will in the future execute, as lessee or guarantor, a four-year
Leasecomm "non-cancellable" lease of certain models of "Verifone" equipment
provided by or through E-Commerce Exchange, LLC (the "Lease Agreements"), and
the lease provides for "base payments" of at least $49.95 per month.
Plaintiffs allege: that the Lease Agreements are, in fact, loans that
are subject to state usury laws; that the Lease Agreements are usurious; that
Leasecomm's use of the Lease Agreements constitutes an unfair and deceptive
trade practice in violation of Massachusetts
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<PAGE> 76
General Laws Chapter 93A; that various of the defendants have conspired with one
another to defraud the members of the purported class and have violated
Massachusetts General Laws Chapter 93A; and that the Company is liable for any
damages that might be entered in favor of the Plaintiffs and the purported class
members and against Leasecomm.
Plaintiffs and the members of the purported class seek: unspecified
damages for monetary losses allegedly sustained by them and reimbursement of
costs and attorneys' fees; treble damages; a declaration that the Lease
Agreements are loans rather than leases and that the Lease Agreements are
usurious; rescission of the Lease Agreements, or reformation of the Lease
Agreements to conform with the limitations on interest rates set forth in the
Massachusetts usury statute, and return of all moneys paid to Leasecomm, or all
monies paid in excess of amounts that would be allowable under the Massachusetts
usury statute; declarations that the alleged conduct of the defendants
constitutes unfair and deceptive trade practices in violation of Massachusetts
General Laws Chapter 93A; injunctive relief requiring Leasecomm to notify any
credit bureaus to which it may have reported Plaintiffs or purported class
members as delinquent that their accounts are in good standing, prohibiting
Leasecomm from charging usurious interest rates, prohibiting Leasecomm from
referring to the Lease Agreements as "leases," requiring Leasecomm to display
the annual percentage rate and total finance charges on all of the Lease
Agreements, and prohibiting the Company from participating in or benefiting from
the alleged activities set forth in the Complaint.
The defendants' responses to the Okougbo Complaint are presently due in
late August, 2000.
Since this matter is in an early stage, there can be no assurance as to
its eventual outcome.
VI. On January 20, 2000, the Company filed suit against Sentinel
Insurance Company Limited ("Sentinel"), in the United States District Court for
the District of Massachusetts (the "Sentinel Complaint"). On August 18, 1999,
Sentinel had issued a Business Performance Insurance Policy (the "Policy") to
the Company as collateral for a Twelve Million Dollar ($12,000,000) loan (the
"Loan") that the Company had made to Premier Holidays International, Inc.
("Premier"). The Loan was personally guaranteed by Premier's President, Daniel
DelPiano ("DelPiano"). Pursuant to the terms of the Policy, Sentinel was
obligated to make payment to the Company for any and all amounts payable under
the terms of the Loan, in the event a default by Premier occurred. After Premier
and DelPiano defaulted on their repayment obligations, the Company made demand
on Sentinel for payment under the Policy. The Company filed the Sentinel
Complaint after Sentinel refused to make payment to the Company under the
Policy. On February 3, 2000, the Company amended its Complaint to assert claims
against Premier and DelPiano arising out of their failure to make payments
required under the Loan and the personal guaranty.
On March 1, 2000, the Company filed a motion for summary judgment on
its claims against Sentinel, seeking judgment in the amount of $13,065,266.49,
plus post-judgment interest and attorneys' fees. The Court has not heard this
motion.
C-5
<PAGE> 77
On March 6, 2000, Premier and DelPiano filed a motion in the
Massachusetts action to dismiss that action or, in the alternative, to transfer
to the Northern District of Georgia, based upon their contention that they are
not subject to personal jurisdiction in Massachusetts, that the contracts
containing the forum-selection clause were procured by fraud, and that Leasecomm
should have been named as a plaintiff. On April 13, 2000, the United States
District Court for the District of Massachusetts issued a Memorandum and Order
denying Premier and DelPiano's motion.
On March 9, 2000 the Company filed a motion for preliminary injunction
seeking an order requiring Sentinel, Premier and Del Piano to turn over to the
Company any collateral in their possession or to which the Company and Leasecomm
may be entitled as a result of both Premier's and Sentinel's defaults under the
Loan and the Policy, respectively. On June 13, 2000, the Court denied the
Company's motion for preliminary injunction, on the express condition that
Sentinel provide adequate assurance of its financial condition within 30 days.
Sentinel failed to do so, and the Company filed a renewed motion for preliminary
injunction on July 17, 2000. The Court has not yet scheduled a hearing.
On January 26, 2000, Premier and DelPiano filed suit against the
Company, its wholly-owned subsidiary, Leasecomm Corporation, and Sentinel in the
Superior Court of Fulton County, Georgia (the "Premier Complaint"). Premier and
DelPiano allege that, notwithstanding the plain wording of both the Loan and the
Policy, Premier agreed to borrow the full amount of the Loan only upon alleged
representations by the Company that it would loan Premier an additional
Forty-Five Million Dollars ($45,000,000). The documents evidencing the Loan, and
the documents evidencing the Policy, refer only to the amount of the Loan
($12,000,000), and not to any greater amount. Premier alleges that, as a result,
it has suffered actual and consequential damages in the amount of Seven Hundred
Sixty-Nine Million Three Hundred Fifty Thousand Dollars ($769,350,000) plus
interest, costs, and attorneys' fees. Premier seeks punitive damages in the
amount of Five Hundred Million Dollars ($500,000,000). Premier also seeks
injunctive relief barring the Company and Leasecomm from making demand on or
commencing court action to collect on the Policy.
On February 22, 2000, Leasecomm removed this case to federal court for
the Northern District of Georgia. Leasecomm has filed a motion to dismiss the
Premier Complaint, or, alternatively, to transfer this case to federal court in
Massachusetts, and is awaiting the Court's decision.
Discovery in the Massachusetts action is in the preliminary stages.
Since this matter is in an early stage, there can be no assurance as to its
eventual outcome.
Section 4.12 SUBSIDIARIES OF LEASECOMM CORPORATION
SUBSIDIARIES SPECIAL PURPOSE SUBSIDIARIES
------------ ----------------------------
None BLT III Finance Corp.
MFI Finance Corp. I
C-6
<PAGE> 78
EXHIBIT D
LEASECOMM CORPORATION
REPORT OF RESPONSIBLE OFFICER
LEASECOMM CORPORATION (the "Borrower") HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(e) of the Fourth
Amended and Restated Revolving Credit Agreement dated as of August __, 2000 (the
"Agreement"). Unless otherwise defined herein, the terms used in this Report
have the meanings given to them in the Agreement.
As required by Section 5.1(a) and (b) of the Agreement, consolidated
and consolidating financial statements of the Parent and its Subsidiaries for
the [year/month] ended ________________ (the "Financial Statements") prepared in
accordance with GAAP consistently applied accompany this Report. The Financial
Statements present fairly the consolidated financial position of the Parent and
its Subsidiaries as at the date thereof and the consolidated results of
operations of the Parent and its Subsidiaries for the period covered thereby
(subject only to normal recurring year-end adjustments).
The figures set forth in SCHEDULE A hereto for determining compliance
with the financial covenants contained in the Agreement are true and complete as
of the date hereof.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by the undersigned
Responsible Officer or by employees or agents under his immediate supervision.
Based on such review, to the best knowledge and belief of the undersigned
Responsible Officer, and as of the date of this Report, no Default has
occurred.*
WITNESS my hand this _____ day of _____________.
LEASECOMM CORPORATION
By:___________________________
Title:
-------------
* If a Default has occurred, this paragraph is to be modified with an
appropriate statement as to the nature thereof, the period of existence thereof
and what action the Borrower has taken, is taking, or proposes to take with
respect thereto.
<PAGE> 79
EXHIBIT E
ASSIGNMENT AND JOINDER AGREEMENT
Dated _________________________
Reference is made to the Fourth Amended and Restated Revolving Credit
Agreement dated as of August __, 2000 (the "Revolving Credit Agreement") between
Leasecomm Corporation (the "Borrower"), the Lenders (as defined in the Revolving
Credit Agreement) and Fleet National Bank, as Agent. Terms defined in the
Revolving Credit Agreement are used herein with the same meanings.
_____________________________________ (the "Assignor") and
__________________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a ____% interest in and
to all of the Assignor's rights and obligations under the Revolving Credit
Agreement as of the Effective Date (as defined below). As a result of such
assignment, the Commitment of the Assignor shall be $______ and the Commitment
of the Assignee shall be $________. Concurrently herewith, the Assignee is
remitting to the Assignor, in federal funds, the amount of its participation in
each such outstanding Loan.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Revolving Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Revolving Credit Agreement or any other instrument or document furnished
pursuant thereto, other than that the Assignor is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim, and (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observation by the Borrower of any of its
obligations under the Revolving Credit Agreement or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Revolving Credit Agreement, together with copies of such financial statements
and other documents and information as it has deemed necessary to make its own
credit analysis and decision to enter into this Agreement; (ii) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
other Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Revolving Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Revolving Credit Agreement as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; and (iv) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Revolving Credit Agreement are
required to be performed by it.
4. The Effective Date of this Agreement shall be ____________________
(the "Effective Date").
<PAGE> 80
5. From and after the Effective Date, (i) the Assignee shall be a party
to the Revolving Credit Agreement and, to the extent rights and obligations have
been transferred to it by this Agreement, shall have the rights and obligations
of a Lender thereunder and (ii) the Assignor shall, to the extent its rights and
obligations have been transferred to the Assignee by this Agreement, relinquish
its rights and be released from its obligations under the Revolving Credit
Agreement. If the Assignor is holding any Revolving Credit Note, the Assignor
shall, promptly after the Effective Date, surrender such Revolving Credit Note
to the Agent and the Agent shall cause the Borrower to issue new Revolving
Credit Notes in accordance with Section 9.1 of the Revolving Credit Agreement.
6. From and after the Effective Date, the Agent shall hold in trust all
payments it receives in respect of the interest assigned hereby and shall
promptly remit such payments to the Assignee.
7. This Assignment and Joinder Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts
(without regard to conflicts of laws rules).
[NAME OF ASSIGNOR]
By:___________________________
Title:
[NAME OF ASSIGNEE]
By:___________________________
Title:
APPROVED:
FLEET NATIONAL BANK, as Agent
By:_______________________________
Title:
LEASECOMM CORPORATION
By:________________________________
Title:
E-2
<PAGE> 81
EXHIBIT F-1
FORM OF DEALER AGREEMENT
(see attached copy)
<PAGE> 82
EXHIBIT F-2
FORM OF SECURITY MONITORING AGREEMENT
(see attached copy)
<PAGE> 83
INSTRUMENT OF ADHERENCE
Leasecomm Corporation
950 Winter Street
Waltham, Massachusetts 02451
Dated as of [__________, ____]
Fleet National Bank, as Agent
100 Federal Street
Boston, MA 02110
Re: INSTRUMENT OF ADHERENCE
Ladies and Gentlemen:
Reference is made to the Fourth Amended and Restated Revolving Credit
Agreement dated as of August __, 2000, as amended, modified, supplemented or
restated from time to time (the "CREDIT AGREEMENT"), among Leasecomm Corporation
(the "BORROWER"), such financial institutions that are or may become parties to
the Credit Agreement as "Lenders" (the "LENDERS"), and Fleet National Bank, as
agent (in such capacity, the "AGENT") for the Lenders. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement.
This Instrument of Adherence is being executed and delivered in
accordance with Section 9.3 of the Credit Agreement. The Borrower has requested
that [Name of New Lender or Increasing Lender] (the "ADDITIONAL COMMITMENT
LENDER") agree to provide a [new] [increased] Commitment pursuant to Section 9.3
of the Credit Agreement, and the Additional Commitment Lender has agreed,
subject to the terms and conditions contained herein and in the Credit
Agreement, to do so.
In consideration of the foregoing premises and intending to be legally
bound, the parties hereto agree as follows:
1. By their respective signatures below, each of the Borrower and the
Agent consents to the provision by the Additional Commitment Lender of a [new]
[increased] Commitment in the amount of [_______] dollars ($_______) (the
"ADDITIONAL COMMITMENT AMOUNT") and to the treatment of the Additional
Commitment Lender as a [New Lender] [Increasing Lender] under Section 9.3 of the
Credit Agreement, to the extent of such Additional Commitment Amount.
2. By its signature below, the Additional Commitment Lender agrees to
be bound (to the extent of its Additional Commitment Amount), as a Lender, by
the terms and conditions of the Credit Agreement and the other Loan Documents,
and to make Loans to the Company and to purchase Letter of Credit Participations
in accordance with its Commitment. By its signature
<PAGE> 84
below, the Additional Commitment Lender further represents, warrants,
acknowledges and agrees as follows:
(i) the Agent and the Lenders have made no representation or
warranty and shall have no responsibility with respect to any
statements, warranties or representations made in or in connection
with the Credit Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness,
sufficiency, collectibility or value of the Credit Agreement or any of
the other Loan Documents, any Collateral, or any other instrument or
document furnished pursuant hereto;
(ii) the Agent and the Lenders have made no representation or
warranty and shall have no responsibility with respect to the
financial condition of the Borrower or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower or any other Person
primarily or secondarily liable in respect of any of the Obligations
of any of their obligations under the Credit Agreement or any of the
other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(iii) such Additional Commitment Lender confirms that it has
received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the most recent financial statements referred
to in the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into this Instrument of Adherence;
(iv) such Additional Commitment Lender will, independently and
without reliance upon the other Lenders or the Agent and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under the Credit Agreement;
(v) such Additional Commitment Lender appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(vi) such Additional Commitment Lender agrees that it will
perform in accordance with their terms all of the obligations that by
the terms of the Credit Agreement are required to be performed by it
as a Lender; and
(vii) such Additional Commitment Lender represents and warrants
that it is legally authorized to enter into this Instrument of
Adherence.
3. The total amount of the Additional Commitment Lender's Commitment,
upon the Effective Date (as hereinafter defined) and after the addition of its
Additional Commitment Amount, shall be [$__________]. All Loans by the
Additional Commitment Lender to the Borrower shall be evidenced by a Note dated
as of the date hereof (the "NEW NOTE"), in the amount of such Commitment and
substantially in the form of EXHIBIT A to the Credit Agreement,
<PAGE> 85
with appropriate conforming changes. If the Additional Commitment Lender is an
Increasing Lender, it shall surrender to the Agent for delivery to the Borrower
any other Note then held by such Lender.
4. This Instrument of Adherence shall become effective upon delivery of
the following documents in form and substance satisfactory to the Agent (the
date of Agent's receipt of the last to be received of such documents being
referred to herein as the "EFFECTIVE DATE"): (a) this Instrument of Adherence,
duly executed by each of the Borrower, the Agent and the Additional Commitment
Lender, (b) the New Note, duly executed by each of the Borrowers, (c) an opinion
of counsel to the Borrower as to such matters as shall be reasonably required by
the Agent and the Additional Commitment Lender, (d) a certificate of a duly
authorized officer of the Borrower certifying (i) as to the resolutions of the
Board of Directors of the Borrower, and (ii) as to the names, titles, incumbency
and specimen signatures of all officers of the Borrower who are authorized to
execute this Instrument of Adherence and the documents executed and/or delivered
in connection herewith, and (e) such certificates of legal existence and good
standing and such other documents as the Agent and the Additional Commitment
Lender shall reasonably request.
5. Upon the Effective Date, the Additional Commitment Lender shall make
all (if any) such payments to the other Lenders as may be necessary to result in
the Loans made by such Additional Commitment Lender being equal to such
Additional Commitment Lender's PRO RATA share of the aggregate principal amount
of all Loans outstanding to the Borrower as of the Effective Date. The Borrower
hereby agrees that the Additional Commitment Lender shall be entitled to all the
rights of a Lender under the Credit Agreement, and such payments to the other
Lenders shall constitute Loans held by the Additional Commitment Lender, and
that the Additional Commitment Lender may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of set-off) with
respect to such amounts as fully as if the Additional Commitment Lender had
initially advanced the amount of such payments to the Borrower.
6. Upon the Effective Date, the Total Commitment shall be adjusted to
reflect the Additional Commitment Amount contemplated hereby, and SCHEDULE 1 to
the Credit Agreement accordingly shall be deemed modified to reflect such
adjustment, as required by Section 9.3 of the Credit Agreement. The Additional
Commitment Lender's address for notices is set forth below.
7. This Instrument of Adherence shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without regard to
conflict of law provisions. This Instrument of Adherence may be executed in any
number of counterparts which together shall constitute one and the same
agreement.
<PAGE> 86
If the Additional Commitment Lender and the Agent agree and consent to
the terms of this Instrument of Adherence, please execute the enclosed
counterpart and return it to the undersigned.
Very truly yours,
LEASECOMM CORPORATION
By:___________________________
Name:
Title:
Agreed and consented to by:
FLEET NATIONAL BANK, as Agent
By:_________________________
Name:
Title:
[ADDITIONAL COMMITMENT LENDER]
By:_________________________
Name:
Title:
Address:
