SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 12, 1997
Mercury Finance Company
(Exact name of registrant as specified in charter)
Delaware 1-10176 36-3627010
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Field Drive, Lake Forest, Illinois 60045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 295-8600
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On March 12, 1997, Mercury Finance Company (the "Company") entered into an
amendment (the "Amendment") to its Loan and Security Agreement with BankAmerica
Business Credit, Inc., as agent, dated as of February 7, 1997, as amended (the
"Loan Agreement") pursuant to which the stated maturity of the $50 million
facility has been extended for 90 days to June 10, 1997. In connection with
the Amendment, the Company received extensions from other lenders of covenant
waivers permitting the Company to pledge its assets as collateral as required
by the Loan Agreement. The loan documents with certain lenders holding
approximately $538 million of debt restrict the Company's ability to pledge
its assets as collateral for borrowings absent such waivers.
In connection with the receipt of the waivers, the Company has agreed
during this 90 day period to resume payment of interest on all unsubordinated
term debt and commercial paper aggregating approximately $982 million principal
amount. Interest will accrue at the rate of 9% per annum or, in certain cases,
the applicable default rate if greater. Interest is required to be paid
currently at the rate of 7%, with an additional 2% to be paid on or before June
10, 1997. In addition, accrued but unpaid interest owing as of March 10, 1997,
will be brought current at the applicable contract rates.
The above description is merely a summary of certain terms of the Amendment
and waivers described above, as well as certain other documents, all of which
are attached as exhibits to this Report on Form 8-K and are incorporated herein
by reference. Reference is also made to the Company's Reports on Form 8-K filed
with the Securities and Exchange Commission on February 14, 1997 and March 11,
1997 which contain information about the Loan Agreement and an amendment thereto
and to which the Loan Agreement and such amendment are filed as exhibits.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description of Document
99.1 Amendment to Loan Agreement dated March 12, 1997 to
Loan and Security Agreement dated as of February 7,
1997 among BankAmerica Business Credit, Inc., as agent,
certain other financial institutions, Mercury Finance
Company and certain of its subsidiaries.
99.2 Form of Limited Waiver Agreement entered into between
Mercury Finance Company and senior noteholders on or
about February 7, 1997.
99.3 Form of Second Limited Waiver Agreement entered into
between Mercury Finance Company and senior noteholders
on or about March 10, 1997.
99.4 Limited Waiver Agreement entered into between Mercury
Finance Company and Paine Webber Inc. dated February
7, 1997 under Commercial Paper Dealer Agreement.
99.5 Limited Waiver Agreement entered into between Mercury
Finance Company and Paine Webber Inc. dated March 10,
1997 under Commercial Paper Dealer Agreement.
99.6 Form of Limited Waiver Agreement entered into between
Mercury Finance Company and Credit Suisse First Boston
Corporation, holder of Mercury commerical paper dated
on or about February 7, 1997.
99.7 Limited Waiver Agreement entered into between Mercury
Finance Company and Credit Suisse First Boston
Corporation, holder of Mercury Commercial Paper dated
as of March 10, 1997.
99.8 Limited Waiver Agreement entered into between Mercury
Finance Company and Credit Suisse First Boston
Corporation, holder of Mercury Suborinated Notes dated
as of March 10, 1997.
99.9 Letter Agreement of Mercury Finance Company to the
Paying Agent and Holders of Commercial Paper of Mercury
Finance Company dated March 12, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mercury Finance Company
Date: March 13, 1997 By: /s/ Bradley Vallem
Its: AVP & Treasurer
SECOND AMENDMENT
TO LOAN AND SECURITY AGREEMENT
Dated as of March 12, 1997
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as of
March 12, 1997 amends the Loan and Security Agreement dated as of February 7,
1997 (as previously amended, the "Loan Agreement") among certain financial
institutions, BANKAMERICA BUSINESS CREDIT, INC., as Agent (the "Agent"), MERCURY
FINANCE COMPANY and certain other borrowers. Terms defined in the Loan
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.
WHEREAS, the Borrowers, the Agent and the Lenders have entered into
the Loan Agreement which provides for the Lenders to make Loans to the Borrowers
from time to time; and
WHEREAS, the parties hereto desire to amend the Loan Agreement in
certain respects as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1 AMENDMENT. Effective on (and subject to the occurrence of)
the Second Amendment Effective Date (as defined below), the definition of
"Stated Termination Date" in Section 1 of the Loan Agreement is hereby amended
to state in its entirety as follows:
"Stated Termination Date" means June 10, 1997, as such date may be
extended pursuant to Section 4.2(b)."
SECTION 2 REPRESENTATIONS AND WARRANTIES. Each Borrower represents
and warrants to the Agent and the Lenders that (a) each warranty set forth in
Section 8 of the Loan Agreement as amended by this Second Amendment (as so
amended, the "Amended Loan Agreement") is, or upon the effectiveness hereof will
be, true and correct in all material respects on and as of the Second Amendment
Effective Date as though made on and as of such date, other than any such
representation or warranty which relates to a specified prior date and no event
has occurred or is continuing, or would result from the execution and delivery
of this Second Amendment, which constitutes a Default or an Event of Default,
(b) the execution and delivery by the Borrowers of this Second Amendment and the
performance by the Borrowers of their respective obligations under the Amended
Loan Agreement (i) are within the corporate powers of the Borrowers, (ii) have
been duly authorized by all necessary corporate action, (iii) have received all
necessary approvals, or authorization of, or declaration or filing with, any
Governmental Authority, (iv) do not require any consent of any other Person,
except for those already duly obtained, including the consents with respect to
the agreements listed on Schedule I hereto, and (v) do not and will not
contravene or conflict with any provision of law or of the articles of
incorporation or by-laws of any Borrower or of any indenture, loan agreement or
other contract, order or decree which is binding upon any Borrower, (c) the
Amended Loan Agreement is the legal, valid and binding obligation of the
Borrowers, enforceable against the Borrowers in accordance with its terms, and
(d) the Borrowers have paid the accrued and unpaid interest to creditors of the
Borrowers under the agreements listed on Schedule I hereto including all amounts
required as a condition to any consent referred to in clause (b)(iv), which
amounts are set forth in full on Schedule II hereto.
SECTION 3 EFFECTIVENESS. The amendments set forth in Section 1 above
shall become effective, as of the day and year first above written, on such date
(herein called the "Second Amendment Effective Date") when the Agent shall have
received counterparts of this Second Amendment executed by all of the parties
hereto and appropriate evidence of payment of the amount set forth in Schedule
II.
SECTION 4 MISCELLANEOUS.
4.1 Waiver. The Agent and the Lenders agree that nothing in Section
8.11 of the Loan Agreement shall prohibit the payment of the amounts set forth
in Section 2(d) hereof. This agreement shall be limited to its terms and shall
not constitute a waiver of any other rights that the Agent and the Lenders may
have from time to time.
4.2 Continuing Effectiveness, etc. As herein amended, the Loan
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the Second Amendment Effective Date, all
references in the Loan Agreement to "Loan Agreement", "Agreement" or similar
terms shall refer to the Amended Loan Agreement.
4.3 Counterparts. This Second Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original but all such
counterparts shall together constitute one and the same Second Amendment.
4.4 Governing Law. This Second Amendment shall be a contract made
under and governed by the internal laws of the State of Illinois.
4.5 Successors and Assigns. This Second Amendment shall be binding
upon the Borrowers, the Lenders and the Agent and their respective successors
and assigns, and shall inure to the benefit of the Borrowers, the Lenders and
the Agent and the respective successors and assigns of the Agent and the
Lenders.
Delivered at Chicago, Illinois, as of the day and year first above
written.
MERCURY FINANCE COMPANY
By
Name:
Title:
MERCURY FINANCE CORPORATION OF ALABAMA
MERCURY FINANCE COMPANY OF ARIZONA
MERC FINANCE COMPANY OF CALIFORNIA
MERCURY FINANCE COMPANY OF COLORADO
MERCURY FINANCE COMPANY OF DELAWARE
MERCURY FINANCE COMPANY OF FLORIDA
MERCURY FINANCE COMPANY OF GEORGIA
MERCURY FINANCE COMPANY OF IDAHO
MERCURY FINANCE COMPANY OF ILLINOIS
MERCURY FINANCE COMPANY OF INDIANA
MERCURY FINANCE COMPANY OF IOWA
MERCURY FINANCE COMPANY OF KANSAS
MERCURY FINANCE COMPANY OF KENTUCKY
MERCURY FINANCE COMPANY OF LOUISIANA
MERCURY FINANCE COMPANY OF MICHIGAN
MERCURY FINANCE COMPANY OF MISSISSIPPI
MERCURY FINANCE COMPANY OF MISSOURI
MERCURY FINANCE COMPANY OF NEVADA
MERCURY FINANCE COMPANY OF NEW MEXICO
MERCURY FINANCE COMPANY OF NEW YORK
MERCURY FINANCE COMPANY OF NORTH CAROLINA
MERCURY FINANCE COMPANY OF OHIO
MFC FINANCE COMPANY OF OKLAHOMA
MERCURY FINANCE COMPANY OF OREGON
MERCURY FINANCE COMPANY OF PENNSYLVANIA
MERCURY FINANCE COMPANY OF SOUTH CAROLINA
MERCURY FINANCE COMPANY OF TENNESSEE
MFC FINANCE COMPANY OF TEXAS
MERCURY FINANCE COMPANY OF UTAH
MERCURY FINANCE COMPANY OF VIRGINIA
MERCURY FINANCE COMPANY OF WASHINGTON
MERCURY FINANCE COMPANY OF WISCONSIN
FILCO MARKETING COMPANY
MFC FINANCIAL SERVICES, INC.
GULFCO FINANCE COMPANY
GULFCO INVESTMENT, INC.
MIDLAND FINANCE CO.
By
Name:
Title:
BANKAMERICA BUSINESS CREDIT,
INC., as a Lender and as the Agent
By
Name:
Vice President
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of
February 7, 1997 is entered into between Mercury Finance corporation, a Delaware
corporation ("Mercury"), and the lender whose name appears on the signature
pages hereof (the "Lender").
WITNESSETH:
WHEREAS, the Lender or its predecessors in interest is a party to or
beneficiary of one or more credit agreements, note agreements or other
agreements, instruments or other documents with or executed by Mercury including
those listed on Schedule 1 hereto pursuant to which Lender has extended credit
to Mercury (collectively, the "Existing Agreements");
WHEREAS, Mercury is in default under various provisions of the
Existing Agreements;
WHEREAS, Mercury is experiencing a severe liquidity crisis and
requires immediate emergency financing to continue its operations;
WHEREAS, at the request of Mercury, BankAmerica Business Credit, Inc.
together with its affiliates ("BofA") is considering providing Mercury and
certain of its subsidiaries (collectively, the "Borrowers") with a secured
revolving loan in an amount not to exceed $50 million and having a maturity of
not greater than 30 days in accordance with the terms and conditions of the term
sheet attached hereto as Exhibit A (the "Term Sheet") between the Borrowers and
BofA (the "Bridge Loan");
WHEREAS, certain provisions of the Existing Agreements unless waived
prohibit the Borrowers from granting liens on their assets to secure
indebtedness for borrowed money and/or require that Lender be granted an equal
or ratable lien on such assets in the event such a lien is granted to another
lender;
WHEREAS, in connection with the Bridge Loan, Mercury has requested the
Lender to waive such provisions of the Existing Agreements to permit it to
obtain the emergency financing it needs;
WHEREAS, the Lender is willing to waive certain limited provisions of
the Existing Agreements to permit the Bridge Loan to be provided Mercury;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and Lender agree as
follows:
1. Treatment of Existing Indebtedness. Mercury has represented to
the Lender that neither it nor its subsidiaries intend to repay, retire, make a
distribution to or on account of, or make an interest payment on account of, any
existing indebtedness for borrowed money, other than the Bridge Loan and the $6
million payment to be made to the insurance subsidiaries of Mercury as provided
in the Term Sheet, including, but not limited to, indebtedness on account of
commercial paper, note agreements, loan agreements, subordinated debt agreements
or any of the indebtedness listed on Schedule 2 hereto (collectively, "Funded
Debt"), unless the Lender receives in connection with such payment or
distribution, and subject to applicable subordination agreements, its pro rata
portion of such payment or distribution on account of indebtedness owing to the
Lender under the Existing Agreements.
2. Waiver. Solely in connection with the Bridge Loan to be extended
in accordance with the terms and conditions of the Term Sheet, the Lender waives
compliance with any of the provisions of the Existing Agreements that (a)
prohibit or restrict the granting of security interests, liens or mortgages by
any of the Borrowers to BofA (the "BofA Liens") to secure the Bridge Loan or (b)
result in or require the creation of a security interest, lien or mortgage in
favor of the Lender on any assets of the Borrowers as a result of the granting
of the BofA Liens to secure the Bridge Loan; provided, that the waivers set
forth in this Section 2 shall be effective on the conditions that the (i)
aggregate principal amount of loans advanced to the Borrowers under the Bridge
Loan does not exceed $50 million, (ii) the term of the Bridge Loan does not
exceed 30 days and (iii) the BofA Liens secure only the Bridge Loan and do not
secure any other indebtedness for borrowed money including Funded Debt
outstanding as of the date hereof or hereafter.
3. Effect on Existing Agreements. In the event of any conflict
between the terms hereof and the terms of any Existing Agreement or any
instruments, documents or agreements executed in connection therewith with
respect to the subject matter of this Agreement, the terms of this Agreement
shall govern and control. Each of the Existing Agreements and such other
related instruments, documents or agreements, and all obligations of Mercury and
all rights and remedies of the Lender thereunder shall remain in full force and
effect except to the extent expressly waived in accordance with the terms
hereof. No defaults or events of default existing as of the date hereof under
the Existing Agreements are being waived or forborne. Mercury acknowledges that
defaults and events of default exist and are continuing under the Existing
Agreements.
4. Representations. Lender represents that it has not assigned or
transferred the indebtedness owing to it under the Existing Agreements or it has
assigned or transferred such indebtedness subject to this Agreement and is duly
authorized to enter into and perform this Agreement. Mercury represents to
Lender that it is duly authorized to enter into and perform this Agreement.
Mercury further represents to Lender that no commercial paper issued by or on
behalf of Mercury contains any provisions that (a) prohibit or restrict the
granting of security interests, liens or mortgages by any of the Borrowers to
secure any indebtedness or (b) result in or require the creation of a security
interest, lien or mortgage in favor of any holder of such commercial paper as a
result of the granting of security interests, liens on mortgages by any of the
Borrowers to any person or entity.
5. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
6. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law. If any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity and the remaining provisions of this
Agreement shall remain unaffected and in full force and effect.
7. Governing Law. This Agreement shall be interpreted, and the
rights and liabilities of the parties hereto determined, in accordance with the
laws of the State of Illinois.
8. Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon the successors and assigns of, each of the parties
hereto.
9. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Waiver Agreement has been duly executed as of
the day and year first above written.
By:
Name:
Title:
Mercury Finance Corporation,
a Delaware corporation
By:
Name:
Title:
Name of Lender:
SECOND LIMITED WAIVER AGREEMENT
This Second Limited Waiver Agreement (this "Agreement") dated as of
March 10, 1997 is entered into between Mercury Finance Company, a Delaware
corporation ("Mercury"), and the lender whose name appears on the signature
pages hereof (the "Lender").
W I T N E S S E T H:
WHEREAS, the Lender or its predecessors in interest is a party to or
beneficiary of one or more credit agreements, note agreements or other
agreements, instruments or other documents with or executed by Mercury including
those listed on Schedule 1 hereto pursuant to which Lender has extended credit
to Mercury (collectively, the "Existing Agreements");
WHEREAS, Mercury is in default under various provisions of the Existing
Agreements;
WHEREAS, in late January 1997, Mercury began experiencing a severe
liquidity crisis and required immediate emergency financing to continue its
operations;
WHEREAS, in February 1997, to meet such emergency financing needs, Mercury
and certain of its subsidiaries (collectively, the "Borrowers") entered into a
Loan and Security Agreement with BankAmerica Business Credit, Inc. ("BABC")
dated as of February 7, 1997 (the "Bridge Loan Agreement") providing the
Borrowers with a secured revolving loan facility in an aggregate principal
amount not to exceed $50 million and having a maturity of March 10, 1997, with
an option to extend (the "Bridge Loan");
WHEREAS, the Borrowers require financing beyond March 10, 1997 to continue
their operations and have therefore requested BABC to extend the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms set forth in
the Second Amendment attached hereto as Exhibit A;
WHEREAS, certain provisions of the Existing Agreements unless waived
prohibit the Borrowers from granting liens on their assets to secure
indebtedness for borrowed money and/or require that the Lender be granted an
equal or ratable lien on such assets in the event such a lien is granted to
another lender;
WHEREAS, in connection with the Bridge Loan, Mercury requested the Lender
to waive such provisions of the Existing Agreements to permit it to obtain the
emergency financing it needed through March 10, 1997, and the Lender or its
assignor granted such a waiver pursuant to a Limited Waiver Agreement dated as
of February 7, 1997;
WHEREAS, in connection with the extension of the maturity date of the
Bridge Loan from March 10, 1997 to June 10, 1997, Mercury has again requested
the Lender to waive such provisions of the Existing Agreements so the Borrowers
may obtain the financing they need to continue their operations;
WHEREAS, the Lender is willing to waive certain limited provisions of the
Existing Agreements to permit the maturity date of the Bridge Loan to be
extended to June 10, 1997;
WHEREAS, Mercury wishes to reserve its rights regarding the application of
certain payments to be made hereunder and the Lender similarly reserves all
rights with respect thereto;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and Lender agree as
follows:
1. Treatment of Existing Indebtedness. Mercury has represented to the
Lender that neither it nor its subsidiaries intend to repay, retire, make a
distribution to or on account of, or make an interest payment on account of, any
existing indebtedness for borrowed money, other than the Bridge Loan, including,
but not limited to, indebtedness on account of commercial paper, note
agreements, loan agreements, subordinated debt agreements or any of the
indebtedness listed on Schedule 2 hereto (collectively, "Funded Debt"), except
as contemplated in this Agreement, unless the Lender receives in connection with
such payment or distribution, and subject to applicable subordination
agreements, its pro rata portion of such payment or distribution on account of
indebtedness owing to the Lender under the Existing Agreements.
2. Amendment of Existing Agreements. The Existing Agreements are hereby
amended to provide that, not withstanding any contrary provision set forth
therein:
(a) commencing on February 10, 1997, the Lender will accrue interest
on the aggregate principal balances owing to the Lender under the Existing
Agreements (whether or not due by reason of acceleration or otherwise) at
the greater rate (the "Default Rate") of (i) 9% per annum and (ii) the
applicable default rate set forth in the Existing Agreements;
(b) from and after the date of this Agreement through June 10, 1997,
(i) interest accrued by the Lender on the aggregate principal balances
owing to the Lender under the Existing Agreements (whether or not due by
reason of acceleration or otherwise) will be paid to the Lender by Mercury
on the first business day of each month (and on June 10, 1997 for the
period from June 1, 1997 through and including June 10, 1997) at the
greater rate of (A) 7% per annum and (B) the applicable nondefault rate set
forth in the Existing Agreements and (ii) on the earlier to occur of (the
"Catch-up Date") (A) June 10, 1997 and (B) the date on which Mercury
receives unrestricted proceeds from the sale of the Lyndon insurance
business (stock or assets), all accrued and unpaid interest calculated
through and including the Catch-up Date, subject to a maximum rate of 9%
per annum, will be paid to the Lender by Mercury; and
(c) to the extent that the interest payments to the Lender under
subclause (b) hereof do not pay in full all accrued interest owing to the
Lender under the Existing Agreements because the Default Rate applicable to
certain or all of the aggregate principal balances owing to the Lender
under the Existing Agreements (whether or not due by reason of acceleration
or otherwise) exceeds 9% per annum, the Lender shall retain any and all of
its rights against Mercury under the Existing Agreement or applicable law
with respect to such amounts.
3. Waiver. Solely in connection with the extension of the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms and conditions
of the Second Amendment, the Lender waives compliance with any of the provisions
of the Existing Agreements that (a) prohibit or restrict the granting of
security interests, liens or mortgages by any of the Borrowers to BABC (the
"BABC Liens") to secure the Bridge Loan or (b) result in or require the creation
of a security interest, lien or mortgage in favor of the Lender on any assets of
the Borrowers as a result of the granting of the BABC Liens to secure the Bridge
Loan; provided, that the waivers set forth in this Section 3 shall be effective
on the conditions that (i) Mercury shall have paid to the Lender in immediately
available funds any and all accrued and unpaid interest on the aggregate
principal balances owing to the Lender under the Existing Agreements
(A) calculated through and including February 9, 1997 at the nondefault interest
rate applicable to such aggregate principal balances under the relevant Existing
Agreement, and (B) calculated from and including February 10, 1997 through the
date hereof at the rate set forth in paragraph 2(b)(i) hereof, (ii) the
aggregate principal amount of loans advanced to the Borrowers under the Bridge
Loan does not exceed $50 million and (iii) the BABC Liens secure only the Bridge
Loan and do not secure any other indebtedness for borrowed money including
Funded Debt outstanding as of the date hereof or hereafter.
4. Effect on Existing Agreements; Reservation of Rights. In the event of
any conflict between the terms hereof and the terms of any Existing Agreement or
any instruments, documents or agreements executed in connection therewith with
respect to the subject matter of this Agreement, the terms of this Agreement
shall govern and control. Each of the Existing Agreements and such other
related instruments, documents or agreements, and all obligations of Mercury and
all rights and remedies of the Lender thereunder or under applicable law shall
remain in full force and effect except to the extent expressly amended or waived
in accordance with the terms hereof. No defaults or events of default existing
as of the date hereof under the Existing Agreements are being waived or
forborne. Mercury acknowledges that defaults and events of default exist and
are continuing under the Existing Agreements. Mercury and the Lender reserve
any and all of their rights as to the application of the payments to be made
under paragraph 2 of this Agreement; provided, however, that Mercury and the
Lender agree that notwithstanding anything in the Existing Agreements or this
Agreement to the contrary, there shall be no requirement that (a) the debt under
the Existing Agreements be accelerated for such debt to accrue or bear interest
at the applicable rate or (b) unanimous consent from all parties to the Existing
Agreements is necessary for the Lender to accrue interest at the rates specified
in paragraph 2 of this Agreement.
5. Representations. The Lender represents that it has not assigned or
transferred the indebtedness owing to it under the Existing Agreements or it has
assigned or transferred such indebtedness subject to this Agreement and is duly
authorized to enter into and perform this Agreement. Mercury represents to the
Lender that it is duly authorized to enter into and perform this Agreement.
Mercury further represents that it understands that the holders of the Funded
Debt (excluding subordinated debt) will (a) accrue interest on all of the Funded
Debt (excluding subordinated debt) commencing on February 10, 1997 at the
Default Rate (as defined above in paragraph 2) and Mercury will pay interest
accrued by the holders of Funded Debt (excluding subordinated debt) thereon to
the holders thereof on the same payment terms set forth in Section 2 hereof and
(b) will pay to the holders of Funded Debt (excluding subordinated debt) any and
all accrued and unpaid interest thereon calculated through and including
February 9, 1997 at the applicable nondefault contract rate, or in the case of
commercial paper, original issue discount accrued through such date. Mercury
further represents to the Lender that transactions contemplated by the Second
Amendment will not result in or require the creation of a security interest,
lien or mortgage in favor of any holder of commercial paper.
6. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
7. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law. If any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity and the remaining provisions of this
Agreement shall remain unaffected and in full force and effect.
8. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the
internal laws of the State of Illinois.
9. Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon the successors and assigns of, each of the parties hereto.
10. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
MERCURY FINANCE COMPANY,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
Name of Lender:
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of February ,
1997 is entered into between Mercury Finance Corporation, a Delaware corporation
("Mercury") and Paine Webber Inc., successor to Kidder, Peabody & Co.,
Incorporated (the "Dealer") under that certain Commercial Paper Dealer Agreement
dated as of March 25, 1991 (the "Dealer Agreement")
WITNESSETH
WHEREAS, Dealer is party to the Dealer Agreement under which Mercury has
issued commercial paper to customers of the Dealer (the "Customers"), which
commercial paper is in default;
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, Mercury is experiencing a severe liquidity crisis and requires
immediate emergency financing to continue its operations;
WHEREAS, at the request of Mercury, BankAmerica Business Credit
Corporation, with any of its subsidiaries or its affiliates (collectively
"BofA") is considering providing Mercury and certain of its subsidiaries
(collectively, the "Borrowers") with a secured term loan in an amount not to
exceed $50 million and having a maturity of not greater than 60 days in
accordance with the terms and conditions of the term sheet attached hereto as
Exhibit A (the "Term Sheet") between the Borrowers and BofA (the "Bridge Loan");
WHEREAS, certain provisions of the Dealer Agreement unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the Bridge Loan, Mercury has requested the
Dealer, on behalf of itself but not its Customers, to waive such provisions of
the Dealer Agreement to permit Mercury to obtain the emergency financing it
needs;
WHEREAS, the Dealer, on behalf of itself but not its Customers, is willing
to waive certain limited provisions of the Dealer Agreement to permit the Bridge
Loan to be provided to Mercury;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and the Dealer agree as
follows:
1. Waiver. Solely in connection with the Bridge Loan to be extended in
accordance with the terms and conditions of the Term Sheet, on behalf of itself
but not its Customers, the Dealer waives compliance with any of the provisions
of the Dealer Agreement that (a) prohibit or restrict the granting of security
interests, liens or mortgages by any of the Borrowers to BofA (the "BofA Liens")
to secure the Bridge Loan or (b) result in or require the creation of a security
interest, lien or mortgage in favor of the Dealer or its customers on any assets
of the Borrowers as a result of the granting of the BofA Liens to secure the
Bridge Loan; provided, that the waivers set forth in this Section 1 shall be
effective on the conditions that the (i) aggregate principal amount of loans
advanced to the Borrowers on a nonrevolving basis under the Bridge Loan does not
exceed $50 million, (ii) the term of the Bridge Loan does not exceed 60 days and
(iii) the BofA Liens secure only the Bridge Loan and do not secure any other
indebtedness for borrowed money outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights and
liabilities of the parties hereto determined, in accordance with the laws of the
State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit of,
and be binding upon the successors and assigns of, each of the parties hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute on instrument.
* * * *
IN WITNESS WHEREOF, this Waiver Agreement has been duly executed as of the
day and year first above written.
By:
Name:
Title:
Mercury Finance Company
By:
Name:
Title:
Paine Webber, Inc.
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of March 10, 1997
is entered into between Mercury Finance Company, a Delaware corporation
("Mercury") and PaineWebber Inc., successor to Kidder, Peabody & Co.,
Incorporated (the "Dealer") under that certain Commercial Paper Dealer Agreement
dated as of March 25, 1991 (the "Dealer Agreement").
W I T N E S S E T H :
WHEREAS, Dealer is party to the Dealer Agreement under which Mercury has
issued commercial paper to customers of the Dealer (the "Customers"), which
commercial paper is in default;
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, in late January 1997, Mercury began experiencing a severe
liquidity crisis and required immediate emergency financing to continue its
operations;
WHEREAS, in February 1997, to meet such emergency financing needs, Mercury
and certain of its subsidiaries (collectively, the "Borrowers") entered into a
Loan and Security Agreement with BankAmerica Business Credit, Inc. ("BABC")
dated as of February 7, 1997 (the "Bridge Loan Agreement") providing the
Borrowers with a secured revolving loan facility in an aggregate principal
amount not to exceed $50 million and having a maturity of March 10, 1997, with
an option to extend (the "Bridge Loan");
WHEREAS, the Borrowers require financing beyond March 10, 1997 to continue
their operations and have therefore requested BABC to extend the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms set forth in
the Second Amendment attached hereto as Exhibit A;
WHEREAS, certain provisions of the Dealer Agreement unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the extension of the maturity date of the
Bridge Loan to June 10, 1997, Mercury has requested the Dealer, on behalf of
itself but not its Customers, to waive such provisions of the Dealer Agreement
to permit Mercury to obtain the emergency financing it needs;
WHEREAS, the Dealer, on behalf of itself but not its Customers, is willing
to waive certain limited provisions of the Dealer Agreement to permit the
maturity of the Bridge Loan to be extended to June 10, 1997;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and the Dealer agree as
follows:
1. Waiver. Solely in connection with the extension of the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms and conditions
of the Second Amendment, on behalf of itself but not its Customers, the Dealer
waives compliance with any of the provisions of the Dealer Agreement that
(a) prohibit or restrict the granting of security interests, liens or mortgages
by any of the Borrowers to BABC (the "BABC Liens") to secure the Bridge Loan or
(b) result in or require the creation of a security interest, lien or mortgage
in favor of the Dealer or its customers on any assets of the Borrowers as a
result of the granting of the BABC Liens to secure the Bridge Loan; provided,
that the waivers set forth in this Section 1 shall be effective on the
conditions that the (i) aggregate principal amount of loans advanced to the
Borrowers under the Bridge Loan does not exceed $50 million and (ii) the BABC
Liens secure only the Bridge Loan and do not secure any other indebtedness for
borrowed money outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the laws of
the State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit
of, and be binding upon the successors and assigns of, each of the parties
hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
MERCURY FINANCE COMPANY,
a Delaware corporation
By:
Name:
Title:
PAINEWEBBER INC.
By:
Name:
Title:
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of February ,
1997 is entered into between Mercury Finance Corporation, a Delaware corporation
("Mercury") and Credit Suisse First Boston Corporation ("CS/FB"), holder of
$__________ in Mercury Commercial Paper acquired on February 5, 1997 from Paine
Webber Inc., successor to Kidder, Peabody & Co., Incorporated (the "Dealer")
under that certain Commercial Paper Dealer Agreement dated as of March 25, 1991
(the "Dealer Agreement")
WITNESSETH
WHEREAS, Dealer is party to the Dealer Agreement under which Mercury has
issued commercial paper to customers of the Dealer (the "Customers"), one of
whom is CS/FB, which commercial paper is in default;
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, Mercury is experiencing a severe liquidity crisis and requires
immediate emergency financing to continue its operations;
WHEREAS, at the request of Mercury, BankAmerica Business Credit
Corporation, with any of its subsidiaries or its affiliates (collectively
"BofA") is considering providing Mercury and certain of its subsidiaries
(collectively, the "Borrowers") with a secured term loan in an amount not to
exceed $50 million and having a maturity of not greater than 60 days in
accordance with the terms and conditions of the term sheet attached hereto as
Exhibit A (the "Term Sheet") between the Borrowers and BofA (the "Bridge Loan");
WHEREAS, certain provisions of the Dealer Agreement unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the Bridge Loan, Mercury has requested the
Dealer, on behalf of itself but not its Customers, to waive such provisions of
the Dealer Agreement to permit Mercury to obtain the emergency financing it
needs;
WHEREAS, the Dealer, on behalf of itself but not its Customers, is willing
to waive certain limited provisions of the Dealer Agreement to permit the Bridge
Loan to be provided to Mercury;
WHEREAS, CS/FB, as one of the Dealer's Customers, is willing to waive in
like manner and to like extent;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and CS/FB agree as
follows:
1. Waiver. Solely in connection with the Bridge Loan to be extended in
accordance with the terms and conditions of the Term Sheet, CS/FB waives
compliance with any of the provisions of the Dealer Agreement that (a) prohibit
or restrict the granting of security interests, liens or mortgages by any of the
Borrowers to BofA (the "BofA Liens") to secure the Bridge Loan or (b) result in
or require the creation of a security interest, lien or mortgage in favor of the
Dealer or its customers on any assets of the Borrowers as a result of the
granting of the BofA Liens to secure the Bridge Loan; provided, that the waivers
set forth in this Section 1 shall be effective on the conditions that the (i)
aggregate principal amount of loans advanced to the Borrowers on a nonrevolving
basis under the Bridge Loan does not exceed $50 million, (ii) the term of the
Bridge Loan does not exceed 60 days and (iii) the BofA Liens secure only the
Bridge Loan and do not secure any other indebtedness for borrowed money
outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights and
liabilities of the parties hereto determined, in accordance with the laws of the
State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit of,
and be binding upon the successors and assigns of, each of the parties hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute on instrument.
* * * *
IN WITNESS WHEREOF, this Waiver Agreement has been duly executed as of the
day and year first above written.
By:
Name:
Title:
Mercury Finance Company
By:
Name: David Matlin
Title: Managing Director
Credit Suisse First Boston Corp.
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of March 10, 1997
is entered into between Mercury Finance Company, a Delaware corporation
("Mercury") and Credit Suisse First Boston Corporation ("CS/FB"), holder of
$16,625,000 in Mercury Commercial Paper acquired on February 5, 1997 from
PaineWebber Inc., successor to Kidder, Peabody & Co., Incorporated (the
"Dealer") under that certain Commercial Paper Dealer Agreement dated as of
March 25, 1991 (the "Dealer Agreement").
W I T N E S S E T H :
WHEREAS, Dealer is party to the Dealer Agreement under which Mercury has
issued commercial paper to customers of the Dealer (the "Customers"), one of
whom is CS/FB, which commercial paper is in default;
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, in late January 1997, Mercury began experiencing a severe
liquidity crisis and required immediate emergency financing to continue its
operations;
WHEREAS, in February 1997, to meet such emergency financing needs, Mercury
and certain of its subsidiaries (collectively, the "Borrowers") entered into a
Loan and Security Agreement with BankAmerica Business Credit, Inc. ("BABC")
dated as of February 7, 1997 (the "Bridge Loan Agreement") providing the
Borrowers with a secured revolving loan facility in an aggregate principal
amount not to exceed $50 million and having a maturity of March 10, 1997, with
an option to extend (the "Bridge Loan");
WHEREAS, the Borrowers require financing beyond March 10, 1997 to continue
their operations and have therefore requested BABC to extend the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms set forth in
the Second Amendment attached hereto as Exhibit A;
WHEREAS, certain provisions of the Dealer Agreement unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the extension of the maturity date of the
Bridge Loan to June 10, 1997, Mercury has requested the Dealer, on behalf of
itself but not its Customers, to waive such provisions of the Dealer Agreement
to permit Mercury to obtain the emergency financing it needs;
WHEREAS, the Dealer, on behalf of itself but not its Customers, is willing
to waive certain limited provisions of the Dealer Agreement to permit the
maturity date of the Bridge Loan to be extended to June 10, 1997;
WHEREAS, CS/FB, as one of the Dealer's Customers, is willing to waive in
like manner and to like extent;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and CS/FB agree as
follows:
1. Waiver. Solely in connection with the extension of the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms and conditions
of the Second Amendment, CS/FB waives compliance with any of the provisions of
the Dealer Agreement that (a) prohibit or restrict the granting of security
interests, liens or mortgages by any of the Borrowers to BABC (the "BABC Liens")
to secure the Bridge Loan or (b) result in or require the creation of a security
interest, lien or mortgage in favor of the Dealer or its customers on any assets
of the Borrowers as a result of the granting of the BABC Liens to secure the
Bridge Loan; provided, that the waivers set forth in this Section 1 shall be
effective on the conditions that the (i) aggregate principal amount of loans
advanced to the Borrowers under the Bridge Loan does not exceed $50 million and
(ii) the BABC Liens secure only the Bridge Loan and do not secure any other
indebtedness for borrowed money outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the laws of
the State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit
of, and be binding upon the successors and assigns of, each of the parties
hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Waiver Agreement has been duly executed as of the
day and year first above written.
MERCURY FINANCE COMPANY,
a Delaware corporation
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON CORP.
By:
Name: David Matlin
Title: Managing Director
LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of March 10, 1997
is entered into between Mercury Finance Company, a Delaware corporation
("Mercury") and Credit Suisse First Boston Corporation ("CS/FB"), holder of
$22,500,000 in Mercury Subordinated Notes as listed on Schedule 1 hereto (the
"Subordinated Notes").
W I T N E S S E T H :
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, in late January 1997, Mercury began experiencing a severe
liquidity crisis and required immediate emergency financing to continue its
operations;
WHEREAS, in February 1997, to meet such emergency financing needs, Mercury
and certain of its subsidiaries (collectively, the "Borrowers") entered into a
Loan and Security Agreement with BankAmerica Business Credit, Inc. ("BABC")
dated as of February 7, 1997 (the "Bridge Loan Agreement") providing the
Borrowers with a secured revolving loan facility in an aggregate principal
amount not to exceed $50 million and having a maturity of March 10, 1997, with
an option to extend (the "Bridge Loan");
WHEREAS, the Borrowers require financing beyond March 10, 1997 to continue
their operations and have therefore requested BABC to extend the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms set forth in
the Second Amendment attached hereto as Exhibit A;
WHEREAS, certain provisions of the Note Agreements governing the
Subordinated Notes (the "Subordinated Debt Documents") unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the extension of the maturity date of the
Bridge Loan to June 10, 1997, Mercury has requested CS/FB to waive such
provisions of the Subordinated Debt Documents to permit Mercury to obtain the
emergency financing it needs;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and CS/FB agree as
follows:
1. Waiver. Solely in connection with the extension of the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms and conditions
of the Second Amendment, CS/FB waives compliance with any of the provisions of
the Subordinated Debt Documents that (a) prohibit or restrict the granting of
security interests, liens or mortgages by any of the Borrowers to BABC (the
"BABC Liens") to secure the Bridge Loan or (b) result in or require the creation
of a security interest, lien or mortgage in favor of CS/FB on any assets of the
Borrowers as a result of the granting of the BABC Liens to secure the Bridge
Loan; provided, that the waivers set forth in this Section 1 shall be effective
on the conditions that the (i) aggregate principal amount of loans advanced to
the Borrowers under the Bridge Loan does not exceed $50 million and (ii) the
BABC Liens secure only the Bridge Loan and do not secure any other indebtedness
for borrowed money outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the laws of
the State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit
of, and be binding upon the successors and assigns of, each of the parties
hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Waiver Agreement has been duly executed as of the
day and year first above written.
MERCURY FINANCE COMPANY,
a Delaware corporation
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON CORP.
By:
Name: David Matlin
Title: Managing Director
March 12, 1997
To the Paying Agent and Holders of Commercial
Paper of Mercury Finance Company
for the Issues of Commercial Paper
Listed On Exhibit and Any Other Commercial
Paper of Mercury Finance Company Now
Outstanding and Unpaid
("the Commercial Paper")
This letter will confirm Mercury Finance Company's ("Mercury") agreement to
take the following actions and make the following acknowledgments in
consideration of (i) the waivers that have been granted and are being granted by
various parties, including certain holders of Mercury's Commercial Paper, in
connection with the Loan and Security Agreement, dated February 7, 1997, between
BankAmerica Business Credit, Inc., Mercury and other borrowers, and (ii) the
forbearance from the taking, prior to the date hereof, of any enforcement action
by holders of Mercury's Commercial Paper:
1. On March 12, 1997, Mercury shall pay cash in immediately available
funds, through the Paying Agent for the Commercial Paper, to the
Depository Trust Company with proper instructions to effectuate
payments to the account of each of the holders of Commercial Paper of
record as of March 13, 1997 in an amount equal to the sum of (A)(i)
with respect to each of the issues of Commercial Paper that matured on
or prior to February 9, 1997, an amount equal to the sum of (1) the
difference between the original issue discount price of such issue of
Commercial Paper (the "Issue Price") and the face amount of such issue
of Commercial Paper payable at the maturity thereof (the "Face
Amount"), and (2) interest on the Issue Price at the rate of 7% per
annum for each day elapsed from the date of maturity through February
9, 1997 or (ii) with respect to each of the issues of Commercial Paper
that mature after February 9, 1997, an amount equal to the accretion
to such issue of Commercial Paper as of February 9, 1997, and (B) with
respect to all issues of Commercial Paper, interest on the Issue Price
at the rate of 7% per annum for each day elapsed from and including
February 10, 1997 to March 12, 1997.
2. With respect to each issue of Commercial Paper, interest shall accrue
on the Issue Price at a rate of 9% per annum for each day elapsed from
and including February 10, 1997 to June 10, 1997 (such period, the
"Waiver Period"). During the Waiver Period, interest shall be paid as
follows: (i) interest on the Issue Price at a rate of 7% per annum
for each day elapsed from and including February 10, 1997 to March 12,
1997 shall be paid as provided in paragraph 1; (ii) from and after
March 12, 1997, interest on the Issue Price at a rate of 7% per annum
shall be paid in arrears on the first business day of each of the
months of April, May and June, 1997; and (iii) interest on the Issue
Price at a rate of 7% per annum shall be paid on June 10, 1997 for
each day elapsed from and including the first business day of June,
1997 to June 10, 1997. In addition, on the earlier of (a) June 10,
1997 or (b) the date on which Mercury receives proceeds from the sale
of the stock, or substantially all of the assets (or any material part
thereof), of Lyndon Property Insurance Company (and each of its
subsidiaries), all accrued but unpaid interest shall be due and
payable.
3. Mercury acknowledges that the holders of the Commercial Paper have
asserted that, in accordance with the provisions of applicable law,
including, specifically, Section 5004 of the New York Civil Practice
Law and Rules, the Commercial Paper is entitled to accrue interest at
the rate of 9% per annum for each day elapsed from the date of
maturity until paid in full. Notwithstanding the foregoing
acknowledgment, each of Mercury and the holders of the Commercial
Paper reserve any and all of its or their respective rights as to the
application of payments to be made pursuant to this Agreement.
4. Mercury acknowledges that holders of Commercial Paper have informed
Mercury that the holders are relying on Mercury's covenants and
agreements as set forth in this letter with respect to their decisions
and activities between the date of this letter and June 10, 1997 and
that the holders are reserving all rights and remedies under
applicable law with respect to the failure by Mercury to pay the
Commercial Paper when due.
5. The undersigned represents and warrants that he has been duly
authorized to execute this letter on behalf of Mercury.
Very truly yours,
MERCURY FINANCE COMPANY
By:
William A. Brandt, Jr.
Its: President and Chief Executive Officer
