Exhibit 10.32
SECOND AMENDED AND RESTATED LOAN AGREEMENT
by and among
MEDALLION FINANCIAL CORP.,
MEDALLION BUSINESS CREDIT, LLC
THE LENDERS PARTY HERETO,
FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association)
AS AGENT AND SWING LINE LENDER
and
FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association)
AS ARRANGER
Dated as of September 22, 2000
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.........................................................1
Section 1.1. Defined Terms................................................1
Section 1.2. Other Definitional Provisions...............................25
ARTICLE 2. AMOUNT AND TERMS OF REVOLVING CREDIT LOANS........................25
Section 2.1. Commitments and Loans.......................................25
Section 2.2. Revolving Credit, Term Loan and Swing Line Notes............30
Section 2.3. Procedures Applicable to Borrowings and Conversions.........34
Section 2.4. Termination and Reduction of Aggregate Revolving Credit
Commitment................................................................38
Section 2.5. Prepayments; Mandatory Payment of Term Loans................39
Section 2.6. Interest on Delinquent Payments.............................41
Section 2.7. Increased Costs.............................................42
Section 2.8. Use of Proceeds.............................................44
Section 2.9. Payment on Non-Business Days................................45
Section 2.10. Term of Revolving Credit Commitments.......................45
Section 2.11. Funding Losses.............................................47
Section 2.12. Alternate Rate of Interest.................................47
Section 2.13. Changes In Legality........................................48
Section 2.14. Participations.............................................48
ARTICLE 3. FEES AND PAYMENTS.................................................49
Section 3.1. Fees........................................................49
Section 3.2. Payments....................................................49
Section 3.3. Taxes.......................................................50
ARTICLE 4. REPRESENTATIONS AND WARRANTIES....................................52
Section 4.1. Corporate Status............................................52
Section 4.2. Subsidiaries................................................52
Section 4.3. Location of Offices, Books and Records......................52
Section 4.4. Corporate Power; Authorization..............................52
Section 4.5. Enforceable Obligations.....................................53
Section 4.6. No Violation of Agreements; Compliance with Law.............53
Section 4.7. Agreements..................................................53
Section 4.8. No Material Litigation......................................54
Section 4.9. Good Title to Properties....................................54
Section 4.10. Margin Regulations.........................................54
Section 4.11. [Reserved].................................................55
Section 4.12. Investment Company.........................................55
Section 4.13. Disclosure.................................................55
Section 4.14. Taxes and Claims...........................................55
Section 4.15. Licenses and Permits.......................................56
Section 4.16. Consents...................................................56
Section 4.17. Employee Benefit Plans.....................................56
Section 4.18. Financial Condition........................................57
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Section 4.19. Environmental Laws, Etc....................................57
Section 4.20. Event of Default...........................................57
Section 4.21. Solvency...................................................58
Section 4.22. Priority; Continued Effectiveness..........................58
Section 4.23. Advertising, Origination and Servicing Activities..........58
Section 4.24. Activities.................................................58
Section 4.25. [Reserved].................................................58
Section 4.26. [Reserved].................................................58
Section 4.27. Non-Affiliation with Banks.................................58
ARTICLE 5. CONDITIONS PRECEDENT..............................................59
Section 5.1. Conditions to Initial Revolving Credit Loan and Initial
Swing Line Loan...........................................................59
Section 5.2. Conditions to All Revolving Credit and Term Loans...........62
ARTICLE 6. AFFIRMATIVE COVENANTS.............................................63
Section 6.1. Financial Statements and Other Information..................63
Section 6.2. Taxes and Claims............................................66
Section 6.3. Insurance...................................................67
Section 6.4. Books and Records...........................................68
Section 6.5. Properties in Good Condition................................68
Section 6.6. Inspection by the Banks.....................................68
Section 6.7. Pay Indebtedness to Agent and Perform Other Covenants.......68
Section 6.8. Compliance With Laws, Etc...................................69
Section 6.9. Notice of Certain Events....................................69
Section 6.10. Environmental Laws, Etc....................................69
Section 6.11. Further Assurances.........................................70
Section 6.12. ERISA......................................................70
Section 6.13. Corporate or Limited Liability Company Existence...........70
Section 6.14. Maintenance of Security Interest...........................71
Section 6.15. Maximum Percentage of Commercial Loans.....................71
Section 6.16. Reserved...................................................71
Section 6.17. Borrowers' Manuals.........................................71
Section 6.18. Principal Office of Clients................................71
ARTICLE 7. FINANCIAL COVENANTS...............................................73
Section 7.1. Maximum Consolidated Leverage Ratio.........................73
Section 7.2. Maximum Combined Leverage Ratio.............................73
Section 7.3. Borrowing Base..............................................73
Section 7.4. Minimum EBIT to Interest Expense Ratio......................73
Section 7.5. Minimum Asset Quality.......................................74
ARTICLE 8. NEGATIVE COVENANTS................................................74
Section 8.1. Liens.......................................................74
Section 8.2. Indebtedness................................................75
Section 8.3. Limitation on Loans and Investments.........................76
Section 8.4. [Reserved]..................................................78
Section 8.5. Restricted Payments.........................................78
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Section 8.6. Merger, Consolidation, Sale or Transfers of Assets..........78
Section 8.7. Transfer of Proceeds........................................79
Section 8.8. Compliance with ERISA.......................................79
Section 8.9. Change in Business..........................................79
Section 8.10. Amendments of Agreements...................................79
Section 8.11. Transactions with Affiliates...............................79
Section 8.12. Negative Pledges...........................................80
Section 8.13. Inconsistent Agreements....................................80
Section 8.14. Capital Expenditures.......................................80
Section 8.15. [Reserved].................................................80
Section 8.16. Portfolio Purchases........................................80
ARTICLE 9. DEFAULTS AND REMEDIES.............................................81
Section 9.1. Events of Default...........................................81
Section 9.2. Suits for Enforcement.......................................85
Section 9.3. Rights and Remedies Cumulative..............................85
Section 9.4. Rights and Remedies Not Waived..............................85
Section 9.5. Further Payments............................................86
ARTICLE 10. MISCELLANEOUS....................................................86
Section 10.1. Collection Costs...........................................86
Section 10.2. Modification and Waiver....................................87
Section 10.3. Governing Law..............................................88
Section 10.4. Notices....................................................88
Section 10.5. Accounting Terms...........................................88
Section 10.6. Costs and Expenses; Indemnity..............................89
Section 10.7. Waiver of Jury Trial and Setoff............................90
Section 10.8. Captions...................................................91
Section 10.9. Lien; Setoff by Banks......................................91
Section 10.10. Security; Continued Effectiveness.........................92
Section 10.11. Jurisdiction; Service of Process..........................92
Section 10.12. Benefit of Agreement......................................93
Section 10.13. Counterparts..............................................93
Section 10.14. Interest..................................................93
Section 10.15. Attorneys' Fees...........................................94
Section 10.16. Severability..............................................94
Section 10.17. Confidentiality...........................................95
Section 10.18. Loss, Theft, Etc. of Notes................................95
ARTICLE 11. AGENCY...........................................................95
Section 11.1. Appointment and Actions....................................96
Section 11.2. Independent Credit Decisions...............................99
Section 11.3. Indemnification of Agent...................................99
Section 11.4. Closing Documents, etc....................................100
Section 11.5. Resignation and Succession................................100
ARTICLE 12. SALES AND TRANSFERS.............................................101
Section 12.1. Sales and Transfers.......................................101
Section 12.2. New Banks.................................................104
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Section 12.3. Joint and Several Liability...............................106
ARTICLE 13. GUARANTEE.......................................................106
Section 13.1. Guarantee.................................................106
Section 13.2. Absolute Obligation.......................................107
Section 13.3. Repayment in Bankruptcy...................................109
Section 13.4. Miscellaneous.............................................109
Section 13.5. Subordination.............................................109
ARTICLE 14. BORROWER AGENCY.................................................110
Section 14.1. Appointment and Actions...................................110
ARTICLE 15. TRANSITIONAL ARRANGEMENTS.......................................110
15.1. Prior Credit Agreement Superseded................................110
15.2. Return and Cancellation of Notes.................................110
15.3. Fees Under Superseded Agreement..................................110
Exhibits and Schedules
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Exhibit A Percentages; Agent Payment Office
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Term Note
Exhibit D Form of Swing Line Note
Exhibit E Form of Loan Request
Exhibit F Form of Security Agreement
Exhibit G Form of Borrowing Base Certificate
Exhibit H Form of Opinion of Counsel to Borrower
Exhibit I Form of Assignment and Acceptance
Schedule I Locations, Chief Executive Office
Schedule II Subsidiaries
Schedule III Investments in Affiliates
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SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of September 22,
2000, among MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION
BUSINESS CREDIT, LLC, a Delaware limited liability company ("MBC;" MBC and MFC
are sometimes hereinafter referred to individually as a "Borrower" and together
as the "Borrowers"), the banks that from time to time are signatories hereto
(including Assignees (as hereinafter defined), collectively, the "Banks" and
individually, a "Bank"), FLEET NATIONAL BANK (f/k/a Fleet Bank, National
Association), as a Bank ("Fleet"), as Swing Line Lender (the "Swing Line
Lender"), as Arranger and as Agent for the Banks (including any successor, the
"Agent").
WHEREAS, MFC, the Agent, the Swing Line Lender and the Banks entered
into a Loan Agreement dated as of July 31, 1998 (as amended, the "Original
Agreement");
WHEREAS, MFC, MBC, the Agent, the Swing Line Lender and the Banks
amended and restated the Original Agreement pursuant to an Amended and Restated
Loan Agreement dated as of June 29, 1999, as amended as of December 31, 1999 and
as further amended as of June 20, 2000 (as so amended, the "First Restatement");
WHEREAS, the parties to the First Restatement wish to amend and restate
the First Restatement in its entirety as set forth herein to, among other
things, increase the Aggregate Revolving Credit Commitment and extend the
maturity of the First Restatement, all on the terms and conditions hereinafter
set forth; and
WHEREAS, for convenience, this Agreement is dated as of September 22,
2000, and references to certain matters related to the period prior thereto have
been deleted;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1. DEFINITIONS
Section 1.1. Defined Terms.
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As used in this Agreement, the terms defined in the recitals hereto
shall have the respective meanings ascribed thereto in said recitals and the
following terms shall have the following respective meanings:
"Account Debtor" shall mean any Person which is or which may become
obligated to a Client under or on account of a Receivable.
"Accumulated Funding Deficiency" shall have the meaning set forth in
Section 302 of ERISA.
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"Additional Commitment Amount" shall have the meaning set forth in
Section 12.2 hereof.
"Adjusted LIBOR Rate" shall mean, with respect to any Interest Period
applicable to any LIBOR Rate Loan, the rate of interest per annum, as determined
by the Agent, equal to the quotient (rounded to the nearest 1/100 of 1.00% or,
if there is no nearest 1/100 of 1.00%, then to the next higher 1/100 of 1.00%)
obtained by dividing the LIBOR Base Rate by an amount equal to the result
obtained by subtracting the Eurodollar Reserve Percentage (expressed as a
decimal) from 1.00. The Adjusted LIBOR Rate shall be adjusted automatically on
and as of the opening of business on the effective date of any change in the
Eurodollar Reserve Percentage.
"Adjusted Net Investment Income" shall mean, with respect to either
Borrower, and calculated on a Consolidated or Unconsolidated basis, as otherwise
specified herein, the aggregate income (or loss), after realized gains on
investments have been added thereto and realized losses on investments have been
subtracted therefrom and net of unrealized appreciation or depreciation on
investments, of such Borrower for such period, which shall be an amount equal to
net revenues and other proper items of income less the aggregate for such
Borrower of any and all items that are treated as expenses under GAAP and, to
the extent applicable thereto, the regulations of the SEC applicable to
investment companies, after realized gains on investments have been added
thereto and realized losses on investments have been subtracted therefrom and
net of unrealized appreciation or depreciation on investments; provided that
with respect to the covenant contained in Section 7.4(b) hereof, such gains and
losses shall only be calculated with respect to the Loans, and shall exclude any
gains or losses related to equity investments or similar items.
"Affiliate" shall mean any Person which, directly or indirectly,
controls or is controlled by or is under common control with any other Person
and, without limiting the generality of the foregoing, shall include any Person
who (a) beneficially owns or holds 20% or more of the Voting Interests of such
other Person (determined either by number of shares or number of votes) or (b)
is an associate (as such term is defined in Rule 405 of the Securities Act of
1933, as in effect on the Second Restatement Effective Date) of such other
Person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"Affiliated Person" has the meaning ascribed to that term in the 1940
Act and the rules and regulations thereunder.
"Agent Payment Office" shall mean with respect to all amounts owing
under the Loan Documents, initially, the office, branch, affiliate, or
correspondent bank of the Agent designated as its "Payment Office" on Exhibit A
to this Agreement and,
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thereafter, such other office, branch, affiliate, or correspondent bank thereof
as it may from time to time designate in writing as such to the Borrowers, the
Swing Line Lender and each Bank.
"Aggregate Revolving Credit Commitment" shall mean $110,000,000, as the
same may be reduced, terminated or increased from time to time pursuant to
Sections 2.1(d), 2.4, 2.10, 9.1 or 12.2 hereof.
"Agreement" shall mean this Loan Agreement, as the same may be amended
and supplemented from time to time.
"Amount" shall mean, (a) with respect to any Loan, the principal amount
of, plus all accrued and unpaid interest on, and all other amounts due in
respect of, such Loan and (b) with respect to any Receivable, all amounts due in
respect of such Receivable.
"Applicable Facility Percentage" means 0.15%.
"Applicable Prime Rate Margin" means 0.50% in the case of any Prime
Rate Loan that is a Revolving Credit Loan and 0.25% in the case of any Prime
Rate Loan that is a Term Loan.
"Applicable LIBOR Margin" means 1.30% in the case of any LIBOR Rate
Loan that is a Revolving Credit Loan and 1.50% in the case of any LIBOR Rate
Loan that is a Term Loan.
"Assignee" or "Assignees" shall have the meaning set forth in Section
12.1 hereof.
"Assignment" or "Assignments" shall have the meaning set forth in
Section 12.1 hereof.
"Assignor" or "Assignors" shall have the meaning set forth in Section
12.1 hereof.
"Authorized Representative" shall mean, with respect to either
Borrower, its chairman, president, chief executive officer, chief operating
officer, chief accounting officer, vice president or chief financial officer, or
any other officer of such Borrower designated as such from time to time by such
Borrower in a written notice to the Agent, accompanied by an incumbency
certificate with specimen signature included.
"Banking Day" shall mean any Business Day on which dealings in deposits
in Dollars are transacted in the London interbank market.
"BL" shall mean Business Lenders, LLC, a Delaware limited liability
company, the sole member of which is MFC.
"Board" shall mean the Board of Governors of the Federal Reserve
System.
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"Borrowing Base Certificate" shall mean a certificate substantially in
the form of Exhibit G hereto, which Borrowing Base Certificate shall identify
all such information separately for MFC and MBC.
"Borrower Financing Statements" shall mean financing statements
executed by either Borrower for filing in accordance with the Uniform Commercial
Code, and all other titles, certificates, assignments and other documents that
the Agent or any Bank may require, in each case in order to perfect the security
interests to be granted under the Security Agreement.
"Borrower Obligations" shall mean, with respect to MFC, all of the
indebtedness, obligations and liabilities of MFC under any of the Loan Documents
and, with respect to MBC, all of the indebtedness, obligations and liabilities
of MBC under any of the Loan Documents, in each case whether direct or indirect,
joint or several, fixed, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, now existing or hereafter
arising, created, assumed, incurred or acquired including (i) any obligation or
liability in respect of any breach of any representation or warranty, and (ii)
all post-petition interest and funding losses.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which the Agent is not open for business at its offices set forth
in this Agreement.
"Capital Stock" with respect to any corporation, shall mean common
stock, preferred stock, limited or general partnership interests, limited
liability company membership interests, and any and all shares or other
equivalents (however designated) of any other equity interests, of such
corporation.
"Change of Control" shall mean the occurrence of one or more of the
following events: (i) MFC shall cease to own 100% of the Voting Interests or
Capital Stock of MBC, (ii) any Person or group of Persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended), other than
Alvin Murstein and Andrew M. Murstein, shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the SEC under said Act) of 20%
or more of the Voting Interests or Capital Stock of MFC, or (iii) the
replacement of more than one-third of the board of directors of any Borrower
over a one-year period from the directors who constituted the board of directors
of such Borrower, as applicable, at the beginning of such period, and such
replacement shall not (1) have been approved by a vote of at least a majority of
the board of directors of such Borrower, as applicable, then still in office who
either were members of such board of directors at the beginning of such period
or whose election as a member of such board of directors was previously so
approved, or (2) in the case of MBC, have been elected or nominated for election
by MFC.
"Client" shall mean, with respect to any Loan, any Person, not
disapproved by the Agent or the Required Banks in writing in its or their sole
discretion, which is obligated to make payments in respect of such Loan (other
than any Account
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Debtor). For purposes of this Agreement and the other Loan Documents, any Client
that is an Affiliate of another Client shall be deemed to be one and the same
Client.
"Code" shall mean the Internal Revenue Code of 1986, and all rules and
regulations promulgated pursuant thereto, as the same may be amended or
supplemented from time to time.
"Code Section 4975" shall mean, at any date, Section 4975 of the Code.
"Collateral" shall mean and include the assets, property or interests
in property of whatever nature whatsoever, real, personal or mixed, tangible or
intangible, of MFC and/or MBC securing the Revolving Credit Loans, Swing Line
Loans and/or Term Loans and all other property and interests in personal
property that shall, from time to time, secure the Revolving Credit Loans, Swing
Line Loans and/or Term Loans.
"Combined MFC/MBC Tangible Net Worth" shall mean the sum of
Unconsolidated Tangible Net Worth of MFC plus Unconsolidated Tangible Net Worth
of MBC plus negative good will of MFC plus negative good will of MBC.
"Commercial Loans" shall mean Loans that are secured in whole or in
part by Real Property, Inventory, Equipment and/or Receivables and that are not
Medallion Loans.
"Commercial Paper" shall mean any and all commercial paper issued
jointly and severally by the Borrowers to the CP Holders from time to time
pursuant to a Commercial Paper Dealer Agreement and a Paying Agency Agreement.
"Commercial Paper Dealer Agreement" shall mean one or more commercial
paper dealer agreements between the Borrowers and a dealer for the issuance and
sale of Commercial Paper by the Borrowers, as the same shall be amended from
time to time, each as approved by the Agent and the Required Banks in writing in
advance.
"CP Debt" shall mean all Indebtedness of the Borrowers to the CP
Holders in respect of Commercial Paper from time to time outstanding.
"CP Holders" shall mean each of the holders from time to time of
outstanding Commercial Paper.
"Consolidated" or "consolidated" shall mean, with reference to any term
defined herein, that term as applied to the accounts of MFC consolidated with
each of its subsidiaries in accordance with GAAP or, as the case may be, that
term as applied to the accounts of MBC consolidated with each of its
subsidiaries (if any) in accordance with GAAP or, as the case may be, that term
as applied to the
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accounts of any other Person consolidated with each of its subsidiaries (if any)
in accordance with GAAP.
"Default" shall mean any of the events specified in Section 9.1 hereof,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Default Rate" shall have the meaning set forth in Section 2.6 hereof.
"Delinquent Receivables Loan" shall mean a Loan secured by Receivables
as to which any payment with respect to any amount due in connection with any
such Receivable is not made within 90 calendar days after such payment was
originally due (without regard to any stated grace period).
"Derivative contract" of a Person shall mean every obligation of such
Person under any forward contract, futures contract, swap, option or other
financing agreement or arrangement (including, without limitation, floors,
collars and similar agreements, but excluding cap agreements), the value of
which is dependent upon interest rates, currency exchange rates, commodities or
other indices.
"Dividends" shall mean for the most recently completed four fiscal
quarters of the applicable Borrower, the sum of all (a) paid cash dividends on
Capital Stock of such Borrower plus (b) accrued and unpaid cash dividends on
Capital Stock of such Borrower.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Investment" shall mean an Investment in respect of a Person
which is a resident of the United States, Canada or Bermuda or a Person (other
than a Governmental Authority) organized or qualified under the laws of any
state of the United States or the District of Columbia, excluding any such
Investment that is a Portfolio Purchase.
"Domestic Loan" shall mean a Loan that is denominated and payable only
in Dollars and for which the Persons that are obligated to pay such Loan are
residents of the United States, Canada or Bermuda or Persons (other than a
Governmental Authority) organized or qualified under the laws of any state of
the United States or the District of Columbia.
"EBIT" shall mean, with respect to either Borrower for any period, and
calculated on a Consolidated or Unconsolidated basis, as otherwise specified
herein, the sum of (i) Adjusted Net Investment Income, plus (ii) Interest
Expense, plus (iii) Federal, state and local income taxes, if any, in each case
of such Borrower for such period, computed in accordance with GAAP.
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"Eligibility Requirements" with respect to any Loan, shall mean the
following requirements:
(a) such Loan is made to, and is a recourse obligation of, the Person
to whom such Loan is made,
(b) such Loan is a Domestic Loan,
(c) [Reserved],
(d) such Loan is pledged in accordance with the Security Agreement,
(e) such Loan is made to an Eligible Client,
(f) the representations, warranties and covenants contained in the
Security Agreement are true and correct, and have been complied with, with
respect to such Loan,
(g) the Agent, on behalf of the Banks, has a perfected, first
priority security interest in such Loan,
(h) such Loan is made in accordance with the credit policy of the
applicable Borrower in existence at the time such Loan is made, and
(i) the monetary terms, payment terms, financial covenants, negative
covenants and any other material terms governing such Loan have not been
amended, modified or waived more than once in any 12 month period on account of
the Person to whom such Loan was made being unable to comply (for whatever
reason) with such terms.
Notwithstanding the foregoing, no Loan shall be deemed to have
satisfied the Eligibility Requirements if the Agent or the Required Banks
believe that such Loan may not be paid in accordance with its original terms or
are insecure for any reason, including, without limitation, because of the
Eligible Client's financial inability to pay or because the Eligible Client has
disputed its liability, asserted any right of set-off or has made a claim with
respect to any other Loan made to such Eligible Client by either Borrower, other
than as a nominal adjustment in the ordinary course of business and in
accordance with regular commercial practice.
"Eligible Client" shall mean, on any date, any Client that meets all
the following criteria:
(a) such Client is not an Affiliate of a Borrower or its
Subsidiaries,
(b) less than 30% of the Amount of all Commercial Loans to such
Client constitute Delinquent Receivables Loans, and
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(c) the Amount of Loans to such Client in the aggregate does not
exceed 20% of the applicable Borrower's Unconsolidated Tangible Net Worth as of
such date.
"Eligible Commercial Loan" shall mean any Commercial Loan that
satisfies the Eligibility Requirements and (a) that is secured by Eligible
Equipment, Eligible Inventory, Eligible Real Estate or Eligible Receivables and
(b) that is made to an Eligible Client that is an ongoing business concern;
provided that no Loan shall be an Eligible Commercial Loan (i) if a Borrower, in
its reasonable business judgment, deems such Eligible Commercial Loan to be
uncollectible or subject to classification as non-accruing and for which it has
not made appropriate credits to its reserves or (ii) if the Loan or accrued
interest thereon is more than 60 days past due.
"Eligible Equipment" of any Borrower shall mean Equipment in which a
perfected security interest has been obtained by such Borrower in accordance
with its standard credit policy and underwriting criteria at such time to secure
the obligations of a Client under a Loan by such Borrower to such Client, or in
the case of Equipment of a beneficial owner of such Client, to secure a guaranty
which shall have been made by such beneficial owner guaranteeing such Loan, and
the same has been assigned to the Agent, for the benefit of the Banks, pursuant
to the Security Agreement and the same is otherwise satisfactory to the Agent.
"Eligible Inventory" of any Borrower shall mean Inventory in which a
first priority perfected security interest has been obtained by such Borrower to
secure the obligations of a Client under a Loan by such Borrower to such Client,
or in the case of Inventory of a beneficial owner of such Client, to secure a
guaranty which shall have been made by such beneficial owner guaranteeing such
Loan, and the same has been assigned to the Agent, for the benefit of the Banks,
pursuant to the Security Agreement. Notwithstanding the foregoing, Eligible
Inventory does not include any of the following: (a) catalogs and other
promotional materials of any kind; (b) work in process; (c) any returned items;
(d) any damaged, defective or recalled items; (e) any obsolete items; (f) any
items used as demonstrators, prototypes or salesmen's samples; (g) any items of
inventory which have been consigned to a Client or as to which a Person claims a
Lien or which is subject to any other legal encumbrance; (h) any items of
inventory which have been consigned by the Client to a consignee; (i) packing
and shipping materials; (j) inventory located on premises leased by the Client
from a landlord with whom the applicable Borrower has not entered into a
landlord's waiver on terms satisfactory to such Borrower; (k) inventory that is
not located in the United States of America and (l) inventory which in the
reasonable judgment of the applicable Borrower, in accordance with its standard
criteria, is considered to be slow-moving or otherwise not merchantable.
Eligible Inventory shall be valued at the lower of (a) cost, (b) market value,
or (c) the valuation consistent with that employed in the preparation of the
financial statements of the applicable Client.
"Eligible Loans" shall mean any Loan that constitutes or comprises
either an Eligible Medallion Loan or Eligible Commercial Loan.
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"Eligible Medallion Loan" shall mean any Medallion Loan that satisfies
the Eligibility Requirements and (a) that is secured by Medallion Rights and (b)
that is made to an Eligible Client that is an ongoing business concern;
provided, that, no Loan shall be an Eligible Medallion Loan (i) if a Borrower,
in its reasonable business judgment, deems such Eligible Medallion Loan to be
uncollectible or subject to classification as non-accruing and for which it has
not made appropriate credits to its reserves or (ii) if the Loan or accrued
interest thereon is more than 60 days past due.
"Eligible Real Estate" of either Borrower shall mean Real Property in
which a mortgage interest has been obtained (and continuously maintained) by
such Borrower to secure the obligations of the Client under a Loan by such
Borrower to such Client, or in the case of Real Property of a beneficial owner
of such Client, to secure a guaranty which shall have been made by such
beneficial owner guaranteeing the Loan, and assigned to the Agent, for the
benefit of the Banks, pursuant to a Mortgage Assignment.
"Eligible Receivables" of either Borrower shall mean Receivables (i)
that are reasonably determined in good faith to be collectible by such Borrower,
(ii) that arise in the ordinary course of a Person's business, (iii) that are
net of credits, rebates, offsets, holdbacks or adjustments and (iv) in which a
first priority perfected security interest has been obtained by such Borrower to
secure the obligations of such Person under a Loan by such Borrower to such
Person, or in the case of Receivables of a beneficial owner of such Client, to
secure a guaranty which shall have been made by such beneficial owner
guaranteeing such Loan, and the same has been assigned to the Agent, for the
benefit of the Banks, pursuant to the Security Agreement. Notwithstanding the
foregoing, no Receivable shall be an Eligible Receivable
(a) if payment with respect to any amount due in connection therewith
is not made within 90 calendar days after such payment was originally due
(without regard to any stated grace period);
(b) to the extent that such Receivable is subject to any offset,
discount, counterclaim, contra-account or any other defense of any kind or
character; or
(c) if the Agent or the Required Banks believe that such Receivable
may not be paid in accordance with its original terms or are insecure for any
reason, including, without limitation, because of the Account Debtor's
bankruptcy, death, incapacity or financial inability to pay or because the
Account Debtor has disputed the liability, asserted any right of set-off or has
made a claim with respect to any other Receivable payable by such Account Debtor
to such Client, other than as a nominal adjustment in the ordinary course of
business and in accordance with regular commercial practice.
"Eligible Section 7a Loans" shall mean Eligible Commercial Loans which
meet the requirements of the SBI Act and the SBA Regulations under its Section
7(a) loan program.
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"Equipment" shall mean all machinery, equipment, fixtures, vehicles,
office equipment, furniture, furnishings, inventories, supplies, computer
equipment, and all other equipment whatsoever, wherever located, together with
all attachments, components, parts, equipment and accessories installed therein
or affixed thereto, including, but not limited to, all equipment as defined in
Section 9-109(2) of the UCC and all products, profits, rents and proceeds of any
of the foregoing; all whether now owned or hereafter created or acquired.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean an entity, whether or not incorporated,
which controls, is controlled by, or is under common control with, either
Borrower within the meaning of Section 4001 of ERISA.
"ERISA Termination Event" shall mean (i) a Reportable Event, (ii) the
withdrawal of either Borrower or any of its ERISA Affiliates from a Plan during
a plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (iii) the filing of a notice of intent to terminate a Plan
or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, (iv) the institution of proceedings to terminate a Plan by the PBGC, or
(v) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Eurodollar Reserve Percentage" shall mean, with respect to the
calculation of the Adjusted LIBOR Rate for any Interest Period, the percentage
(expressed as a decimal) that is in effect on the date such calculation is made,
as prescribed by the Board for determining the maximum reserve requirement
(including without limitation any basic, marginal, special, supplemental or
emergency reserves and determined without benefit of any credits for proration,
exceptions, or offsets that may be available from time to time) for a member
bank of the Federal Reserve System applicable to Eurocurrency funding by such
member bank, currently referred to as "Eurocurrency liabilities" in Regulation D
of the Board (or in respect of any other category of liabilities, which includes
deposits by reference to which the interest rate on LIBOR Rate Loans is
determined, or any category of extensions of credit or other assets, including
loans by a non-United States office of any Bank to United States residents).
"Event of Default" shall mean any of the events specified in Section
9.1 hereof.
"Exposure Percentage" shall mean as of any date and with respect to the
Swing Line Lender or any Bank, as the case may be, a fraction the numerator of
which is the Exposures on such date of the Swing Line Lender or such Bank, as
applicable, and the denominator of which is the aggregate Exposures on such date
of the Swing Line Lender and all Banks.
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"Exposures" shall mean, as of any date, with respect to the Swing Line
Lender or any Bank, as the case may be, and, as the context requires, the
Revolving Credit Loans, Swing Line Loans and/or Term Loans (each a "Loan Type"),
an amount equal to (i) the outstanding principal amount on such date of all
loans of such Loan Type owed to such Bank, plus (ii) with respect to the Swing
Line Lender only and only when the Loan Type is a Swing Line Loan, the excess of
(a) the outstanding principal amount on such date of all Swing Line Loans, minus
(b) all payments made to the Swing Line Lender by the Borrowers and the Banks in
repayment thereof or participation therein, as the case may be, plus (iii) with
respect to each Bank, the excess of (a) the aggregate sum of all payments by
such Bank in acquiring participations in Swing Line Loans, minus (b) all
reimbursements of such Bank in respect thereof.
"Facility Fee" shall mean the fee required to be paid pursuant to
Section 3.1 hereof.
"Federal Funds Rate" shall mean, for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%) 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 on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that, (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average of the quotations for such day on such transactions
received by the Agent.
"Fee Letter" shall mean that certain letter agreement among the
Borrowers and the Agent of even date herewith.
"First Restatement" shall have the meaning set forth in the preamble
hereto.
"First Restatement Effective Date" shall mean June 29, 1999, which was
the effective date of the First Restatement.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any government, and any corporation or other entity owned or
controlled (through ownership of Capital Stock or otherwise) by any of the
foregoing.
"Hazardous Materials" shall mean and include, without limitation,
gasoline, petroleum products, explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, polychlorinated
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biphenyls or related or similar materials, asbestos or any material containing
asbestos, or any other substance or material as may be defined as a hazardous or
toxic substance by any Federal, state or local environmental law, ordinance,
rule or regulation.
"Increased Costs Notice" shall have the meaning set forth in Section
2.7(b) hereof.
"Indebtedness" of a Person shall mean and include, without duplication,
(i) all items which, in accordance with GAAP, would be included in determining
total liabilities as shown on the liability side of a balance sheet as at the
date Indebtedness of such Person is to be determined, other than dividends on
Capital Stock declared but not paid to the extent such dividends are not
Restricted Payments, (ii) any liability secured by any Lien on property owned or
acquired by such Person, whether or not such liability shall have been assumed
by such Person, (iii) guaranties, endorsements (other than for collection in the
ordinary course of business), reimbursement obligations in respect of undrawn
letters of credit and other contingent obligations of such Person in respect of
the obligations of others, (iv) all obligations of such Person in respect of
Derivative Contracts.
"Independent Public Accountants" shall mean Arthur Andersen LLP or such
other nationally recognized firm of independent certified public accountants
selected by the Borrowers.
"Initial Revolving Credit Loan" shall mean the Revolving Credit Loan or
Revolving Credit Loans made by the Banks to either or both of the Borrowers on
the Second Restatement Effective Date.
"Initial Term" shall mean the period from and including the Second
Restatement Effective Date to and including September 21, 2001.
"Instrument of Adherence" shall have the meaning set forth in Section
12.2 hereof.
"Interest Expense" shall mean, for any period with respect to either
Borrower, and calculated on a Consolidated or Unconsolidated basis, as otherwise
specified herein, all interest paid or scheduled to be paid (including
amortization of original issue discount and non-cash interest payments or
accruals and the interest component of leases that, in accordance with GAAP, are
capitalized leases) by such Borrower during such period on Indebtedness of such
Borrower.
"Interest Period" shall have the meaning set forth in Section 2.2(d)
hereof.
"Inventory" shall mean, with respect to any Person, all goods held by
such Person for sale or lease by such Person, or to be furnished under contracts
of service, in each case in the ordinary course of such Person's business.
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"Inventory Loans" shall mean Loans secured in whole or in part by
Inventory.
"Investment" in any Person shall mean any loan, advance, or extension
of credit to or for the account of; any guaranty, endorsement or other direct or
indirect contingent liability in connection with the obligations, Capital Stock
or dividends of; any ownership, purchase or acquisition of any assets, business,
Capital Stock, obligations or securities of; or any other interest in or capital
contribution to; such Person, but shall not include (a) any Loan, (b) any
Investment permitted by Section 8.14 hereof and (c) any Portfolio Purchase.
"LIBOR Base Rate" shall mean, with respect to any Interest Period, the
rate per annum as determined on the basis of the offered rates for deposits in
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
Banking Days preceding the first day of such Interest Period; provided, however,
if the rate described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR Base Rate shall be the rate
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point), determined on the basis of the offered rates for deposits in
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) 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 Dollar deposit offered rate. If at least two such quotations
are provided, the 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
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 Banking Days preceding the first
day of such Interest Period. In the event that the Agent is unable to obtain any
such quotation as provided above, it will be deemed that the LIBOR Base Rate for
a LIBOR Rate Loan cannot be determined.
"LIBOR Rate Loan" shall mean a Revolving Credit Loan or Term Loan
bearing interest during an Interest Period applicable to such Revolving Credit
Loan or Term Loan at a fixed rate of interest determined by reference to the
Adjusted LIBOR Rate plus the applicable margin as specified in Section 2.2(c)(i)
hereof in the case of a Revolving Credit Loan and as specified in Section
2.2(c)(iii) hereof in the case of a Term Loan.
"Lien" shall mean any interest in property securing an obligation owed
to a Person, whether such interest is based on the common law, statute or
contract, and including but not limited to the security interest arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" includes
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases
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and other similar title exceptions and encumbrances, including but not limited
to mechanics', materialmen's, warehousemen's, carriers' and other similar
encumbrances, affecting property.
"Loan" shall mean any loan or advance made in the ordinary course of
business by a Borrower (which for purposes of this definition shall include
those acquired pursuant to a Portfolio Purchase that is permitted pursuant to
the terms of this Agreement) to or for the account of any Client or customer of
such Borrower, which loan, advance or extension of credit is permitted pursuant
to the terms of this Agreement. Any loan, advance or extension of credit made at
a different point in time than another loan, advance or extension of credit
shall be deemed to be a separate and distinct Loan.
"Loan Documents" shall mean and include this Agreement, the Revolving
Credit Notes, the Term Notes, the Swing Line Notes, the Security Agreement, any
Mortgage Assignment, the Borrower Financing Statements, the Borrowing Base
Certificates, the Fee Letter and each other document, instrument or agreement
executed pursuant to, or in connection with, any Loan Document.
"Loan Request" shall mean a request for one or more Revolving Credit
Loans or Swing Line Loans or for the continuation or conversion of any Revolving
Credit Loan, Term Loan or Swing Line Loan substantially in the form of Exhibit E
hereto, executed by an Authorized Representative on behalf of a Borrower.
"Material Adverse Effect" shall mean an event, action or condition
affecting any Person or any of its properties or revenues that would (i)
adversely affect the validity or enforceability of, or the authority of such
Person to perform its obligations under, any of the Loan Documents to which it
is a party, or (ii) materially adversely affect the business, operations, assets
or condition (financial or otherwise) of such Person or the ability of such
Person to perform its obligations under any of the Loan Documents to which it is
a party or (iii) materially adversely affect the value of the Collateral. Unless
the context otherwise requires, any reference to Material Adverse Effect shall
mean and refer to a Material Adverse Effect with respect to either Borrower.
"Maturity" shall have the meaning set forth in Section 2.2(b) hereof.
"MBC" shall mean Medallion Business Credit, LLC, a Delaware limited
liability company the sole member of which is MFC.
"MBC Borrowing Base" shall mean, as determined pursuant to the most
recently required Borrowing Base Certificate
(i) cash and Short Term Investments shown on MBC's balance sheet as
of such date, plus
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(ii) 83.3% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MBC's Eligible Medallion Loans from time to time
outstanding that are Retained Loans, plus
(iii) 80% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MBC's Eligible Commercial Loans from time to time
outstanding that are Retained Loans,
provided, that, if all or any part of any Loan would be excluded as an
Eligible Commercial Loan or Eligible Medallion Loan under any of the provisions
of this Agreement, then the entire outstanding principal amount of, plus accrued
interest on, such Loan shall be excluded.
"Medallion" shall mean the plate which displays the license number of a
licensed Taxicab on the outside of the vehicle and which is issued by the New
York City Taxi and Limousine Commission, or by any other similar Governmental
Authority for a jurisdiction other than New York City charged with the authority
to issue licenses for the operation of Taxicabs.
"Medallion Capital" shall mean Medallion Capital, Inc., a Minnesota
corporation which is a wholly owned Subsidiary of MFC.
"Medallion Funding" shall mean Medallion Funding Corp., a New York
corporation which is a wholly owned Subsidiary of MFC.
"Medallion Loans" shall mean Loans secured in whole or in part by
Medallion Rights.
"Medallion Rights" shall mean, as to either Borrower, all license,
operating and/or subscription rights to Taxicab Medallion(s), and all license,
operating and/or subscription rights evidenced by such Medallions, and all
renewals thereof, in which a perfected security interest has been obtained by
such Borrower to secure the Loan made by such Borrower to such Person (including
pursuant to all applicable local regulations governing such Medallions), and
assigned to the Agent, for the benefit of the Banks, pursuant to the Security
Agreement, as the case may be.
"MFC Borrowing Base" shall mean, as determined pursuant to the most
recently required Borrowing Base Certificate:
(i) cash and Short Term Investments shown on MFC's balance sheet as
of such date, plus
(ii) 83.3% of the aggregate outstanding principal balances of,
plus accrued interest on, all of MFC's Eligible Medallion Loans from time to
time outstanding that are Retained Loans, plus
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(iii) 75% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MFC's Eligible Commercial Loans other than Section
7a Loans from time to time outstanding that are Retained Loans; plus
(iv) 75% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MFC's Eligible Section 7a Loans purchased from
Business Lenders, LLC from time to time outstanding that are Retained Loans;
provided, that, if all or any part of any Loan would be excluded as an
Eligible Commercial Loan, Eligible Medallion Loan or Eligible Section 7a Loan
under any of the provisions of this Agreement, then the entire outstanding
principal amount of, plus accrued interest on, such Loan shall be excluded.
"Mortgage Assignment" shall mean a Mortgage Assignment between a
Borrower and the Agent for the benefit of the Banks, in such form as the Agent
shall determine as necessary or desirable under the law applicable to the
property covered by such Mortgage Assignment, delivered from time to time by
such Borrower to the Agent as contemplated by the definition of "Eligible Real
Estate."
"Multiemployer Plan" shall mean a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Realized Loss" as to any Loan shall mean the gross realized loss
(as determined by GAAP) with respect to such Loan minus actual cash recoveries
with respect to such Loan.
"New Bank" shall have the meaning set forth in Section 12.2 hereof.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
"Notes" or "Revolving Credit Note(s)" or "Swing Line Note(s)" or "Term
Notes" shall mean the promissory notes of the Borrowers referred to in Sections
2.2 and 12.2 hereof and shall include any replacements therefor issued pursuant
to Section 10.18 or 12.1 hereof.
"Original Agreement" shall have the meaning set forth in the preamble
hereto.
"Original Effective Date" shall mean July 31, 1998.
"Original MBC Security Agreement" shall mean the "MBC Security
Agreement", as defined in the First Restatement.
"Original MFC Security Agreement" shall mean the "MFC Security
Agreement", as defined in the First Restatement.
"Other Taxes" shall have the meaning set forth in Section 3.3 hereof.
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"Participant" or "Participants" shall mean any Person, including a
Bank, that pursuant to the terms of this Agreement, buys a participation in any
of the Indebtedness owing in connection with the Loan Documents.
"Paying Agency Agreement" shall mean one or more issuing and paying
agency agreements between MFC and a Paying Agent providing for the issuance of
Commercial Paper by MFC to the CP Holders, as the same shall be amended from
time to time, each as approved by the Agent and the Required Banks in accordance
with the terms of this Agreement.
"Paying Agent" shall mean one or more paying agents acting as paying
agent under a Paying Agency Agreement with the Borrowers.
"Payments" shall have the meaning set forth in Section 3.2 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Percentage" of each Bank shall mean, at any particular time, the
percentage designated as such for such Bank on Exhibit A hereto, as adjusted
from time to time pursuant to Section 12.1(e) or otherwise in accordance with
the terms hereof.
"Permitted Debt" shall mean (i) all unsecured Indebtedness of a
Borrower owed to the Permitted Lenders and (ii) all CP Debt.
"Permitted Lenders" shall mean the financial institutions approved from
time to time by the Required Banks, which approval will not be unreasonably
withheld.
"Permitted Liens" shall have the meaning set forth in Section 8.1
hereof.
"Person" or "person" shall mean any individual, partnership, film,
corporation, limited liability company, association, joint venture, trust or
other entity, or any Governmental Authority.
"Plan" shall mean, as to either Borrower, at any particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Borrower or an ERISA Affiliate is (or, if such plan were terminated at such
time, under Section 4069 of ERISA would be deemed to be) an "employer" as
defined in Section 3(S) of ERISA.
"Portfolio Purchase" shall mean, as to either Borrower, any purchase or
acquisition by such Borrower, whether for cash, for stock, pursuant to financing
or otherwise, of any assets, business, Capital Stock, obligations or securities
of, any Person; or other interest in or capital contribution to, any Person that
results in, or would result in (after taking into account the applicable
Portfolio Purchase), such Borrower having any additional Loans.
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"Prime Rate" shall mean the higher of (a) the annual variable rate of
interest designated by Fleet from time to time as its "prime rate" in effect at
its principal office and (b) Federal Funds Rate plus 0.50% per annum. The Prime
Rate is determined as a means of pricing for United States based customers and
is not directly fixed to any external rate of interest or index, nor is it
necessarily the lowest rate of interest charged by Fleet at any given time for
any particular class of customers or credit extensions.
"Prime Rate Loan" shall mean, as of any date of determination, a
Revolving Credit Loan, Swing Line Loan or Term Loan bearing interest, as of such
date of determination, at a variable rate of interest determined by reference to
the Prime Rate.
"Principal Payments" shall have the meaning set forth in Section 2.5(b)
hereof.
"Prohibited Transaction" shall have the meaning set forth in Section
406 of ERISA or Code Section 4975.
"Property" shall mean all Equipment, Real Property or other real or
personal property, tangible or intangible, owned or operated by a Borrower.
"Real Estate Loans" shall mean Loans that are secured in whole or in
part by Real Property which Real Property complies with the requirements set
forth in Section 4.19 hereof for Property owned by a Borrower.
"Real Property" shall mean real property of a Person or an ultimate
beneficial owner of such Person or machinery or Equipment of such Person or
beneficial owner forming a part of, or affixed to, such real property.
"Receivables" shall mean, with respect to any Person, all present and
future rights to payment for goods sold or leased or for services rendered by
such Person whether or not evidenced by an instrument or chattel paper.
"Receivables Loans" shall mean Loans secured in whole or in part by
Receivables.
"Registration Statement" shall mean that portion of the Registration
Statement required to be filed by MFC with the SEC pursuant to the 1940 Act
containing MFC's fundamental policies (that is, those policies that cannot be
changed without the approval of the holders of a majority of MFC's outstanding
voting securities, as defined under the 1940 Act), as amended from time to time,
provided that the Agent and the Banks shall have received prior written
notification of any such amendments.
"Rejection of Renewal Deadline" shall have the meaning set forth in
Section 2.10(b) hereof.
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"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the 30-day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.
"Renewal Fee" shall mean the fee payable pursuant to Section 3.1(c)
hereof.
"Renewal Reconsideration Deadline" shall have the meaning set forth in
Section 2.10(b) hereof.
"Renewal Deadline" shall have the meaning set forth in Section 2.10(b)
hereof.
"Renewal Term" shall have the meaning set forth in Section 2.10(b)
hereof.
"Required Banks" shall mean, as of any date of determination, the Agent
and such Bank or Banks as have Revolving Credit Commitments or Term Loans
outstanding in excess of 51% of the sum of the Aggregate Revolving Credit
Commitment plus all Term Loans then outstanding.
"Residential Construction Real Estate Loans" shall mean Real Estate
Loans that are secured in whole or in part by Real Property used in whole or in
part for residential purposes or on which is being constructed or renovated
buildings to be used in whole or in part for residential purposes.
"Restricted Investment" shall mean any Investment, to the extent it
does not constitute a Short Term Investment.
"Restricted Payment" shall mean, with respect to either Borrower, any
of the following: (i) the payment of any dividend on or any distribution in
respect of any Capital Stock of such Borrower (other than the payment of
Dividends required to be paid in order to avoid the imposition of income taxes
pursuant to the Code, or, for so long as such Borrower is a registered
investment company under the 1940 Act, the payment of such Dividends as may be
required by the 1940 Act), (ii) any defeasance, redemption, repurchase or other
acquisition or retirement for value prior to scheduled maturity of any
Indebtedness ranked pari passu or subordinate in right of payment to the
Revolving Credit Notes, Swing Line Notes or the Term Notes or of any
Indebtedness having a maturity date subsequent to the maturity of the Revolving
Credit Notes, Swing Line Notes or the Term Notes (other than Permitted Debt and
Indebtedness permitted by Sections 8.2(c), (e) and (g) hereof), (iii) when paid
(or when the proceeds of which are paid) to any Person during the continuance of
any Default or Event of Default, any defeasance, redemption, repurchase or other
acquisition or retirement for value prior to scheduled maturity of any
Indebtedness permitted by Sections 8.2(c), (e) and (g) hereof, (iv) the
redemption, repurchase, retirement or other acquisition of any Capital Stock of
such Borrower or of any warrants, rights or options to purchase or acquire any
Capital Stock of such Borrower (other than pursuant to and in accordance with
stock option plans and other benefit plans for management or employees of either
Borrower, in an aggregate amount not in excess of $500,000 during any 12-month
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period, provided that any such redemption, repurchase, retirement or other
acquisition of any Capital Stock of such Borrower or of any warrants, rights or
options to purchase or acquire any Capital Stock of such Borrower otherwise
permitted by this parenthetical clause shall not be permitted following the
occurrence and during the continuance of any Default or Event of Default), (v)
any expenditure or the incurrence of any liability to make any expenditure for
any Restricted Investment not permitted by Section 8.3 hereof, (vi) when
incurred during the continuance of any Default or Event of Default any
expenditure or the incurrence of any liability to make any expenditure for any
Restricted Investment permitted by Section 8.3 hereof (other than Loans made in
the ordinary course of business), (vii) the payment of any principal of,
interest on, or any amounts due in respect of, any Indebtedness not permitted by
Section 8.2 hereof, and (viii) the payment of any principal or interest on, or
any other amounts due in respect of, any Subordinated Debt (except to the extent
otherwise approved by the Required Banks and the Agent).
"Retained Loans" as to either Borrower shall mean that portion of each
Eligible Loan retained by such Borrower and not granted by such Borrower to any
other Person as a participation in the principal amount and accrued interest of
such Eligible Loan.
"Revolving Credit Commitment" of a Bank shall mean, as of any date of
calculation, an amount equal to the product of such Bank's Percentage times the
Aggregate Revolving Credit Commitment.
"Revolving Credit Commitment Period" at any date shall mean with
respect to any Bank, the period from and including the Second Restatement
Effective Date to, but excluding, the Term-Out Date with respect to such Bank's
Revolving Credit Commitment.
"Revolving Credit Exposure" shall mean with respect to any Bank as of
any date, the sum as of such date of (i) the outstanding principal amount of
such Bank's Revolving Credit Loans and (ii) such Bank's Swing Line Exposure.
"Revolving Credit Loan" shall mean a loan or advance made pursuant to
Section 2.1(a) hereof.
"Revolving Credit Loans" shall mean, collectively, the Revolving Credit
Loans from time to time outstanding and unpaid.
"Revolving Credit Obligations" shall have the meaning set forth in
Section 2.10(b) hereof.
"Satisfactory Subordinated Debt" shall mean Subordinated Debt;
provided, that, no such Subordinated Debt shall be deemed Satisfactory
Subordinated Debt unless and until the Agent has provided written notice to the
Borrowers that same shall be deemed Satisfactory Subordinated Debt for purposes
of this Agreement.
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"SBA" shall mean the Small Business Administration.
"SBA Regulations" shall mean the regulations set forth at 13 CFR 107
implementing the SBI Act, as the same may be amended from time to time, and all
related guidelines, directives, treaties and interpretations thereof by any
Governmental Authority charged with the administration or interpretation
thereof.
"SBI Act" shall mean Title III of the Small Business Investment Act of
1958, as amended, 15 U.S.C. 681 et seq.
"Scheduled Swing Line Commitment Termination Date" shall mean the fifth
Business Day preceding the Term-Out Date.
"SEC" shall mean the United States Securities and Exchange Commission.
"Second Restatement Effective Date" shall mean September 22, 2000,
provided that (i) counterparts of this Agreement executed and delivered by the
parties hereto shall have been received by the Agent and (ii) the conditions
precedent set forth in Article V hereof shall have been satisfied or waived in
writing by all of the Banks.
"Security Agreement" shall mean the Amended and Restated Security
Agreement dated the Second Restatement Effective Date, among MBC, MFC and the
Agent for the benefit of the Banks, the Swing Line Lender and the CP Holders,
substantially in the form of Exhibit F hereto, as the same may be amended or
supplemented from time to time, provided that in the event a stock pledge
agreement is executed pursuant to Section 6.19(b) hereof, all references to
"Security Agreement" in any of the Loan Documents shall be deemed to include
such stock pledge agreement.
"Security Documents" shall mean the Security Agreement, any Mortgage
Assignment, the Borrower Financing Statements and each other document,
instrument or agreement executed pursuant to, or in connection with, any of the
foregoing.
"Senior Debt" shall mean the sum of (a) all Indebtedness of either or
both of the Borrowers under this Agreement, plus (b) all Indebtedness of either
or both of the Borrowers consisting of or with respect to Commercial Paper.
"Short Term Investment" shall mean an Investment in (i) direct
obligations of the United States of America; (ii) negotiable certificates of
deposit issued by, or negotiable bankers' acceptances (eligible for discount at
Federal Reserve Banks) of, or repurchase agreements in respect of obligations
described in clause (i) with, any bank or trust company organized under the laws
of the United States of America or any state thereof having capital and surplus
of not less than $250,000,000; and (iii) readily marketable commercial paper
which, at the time of acquisition, is rated at least A-1 by Standard & Poor's
Corporation or P-1 by
-21-
Moody's Investor Services, Inc.; provided, that all of such Investments
described in clauses (i), (ii) and (iii) shall be payable in Dollars and shall
mature within twelve months after the date of acquisition thereof.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but is not a Multiemployer Plan.
"Solvent" shall mean, as to any Person, that such Person has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and owns property having a value both at fair valuation and at present
fair saleable value, greater than the amount required to pay its debts
(including contingencies).
"Subordinated Debt" shall mean all Indebtedness of either or both of
the Borrowers for borrowed money that is subordinated to the Revolving Credit
Loans, Swing Line Loans and the Term Loans on terms (including monetary and
payment terms) that are, and pursuant to a form of subordination that is,
acceptable in form and substance to the Agent and the Required Banks.
"Subsidiary" or "Subsidiaries" of a Borrower shall mean any corporation
or entity more than 50% of the outstanding Voting Interests (or similar rights
to the extent the Subsidiary is not a corporation) of which is at the time
owned, directly or indirectly, by such Borrower and/or by one or more of its
Subsidiaries; provided, however, that the term "Subsidiary" shall be deemed to
exclude all Subsidiaries the Consolidated Tangible Net Worth of which
constitutes less than 5% of the Consolidated Tangible Net Worth of such
Borrower.
"Super-majority Banks" shall mean, as of any date of determination, the
Agent and such Bank or Banks as have Revolving Credit Commitments or Term Loans
outstanding equal to or in excess of 75% of the sum of the Aggregate Revolving
Credit Commitment plus all Term Loans then outstanding.
"Swing Line Commitment" shall mean the undertaking of the Swing Line
Lender during the Swing Line Commitment Period to make Swing Line Loans, subject
to the terms and conditions hereof, in an aggregate outstanding principal amount
not in excess of the Swing Line Commitment Amount, and the commitment of the
Banks to participate therein as set forth in Section 2.1(c), as the same may be
adjusted from time to time pursuant to Sections 2.4 and Article 12.
"Swing Line Commitment Amount" shall mean $5,000,000.
"Swing Line Commitment Period" shall mean the period from the Second
Restatement Effective Date until the Swing Line Commitment Termination Date.
"Swing Line Commitment Termination Date" shall mean the earlier of the
Business Day immediately preceding the Scheduled Swing Line Commitment
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Termination Date or such other date upon which the Swing Line Commitment shall
have been terminated in accordance with Section 2.4 or Section 9.1.
"Swing Line Exposure" shall mean at any time, in respect of any Bank,
an amount equal to the aggregate outstanding principal amount of the Swing Line
Loans at such time, multiplied by such Bank's Percentage at such time.
"Swing Line Interest Period" shall mean with respect to any Swing Line
Loan requested by a Borrower, the period commencing on the borrowing date with
respect to such Swing Line Loan and ending not in excess of ten days thereafter,
as selected by such Borrower in the applicable Loan Request therefor, provided,
however, that (i) if any Swing Line Interest Period would otherwise end on a day
that is not a Business Day, such Swing Line Interest Period shall be extended to
the next succeeding Business Day, unless such next succeeding Business Day would
be a date on or after the Scheduled Swing Line Commitment Termination Date, in
which event such Swing Line Interest Period shall end on the next preceding
Business Day, and (ii) no Swing Line Interest Period shall end after the
Scheduled Swing Line Commitment Termination Date. Interest shall accrue from and
including the first day of a Swing Line Interest Period to, but excluding, the
last day of such Swing Line Interest Period.
"Swing Line Loan" and "Swing Line Loans" shall have the meaning set
forth in Section 2.1(c).
"Swing Line Maturity Date" shall mean the Scheduled Swing Line
Commitment Termination Date, or such earlier date on which the Swing Line Loans
shall become due and payable, whether by acceleration or otherwise.
"Swing Line Participation Amount" shall have the meaning set forth in
Section 2.1(c)(iii).
"Swing Line Rate" shall mean with respect to each Swing Line Loan, the
rate per annum equal to, (i) at all times during the period, if any, commencing
on the date of delivery of a notice of an Event of Default by the Agent to the
Banks and terminating on the date on which such Event of Default shall no longer
be continuing, the Prime Rate plus 2.00%, and (ii) at all other times, the Prime
Rate minus 0.75%, provided that in no event shall the Swing Line Rate be less
than the Federal Funds Rate plus 0.50%.
"Tangible Net Worth" shall mean, as to any Person and calculated on a
Consolidated or Unconsolidated Basis, as otherwise specified herein, the sum of
capital surplus, earned surplus, capital stock minus deferred charges,
intangibles, treasury stock, all determined in accordance with GAAP and, to the
extent applicable thereto, the regulations of the SEC applicable to investment
companies, provided that the Unconsolidated Tangible Net Worth of any Person
shall not include any Investments of such Person in its Subsidiaries.
"Taxes" shall have the meaning set forth in Section 3.3 hereof.
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"Taxicab" shall mean a motor vehicle carrying passengers for hire, duly
licensed as a taxicab by the New York City Taxi and Limousine Commission, or any
other Governmental Authority for a jurisdiction other than New York City, and
permitted to accept hails from passengers in the street.
"Term Loan" shall mean a loan or advance pursuant to Section 2.1 (b)
hereof.
"Term Loans" shall mean, collectively, the Term Loans from time to time
outstanding and unpaid.
"Term Loan Commitment" shall mean, in respect of any Bank, its
commitment, pursuant to Section 2.1 (b) hereof, to make a Term Loan to each
Borrower on such Bank's Term-Out Date equal to the principal amount of its
Revolving Credit Loans then outstanding to such Borrower.
"Termination Date" shall mean the earlier of (i) the date on which this
Agreement shall terminate in accordance with the provisions of Section 2.10
hereof or (ii) the Business Day, if any, on which all of the Revolving Credit
Commitments are terminated in accordance with Section 2.4 or 9.1 hereof.
"Term Loan Period" shall mean, with respect to each Term Loan, the
period from the Term-Out Date with respect to the Revolving Credit Loan or Loans
replaced by such Term Loan through the date of such Term Loan's Maturity.
"Term-Out Date" shall mean, with respect to each Revolving Credit Loan,
September 21, 2001, subject, however, in each case, to the renewal provisions
set forth in Section 2.10 hereof.
"Total Liabilities" shall mean, with respect to any Person as of any
date of calculation, and calculated on a Consolidated or Unconsolidated basis as
otherwise specified herein, the aggregate outstanding Indebtedness of such
Person determined in accordance with GAAP.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as then in effect in that jurisdiction.
"Unconsolidated" or "unconsolidated" shall mean, with reference to any
term defined herein, that term as applied to the accounts of MFC or MBC, as
applicable, without taking into account the Subsidiaries of such Person.
"Underlying Collateral" shall mean, as to either Borrower, all of such
Borrower's rights with respect to, or interest in, any and all present and
future Medallion Rights, Equipment, Inventory, Real Property, Receivables,
machinery, future accounts, accounts receivable, receivables, contracts,
contract rights, general intangibles, books, desks, notes, bills, drafts,
acceptances, chooses in action, chattel paper, instruments, documents and other
forms of obligations and property, real, personal or mixed, tangible or
intangible, at any time owing to or
-24-
owned by any Client to whom such Borrower has made a Loan, or any guarantor of
such Client.
"Voting Interests" shall mean securities, as defined in Section 2(1) of
the Securities Act of 1933, as amended, of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of the corporate directors (or Persons performing similar functions).
References in this Agreement to percentages of Voting Interests, unless
otherwise noted, refer to percentages of votes to which such Voting Interests
are entitled in the election of corporate directors (or Persons performing
similar functions) rather than to the number of shares.
Section 1.2. Other Definitional Provisions.
-----------------------------
(a) All terms defined in this Agreement in the singular shall
have comparable meanings when used in the plural, and vice versa.
(b) The words "hereof," "hereby," "herein," and "hereunder"
and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provisions of this
Agreement, the term "hereafter" shall mean after, and the term
"heretofore" shall mean before, the date of this Agreement, and
"Article," "Section," "Schedule," "Exhibit," "Annex" and like
references are to this Agreement unless otherwise specified.
(c) Any defined term which relates to a document shall include
within its definition any amendments, modifications, renewals,
restatements, extensions, supplements, or substitutions which may have
been heretofore or may be hereafter executed in accordance with the
terms thereof and hereof.
(d) References in this Agreement to particular sections of the
Code, ERISA or any other legislation shall be deemed to refer also to
any successor sections thereto or other redesignations for codification
purposes.
(e) All terms defined in the UCC and not otherwise defined or
modified herein shall have the same respective meanings as are given to
such terms in the UCC.
ARTICLE 2. AMOUNT AND TERMS OF REVOLVING CREDIT LOANS
Section 2.1. Commitments and Loans.
---------------------
(a) Revolving Credit Loans. Subject to the terms and
conditions and relying upon the representations, warranties and
covenants herein set forth, each Bank severally (and not jointly)
agrees to make one or more Revolving Credit Loans to each Borrower from
time to time during the Revolving Credit Commitment Period in an
aggregate amount at any one
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time outstanding not to exceed for both Borrowers such Bank's Revolving
Credit Commitment. During the Revolving Credit Commitment Period, the
Borrowers may borrow, prepay and reborrow the Revolving Credit Loans,
all in accordance with the terms and conditions hereof; provided,
however, that immediately after giving effect thereto, (i) such Bank's
Revolving Credit Exposure shall not exceed such Bank's Revolving Credit
Commitment, (ii) the aggregate unpaid balance of all Swing Line Loans
to MFC plus the aggregate unpaid balance of all Revolving Credit Loans
to MFC plus the aggregate unpaid balance of all Term Loans to MFC shall
not exceed the MFC Borrowing Base, (iii) the aggregate unpaid balance
of all Swing Line Loans to MBC plus the aggregate unpaid balance of all
Revolving Credit Loans to MBC plus the aggregate unpaid balance of all
Term Loans to MBC shall not exceed the MBC Borrowing Base, (iv) the
aggregate unpaid balance of all Swing Line Loans to the Borrowers plus
the aggregate unpaid balance of all Revolving Credit Loans to the
Borrowers shall not exceed the Aggregate Revolving Credit Commitment,
(v) the aggregate unpaid balance of all Swing Line Loans to the
Borrowers plus the aggregate unpaid balance of all Revolving Credit
Loans to the Borrowers made by the Swing Line Lender shall not exceed
the Revolving Credit Commitment of the Swing Line Lender, and (vi) the
MFC Borrowing Base plus the MBC Borrowing Base shall be in an amount at
least equal to the aggregate unpaid balance of all Senior Debt at such
time.
(b) Term Loan Commitments. Subject to the terms and conditions
and relying upon the representations, warranties and covenants herein
set forth, each Bank severally (and not jointly) agrees to make a Term
Loan to each Borrower on the Term-Out Date in a principal amount equal
to the principal amount of its Revolving Credit Loans and Swing Line
Loans outstanding on such Term-Out Date to such Borrower (after which
the amount of such Bank's Revolving Credit Commitment shall be $0);
provided, that immediately prior to making each Term Loan, the
Borrowers execute Term Notes in favor of each Bank making a Term Loan,
and immediately after making each Term Loan (i) the aggregate unpaid
balance of all Term Loans to the Borrowers shall not exceed the
aggregate of the Term Loan Commitments of all the Banks, (ii) the
aggregate unpaid balance of all Swing Line Loans to MFC plus the
aggregate unpaid balance of all Revolving Credit Loans to MFC plus the
aggregate unpaid balance of all Term Loans to MFC shall not exceed the
MFC Borrowing Base, (iii) the aggregate unpaid balance of all Swing
Line Loans to MBC plus the aggregate unpaid balance of all Revolving
Credit Loans to MBC plus the aggregate unpaid balance of all Term Loans
to MBC shall not exceed the MBC Borrowing Base, (iv) the aggregate
unpaid balance of all Swing Line Loans to the Borrowers plus the
aggregate unpaid balance of all Revolving Credit Loans to the Borrowers
plus the aggregate unpaid balance of all Term Loans to the Borrowers
shall not exceed the sum of the Aggregate Revolving Credit Commitment
and the aggregate unpaid balance of all outstanding Term Loans, (v) the
aggregate unpaid balance of all Swing
-26-
Line Loans to the Borrowers plus the aggregate unpaid balance of all
Revolving Credit Loans to the Borrowers made by the Swing Line Lender
plus the aggregate unpaid balance of all Term Loans to the Borrowers
made by the Swing Line Lender shall not exceed the sum of the Revolving
Credit Commitment of the Swing Line Lender and the aggregate unpaid
balance of all outstanding Term Loans of the Swing Line Lender, and
(vi) the MFC Borrowing Base plus the MBC Borrowing Base shall be in an
amount at least equal to the aggregate unpaid balance of all Senior
Debt at such time. The proceeds of each Term Loan to a Borrower shall
be made available to such Borrower by such Bank on the applicable
Term-Out Date by applying such proceeds directly to the payment of the
amounts owing to such Bank with respect to such Bank's Revolving Credit
Loans to such Borrower and the Aggregate Revolving Credit Commitment
shall be reduced by an amount equal to the aggregate principal amount
of such Term Loans. Prior to each Term Loan's Maturity, each Borrower
may prepay (and is required to prepay) the Term Loans made to it, only
in accordance with the provisions hereof, but thereafter may not
reborrow amounts so prepaid.
(c) Swing Line Loans.
----------------
(i) Subject to the terms and conditions hereof, the
Swing Line Lender agrees to make swing line loans (each a "Swing
Line Loan" and, collectively, the "Swing Line Loans") to each
Borrower in Dollars from time to time during the Swing Line
Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed for both Borrowers the Swing Line
Commitment Amount, provided, however, that, immediately after
making each Swing Line Loan, (u) the aggregate unpaid balance of
the Swing Line Loans to the Borrowers would not exceed the Swing
Line Commitment Amount, (v) the aggregate unpaid balance of all
Swing Line Loans to MFC plus the aggregate unpaid balance of all
Revolving Credit Loans to MFC plus the aggregate unpaid balance
of all Term Loans to MFC shall not exceed the MFC Borrowing Base,
(w) the aggregate unpaid balance of all Swing Line Loans to MBC
plus the aggregate unpaid balance of all Revolving Credit Loans
to MBC plus the aggregate unpaid balance of all Term Loans to MBC
shall not exceed the MBC Borrowing Base, (x) the aggregate unpaid
balance of all Swing Line Loans to the Borrowers plus the
aggregate unpaid balance of all Revolving Credit Loans to the
Borrowers shall not exceed the Aggregate Revolving Credit
Commitment, (y) the aggregate unpaid balance of all Swing Line
Loans to the Borrowers plus the aggregate unpaid balance of all
Revolving Credit Loans made by the Swing Line Lender to the
Borrowers shall not exceed the Revolving Credit Commitment of the
Swing Line Lender, and (z) the MFC Borrowing Base plus the MBC
Borrowing Base shall be in an amount at least equal to the
aggregate unpaid balance of all Senior Debt at such time. During
the Swing Line Commitment Period, the Borrowers may borrow,
prepay in whole or in part and reborrow under the Swing
-27-
Line Commitment, all in accordance with the terms and conditions
of this Agreement. No Swing Line Loan shall be made prior to the
making of the first Revolving Credit Loans on the Second
Restatement Effective Date.
(ii) The Swing Line Lender shall not be obligated to
make any Swing Line Loan at a time when any Bank shall be in
default of its obligations under this Agreement unless
arrangements to eliminate the Swing Line Lender's risk with
respect to such defaulting Bank's participation in such Swing
Line Loan shall have been made for the benefit of the Swing Line
Lender and such arrangements are in all respects satisfactory to
the Swing Line Lender. The Swing Line Lender will not make any
Swing Line Loan if the Agent or any Bank, by notice to the Swing
Line Lender and the Borrowers no later than one Business Day
prior to the borrowing date with respect to such Swing Line Loan,
shall have determined that the conditions set forth in ARTICLE 5
have not been satisfied and such conditions remain unsatisfied as
of the requested time of the making of such Swing Line Loan. Each
Swing Line Loan shall be due and payable on the earlier to occur
of the last day of the Swing Line Interest Period applicable
thereto and the Swing Line Maturity Date.
(iii) Upon (1) a request by the Swing Line Lender, (2)
receipt by a Bank of notice of an Event of Default from the
Agent, or (3) the acceleration of any loan or termination of the
Revolving Credit Commitments, the Term Loan Commitments or the
Swing Line Commitments, each Bank shall make Revolving Credit
Loans constituting Prime Rate Loans to each Borrower having
outstanding Swing Line Loans, on the next succeeding Business Day
following such notice, in an amount equal to the product of such
Bank's Percentage and the aggregate outstanding principal amount
of the Swing Line Loans, provided that all accrued and unpaid
interest thereon shall be paid in accordance with the provisions
hereunder. In the event that it is impracticable for such
Revolving Credit Loans to be made for any reason by any Bank on
the date otherwise required above, such Bank shall purchase
unconditionally, irrevocably, and severally (and not jointly)
from the Swing Line Lender a participation in the outstanding
Swing Line Loans (including accrued interest thereon) in an
amount (the "Swing Line Participation Amount") equal to the
product of its Percentage and the aggregate outstanding principal
amount of the Swing Line Loans plus all accrued and unpaid
interest thereon. Each Bank shall also be liable to make
Revolving Credit Loans or purchase participations, as set forth
above, for an amount equal to the product of its Percentage and
any amounts paid by a Borrower pursuant to this Section that are
subsequently rescinded or avoided, or must be otherwise restored
or returned. Such liabilities to make Revolving Credit Loans or
purchase participations as set in this Section
-28-
2.1(c)(iii) shall be absolute and unconditional and without
regard to the occurrence of any Default or the compliance by the
Borrowers with any of their obligations under the Loan Documents.
(iv) In furtherance of this Section 2.1(c), upon the
occurrence of any event set forth in Section 2.1(c)(iii) hereof,
such Bank shall promptly make available its Revolving Credit
Loans or Swing Line Participation Amount, as applicable, to the
Agent for the account of the Swing Line Lender at the applicable
Agent Payment Office, in Dollars, and in immediately available
funds. The Agent shall deliver the payments made by each Bank
pursuant to the immediately preceding sentence to the Swing Line
Lender promptly upon receipt thereof in like funds as received.
Each Bank shall indemnify and hold harmless the Agent and the
Swing Line Lender from and against any and all losses,
liabilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses resulting from any
failure on the part of such Bank to pay, or from any delay in
paying the Agent any amount such Bank is required to pay in
accordance with this Section 2.1(c)(iv) (except in respect of
losses, liabilities, actions, suits, judgments, demands, costs
and expenses suffered by the Agent or the Swing Line Lender, as
the case may be, resulting from the gross negligence or willful
misconduct of the Agent or the Swing Line Lender, as the case may
be), and such Bank shall be required to pay interest to the Agent
for the account of the Swing Line Lender from the date such
amount was due until paid in full, on the unpaid portion thereof,
at a rate of interest per annum equal to the Federal Funds Rate
payable upon demand by the Swing Line Lender. The Agent shall
distribute such interest payments to the Swing Line Lender upon
receipt thereof in like funds as received.
(v) Whenever the Agent is reimbursed by a Borrower, for
the account of the Swing Line Lender, for any payment (including
interest payments) in connection with Swing Line Loans and such
payment relates to an amount previously paid by a Bank pursuant
to this Section, the Agent will promptly pay over such payment to
such Bank.
(d) Limited Increase In Aggregate Revolving Credit Commitment.
Unless a Default or Event of Default has occurred and is continuing,
the Borrowers may request that the Aggregate Revolving Credit
Commitment be increased to $120,000,000 hereunder, subject to the
approval of the Agent, provided, however, that (i) any Bank which is a
party to this Agreement prior to such increase may elect to fund a
share of the increase (as allocated by the Agent), thereby increasing
its Revolving Credit Commitment hereunder, but no Bank shall be
required to do so, (ii) in the event that it becomes necessary to
include a new Bank to provide additional funding under this Section
2.1(d), such new Bank must be reasonably acceptable to the Agent and
the Borrowers, and (iii) the Banks' Percentages
-29-
shall be correspondingly adjusted, the new Bank shall make all (if any)
such payments to the other Banks as may be necessary to result in the
Revolving Credit Loans made by such new Bank being equal to such new
Bank's Percentage (as then in effect) of the aggregate principal amount
of all Revolving Credit Loans outstanding to the Borrowers as of such
date), and Notes issued or amended and such other changes shall be made
to the Loan Documents, as necessary, to reflect any such increase in
the Aggregate Revolving Credit Commitment. Any such increase (whether
to $120,000,000 or to a lesser amount) shall require, among other
things, the satisfaction of such conditions precedent as the Agent may
require, including, without limitation, the obtaining by any Bank of
requisite internal approvals, the Agent's receipt of evidence of
applicable corporate authorization and other corporate documentation
from the Borrowers and the legal opinion of counsel to the Borrowers,
each in form and substance satisfactory to the Agent, such Banks as are
participating in such increase and the Borrowers.
Section 2.2. Revolving Credit, Term Loan and Swing Line Notes.
------------------------------------------------
(a) (i) Revolving Credit Notes. The Revolving Credit Loans
of each Bank to each Borrower shall be evidenced by a separate
Revolving Credit Note of such Borrower, in substantially the form of
Exhibit B hereto, payable to the order of such Bank and representing
the obligation of such Borrower to pay the aggregate principal amount
of the Revolving Credit Loans from time to time outstanding from such
Bank to such Borrower, together with interest thereon. Each Bank is
hereby authorized to endorse the date, amount and loan type of each
Revolving Credit Loan, the Interest Periods during which such Revolving
Credit Loan is a Prime Rate Loan or a LIBOR Rate Loan, and each payment
or prepayment of principal thereof on the schedule (including
additional pages thereto added by such Bank as required) annexed to and
constituting a part of each of its Revolving Credit Notes, which
endorsement shall constitute prima facie evidence of the accuracy of
the information so endorsed; provided, however, that the failure of any
Bank to insert any such date or amount or other information on such
schedule shall not in any manner affect the obligation of either
Borrower to repay its Revolving Credit Loans in accordance with the
terms of this Agreement.
(ii) Term Loan Notes. The Term Loan of each Bank to each
Borrower shall be evidenced by separate Term Note of such
Borrower, in substantially the form of Exhibit C hereto, payable
to the order of such Bank and representing the obligation of such
Borrower to pay the aggregate principal amount of the Term Loan
from time to time outstanding from such Bank to such Borrower,
together with interest thereon. Each Bank is hereby authorized to
endorse the date, amount and loan type of each Term Loan, the
Interest Periods during which such Term Loan is a Prime Rate Loan
or LIBOR Rate Loan, and each payment or prepayment of principal
thereof on the schedule (including additional pages thereto added
by such Bank as required)
-30-
annexed to and constituting a part of each of its Term Notes,
which endorsement shall constitute prima facie evidence of the
accuracy of the information so endorsed; provided, however, that
the failure of any Bank to insert any such date or amount or
other information on such schedule shall not in any manner affect
the obligation of either Borrower to repay its Term Loans in
accordance with the terms of this Agreement.
(iii) Swing Line Note. The Swing Line Loans of the Swing
Line Lender to each Borrower shall be evidenced by a Swing Line
Note of such Borrower, in substantially the form of Exhibit D,
payable to the order of the Swing Line Lender and representing
the obligation of such Borrower to pay the aggregate principal
amount of the Swing Line Loans from time to time outstanding from
such Swing Line Lender to such Borrower, together with interest
thereon. The Swing Line Lender is hereby authorized to endorse
the date, amount and Swing Line Interest Period of each Swing
Line Loan, and each payment or prepayment of principal thereof on
the schedule (including additional pages thereto added by the
Swing Line Lender as required) annexed to and constituting a part
of each of its Swing Line Notes, which endorsement shall
constitute prima facie evidence of the accuracy of the
information so endorsed; provided, however, that the failure of
the Swing Line Lender to insert any such date or amount or other
information on such schedule shall not in any manner affect the
obligation of either Borrower to repay its Swing Line Loans in
accordance with the terms of this Agreement.
(b) Date and Maturity of Each Note. Each Note shall, except as
otherwise provided in Section 12.1 or 12.2 hereof, be dated (A) the
Second Restatement Effective Date in the case of the Revolving Credit
Notes and Swing Line Notes and (B) the applicable Term-Out Date, in the
case of each Term Note issued in replacement of a Revolving Credit
Note, and shall be payable at its Maturity. For purposes of this
Agreement, the term "Maturity" shall mean, with respect to (i) any
Revolving Credit Loan, the earliest of (A) the Term-Out Date for such
Revolving Credit Loan, (B) the Termination Date and (C) any other date
on which such Revolving Credit Loan shall be or become due and payable
in accordance with the terms of this Agreement, whether by declaration,
acceleration, or otherwise, (ii) with respect to any Swing Line Loan,
on the earlier of (A) the date such Swing Line Loan shall be or become
due and payable, in whole or in part, in accordance with the terms of
this Agreement whether by stated maturity, required or optional
prepayment, declaration, acceleration, or otherwise, and (B) the Swing
Line Commitment Termination Date and (iii) with respect to any Term
Loan made by a Bank to replace its existing Revolving Credit Loans
pursuant to Section 2.1 (b) hereof, the earlier of (A) the first
anniversary of the Term-Out Date applicable to such replaced Revolving
Credit Loans and (B) any other date on which such Term Loan shall be or
become due and payable, in whole
-31-
or in part, in accordance with the terms of this Agreement, whether by
required or optional prepayment, declaration, acceleration, or
otherwise.
(c)(i) Interest Rate on the Revolving Credit Notes. Each
Revolving Credit Note shall bear interest, subject to the provisions of
Section 10.14 hereof, until its Maturity on the principal amount
thereof from time to time outstanding at an annual rate elected by the
Borrower issuing such Revolving Credit Note in accordance with the
notice provisions set forth in Section 2.3 hereof equal to either (a)
the Prime Rate minus the Applicable Prime Rate Margin, provided that in
no event shall the interest rate hereunder be less than the Federal
Funds Rate plus 0.50%, or (b) the Adjusted LIBOR Rate plus the
Applicable LIBOR Margin. The rate of interest of each Revolving Credit
Note shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
(c)(ii) Interest Rate on Swing Line Notes. Each Swing Line Note
shall bear interest, subject to the provisions of Section 10.14 hereof,
until its Maturity on the principal amount thereof from time to time
outstanding at an annual rate equal to the Swing Line Rate for the
applicable Swing Line Interest Period. The rate of interest of the
Swing Line Notes shall be computed on the basis of a 360-day year for
the actual number of days elapsed.
(c)(iii) Interest Rate on the Term Notes. Each Term Note
shall bear interest, subject to the provisions of Section 10.14 hereof,
until its Maturity on the principal amount thereof from time to time
outstanding at an annual rate elected by the Borrower issuing such term
Note in accordance with the notice provisions set forth in Section 2.3
hereof equal to either (a) the Prime Rate minus the Applicable Prime
Rate Margin, provided that in no event shall the interest rate
hereunder be less than the Federal Funds Rate plus 0.50%, or (b) the
Adjusted LIBOR Rate plus the Applicable LIBOR Margin. The rate of
interest of each Term Note shall be computed on the basis of a 360-day
year for the actual number of days elapsed.
(c) (iv) Interest Rate after Maturity. The unpaid principal
balance of each Note shall bear interest from and including its
Maturity and thereafter until paid at the rate specified in Section 2.6
hereof.
(d) The Interest Period. The interest period (the "Interest
Period") with respect to (i) any Prime Rate Loan, shall be a period
continued from day to day until terminated by the Borrower which
borrowed such Prime Rate Loan, such termination to be effective two
business days after the selection of a LIBOR Rate Loan to replace such
Prime Rate Loan and (ii) any LIBOR Rate Loan, shall be a period of
borrowing commencing on and including the date of advance or conversion
and ending on the numerically corresponding date that is one, two,
three or six months thereafter, as set forth in the Loan Request.
Notwithstanding the foregoing:
-32-
(A) (I) if the numerically corresponding date in the
appropriate month is not a Banking Day, such Interest Period
shall be extended to the next succeeding day that is a Banking
Day; provided, that, in the case of a LIBOR Rate Loan, if such
day falls in the succeeding calendar month, such Interest Period
shall end on the first preceding day that is a Banking Day and
(II) if there is no numerically corresponding date in the
appropriate month, such Interest Period shall end on the last
Banking Day in such month,
(B) in the case of any LIBOR Rate Loan made on or after
the Term-Out Date, the Interest Period shall be limited to a
period of one month, and
(C) Reserved.
(D) in no case shall the Interest Period of either a
Revolving Credit Loan or a Term Loan end on a date subsequent to
such loan's Maturity.
(e) Payment of Interest. Interest accrued on each
Revolving Credit Loan, Swing Line Loan or Term Loan shall be
payable, without duplication, on:
(i) the Maturity of such loan;
(ii) with respect to any portion of any Revolving
Credit Loan, Swing Line Loan or Term Loan repaid or
prepaid pursuant to this Agreement, the date of such
repayment or prepayment, as the case may be;
(iii) with respect to the Swing Line Loans and
with respect to any portion of the outstanding principal
amount of Revolving Credit Loans and Term Loans maintained
as Prime Rate Loans, the first Business Day of each
calendar month, payable monthly and in arrears, commencing
with the first such date following the date of the making
of such Revolving Credit Loans, Swing Line Loans or Term
Loans as, or, with respect to Revolving Credit Loans and
Term Loans, their conversion into, Prime Rate Loans;
(iv) with respect to the portion of the
outstanding principal amount of all Revolving Credit Loans
or Term Loans maintained as LIBOR Rate Loans, the last day
of each applicable Interest Period and, in connection with
any such Revolving Credit Loan having a six-month Interest
Period, the day that would be the last day of a
three-month Interest Period commencing on the same day as
such six-month Interest Period commences; and
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(v) with respect to that portion of the
outstanding principal amount of all Revolving Credit Loans
or Term Loans that is converted to Prime Rate Loans or
LIBOR Rate Loans on a day when interest otherwise would
not have been payable pursuant to Section 2.2(c)(iii) or
(iv), the date of such conversion.
Section 2.3. Procedures Applicable to Borrowings and Conversions.
---------------------------------------------------
(a) (i) Revolving Credit Loans. Subject to the limitations
applicable to Interest Periods for LIBOR Rate Loans and to the
provisions of Section 2.4(b) hereof and otherwise contained herein,
each Borrower may borrow Revolving Credit Loans on any Business Day (in
the case of LIBOR Rate Loans, on any Banking Day) during the Revolving
Credit Commitment Period; provided, however, that such Borrower shall
give the Agent irrevocable written notice in the form of a Loan Request
(which may be sent via teletransmission) substantially in the form of
Exhibit E hereto, specifying the aggregate amount of the loan it is
seeking as follows:
(A) in the case of a borrowing of a Revolving Credit
Loan as a Prime Rate Loan, on or before 11:00 a.m., prevailing
New York City time, on the first Business Day preceding the
requested borrowing date, which borrowing date shall be a
Business Day (or irrevocable oral notice on or before 11:00 a.m.,
prevailing New York City time, on such date, confirmed in a Loan
Request (which may be sent via teletransmission) no later than
5:00 p.m., prevailing New York City time, on such first Business
Day preceding such borrowing date); and
(B) in the case of a borrowing of a Revolving Credit
Loan as a LIBOR Rate Loan, on or before 11:00 a.m., prevailing
New York City time, on the third Banking Day preceding the first
day of the requested Interest Period (or irrevocable oral notice
on or before 11:00 a.m., prevailing New York City time, on such
date, confirmed in a Loan Request (which may be sent via
teletransmission) no later than 5:00 p.m., prevailing New York
City time, on such third Banking Day preceding the first day of
the requested Interest Period).
If a Borrower furnishes a Loan Request to the Agent, but no election is
made as to either the loan type or Interest Period to be applicable thereto, the
Revolving Credit Loan will be made as a Prime Rate Loan. Each borrowing of a
given loan type shall be in an aggregate principal amount, together with
Revolving Credit Loans of the same loan type to be continued as such and
Revolving Credit Loans of other loan types to be converted to such loan type on
the same Business Day, of at least (x) $1,000,000 or any integral multiple of
$100,000 in excess thereof in the case of LIBOR Rate Loans and (y) $100,000 or
any integral multiple of $50,000 in excess thereof in the case of Prime Rate
Loans.
(ii) Term Loans. The date on which each Term Loan shall
be made shall be the Term-Out Date applicable to the Revolving
Credit
-34-
Loan or Loans which such Term Loan shall replace. Each Term Loan
shall, for its first Interest Period, be a Prime Rate Loan unless
the Borrower borrowing such Term Loan gives irrevocable written
notice to the Agent that it wants such loan, for its first
Interest Period, to be a LIBOR Rate Loan. Such notice specifying
a LIBOR Rate Loan must be received by the Agent on or before
11:00 a.m., prevailing New York City time, on the third Banking
Day preceding the date on which such Term Loan is to be made (or
irrevocable oral notice must be given on or before 11:00 a.m.,
prevailing New York City time, on such date, confirmed in writing
(which may be sent via teletransmission) no later than 5:00 p.m.,
prevailing New York City time, on such third Banking Day
preceding the date on which such Term Loan is to be made). Such
first Interest Period shall continue until such Borrower has
notified the Agent, in accordance with Section 2.3(c) hereof, of
its selection of the next succeeding loan type and Interest
Period. Within five Business Days after any Term Loan has been
made, the Agent shall revise Exhibit A hereto to reflect the
corresponding reduction in the Aggregate Revolving Credit
Commitment. Each Term Loan shall be as provided in Section 2.5(b)
hereof.
(iii) Swing Line Loans. Each Borrower may borrow under
the Swing Line Commitment on any Business Day during the Swing
Line Commitment Period, provided that such Borrower shall notify
the Agent and the Swing Line Lender (by telephone or facsimile
confirmed promptly by the delivery to the Agent and the Swing
Line Lender of a Loan Request manually signed by such Borrower)
no later than 3:00 p.m. on the requested borrowing date,
specifying a) the aggregate principal amount to be borrowed under
the Swing Line Commitment, b) the requested borrowing date, and
c) the amount of, and the length of the Swing Line Interest
Period for, each Swing Line Loan. The Swing Line Lender will
then, subject to its determination that the terms and conditions
of this Agreement have been satisfied, make the requested amount
available, in Dollars and in immediately available funds,
promptly on that same day, to the Agent at the applicable Agent
Payment Office who, thereupon, will promptly make such amount
available to such Borrower at the such Agent Payment Office, in
Dollars, and in immediately available funds. Each borrowing of
Swing Line Loans shall be in an aggregate principal amount equal
to $100,000 or such amount plus an integral multiple of $50,000
in excess thereof or, if less, the unused portion of the Swing
Line Commitment Amount.
(b)(i) Designation of Use of Funds; Funding of Revolving
Credit Loans and Term Loans. Notwithstanding anything to the contrary
contained in this Agreement, each Loan Request shall be executed and
acknowledged by the Borrower requesting the loan(s) to which such Loan
Request relates. Upon receipt of each Loan Request requesting Revolving
Credit Loans or Term Loans, the Agent shall promptly notify each Bank
-35-
thereof. Subject to its receipt of the notice referred to in the
preceding sentence, each Bank will make the amount of its Percentage of
the requested Revolving Credit Loans, or Term Loans, as the case may
be, available to the Agent for the account of the Borrower requesting
such loan(s) at the applicable Agent Payment Office in Dollars not
later than 2:00 p.m. (New York City time), on the relevant borrowing
date requested by such Borrower, in funds immediately available to the
Agent at such Agent Payment Office. The amounts so made available to
the Agent on such borrowing date will then, subject to the satisfaction
of the terms and conditions of this Agreement, as determined by the
Agent, be made available on such borrowing date to such Borrower by the
Agent at such Agent Payment Office, in Dollars, and in immediately
available funds, no later than 3:00 p.m. (New York City time).
(b)(ii) Failure to Fund. Unless the Agent shall have
received prior notice from a Bank (by telephone or otherwise, such
notice to be promptly confirmed by facsimile or other writing) that
such Bank will not make available to the Agent such Bank's Percentage
of the Revolving Credit Loans or Term Loans, as the case may be, to be
made on a borrowing date, the Agent may assume that such Bank has made
such amount available to the Agent on the borrowing date in accordance
with this Section, provided that such Bank received notice thereof from
the Agent in accordance with the terms hereof, and the Agent may, in
reliance upon such assumption, make available on such borrowing date to
the Borrower requesting such loan(s) a corresponding amount. If and to
the extent such Bank shall not have so made such amount available to
the Agent, such Bank and the Borrower requesting such loan(s) severally
agree to pay to the Agent, forthwith on demand, such corresponding
amount (to the extent not previously paid by the other), together with
interest thereon for each day from the date such amount is made
available to such Borrower until the date such amount is paid to the
Agent, at a rate per annum equal to, in the case of such Borrower, the
applicable interest rate then applicable to such loan(s), and, in the
case of such Bank, to the extent such amount is paid to the Agent (A)
no later than the second day after the date such amount is made
available to such Borrower, the Federal Funds Rate and (B) after the
second day after the date such amount is made available to such
Borrower, the applicable interest rate then applicable to such loan(s).
Such payment by such Borrower, however, shall be without prejudice to
its rights against such Bank. If such Bank shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such Bank's
Revolving Credit Loan or Term Loan, as the case may be, as part of such
Revolving Credit Loans and Term Loans for purposes of this Agreement,
which Revolving Credit Loan and Term Loan, as the case may be, shall be
deemed to have been made by such Bank on such borrowing date. No Bank's
obligation to fund any Revolving Credit Loan or Term Loan shall be
affected by any other Bank's failure to fund any Revolving Credit Loan
or Term Loan, nor shall any
-36-
Bank's Revolving Credit Commitment or Term Loan Commitment be increased
as a result of any such failure of any other Bank.
(c) Subject to the limitations applicable to Interest Periods
for LIBOR Rate Loans, a Borrower may continue any of its LIBOR Rate
Loans as such for an additional Interest Period or convert any of its
Revolving Credit Loans or Term Loans of a given loan type into
Revolving Credit Loans or Term Loans of a different loan type on any
Business Day (in the case of LIBOR Rate Loans to be continued or
converted, on any Banking Day) during the Revolving Credit Commitment
Period or Term Loan Period applicable to such LIBOR Rate Loan;
provided, however, that:
(i) Such Borrower shall give the Agent the irrevocable
written notice in the form of a Loan Request in the manner and by
the applicable time specified in Section 2.3(a) hereof for the
borrowing of a Revolving Credit Loan of the loan type to be
converted to or continued and, if applicable, the Interest Period
therefor;
(ii) in the case of the continuation of less than all of
the outstanding Revolving Credit Loans or of only a portion of a
Term Loan of a given loan type on the same Business Day, the
aggregate. principal amount of the Revolving Credit Loans or the
Term Loan of such loan type to be continued as such, together
with any Revolving Credit Loans or portion of a Term Loan to be
made as or converted to the same loan type on such Business Day,
shall not be less than $1,000,000 or any integral multiple of
$100,000 in excess thereof;
(iii) in the case of the conversion of less than all of
the outstanding Revolving Credit Loans or of only a portion of a
Term Loan of a given loan type to another loan type on the same
Business Day, the aggregate principal amount of Revolving Credit
Loans or the portion of the Term Loan of such loan type to be
converted to another loan type together with any Revolving Credit
Loans or any portion of the Term Loan of such other loan type to
be made or continued as such on such Business Day, shall not be
less than $1,000,000;
(iv) LIBOR Rate Loans may be converted only at the end
of the then applicable Interest Period;
(v) no LIBOR Rate Loan may be continued as such, nor
may any Revolving Credit Loan or Term Loan be converted to a
LIBOR Rate Loan, for less than the minimum applicable Interest
Period therefor; and
(vi) no LIBOR Rate Loan may be continued as such, nor
may any Revolving Credit Loan or Term Loan be converted to a
LIBOR Rate Loan, if any Default or Event of Default shall have
occurred and be continuing as of any date during the period
commencing on the
-37-
date the Loan Request is required to be submitted to the Agent
and ending on the first day of the requested Interest Period.
If a Borrower fails, in connection with the expiration of an Interest
Period applicable to a Revolving Credit Loan or Term Loan made to such Borrower
that is a LIBOR Rate Loan, to furnish a Loan Request to the Agent for the
continuation or conversion thereof or fails to elect a loan type or permitted
Interest Period therefor, or if the continuation or conversion of any Revolving
Credit Loan or Term Loan as a LIBOR Rate Loan is prohibited due to the
occurrence and continuance of a Default or Event of Default, such Revolving
Credit Loan or Term Loan (unless prepaid in accordance with the provisions of
Section 2.5 hereof or accelerated in accordance with Section 9.1 hereof) shall
be converted automatically to a Prime Rate Loan as of the expiration of the then
applicable Interest Period.
Section 2.4. Termination and Reduction of Aggregate Revolving Credit
Commitment.
----------
(a) Subject to the provisions of Section 2.5 hereof, the Borrowers
shall have the option to terminate, and from time to time to reduce permanently,
the Aggregate Revolving Credit Commitment, upon irrevocable written notice to
the Agent and the Banks at least five Business Days prior to the proposed
Termination Date or reduction date, as the case may be, specifying such date,
whether a termination or reduction is being requested and, if a reduction is
being requested, the amount thereof. On the date specified in such notice, such
termination or reduction shall be effected; provided, however, that (i) in the
case of a termination, such termination must also include a termination of the
Swing Line Commitment and such termination must be accompanied by repayment of
all outstanding Revolving Credit Loans, Swing Line Loans and outstanding Term
Loans in full (which shall include all such loans payable by MFC and all such
loans payable by MBC), together with all other amounts owed to the Agent or any
Bank or the Swing Line Lender pursuant to any of the Loan Documents and (ii) in
the case of any reduction, such reduction is accompanied by (A) repayment of the
Revolving Credit Loans to the extent (if any) that the aggregate principal
amount of the Revolving Credit Loans and Swing Line Loans outstanding exceeds
the amount of the Aggregate Revolving Credit Commitment after taking into
account the Aggregate Revolving Credit Commitment as then reduced (allocated
between the loans of MFC and MBC as they shall specify in the notice of such
reduction, provided that such allocation otherwise complies with the terms of
this Agreement) and (B) repayment of an amount of all Term Loans then
outstanding (allocated between the loans of MFC and MBC as they shall specify in
the notice of such reduction, provided that such allocation otherwise complies
with the terms of this Agreement) equal to the percentage by which the Aggregate
Revolving Credit Commitment is to be reduced multiplied by the aggregate
principal amount, together with accrued interest on all Term Loans then being
repaid. Any such repayment shall be subject to the provisions of Section 2.5(a)
hereof. Any reduction of the Aggregate Revolving Credit Commitment shall be in
an aggregate amount of $500,000 or an integral multiple thereof and shall be
applied by the Agent pro rata among the Banks in proportion to their Revolving
Credit Commitments. Any repayment of
-38-
outstanding Term Loans required by a reduction in the Aggregate Revolving Credit
Commitment shall be applied by the Agent pro rata among the Banks in proportion
to the amount of the principal plus accrued interest of their Term Loans then
outstanding. Within five Business Days after any reduction in the Aggregate
Revolving Credit Commitment pursuant to this Section 2.4(a), the Agent shall
revise Exhibit A hereto to reflect such reduction and shall promptly send a copy
thereof to the Banks. Upon termination of the Aggregate Revolving Credit
Commitment pursuant to this Section 2.4(a) and upon payment of all amounts due
by the Borrowers to the Agent, the Swing Line Lender and the Banks under the
Loan Documents, the obligations of the parties hereto, except as otherwise
provided herein, shall be deemed terminated; provided, however, that this
Agreement and the other Loan Documents shall continue to be effective or shall
be reinstated, as the case may be, if any payment hereunder or in connection
with any of the Loan Documents at any time is rescinded or otherwise must be
returned as a result of the bankruptcy, insolvency or reorganization of either
Borrower or otherwise, all as if such payment had not been made. Upon any
reduction of the Aggregate Revolving Credit Commitment, in the event that the
Borrowers shall fail to specify in the notice of such reduction the allocation
of prepayments between the loans of MFC and MBC in accordance with the terms of
this Agreement, it shall be in the Agent's discretion as to whether to apply any
prepayments of loans in connection therewith against (i) MFC's obligations to
the Agent, the Swing Line Lender and the Banks and/or (ii) MBC's obligations to
the Agent, the Swing Line Lender and the Banks.
Section 2.5. Prepayments; Mandatory Payment of Term Loans.
--------------------------------------------
(a) Voluntary Prepayments. Each Borrower from time to time may
prepay its Revolving Credit Loans, Swing Line Loans, or Term Loans, in
whole or in part, without premium or penalty, upon irrevocable written
notice to the Agent given at least as early before the proposed date of
such prepayment as the corresponding time specified in Section 2.3(a)
hereof for notice of the borrowing of a Revolving Credit Loan of the
loan type to be prepaid, specifying the date of prepayment and the
amount of the prepayment; provided, however, that (i) the entire
Aggregate Revolving Credit Commitment may not be terminated (although
all Revolving Credit Loans may be paid off in full) while any Term Loan
remains outstanding, (ii) except for prepayments necessitated by
Section 8.6(b) hereof, each partial prepayment of the Revolving Credit
Loans or Swing Line Loans shall be in an amount not less than $500,000
or any integral multiple of $100,000 in excess thereof, (iii) except
for prepayments necessitated by the Borrowers' election to reduce the
Aggregate Revolving Credit Commitment pursuant to Section 2.4 hereof,
without the prior written approval of the Required Banks, neither
Borrower may prepay any Term Loan unless all Revolving Credit Loans
have been paid off in full and the Aggregate Revolving Credit
Commitment terminated, (iv) neither Borrower may prepay any LIBOR Rate
Loan prior to the last day of the Interest Period therefor and neither
Borrower may prepay any Swing Line Loan prior to the last day of the
Swing Line Interest Period therefor. To the extent possible, the
Borrowers
-39-
shall, in connection with any voluntary prepayment, prepay Prime Rate
Loans first and LIBOR Rate Loans second. Any prepayment of LIBOR Rate
Loans shall be subject to Section 2.11 hereof. If any notice of
prepayment is given, the amount specified in such notice shall be due
and payable in the manner and by the time provided in Section 3.2
hereof on the date specified in such notice, together with accrued
interest thereon to such date as provided in Section 2.2(c) hereof. Any
such prepayment of a Revolving Credit Loan may be reborrowed, subject
to the terms and conditions of this Agreement, from time to time. Any
prepayment of a Term Loan may not be reborrowed.
(b) Mandatory Payment of Term Loans. Principal on each Term
Loan shall be repaid by the Borrower borrowing such Term Loan in equal
monthly installments, with each such installment calculated to be
1/12th of the amount necessary to amortize such Term Loan over a
twelve-month period. Such payments (the "Principal Payments") shall be
paid by such Borrower to the Agent on the last day of each month during
which such Term Loan is outstanding, commencing with the month during
which such Term Loan is made pursuant to Section 2.1(b) hereof. Any
prepayments of principal on any Term Loan pursuant to Sections 2.5(a)
and (c) hereof shall not reduce the amount of each monthly Principal
Payment. Any prepayments of principal on the Term Loans pursuant to
Sections 2.5(a) and (c) hereof shall be applied against the monthly
Principal Payments in inverse order of the dates on which such
Principal Payments are to be made.
(c) Mandatory Prepayments.
---------------------
(i) If, at any time, (A) the aggregate outstanding
principal balance of the Revolving Credit Loans, plus the
aggregate outstanding principal balance of all Swing Line Loans,
exceeds the Aggregate Revolving Credit Commitment, or (B) the
aggregate outstanding principal balance of the Swing Line Loans
exceeds the Swing Line Commitment, or (C) the aggregate principal
balance of all Revolving Credit Loans, plus the aggregate
principal balance of all Swing Line Loans, plus the aggregate
principal balance of all Term Loans, exceeds the sum of the
Aggregate Revolving Credit Commitment and the aggregate principal
balance of all Term Loans, (D) the aggregate outstanding
principal balance of the Revolving Credit Loans of the Swing Line
Lender, plus the aggregate outstanding principal balance of all
Swing Line Loans, exceeds the Revolving Credit Commitment of the
Swing Line Lender, or (E) the aggregate unpaid balance of all
Senior Debt exceeds the MFC Borrowing Base plus the MBC Borrowing
Base, the Borrowers shall make a prepayment of such Revolving
Credit Loans, or Swing Line Loans, as the case may be (or if no
such loans shall then be outstanding, the Borrowers shall make a
prepayment of the Term Loans), in the amount of such excess
(rounded upwards to the next higher integral multiple of
$100,000), together with accrued interest
-40-
thereon to the date of prepayment as provided in Section 2.2(c)
hereof. Such prepayment shall be allocated between the loans of
MFC and MBC as they shall specify in connection with such
prepayment, provided that such allocation otherwise complies with
the terms of this Agreement. In the event that the Borrowers
shall fail so to specify such allocation, it shall be in the
Agent's discretion as to whether to apply any such prepayments
against (i) MFC's obligations to the Agent, the Swing Line Lender
and the Banks and/or (ii) MBC's obligations to the Agent, the
Swing Line Lender and the Banks. To the extent possible, the
Borrowers shall, in connection with such mandatory prepayment,
prepay Prime Rate Loans first, and LIBOR Rate Loans second. Any
prepayment of LIBOR Rate Loans shall be subject to Section 2.11
hereof.
(ii) If, at any time, (A) the aggregate unpaid balance
of all Swing Line Loans plus the aggregate unpaid balance of all
Revolving Credit Loans plus the aggregate unpaid balance of all
Term Loans made to MBC shall exceed the MBC Borrowing Base, (B)
the aggregate unpaid balance of all Swing Line Loans plus the
aggregate unpaid balance of all Revolving Credit Loans plus the
aggregate unpaid balance of all Term Loans made to MFC shall
exceed the MFC Borrowing Base, or (C) the aggregate unpaid
balance of all Senior Debt shall exceed the MFC Borrowing Base
plus the MBC Borrowing Base, within five days of the first day
there exists any such deficiency the relevant Borrower shall make
payment to the Agent (to be applied against such Borrower's Swing
Line Loans first, then Revolving Credit Loans and then Term
Loans) in an amount necessary to eliminate such excess, together
with accrued interest thereon to the date of prepayment as
provided in Section 2.2(c) hereof. To the extent possible, each
Borrower shall, in connection with any such mandatory prepayment,
prepay Prime Rate Loans first, and LIBOR Rate Loans second. Any
prepayment of LIBOR Rate Loans shall be subject to Section 2.11
hereof.
(d) Application of Payments. With respect to all payments
pursuant to subsections (a), (b) and (c) above, upon receipt of any
notice of payment and/or any such payment, the Agent shall promptly
notify each Bank thereof and, with respect to Revolving Credit Loans
and Term Loans of a Borrower, each such prepayment shall be effected
pro rata amongst all the Banks in proportion to each Bank's then
outstanding Revolving Credit Loans or Term Loans to such Borrower, as
the case may be.
Section 2.6. Interest on Delinquent Payments.
-------------------------------
All unpaid amounts due under the Notes or any other Loan Document that
are not paid when due (including, to the extent permitted by law, unpaid
interest on the Notes) shall bear interest, subject to the provisions of Section
10.14 hereof, from and including its due date until paid in full (whether before
or after the
-41-
occurrence of any Event of Default described in Sections 9.1(h) or 9.1(i)
hereof) at an annual rate equal to the sum of (i) in the case of any Prime Rate
Loan, 2% plus the Prime Rate applicable to such Prime Rate Loan then in effect,
(ii) in the case of any LIBOR Rate Loan, 2% in excess of the rate then
applicable to such LIBOR Rate Loan. Such rate of interest (the "Default Rate")
shall be computed on the basis of a 360-day year for the actual number of days
elapsed. If the Default Rate is to be based on the Prime Rate, the Prime Rate to
be charged shall change when and as the Prime Rate is changed, and any such
change in the Prime Rate shall become effective at the opening of business on
the day on which such change is adopted. At the end of the applicable Interest
Period for a LIBOR Rate Loan on which the Default Rate is being charged, such
LIBOR Rate Loan shall be automatically converted to a Prime Rate Loan, and the
Default Rate to be charged in respect of such Loan. shall be computed based on
the Prime Rate.
Section 2.7. Increased Costs.
---------------
(a) In the event any applicable existing or future law,
regulation, guideline, treaty or directive or condition or
interpretation thereof (including, without limitation, any request,
guideline or policy; whether or not having the force of law) by any
Governmental Authority charged with the administration or
interpretation thereof, or any change in any of the foregoing:
(i) subjects any Bank, or the Swing Line Lender, to any
tax levy, impost, duty, charge, fee, deduction or withholding of
any nature with respect to its Revolving Credit and/or Term Loan
and/or Swing Line Commitment to make Loans or any Revolving
Credit Loan or Term Loan or Swing Line Loan; or
(ii) changes the basis of taxation of payments to such
Bank of principal of and/or interest on its Loans or its
Revolving Credit and/or Term Loan and/or Swing Line Commitment to
make Loans and/or fees and other amounts payable hereunder in
respect of its Loans or its Revolving Credit or Term Loan or
Swing Line Commitment to make Loans ; or
(iii) imposes, modifies or deems applicable or results in
the application of or increases any reserve, special-deposit,
assessment, liquidity or similar requirement (whether or not
having the force of law) against assets held by, or deposits in
or for the account of, or loans or commitments to lend Loans by
any office of any Bank (based upon such Bank's or such
Participant's reasonable allocation of the aggregate of such
requirements); or
(iv) imposes upon such Bank any other condition or
requirement with respect to its Revolving Credit and/or Term Loan
and/or Swing Line Commitment to make Loans or any Revolving
-42-
Credit Loan or Term Loan or Swing Line Loan of which any Loan
forms a part;
and the result of any of the foregoing is to increase the actual cost
to such Bank of making or maintaining its Revolving Credit and/or Term Loan
and/or Swing Line Commitment to make Loans or its Revolving Credit Loans or Term
Loans or Swing Line Loans hereunder that are Loans or to reduce the amount of
any payment (whether of principal, interest, or otherwise) received or
receivable by such Bank in respect of any Loan or its Revolving Credit or Term
Loan or Swing Line Commitment to make Loans or to require such Bank to make any
payment, then and in any such case set forth in paragraphs (i) through (iv)
above:
(1) such Bank, or the Swing Line Lender, as the case
may be, shall promptly notify the Borrowers in writing of the
happening of such event;
(2) such Bank, or the Swing Line Lender, as the case
may be, shall promptly deliver to the Borrowers a certificate of
such Bank, or the Swing Line Lender, stating the event that has
occurred or the reserve or requirements or other conditions that
have been imposed on such Bank, or the Swing Line Lender, the
request, directive, guideline or requirement with which it has
complied, together with the date thereof and the amount (based
upon such Bank's, or the Swing Line Lender's, as the case may be,
reasonable policies as to the allocation of capital and costs, as
applicable) of such increased cost, reduction or payment for one
or more periods ending not later than the date of such
certificate; and
(3) The Borrowers shall pay within 10 days after demand
therefor such amount or amounts as will compensate such Bank, or
the Swing Line Lender, as the case may be, for such additional
cost, reduction or payment.
(b) If, after the Second Restatement Effective Date, any Bank
or the Swing Line Lender, as the case may be, shall have determined
that any change in any present (or any adoption, application, or change
in any future) applicable law, governmental rule, regulation, policy,
guideline, or directive or request (whether or not having the force of
law), or any change in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or
administration thereof, of general application regarding capital
adequacy, capital maintenance, capital ratios or other similar
requirements (whether or not having the force of law), increases or
otherwise affects the amount of capital required or expected to be
maintained by any of the Banks, or the Swing Line Lender, as the case
may be, or any corporation controlling any of the Banks or the Swing
Line Lender, as the case may be, or such Bank, or the Swing Line
Lender, as the case may be, determines that the amount of capital
required is increased by or based upon the existence of the revolving
credit, swing line
-43-
and term loan facilities or commitments established hereunder or any
loans made pursuant hereto or upon agreements or loans of the type
contemplated hereby, then such Bank or the Swing Line Lender, as the
case may be, may give written notice to the Borrowers of such fact (the
"Increased Costs Notice"). To the extent that the costs of such
increased capital requirements are not then reflected in the Prime Rate
or the LIBOR Base Rate, the Borrowers shall thereafter attempt to
negotiate in good faith an adjustment of the compensation payable
hereunder which will adequately compensate such Bank, or the Swing Line
Lender, as the case may be, in light of such changed circumstances.
Each Bank and the Swing Line Lender, as the case may be, hereby agrees
that any Increased Cost Notice from it to the Borrowers shall be
delivered to the Borrowers no later than 90 days following the end of
any financial period with respect to which such compensation is sought.
If the Borrowers and such Bank, or the Swing Line Lender, as the case
may be, are unable to agree to an adjustment within 30 days of the day
on which the Borrowers receive such notice, then, commencing on such
thirtieth day and retroactive to the date of such notice (but not
earlier than the effective date of any such change), the fees payable
to such Bank, or the Swing Line Lender, as the case may be, hereunder
shall increase by an amount which will, in such Bank's, or the Swing
Line Lender's, as the case may be, reasonable determination, provide
adequate compensation. Such Bank, or the Swing Line Lender, as the case
may be, shall allocate such cost increases among its customers in good
faith and on an equitable basis.
(c) The certificate of such Bank, or the Swing Line Lender, as
the case may be as to the additional amounts payable pursuant to this
Section 2.7 delivered to the Borrowers, in the absence of manifest
error, shall be conclusive as to the amount thereof. A claim by any
Bank, or the Swing Line Lender, as the case may be, for all or any part
of any additional amount required to be paid by the Borrowers under
this Section 2.7 may be made at any time and from time to time as the
occasion therefor may arise. The protection of this Section 2.7 shall
be available to such Bank and the Swing Line Lender regardless of any
possible contention of invalidity or inapplicability of the law,
regulation or condition that has been imposed. In the event that any
such law, regulation or condition is subsequently held to be invalid or
inapplicable and the result thereof is to eradicate any such additional
cost, reduction or payment, such Bank, or the Swing Line Lender, as the
case may be, shall promptly pay to the Borrowers an amount equal to the
amount of compensation paid by the Borrowers to such Bank, or the Swing
Line Lender, as the case may be, for its account as a result of such
invalid or inapplicable law, regulation or condition.
Section 2.8. Use of Proceeds.
---------------
The proceeds of all Revolving Credit Loans, Swing Line Loans and Term
Loans made to the Borrowers hereunder shall be used only (i) to fund Medallion
Loans and Commercial Loans of MFC and MBC made in the ordinary course of
-44-
business of MFC and MBC, (ii) to refinance any outstanding Commercial Paper,
provided that such proceeds shall only be used to refinance Commercial Paper so
long as (and without in any way limiting the requirements of Section 5.1 hereof
with respect to the initial Revolving Credit Loans, Swing Line Loans and Term
Loans and of Section 5.2 hereof) no Default or Event of Default then exists or
would exist as a result thereof, and (iii) for other working capital purposes of
the Borrowers; provided, that, in no event shall proceeds of Revolving Credit
Loans be used for the direct or indirect benefit of any Subsidiary of MFC (other
than MBC) or of MBC, except as would otherwise be permitted by Section 8.3(e)
hereof.
Section 2.9. Payment on Non-Business Days.
----------------------------
Whenever any payment to be made under the Notes (other than principal
of or any interest on LIBOR Rate Loans), this Agreement, or any other Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding business Day, and such extension of
time in such case shall be included in the computation of payment of interest or
fees, as the case may be, and such extension of time shall be included in
computing interest and fees in connection with such payment.
Section 2.10. Term of Revolving Credit Commitments.
------------------------------------
(a) Subject to the other provisions of this Section 2.10, (i)
with respect to the Initial Term, the Revolving Credit Commitment and
other obligations of each Bank under this Agreement with respect to
Revolving Credit Loans shall terminate on the last day of the Initial
Term, and (ii) with respect to each Renewal Term (as defined in Section
2.10(b) below), the Revolving Credit Commitment and other obligations
of each Bank under this Agreement with respect to Revolving Credit
Loans shall terminate on the date which is 364 days after the date on
which such Renewal Term commenced.
(b) Each Bank's Revolving Credit Commitment and other
obligations under this Agreement with respect to Revolving Credit Loans
(collectively, "Revolving Credit Obligations") shall be terminated on
the last day of the Initial Term (or, in the event of a renewal, the
last day of the then current Renewal Term) unless such Bank gives
written notice of renewal, for a 364-day period, of its Revolving
Credit Obligations to the Borrowers by the date which is 45 days prior
to the date on which such obligations are to be terminated (August 8,
2001, in the case of the Initial Term) (the "Renewal Deadline"). Any
Bank that does not give such notice in accordance with the preceding
sentence shall be deemed to have elected not to renew its Revolving
Credit Obligations. The Borrowers shall then have until the fifth
Business Day following the Renewal Deadline to reject (by written
notice, which must be received by no later than 5:00 p.m., prevailing
New York City time, on such fifth Business Day) any Bank's offer of
renewal (the "Rejection of Renewal Deadline"). If any Bank has elected
not to renew its Revolving Credit Obligations, then, not later than
three Business Days after the
-45-
Rejection of Renewal Deadline the Borrowers shall provide each Bank and
the Agent a list indicating each Bank that has elected to renew its
Revolving Credit Obligations and all Banks who originally elected to
renew their Revolving Credit Obligations shall have until the tenth
Business Day following the Rejection of Renewal Deadline to reverse
their decision and elect instead (by written notice to the Borrowers,
which must be received by no later than 5:00 p.m., prevailing New York
City time, on such tenth Business Day) not to renew such obligations
(the "Renewal Reconsideration Deadline"). The foregoing procedure with
respect to the renewal of the Revolving Credit Obligations of each Bank
under this Agreement shall be repeated for each 364-day term following
the Initial Term (each such term, a "Renewal Term") with the Renewal
Deadline, the Rejection of Renewal Deadline and the Renewal
Reconsideration Deadline to be applicable with respect to each such
term, until there are no longer any Revolving Credit Commitments
outstanding. In the event that any Bank elects to extend its Revolving
Credit Obligations for a Renewal Term or Terms, (i) the expiration,
termination, Maturity and Term-Out Date of such Obligations outstanding
at the commencement of, or made during, the Renewal Term shall be the
date which is 364 days after the date on which such Renewal Term
commenced, and (ii) each Revolving Credit Note shall be deemed amended
to reflect the extended Maturity. If any Bank elects not to renew its
Revolving Credit Obligations, or if the Borrowers reject any Bank's
offer to renew its Revolving Credit Obligations, then, on the Term-Out
Date of such Bank's Revolving Credit Loan(s), such Bank shall make a
Term Loan to each Borrower in accordance with the provisions of Section
2.1(b) hereof and the Aggregate Revolving Credit Commitment shall be
reduced by an amount equal to the aggregate principal amount of such
Term Loans. The procedures set forth above shall also separately apply
to the Swing Line Lender with respect to the Swing Line Commitment;
provided, that, in the event all Banks extending Revolving Credit Loans
elect not to renew as set forth above, the Swing Line Lender shall be
deemed to have made a similar election.
(c) Within five Business Days after the commencement of any
Renewal Term, the Agent shall revise Exhibit A hereto if required in
connection with any change in the Aggregate Revolving Credit
Commitment.
(d) Notwithstanding the foregoing provisions of this Section
2.10, upon the occurrence of an Event of Default, the provisions of
Article IX hereof shall apply and the Agent may take any action
permitted or required thereunder.
(e) The occurrence of the Termination Date shall not release,
terminate or limit the rights or remedies of the Agent, or any Bank, or
the obligations under this Agreement or any other Loan Document of the
Borrowers, and such rights and remedies and such obligations shall
survive until the Borrowers shall have fully paid and performed all
their obligations hereunder and thereunder in full.
-46-
Section 2.11. Funding Losses.
--------------
(a) The Borrowers shall pay, within 10 days after demand
therefor, such amount as will compensate the Banks for any loss or
reasonable expense they may sustain as a consequence of (i) the receipt
or recovery or conversion for any reason (including, without
limitation, as a consequence of acceleration pursuant to Article IX
hereof, a termination, reduction or increase of the Aggregate Revolving
Credit Commitment pursuant to Sections 2.1(d) or 2.4 hereof, a
voluntary or mandatory payment pursuant to Section 2.5 hereof, or a
mandatory conversion pursuant to Section 2.13 hereof) of all or any
part of a LIBOR Rate Loan prior to the last day of the applicable
Interest Period therefor, or (ii) any failure to borrow, convert to or
continue any LIBOR Rate Loan as such after submitting a Loan Request
(whether oral or written) relating thereto, including, but not limited
to, (A) any loss or expense sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain a
LIBOR Rate Loan or any part thereof but excluding (B) any loss of
margin on reemployment of the funds so received or recovered.
(b) Each Bank shall be entitled to fund its Revolving Credit
Loans and Term Loans in such manner as it may determine in its sole
discretion, including without limitation the London interbank market
and the New York secondary market; provided, however, that, for the
purposes of calculations under this Section 2.11, each LIBOR Rate Loan
shall be deemed to have been funded by the purchase in the London
interbank market of a Dollar deposit in an amount comparable to the
principal amount of such LIBOR Rate Loan and having a maturity
comparable to the applicable Interest Period therefor.
(c) A certificate of any Bank or the Swing Line Lender, as the
case may be, as to any additional amounts payable pursuant to this
Section 2.11 setting forth in reasonable detail the basis and method of
determining such amounts shall be conclusive, absent manifest error, as
to the determination by such Bank set forth therein. A claim by any
Bank or the Swing Line Lender for all or any part of any additional
amount required to be paid by the Borrowers under this Section 2.11 may
be made at any time and from time to time as often as the occasion
therefor may arise.
Section 2.12. Alternate Rate of Interest.
--------------------------
(a) In the event, and on each occasion prior to the
commencement of any Interest Period for any LIBOR Rate Loans, (i) the
Required Banks shall have notified the Agent that they have determined,
or the Agent or Fleet shall have determined, that Dollar deposits in an
amount comparable to the principal amount of such LIBOR Rate Loan and
having a scheduled maturity comparable to the Interest Period set forth
in the related Loan Request are not generally available in the London
interbank market or (ii) the Agent or Fleet shall determine that
reasonable means do not exist for
-47-
ascertaining the LIBOR Base Rate, the Agent, as soon as practicable
thereafter, shall give oral notice of such determination to the
Borrowers, promptly confirmed in writing (which may be by
teletransmission). In the event of any such determination and until the
Agent notifies the Borrowers (and provides a copy of this notice to the
Banks) that the circumstances giving rise to such notice no longer
exist, no Revolving Credit Loans or Term Loans will be made as LIBOR
Rate Loans and no Revolving Credit Loans or Term Loans will be
converted to or continued as LIBOR Rate Loans, but shall convert to
Prime Rate Loans at the end of the applicable Interest Period, if any,
therefor. Each determination by a Bank, or the Agent or Fleet, as the
case may be, hereunder shall be conclusive absent manifest error.
Section 2.13. Changes In Legality.
-------------------
(a) If, anything to the contrary herein contained
notwithstanding, any applicable existing or future law, regulation,
guideline, treaty or directive or condition or interpretation thereof
(including, without limitation, any request, guideline or policy,
whether or not having the force of law), by any Governmental Authority
charged with the administration or interpretation thereof, or any
change in any of the foregoing shall make it unlawful or improper for
any Bank to make or maintain any Revolving Credit Loans or any Term
Loan as LIBOR Rate Loans, then, by oral notice to the Borrowers and the
Agent, promptly confirmed in writing (which may be by
teletransmission), such Bank may:
(i) declare that its Revolving Credit Loans or Term
Loans thereafter will not be made by it as LIBOR Rate Loans,
whereupon the Borrowers shall be prohibited from requesting
Revolving Credit Loans or Term Loans as LIBOR Rate Loans unless
and until such declaration is withdrawn; and
(ii) require that all its outstanding Revolving Credit
Loans or its Term Loan that are LIBOR Rate Loans be converted to
Prime Rate Loans, in which event all such Revolving Credit Loans
or Term Loans shall be converted automatically to Prime Rate
Loan(s) as of the end of their applicable Interest Periods or as
of such earlier date as may be required of such Bank for the
lawful or proper conduct of its lending activities.
Section 2.14. Participations.
--------------
Each Borrower may grant participations to other Persons of such
Borrower's choosing in a portion of its rights and/or obligations under any
Loan; provided, however, that any such participation shall be granted pursuant
to a form of participation agreement which shall provide, among other things,
that (a) such Borrower shall service such Loan, (b) any participant thereunder
shall be entitled to no more than its pro rata share of the Underlying
Collateral securing such Loan and to no more than principal and interest under
such Loan, (c) such
-48-
Borrower's interest shall be pari passu or superior in right of payment to the
interest of such participant in such Loan or otherwise in accordance with such
Borrower's standard underwriting criteria and credit policy at the time thereof
and (d) such Borrower's rights to any payment under such Loan shall be prior to,
or pro-rata with, any such participant. Upon request by the Agent or the
Required Banks, the Borrowers shall provide the Banks in writing with a
description of all Loans in respect of which participations have been granted.
Notwithstanding the foregoing, neither Borrower shall grant a participation to
any Subsidiary or Affiliate of either Borrower in any Medallion Loan originated
by such Borrower, except that MFC may grant participations in any of its
Medallion Loans to MBC.
ARTICLE 3. FEES AND PAYMENTS
Section 3.1. Fees.
----
(a) Annual Facility Fee. The Borrowers shall pay to the Agent,
for the pro rata benefit of each Bank (based on each Bank's Percentage
of the Aggregate Revolving Credit Commitment), an annual fee (the
"Facility Fee") equal to the Applicable Facility Percentage of the
average daily Aggregate Revolving Credit Commitment (regardless of
usage). Such fee shall be payable to the Agent for the period from the
Second Restatement Effective Date to and including the last day of the
Revolving Credit Commitment Period, payable quarterly in arrears on the
first day of each calendar quarter during the Revolving Credit
Commitment Period, commencing with the first such date after the Second
Restatement Effective Date, and ending on the Termination Date. Fees
shall be calculated for each month on the basis of a 360-day year for
the actual number of days elapsed in such month.
(b) Agent Fees. The Borrowers agree to pay to the Agent, for
its own account, all the fees set forth in the Fee Letter.
(c) Renewal Fee. The Borrowers agree to pay to the Agent, for
the pro rata benefit of each Bank (based on each Bank's Percentage of
the Aggregate Revolving Credit Commitment), a fee of $180,000 (the
"Renewal Fee") on the Second Restatement Effective Date.
Section 3.2. Payments.
--------
(a) Routine Payments. Except as otherwise specifically
provided in this Agreement, each payment (including each prepayment) by
each Borrower pursuant to this Agreement or the Notes, whether in
respect of principal, interest, or increased costs and the Facility
Fee, the Renewal Fee and all other fees to be paid to the Agent, the
Swing Line Lender and the Banks in connection with the Loan Documents
(collectively, "Payments"; and the portion of such payments that are on
account of the Facility Fee and the Renewal Fee together with all of
such other fees, is sometimes hereinafter collectively referred to as
the "Fees") shall be made by such Borrower without set-off,
withholding, deduction, or counterclaim to the Agent at the
-49-
applicable Agent Payment Office in Dollars in funds immediately
available to the Agent at such office by 12:00 noon (local time in the
city in which such Agent Payment Office is located) on the due date for
such Payment. The failure of such Borrower to make any such Payment by
such time shall not constitute a default hereunder, provided that such
payment is made on such due date, but any such Payment made after 12:00
p.m. (local time in the city in which such payment is to be made in
accordance with the terms hereof) on such due date shall be deemed to
have been made on the next Business Day for the purpose of calculating
interest on amounts outstanding on the applicable loans. Subject to
Section 9.5, promptly upon receipt thereof by the Agent, (a) each
Payment of principal and interest on the Revolving Credit Loans, Term
Loans and Swing Line Loans shall be remitted by the Agent in like funds
as received to each Bank and the Swing Line Lender, as the case may be,
pro rata according to its Exposure Percentage of such loans, and (b)
each payment of the Facility Fee and Renewal Fee shall be remitted by
the Agent in like funds as received to each Bank pro rata according to
such Bank's Revolving Credit Commitment.
(b) Alternate Payment Dates. If any Payment hereunder shall be
due and payable on a day which is not a Business Day, the due date
thereof (except as otherwise provided in this Agreement) shall be
extended to the next Business Day and (except with respect to Payments
in respect of the Fees) interest shall be payable at the applicable
rate specified herein during such extension, provided, however, that,
if such next Business Day is after the Maturity of such loan, any such
payment shall be due on the immediately preceding Business Day.
Section 3.3. Taxes.
-----
(a) Any and all payments by the Borrowers pursuant to this
Agreement, the Revolving Credit Notes, the Term Notes or the Swing Line
Notes shall be made, in accordance with the terms hereof and thereof,
free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding franchise taxes imposed
on the Agent, the Swing Line Lender or any Bank by the jurisdiction
under the laws of which the Agent, the Swing Line Lender or such Bank
is organized or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If either
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Agent, or the Swing Line
Lender or any Bank, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.3) the Agent, the Swing Line Lender or such Bank shall receive an
amount equal to the sum it would have received had no such deductions
been made, (ii) such Borrower shall make such deductions, (iii) such
Borrower shall pay the full amount deducted to the relevant taxation
authority or other
-50-
authority in accordance with applicable law, and (iv) such Borrower
shall deliver to the Agent evidence of such payment to the relevant
Governmental Authority.
(b) In addition, the Borrowers agree to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies of the United States or any state or
political subdivision thereof or any applicable foreign jurisdiction
that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes") and to deliver to the Agent and the Banks evidence of such
payment to the relevant Governmental Authority.
(c) The Borrowers will indemnify the Agent, the Swing Line
Lender and the Banks for the full amount of Taxes and Other Taxes
(including without limitation Taxes and Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.3) paid by the
Agent, the Swing Line Lender or any Bank (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be
made within 10 days after written demand therefor by the Agent, the
Swing Line Lender or any Bank. Should the Borrowers elect to contest
whether or not the Taxes or Other Taxes giving rise to their
indemnification obligation hereunder were correctly or legally
asserted, the Agent, the Swing Line Lender or the Bank being
indemnified agrees to cooperate in such contest, at the Borrowers'
expense, and to make available to the Borrowers such books and records
as may be reasonably necessary and useful in connection with such
contest.
(d) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 3.3 shall survive the payment in
full of principal, interest, fees and other amounts hereunder and under
the other Loan Documents.
(e) Each Bank, if any, that is not organized under the laws of
the United States of America or any state of the United States or the
District of Columbia agrees (i) prior to the first payment to such Bank
of any amounts due to such Bank under the Loan Documents, upon request
by the Borrowers, to execute and deliver to the Borrowers completed
counterparts of IRS Form W-8, 1001, or 4224 (or any successor thereto
or substitute therefor), as applicable, and (ii) thereafter, upon
request by the Borrowers from time to time in order to maintain the
effectiveness and accuracy of such tax forms and otherwise to comply
with United States tax laws, to execute and deliver to the Borrowers
additional or supplemental tax forms with respect to amounts due to
such Bank under the Loan Documents.
-51-
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, the Swing Line Lender and the Banks to
enter into this Agreement and to make the Revolving Credit Loans, Swing Line
Loans and Term Loans, each Borrower hereby makes the following representations
and warranties, which shall survive the execution and delivery of the Loan
Documents and (except to the extent that any of such representations and
warranties expressly relates to earlier dates, in which case it shall continue
to be true as of such dates) shall be deemed repeated and confirmed as of each
date on which any Revolving Credit Loans, Swing Line Loans or Term Loans are
requested by either Borrower or made by any Bank or the Swing Line Lender, as
the case may be:
Section 4.1. Corporate Status.
----------------
MFC is a duly organized and validly existing corporation and MBC is a
duly organized and validly existing limited liability company, and each is in
good standing under the laws of its state of organization, is properly licensed
and has the corporate, or limited liability company, as the case may be, power
and authority and the legal right to own its property and conduct the business
in which it is engaged or presently proposes to engage and is duly licensed and
qualified as a foreign organization in good standing under the laws of each
jurisdiction where the failure to qualify as such would have a Material Adverse
Effect.
Section 4.2. Subsidiaries.
------------
Except as set forth on Schedule II hereof (as the same may be amended
from time to time to include entities the Consolidated Tangible Net Worth of
which constitute more than 5% of the Consolidated Tangible Net Worth of MFC),
there are no corporations of which MFC owns, directly or indirectly, shares of
capital stock having in the aggregate 50% or more of the total combined voting
power of the issued and outstanding shares of capital stock entitled to vote
generally in the election of directors of such corporation; nor are there any
corporations, partnerships, joint ventures or other entities in which MFC or MBC
has, or pursuant to any agreement has the right to acquire at any time by any
means, directly or indirectly, an equity interest or investment.
Section 4.3. Location of Offices, Books and Records.
--------------------------------------
Schedule I annexed hereto, as amended from time to time pursuant to
Section 6.9 hereof, completely and accurately lists all places at which (i) each
Borrower maintains its books and records relating to, among other things, its
Loans, (ii) either Borrower has any places of business and (iii) each Borrower
has its chief executive office.
Section 4.4. Corporate Power; Authorization.
------------------------------
-52-
Each Borrower has the corporate, or limited liability company, as the
case may be, power and authority and the legal right to make, deliver and
perform this Agreement and the other Loan Documents to which it is a party. Each
Borrower has taken all necessary corporate, or limited liability company, as the
case may be, action (including, but not limited to, the obtaining of any consent
of stockholders required by law or by the Certificate of Incorporation or
By-Laws in the case of MFC and obtaining of any consent of members required by
law or by the Certificate of Formation or Operating Agreement in the case of
MBC) to authorize the execution, delivery and performance of the Loan Documents
to which it is a party or by which it is otherwise affected and to authorize the
transactions contemplated hereby and thereby.
Section 4.5. Enforceable Obligations.
-----------------------
Each Loan Document, and each other instrument and document executed by
a Borrower and delivered to the Agent pursuant to Section 5.1 hereof,
constitutes the legal, valid and binding obligation of such Borrower,
enforceable in accordance with its respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally, and
general principles of equity, and there are no actions, suits or proceedings
pending or, to the knowledge of such Borrower, threatened against, or affecting,
a Borrower or any of its officers or directors calling into question the
legality, validity or enforceability of any thereof.
Section 4.6. No Violation of Agreements; Compliance with Law.
-----------------------------------------------
Neither Borrower is in default under any indenture, mortgage, deed of
trust, agreement or other instrument to which it is a party or by which it or
any of its properties may be bound. Neither the execution and delivery of the
Loan Documents nor any of the instruments and documents to be delivered by a
Borrower pursuant to this Agreement or the other Loan Documents, nor the
consummation of the transactions herein and therein contemplated, nor compliance
with the provisions hereof or thereof will violate any law or regulation, or any
order or decree of any court or governmental instrumentality, or will conflict
with, or result in the breach of, or constitute a default under, in the case of
MFC, the Registration Statement and, in the case of either Borrower, any
indenture, mortgage, deed of trust, agreement or other instrument to which a
Borrower is a party or by which it may be bound, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property of a
Borrower except as expressly permitted by this Agreement, or violate any
provision of the Certificate of Incorporation, By-Laws or any preferred stock
provisions of MFC or violate any provision of the Certificate of Formation or
Operating Agreement of MBC.
Section 4.7. Agreements.
----------
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Neither Borrower is a party to any agreement or instrument or subject
to any corporate or limited liability company (as the case may be) restriction
(including any restriction set forth in the Certificate of Incorporation,
By-Laws, preferred stock provisions or Registration Statement in the case of MFC
or set forth in the Certificate of Formation or Operating Agreement in the case
of MBC) that could have a Material Adverse Effect.
Section 4.8. No Material Litigation.
----------------------
There are no actions, suits or proceedings pending or, to the knowledge
of either Borrower, threatened, against, or affecting either Borrower or any of
its officers or directors before any court, arbitrator or governmental or
administrative body or agency which, if adversely determined, might have a
Material Adverse Effect. No injunction, writ, restraining order or other order
of any nature adverse to either Borrower or the conduct of its business or
inconsistent with the due consummation of such transactions has been issued by
any Governmental Authority. Neither Borrower is in default under any applicable
statute (including without limitation, the 1940 Act), rule, order, decree or
regulation of any court, arbitrator or governmental body or agency having
jurisdiction over such Borrower.
Section 4.9. Good Title to Properties.
------------------------
Each Borrower has good and marketable title to all its properties and
assets, subject to no Liens of any kind (except as expressly permitted under
this Agreement).
Section 4.10. Margin Regulations.
------------------
Neither Borrower is obligated to register with the Board as a "lender"
as such term is defined in Regulation U as amended (12 C.F.R. Part 207), issued
by the Board. The proceeds of the borrowings made pursuant to this Agreement
will be used by the Borrowers only for the purposes set forth in Section 2.8
hereof. None of such proceeds and none of the proceeds of any loan or advance
made by a Borrower will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" as such term is defined in Regulation
U as amended (12 C.F.R. Part 221), issued by the Board, or for the purposes of
maintaining, reducing or retiring any Indebtedness that originally was incurred
to purchase or carry margin stock or for any other purpose that might constitute
any of the Revolving Credit Loans, Swing Line Loans or Term Loans under this
Agreement or any such loans or advances a "purpose credit" within the meaning of
said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither a
Borrower nor any agent acting on behalf of either of them has taken or will take
any action that might cause this Agreement or any of the documents or
instruments delivered pursuant hereto or other Loan Documents to violate any
regulation of the Board or to violate the Securities Exchange Act of 1933, as
amended.
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Section 4.11. [Reserved]
--------
Section 4.12. Investment Company.
------------------
MFC is a closed-end management investment company registered under the
1940 Act and has elected to be treated as a "business development company" under
and as defined in the 1940 Act. MFC is an "investment company," as such term is
defined in the 1940 Act. MBC is not a "business development company" and is not
an "investment company," as such term is defined in the 1940 Act. The
acquisition of the Notes by the Banks, the application of the proceeds and
repayment thereof by the Borrowers and the performance of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
provision of said Act, or any rule, regulation or order issued by the SEC
thereunder.
Section 4.13. Disclosure.
----------
No representation or warranty made by either Borrower in any Loan
Document or any other document furnished from time to time in connection
herewith or therewith contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to either Borrower or any of
its officers or directors which has, or which in the future might have, in the
reasonable judgment of either Borrower, a Material Adverse Effect, except as set
forth or referred to in this Agreement or in another document or instrument
heretofore furnished to the Banks.
Section 4.14. Taxes and Claims.
----------------
MFC has elected to be treated as and qualifies as a "regulated
investment company" within the meaning of the Code. Each Borrower has filed or
caused to be filed, all Federal, state and local tax returns and reports which
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or charges imposed on it or any of its property by any
Governmental Authority (other than those the amount or validity of which are
currently being diligently contested in good faith by appropriate proceedings
and in respect of which adequate reserves in conformity with GAAP have been
provided on the books of the applicable Borrower); and no tax liens have been
filed and, to the knowledge of each Borrower, no claims are being asserted with
respect to any such taxes, fees or other charges. Each Borrower, to the best of
its knowledge, has paid and discharged all lawful claims for labor, material,
supplies and anything else which might or could, if unpaid, become a Lien on any
of its properties (other than those the amount or validity of which are
currently being diligently contested in good faith by appropriate proceedings
and in respect of which adequate reserves in conformity with GAAP have been
provided on the books of the applicable Borrower).
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Section 4.15. Licenses and Permits.
--------------------
Each Borrower possesses all the licenses, permits, approvals and
consents of Federal, state and local governments and regulatory authorities and
rights in any thereof, adequate for the conduct of its business as now
conducted, without conflict with the rights or claimed rights of others. Neither
Borrower has received any notice nor does either Borrower have any knowledge or
reason to believe that any appropriate authority intends to cancel, terminate or
modify any of such licenses or permits or that valid grounds for such
cancellation, termination or modification exist.
Section 4.16. Consents.
--------
No consent, authorization or action of, or filing with, any
Governmental Authority or any other Person is required to authorize, or is
otherwise required of either Borrower in connection with, the execution,
delivery, performance, validity or enforceability of the Loan Documents or any
of the instruments or documents to be delivered pursuant to the Loan Documents.
Section 4.17. Employee Benefit Plans.
----------------------
(a) None of the Plans maintained at any time by either
Borrower, or any ERISA Affiliate thereof or the trusts created
thereunder has engaged in a Prohibited Transaction which could subject
any such Plan or trust to a material tax, liability or penalty on or
resulting from Prohibited Transactions imposed under Code Section 4975
or ERISA.
(b) None of the Plans which are employee pension benefit plans
maintained at any time by either Borrower, or any ERISA Affiliate
thereof, or the trusts created thereunder has been terminated in a
manner that results or could result in a liability to either Borrower
in excess of $50,000, nor has either Borrower, any ERISA Affiliate
thereof, or any such Plan of either Borrower or any ERISA Affiliate
incurred any liability to the PBGC in excess of $50,000, other than for
required insurance premiums which have been paid when due; neither a
Borrower nor any ERISA Affiliate thereof has withdrawn from or caused a
partial withdrawal to occur with respect to any Multiemployer Plan
within the meanings of Sections 4203 and 4205 of ERISA the effect of
which was a liability or potential liability to either Borrower in
excess of $50,000; and each Borrower and each ERISA Affiliate has made
or provided for all contributions to all employee pension benefit plans
which they maintain and which were required under ERISA or the Code as
of the end of the most recent fiscal year under each such plan; no such
employee pension benefit plan has incurred any Accumulated Funding
Deficiency the effect of which was a liability or potential liability
to either Borrower in excess of $50,000, whether or not waived; nor has
there been any Reportable Event, or other event or condition which
presents a risk of termination of any such Plan by the PBGC, which
termination could result in a potential liability to either Borrower in
excess of $50,000.
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(c) The present value of all accrued benefits under the Plans,
if any, which are employee pension benefit plans did not, as of the
most recent valuation date for each such Plan, exceed by more than
$50,000 the then current value of the assets of such Plans allocable to
such accrued benefits.
(d) Each employee pension benefit plan maintained by each
Borrower and each ERISA Affiliate has been administered in accordance
with its terms and is in compliance in all material respects with all
applicable requirements of ERISA and other applicable laws, regulations
and rulings.
(e) As used in this Section 4.17 the term "employee Pension
benefit Plan" and "accrued benefits" shall have the respective meanings
assigned to them in ERISA.
Section 4.18. Financial Condition.
-------------------
The consolidated balance sheets of MFC for the fiscal years ended
December 31, 1998 and December 31, 1999 and the related consolidated statements
of income, retained earnings and cash flow for the fiscal years ended on said
dates, as certified by the Independent Public Accountants present fairly the
consolidated financial condition of MFC as at the date of such balance sheets,
and the results of its operations for such periods. All such financial
statements have been prepared in accordance with GAAP applied on a basis
consistent with that of the comparable preceding period, and since the dates of
the financial statements relating to the fiscal year ended December 31, 1999
mentioned above, there has been no material adverse change in the consolidated
condition, financial or otherwise, of either Borrower.
Section 4.19. Environmental Laws, Etc.
-----------------------
(a) All Property heretofore, now or hereafter owned or
operated by each Borrower complied, complies and will comply in all
material respects with all applicable Federal, state and local,
environmental, health and safety statutes, guidelines, codes,
ordinances and regulations;
(b) such Property does not contain and is not being and has
not been used to generate, manufacture, refine, produce, store, handle,
transfer, process, dispose of, or transport, any Hazardous Materials in
violation of any material applicable Federal, state or local law or
regulation; and
(c) there are no underground storage tanks or surface
impoundments located on, under, or within such Property in violation of
any material applicable Federal, state or local law or regulation.
Section 4.20. Event of Default.
----------------
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No event has occurred and is continuing that constitutes a Default or
an Event of Default or would constitute such a Default or Event of Default after
notice or lapse of time or both.
Section 4.21. Solvency.
--------
Each Borrower is Solvent, and will not, as a result of the transactions
contemplated hereby or by the Loan Documents cease to be Solvent.
Section 4.22. Priority; Continued Effectiveness.
---------------------------------
Except as otherwise permitted hereunder, the Agent, for the ratable
benefit of the Banks and the Swing Line Lender, has a valid and perfected first
priority security interest in and to all Collateral, enforceable against each
Borrower and all third parties in all relevant jurisdictions and securing the
payment of the Revolving Credit Loans, Swing Line Loans and Term Loans and all
other sums payable under or in connection with the Loan Documents. The Security
Agreement is effective to create in favor of the Agent, for the ratable benefit
of the Banks and the Swing Line Lender, a valid and perfected first priority
(except as otherwise permitted hereunder) security interest in and to the
Collateral described therein securing the payment of the Revolving Credit Loans,
Swing Line Loans and Term Loans and all other sums payable under or in
connection with the Loan Documents, whether incurred prior to or after the
Restatement Effective Date. No additional Borrower Financing Statements are
required to be filed as of the Restatement Effective Date in order to maintain
the perfection and priority of the security interests created pursuant to the
Security Agreement.
Section 4.23. Advertising, Origination and Servicing Activities.
-------------------------------------------------
All advertising, origination and servicing activities, procedures and
materials used with regard to any Loan made or accounts acquired, collected or
serviced by either Borrower comply with all applicable Federal, state and local
laws, ordinances, rules and regulations, including but not limited to those
related to usury, truth in lending, real estate settlement procedures, consumer
protection, equal credit opportunity, fair debt collection, rescission rights
and disclosures, except where failure to comply would not have a Material
Adverse Effect.
Section 4.24. Activities.
----------
The only transactions engaged in by each Borrower in the ordinary
course of its business consist of: (i) the making and servicing of Loans and
Investments; and (ii) transactions incidental to the foregoing.
Section 4.25. [Reserved].
--------
Section 4.26. [Reserved].
--------
Section 4.27. Non-Affiliation with Banks.
--------------------------
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So far as appears from the records of the Borrowers, neither any Bank
nor any Affiliated Person of any Bank known to either Borrower is an Affiliated
Person of such Borrower or a person related to such Borrower in the manner
described in subsection (b) or (e) of Section 57 of the 1940 Act, and none of
the Borrowers or any Affiliated Person of the Borrowers is an Affiliated Person
of any Bank or any Affiliated Person of any Bank known to either Borrower.
ARTICLE 5. CONDITIONS PRECEDENT
Section 5.1. Conditions to Initial Revolving Credit Loan and Initial
Swing Line Loan.
---------------
The obligation of (i) the Banks to make the initial Revolving Credit
Loan and (ii) the Swing Line Lender to make its first Swing Line Loan under the
Original Agreement, were each subject to the satisfaction on the Original
Effective Date of the conditions precedent set forth in Section 5.1 of the
Original Agreement. The obligation of (i) the Banks to make the initial
Revolving Credit Loan on the First Restatement Effective Date and (ii) the Swing
Line Lender to make its first Swing Line Loan under the First Restatement, were
each subject to the satisfaction on the First Restatement Effective Date of the
conditions precedent set forth in Section 5.1 of the First Restatement. The
obligation of (i) the Banks to make the Initial Revolving Credit Loan and (ii)
the Swing Line Lender to make its first Swing Line Loan hereunder, are each
subject to the satisfaction on the Second Restatement Effective Date of the
following conditions precedent:
(a) The Agent and the Swing Line Lender shall have received,
on or before making the initial Swing Line Loan, Swing Line Notes
conforming to the requirements hereof in the form of Exhibit D hereto,
executed by an Authorized Representative of MFC and MBC, respectively;
and the Agent and each Bank shall have received, on or before making
the Initial Revolving Credit Loan, the following, each in form and
substance satisfactory to the Agent and each Bank in all respects:
(i) for each Bank, Revolving Credit Notes conforming to
the requirements hereof in the form of Exhibit B hereto, executed
by an Authorized Representative of MFC and MBC, respectively;
(ii) evidence satisfactory to the Banks that there is no
outstanding Indebtedness or Liens except Permitted Indebtedness
and Permitted Liens;
(iii) (A) the Security Agreement in the form of Exhibit
F, executed by an Authorized Representative of MBC and MFC and
(B) perfection certificates executed by each of MBC and MFC;
(iv) evidence satisfactory to the Banks that such
additional Borrower Financing Statements as the Agent and the
Banks require in connection with the amendments effected by this
Agreement have
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been executed and delivered to the Agent in a form acceptable to
the Agent, such that the security interests described in the
Security Documents constitute valid and perfected first priority
security interests, subject only to Liens permitted pursuant to
Section 8.1 hereof;
(v) the results of a search of all filings made against
MFC and MBC under the UCC as in effect in any relevant state,
indicating that the Collateral is free and clear of any Lien or
encumbrance, other than Permitted Liens;
(vi) an opinion of counsel to the Borrowers
substantially in the form of Exhibit H hereto; such opinion shall
also cover such other matters incident to the transactions
contemplated by this Agreement and the other Loan Documents as
the Required Banks reasonably may require;
(vii) (A) a copy of the Certificate of Incorporation of
MFC and all amendments thereto, certified as of the date hereof
by the Chief Financial Officer of MFC and (B) a copy of the
Certificate of Formation of MBC and all amendments thereto,
certified as of the date hereof by the Chief Financial Officer of
MBC;
(viii) (A) a copy of the By-laws of MFC certified as of
the date hereof by the Chief Financial Officer of MFC and (B) a
copy of the Operating Agreement of MBC in effect as of the
Restatement Effective Date, certified as of the date hereof by
the Chief Financial Officer of MBC;
(ix) certified copies of the resolutions of the Board of
Directors of MFC and of the Managers or applicable governing body
of MBC, each approving each of the Loan Documents and each of the
other instruments and documents to be executed by it and
delivered to the Banks pursuant to this Agreement or any other
Loan Document, certified by the Chief Financial Officer of the
applicable Borrower, and certified copies of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect thereto;
(x) certificates of the Chief Financial Officer of each
Borrower certifying the names and true signatures of the officers
of such Borrower authorized to sign each document to which it is
a signatory and which is to be delivered by it hereunder or
pursuant to any other Loan Document to which it is a party;
(xi) a certificate of the Chief Financial Officer of
each Borrower to the effect that (A) the financial statements
referred to in Section 4.18 hereof present fairly the financial
condition of such
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Borrower as of the date and for the period of such financial
statements and (B) no material adverse change in the condition,
financial or otherwise, of such Borrower has occurred since the
date of such financial statements;
(xii) a certificate of an Authorized Representative of
each Borrower to the effect that such Borrower has in effect all
insurance coverage required pursuant to Section 6.3 hereof;
(xiii) originals of instruments and other documents
constituting part of the Collateral or Underlying Collateral as
the Agent may request in order to perfect its security interest,
on behalf of the Banks, in such Collateral;
(xiv) copies of all other documents, instruments and
agreements requested by the Agent in connection with the
transactions contemplated by this Agreement and the other Loan
Documents; and
(xv) a Borrowing Base Certificate in the form of Exhibit
G from each Borrower.
(b) MFC shall be a corporation, and MBC shall be a limited
liability company, each duly organized and validly existing, shall have
all licenses, permits and authorizations necessary to own its
properties and to conduct its business as now conducted and proposed to
be conducted and shall be in good standing in the jurisdiction of its
organization and in each other jurisdiction in which the nature of its
business or ownership or use of its property requires such
qualification and the Agent shall have received such evidence thereof,
as it or the Required Banks may request.
(c) All requisite corporate or limited liability company (as
applicable) action and proceedings in connection with the Loan
Documents shall be satisfactory in form and substance to the Agent and
the Banks, and the Agent and the Banks shall have received all
information and copies of all documents, including without limitation,
records of requisite corporate action and proceedings which the Agent,
the Banks and Bingham Dana LLP, as counsel to the Agent, may have
requested in connection therewith, such documents, where so requested,
to be certified by appropriate corporate officers or Governmental
Authorities.
(d) All necessary approvals, authorizations and consents, if
any be required, of any Governmental Authority having jurisdiction with
respect to any of the Collateral and the transactions contemplated by
this Agreement and the other Loan Documents shall have been obtained.
In addition, each Borrower shall be in compliance, both before and
after the making of the Initial Revolving Credit Loans, with all laws,
rules, regulations, orders and
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administrative guidelines applicable to the operation of its business,
including, without limitation, those of the SBA.
(e) All representations, warranties, covenants and agreements
contained in any Loan Document shall be true and correct in all
material respects, and shall have been performed (to the extent
required to be performed on or prior to the Second Restatement
Effective Date), as of the Second Restatement Effective Date.
(f) Each Borrower shall have paid to the Agent and each Bank
party to the First Restatement all amounts which are required to be
paid to the Agent and each such Bank on or before the Second
Restatement Effective Date pursuant to the First Restatement.
(g) The Borrowers shall have paid the Renewal Fee as required
pursuant to Section 3.1(c) hereof.
(h) The rights of the Agent and the Banks under each of the
Security Agreement, the Mortgage Assignments and the Borrower Financing
Statements shall be and continue in full force and effect after the
Second Restatement Effective Date (subject to the filing of any
continuation statements required by the UCC).
Section 5.2. Conditions to All Revolving Credit and Term Loans.
-------------------------------------------------
The obligation of the Banks to make any Revolving Credit Loans
(including the Initial Revolving Credit Loan) and any Term Loans and the
obligation of the Swing Line Lender to make any Swing Line Loan (including any
initial Swing Line Loan) is further subject to the satisfaction of the following
conditions precedent:
(a) each of the representations and warranties made by a
Borrower in or pursuant to any Loan Document or which are contained in
any agreement, instrument, certificate, document or other writing
furnished at any time under or in connection herewith or therewith
shall be true and correct in all material respects when made and on and
as of the date of the making of such Revolving Credit Loan or Term Loan
or Swing Line Loan (except to the extent any representation or warranty
expressly relates to an earlier date, in which case it shall continue
to be true as of such date) and after giving effect thereto;
(b) no Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the Revolving Credit
Loans or Term Loans or Swing Line Loans to be made on such date;
(c) no event, action or condition has occurred that would
adversely affect the validity or enforceability of, or the authority of
either Borrower to
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perform its obligations under, any of the Loan Documents to which it is
a party.
(d) after taking into account Revolving Credit Loans and/or
Term Loans and/or Swing Line Loans to be made on such date, (i) the
aggregate unpaid balance of all Swing Line Loans to MFC plus the
aggregate unpaid balance of all Revolving Credit Loans to MFC plus the
aggregate unpaid balance of all Term Loans to MFC shall not exceed the
MFC Borrowing Base and (ii) the aggregate unpaid balance of all Swing
Line Loans to MBC plus the aggregate unpaid balance of all Revolving
Credit Loans to MBC plus the aggregate unpaid balance of all Term Loans
to MBC shall not exceed the MBC Borrowing Base.
Each borrowing by the Borrowers hereunder shall constitute a
representation and warranty by each Borrower as of the date of such borrowing
that the conditions in clauses (a), (b), (c) and (d) of this Section 5.2 have
been satisfied.
ARTICLE 6. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, until the Notes together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under the Loan Documents are paid in full and the
Aggregate Revolving Credit Commitment, the Swing Line Commitment and all Term
Loan Commitments are terminated, unless specifically waived in writing by the
Agent and the Required Banks:
Section 6.1. Financial Statements and Other Information.
------------------------------------------
The Borrowers shall furnish to the Agent and each Bank:
(a) as soon as practicable and in any event within 45 days
after the close of each calendar quarter, beginning with the calendar
quarter ending September 30, 2000, a detailed schedule of all
outstanding Loans of each Borrower setting forth (i) the aging, on a
contractual basis, of each Loan, (ii) the aggregate dollar amount of
Loans as to which any amendments or modifications to or waivers of any
terms thereof have been made during the quarter as a result of the
Person to whom such Loan was made being unable to comply (for whatever
reason) with the terms thereof, (iii) information satisfactory to the
Agent with respect to the concentration of the Loans in any given
industry (determined in accordance with the Standard Industrial
Classification promulgated by the United States Office of Management
and Budget), and (iv) information satisfactory to the Agent with
respect to Loan concentrations, rewrites, charge-offs under any Loans,
delinquent Loans and Loan loss reserve analysis;
(b) at the request of the Agent (which request shall not be
made, unless an Event of Default has occurred and is continuing, on
more than
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one occasion in each calendar year), a schedule setting forth as to
each Borrower (i) the number of Medallion Rights pledged to such
Borrower as security for Loans made by it, (ii) the then outstanding
aggregate principal amount of the Loans secured by such Medallion
Rights and (iii) such Borrower's good-faith best estimate (along with
supporting documentation) of the current fair market value of the
operating rights and licenses evidenced by Medallions included in such
Medallion Rights;
(c) monthly, and not later than 20 Business Days after the
last day of each month, a Borrowing Base Certificate indicating a
separate computation of the MFC Borrowing Base and the MBC Borrowing
Base, covering the immediately preceding month;
(d) as soon as practicable and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year of MFC, beginning with the fiscal quarter ending September 30,
2000 a consolidated and consolidating balance sheet, a statement of
income and retained earnings and a statement of cash flow of each
Borrower, as at the end of and for the quarterly period then ended and
for the period commencing at the end of the previous fiscal year and
ending with such quarter, setting forth the corresponding figures for
the appropriate periods of the previous fiscal year in comparative
form, all in reasonable detail (which detail, if requested by the
Agent, shall include data as to non-accruals and related collateral,
repossessions, charge-offs and reconciliation for allowance for losses)
and be reviewed by the Independent Public Accountants and certified by
the chief executive officer, chief operating officer, chief financial
officer, or chief accounting officer of each Borrower to be true and
correct and to have been prepared in accordance with GAAP (except for
the omission of footnotes), subject to normal recurring year-end audit
adjustments;
(e) as soon as practicable and in any event within 90 days
after the end of each fiscal year of MFC commencing with the fiscal
year ending December 31, 2000, a consolidated and consolidating balance
sheet, a statement of income and retained earnings and a statement of
cash flow, and an annual budget, of each Borrower, as at the end of and
for the fiscal year just closed, setting forth the corresponding
figures of the previous fiscal year in comparative form, all in
reasonable detail (which detail, if requested by the Agent, shall
include data as to non-accruals and related collateral, repossessions,
charge-offs and reconciliation for allowance for losses), presented in
a manner consistent with the financial statements of each Borrower for
the preceding fiscal year, and, with respect to such consolidated
statements, certified (without any qualification or exception deemed
material by the Agent or any Bank) by the Independent Public
Accountants; and concurrently with such financial statements, a written
statement, addressed to the Agent and the Banks, signed by such
Independent Public Accountant to the effect that, in making the
examination necessary for their certification of such financial
statements, they have not obtained, as of the end of such fiscal year,
any knowledge of
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the existence of any Default or Event of Default, or, if such
accountants shall have obtained from such examination any such
knowledge, they shall disclose in such written statement the Default or
Event of Default;
(f) concurrently with the delivery of the schedules or
financial statements required to be furnished under Sections 6.1(a) or
6.1(d) hereof, a certificate signed by the chief executive officer,
chief operating officer, chief financial officer, or chief accounting
officer of each Borrower, and concurrently with the delivery of the
financial statements required to be furnished under Section 6.1(e)
hereof, a certificate signed by the Independent Public Accountants, and
promptly upon the occurrence of any Default or Event of Default, a
certificate signed by the chief executive officer, chief operating
officer, chief financial officer, or chief accounting officer of each
Borrower or such Independent Public Accountants, if a Default or Event
of Default shall have occurred during the period of their review, in
each case stating (i) that a review of the activities of each Borrower
during such period has been made under his or their, as the case may
be, immediate supervision with a view to determining whether each such
Borrower has observed, performed and fulfilled all of its obligations
under this Agreement, and (ii) that there existed during such period no
Default or Event of Default (provided that, as to a certificate
prepared by the Independent Public Accountants, such period, as it
relates to the compliance by each Borrower with covenants contained in
Articles VII and VIII hereof shall apply to the fiscal period covered
by their review) or if any such Default or Event of Default exists,
specifying the nature thereof, the period of existence thereof and what
action the Borrowers propose to take, or have taken, with respect
thereto; each such certificate shall be accompanied by a schedule
setting forth the computations as of the end of such period of each of
the financial ratios, tests or covenants specified in Article VII and
Sections 6.15, 8.2, 8.3, and 8.14 hereof;
(g) concurrently with the delivery of the financial statements
required to be furnished under Section 6.1(e) hereof, (i) any
management letters prepared by the Independent Public Accountants
described above, setting forth weaknesses in the accounting and control
procedures of either Borrower and (ii) projections (in a format
satisfactory to the Agent) for the fiscal year immediately following
the fiscal year for which such financial statements were provided;
(h) promptly upon receipt thereof with respect to each
Borrower, copies of (i) all financial reports (including, without
limitation, management letters), if any, submitted to such Borrower by
its auditors in connection with each annual, interim or special audit
of its books by such auditors, (ii) all "vault count opinions"
submitted to such Borrower in connection with each inspection by such
auditors of the documents evidencing such Borrower's Loans and the
Underlying Collateral securing such Loans, (iii) all audits submitted
to such Borrower by the SBA or any other Governmental Authority and
(iv) all reports, letters or other
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documents submitted to such Borrower by the SBA or any other
Governmental Authority relating to a material change in such Borrower's
business or the rules and regulations promulgated by any Governmental
Authority applicable thereto, including, without limitation, the SBI
Act, the SBA Regulations, the 1940 Act and the Code;
(i) promptly upon the filing thereof with the SEC or the
mailing thereof to shareholders of MFC, copies of all reports to
shareholders, amendments and supplements to the Registration Statement,
proxy statements and other materials of a financial or otherwise
material nature;
(j) annually, when furnished to MFC, a copy of the Independent
Public Accountant's annual management letter provided to MFC;
(k) quarterly, (i) a listing of the Loans over $3,000,000,
(ii) a detailed listing of accounts charged-off for the quarter, (iii)
a report detailing all accounts that have been restructured or
modified, including delinquent rewrites and troubled debt restructuring
Loans, as well as non-distressed Loans, and listing the number and
amount of such Loans and whether such Loans are Medallion Loans or
Commercial Loans, (iv) a loss reserve analysis in the form used by the
Borrowers as of the Second Restatement Effective Date, (v) a listing of
accounts delinquent by more than twelve (12) months, and (vi) a
delinquency analysis report in the form currently prepared by the
Borrowers, with the addition of (A) an over one hundred twenty (120)
days category and (B) a separate analysis for Section 7a Loans
similarly aged, in each case in form and content satisfactory to the
Agent;
(l) no later than December 15, 2000, a commercial finance
examination in form and substance satisfactory to the Agent; and
(m) with reasonable promptness, such other information
respecting the business, operations and financial condition of either
Borrower (including, without limitation periodic commercial finance
examinations) as the Agent or any of the Banks from time to time
reasonably may request.
Section 6.2. Taxes and Claims; Investment Company Status.
-------------------------------------------
(a) Each Borrower shall pay promptly when due, (i) all
material sales, use, excise, personal property, income, withholding,
corporate franchise and all other taxes, assessments and governmental
charges upon or against or relating to such Borrower or its ownership
or use of any of its properties, assets, income or gross receipts
unless and to the extent that such charges are being diligently
contested in good faith by appropriate proceedings and adequate
reserves in conformity with GAAP have been provided therefor on the
books of such Borrower, and (ii) all lawful claims, whether for labor,
materials, supplies, services or anything else which might or could, if
unpaid, become a Lien or charge upon the properties or assets of
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such Borrower or any of its Subsidiaries, which Lien would not be
permitted under this Agreement, unless and to the extent such claims
are being diligently contested in good faith by appropriate proceedings
and adequate reserves in conformity with GAAP have been provided
therefor on the books of such Borrower. MFC will maintain its status as
a "regulated investment company" under the Code at all times and will
make sufficient distributions to qualify to be taxed as a "regulated
investment company" pursuant to subchapter M of the Code or, prior to
any change in status as a "regulated investment company", MFC shall
demonstrate to the satisfaction of the Agent that it is able to comply
on a pro forma basis with the financial covenants in Article 7 hereof.
(b) Neither Borrower shall permit, or suffer to remain, and
will promptly discharge, any Lien (other than a Permitted Lien) arising
from any unpaid tax, assessment, levy or governmental charge.
(c) In the event either Borrower shall fail to pay any such
tax, assessment, levy or governmental charge or to discharge any such
Lien (other than a Permitted Lien), then the Agent, without waiving or
releasing any obligation or default of the Borrowers hereunder, may at
any time or times hereafter, but shall be under no obligation to do so,
make such payment, settlement, compromise or release or cause to be
released any such Lien, and take any other action with respect thereto
which the Agent deems advisable. All sums paid by the Agent in
satisfaction of, or on account of any tax, levy or assessment or
governmental charge, or to discharge or release any Lien, and any,
expenses, including reasonable attorneys' fees actually incurred, court
costs and other charges relating thereto, shall become a part of the
Obligations secured by the Collateral, payable on demand.
Section 6.3. Insurance.
---------
(a) Each Borrower shall (i) keep all of its properties
adequately insured at all times with responsible insurance carriers
against loss or damage by fire and other hazards and (ii) maintain
adequate insurance at all times with responsible carriers against
liability on account of damage to persons and property and under all
applicable workers' compensation laws. For the purposes of this Section
6.3(a), insurance shall be deemed adequate if the same is not less
extensive in coverage and amount than is customarily maintained by
other persons engaged in the same or similar business similarly
situated and if it is in at least such amounts as are required to be
maintained by the 1940 Act.
(b) Each Borrower, from time to time upon request of the Agent
or any Bank, promptly shall furnish or cause to be furnished to the
Agent and any such requesting Bank evidence, in form and substance
satisfactory to the Agent and such Bank (if requested by a Bank), of
the maintenance of all insurance required by this Section 6.3 to be
maintained, including, but not limited to, such originals or copies as
the Agent or such Bank may request of
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policies, certificates of insurance, riders and endorsements relating
to such insurance and proof of premium payments.
Section 6.4. Books and Records.
-----------------
Each Borrower shall maintain, at all times, true and complete books,
records and accounts in which true and correct entries shall be made of its
transactions in accordance with GAAP consistently applied and in compliance with
the regulations of any governmental regulatory body having jurisdiction over it.
Section 6.5. Properties in Good Condition.
----------------------------
Each Borrower shall keep its properties in good repair, working order
and condition (subject to such wear and tear as may occur in the ordinary course
of business) and, from time to time, make all needful and proper repairs,
renewals, replacements, additions and improvements thereto, so that the business
carried on may be properly and advantageously conducted at all times in
accordance with prudent business management.
Section 6.6. Inspection by the Banks.
-----------------------
Each Borrower shall allow any representative of the Agent or any of the
Banks to visit and inspect any of the properties of such Borrower to examine and
audit the books of account and other records and files of such Borrower, to make
copies thereof and to discuss the affairs, business, finances and accounts of
such Borrower with its officers and employees, all at such reasonable times and
as often as the Agent or any of the Banks may request; provided, that, (a) at
least once each calendar year such an inspection shall be conducted by the Agent
at the request of the Required Banks (or without such a request if the Agent
shall deem it necessary or advisable), and (b) the first such inspection shall
occur no later than December 31, 2000. Reasonable expenses incurred in
connection with one such audit and inspection requested by the Required Banks or
the Agent each year shall be paid by the Borrowers, with any additional audits
to be at the expense of the Bank performing the same, or at the expense of all
Banks if conducted by the Agent, except that, if an Event of Default shall have
occurred and be continuing, all such additional audits shall be at the expense
of the Borrowers.
Section 6.7. Pay Indebtedness to Agent and Perform Other Covenants.
-----------------------------------------------------
Each Borrower shall (a) make full and timely payments to the Agent, for
the ratable benefit of the Banks, and the Swing Line Lender, as the case may be,
of the principal of and interest on the Notes of such Borrower and all other
amounts owed by such Borrower under or pursuant to the Loan Documents, whether
now existing or hereafter arising and (b) duly comply with all the terms and
covenants contained in each of the instruments and documents furnished in
connection with or pursuant to this Agreement or the other Loan Documents, all
at the times and places and in the manner set forth therein.
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Section 6.8. Compliance With Laws, Etc.
-------------------------
Each Borrower shall comply with all applicable laws and regulations,
including but not limited to, those of the SBA and Federal, state and local laws
and regulations relating to consumer lending, disclosure, collection and
licensing where the failure so to comply would have a Material Adverse Effect
(other than those the validity of which are being diligently contested in good
faith by appropriate proceedings and adequate reserves in conformity with GAAP
have been provided therefor on the books of the applicable Borrower). The
Borrowers will at all times comply with ss.61 of the 1940 Act and will at all
times comply in all material respects with the investment objectives,
limitations and policies set forth (or incorporated by reference) in the
Registration Statement.
Section 6.9. Notice of Certain Events.
------------------------
Each Borrower shall promptly, but in no event later than three Business
Days after obtaining knowledge thereof, give written notice to the Agent and the
Banks of (a) any material litigation, including arbitrations, and of any
investigations or proceedings before any Governmental Authority brought against
a Borrower, whether or not the claim is considered by a Borrower to be covered
by insurance, which might, if determined adversely, have a Material Adverse
Effect, or where the amount involved, when added together with all other amounts
involved in any other litigation, investigation, arbitration or proceeding
affecting such Borrower, would exceed $500,000, and each Borrower shall, if
requested by the Agent or the Required Banks, set up such reserves as it deems
necessary (provided, that, such reserves shall be in such amounts such that
neither the Agent nor the Required Banks has informed either such Borrower that
such reserves are not satisfactory to protect the Agent or the Banks against
loss); (b) any written notice of a violation received by a Borrower from any
Governmental Authority which, if such violation were established, might have a
Material Adverse Effect; (c) any material attachment, judgment, lien, levy or
order which may be placed on or assessed against or threatened against a
Borrower or the Collateral; (d) any Default or Event of Default or any event
that, after notice or lapse of time or both, would become a Default or Event of
Default; (e) any other matter that has or causes or may have or cause a Material
Adverse Effect with respect to a Borrower; and (f) any change in the corporate
name or corporate form of a Borrower, or any change in the information disclosed
on Schedule I annexed hereto.
Section 6.10. Environmental Laws, Etc.
-----------------------
(a) Each Borrower shall keep all Property owned or operated by
it free of Hazardous Materials and comply with the requirements of all
applicable Federal, state and local environmental, health, safety and
sanitation laws, ordinances, regulatory and administrative authorities
with respect thereto. Except to the extent it does so on the date
hereof and in strict compliance with all applicable laws, neither
Borrower shall use any Property to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, process
or in any manner deal with,
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Hazardous Materials, and neither Borrower shall cause or permit, as a
result of any intentional or unintentional act or omission on the part
of a Borrower or any occupant, tenant or subtenant, the installation or
placement of Hazardous Materials onto any Property or onto any other
property or suffer the presence of Hazardous Materials on any Property.
Each Borrower shall undertake promptly and pursue diligently to
completion appropriate remedial clean-up action in the event of any
release of Hazardous Materials on, upon or into any real property owned
or operated by a Borrower or any real property adjacent thereto.
(b) Each Borrower agrees to provide the Banks with copies of
any notifications of releases of Hazardous Materials that are given by
or on behalf of a Borrower to any Governmental Authority with respect
to any real property owned or operated by a Borrower. Such copies shall
be sent to the Banks concurrently with the mailing or delivery of such
copies to the Governmental Authority.
Section 6.11. Further Assurances.
------------------
Upon the request of the Agent or the Required Banks, each Borrower at
its cost and expense shall duly execute and deliver, or cause to be duly
executed and delivered, to the Agent and the Banks such further instruments and
do and cause to be done such further acts as may be reasonably necessary or
proper in the opinion of the Agent or the Required Banks to carry out more
effectually the provisions and purposes of this Agreement and the other Loan
Documents.
Section 6.12. ERISA.
-----
Each Borrower shall deliver to the Agent and the Banks, promptly after
(i) the occurrence thereof, notice that an ERISA Termination Event or a
Prohibited Transaction with respect to any Plan has occurred, which notice shall
specify the nature thereof and such Borrower's proposed response thereto, and
(ii) actual knowledge thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any Plan.
Section 6.13. Corporate or Limited Liability Company Existence.
------------------------------------------------
Each Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate or limited
liability company (as applicable) existence (except as otherwise may be
permitted by Section 8.6 hereof) and all rights, licenses, permits and
franchises, the termination of which would have a Material Adverse Effect;
comply with all laws, regulations, ordinances, rules and orders applicable to
it, noncompliance with which would have a Material Adverse Effect; conduct and
operate its business in substantially the manner in which it is presently
conducted and operated without material alteration or change in the nature of
such business; at all times maintain and preserve all property used or useful in
the conduct of its business and keep the same in appropriate repair and
condition, and from time to time make, or cause to
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be made, all appropriate repairs, renewals and replacements thereto, so that the
business carried on in connection therewith may be properly conducted at all
times. MFC will maintain in full force and effect its status as a registered
investment company. MFC will not at any time withdraw its election to be a
business development corporation under the 1940 Act unless it first shall have
delivered to the Agent and the Banks a legal opinion from counsel to MFC
satisfactory to MFC and in form and substance satisfactory to the Agent that
states that such withdrawal shall not have an adverse effect on the validity or
enforceability of the Loan Documents or the legality of the joint and several
nature of the Borrowers' liability under the Loan Documents, or otherwise
adversely effect the Borrowers' compliance with the 1940 Act.
Section 6.14. Maintenance of Security Interest.
--------------------------------
Each Borrower shall maintain perfected, first priority security
interests in the Collateral in favor of the Agent for the benefit of the Banks
and the Swing Line Lender in accordance with the terms of the Security
Agreement, subject only to the Liens permitted pursuant to Section 8.1 hereof
and taking into account the time required for such Borrower to deliver
Collateral to the Agent (which Collateral shall be delivered to the Agent
promptly upon receipt thereof by such Borrower); provided, that, the Borrowers
shall have no responsibility for a breach of this covenant if caused by the
gross negligence of the Agent.
Section 6.15. Maximum Percentage of Commercial Loans.
--------------------------------------
For so long as amounts are owed by either Borrower to the Banks, the
Swing Line Lender or the Agent under the Loan Documents or any of the Revolving
Credit Commitments remain in effect, not more than 80% of the aggregate
principal amount of all Loans made by the Borrowers and then outstanding shall
be Commercial Loans and not fewer than 20% of the aggregate principal amount of
all Loans made by the Borrowers and then outstanding shall be Medallion Loans.
Section 6.16. Reserved.
--------
Section 6.17. Borrowers' Manuals.
------------------
Each Borrower shall notify the Agent and each Bank of any and all
material changes to its then operative credit policy manual from those most
recently delivered.
Section 6.18. Principal Office of Clients.
---------------------------
Within five Business Days of any request therefor from the Agent, each
Borrower shall update Schedule II to this Agreement to provide, to the best of
such Borrower's knowledge, each location at which each Client has its principal
or chief executive office.
6.19. Post-Closing Matters.
--------------------
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Each of the Borrowers agrees to:
(a) promptly execute upon the request of the Agent, UCC-1 and/or
UCC-3 filings in form and substance satisfactory to the Agent, as well as any
payoff letters or other evidence of termination requested by the Agent to
release any non-Permitted Liens;
(b) no later than October 27, 2000, (i) execute a stock pledge
agreement or an amendment to the Security Agreement, in form and substance
satisfactory to the Agent, pledging or confirming the pledge of all of the
Capital Stock of its direct and indirect Subsidiaries to the Agent for the
benefit of itself and the Banks, subject to limitations imposed by applicable
law with respect to any particular Subsidiary, and to the receipt of consents
(including lender consents) as may be required under other loan documents for
any particular Subsidiary, provided that the Borrowers shall have used their
best efforts to obtain such consents, and (ii) in connection therewith, deliver
to the Agent (A) all stock certificates or other certificates evidencing such
Borrower's equity interests together with undated stock powers or other
instruments of endorsement duly executed in blank, (B) resolutions authorizing
such pledge(s), and (C) opinions of counsel, in each case as the Agent deems
appropriate and in form and substance satisfactory to the Agent;
(c) deliver to the Agent no later than October 6, 2000 the results of
such UCC filing searches in Massachusetts and Illinois as the Agent shall
request;
(d) deliver to the Agent no later than October 6, 2000, certificates
from the Secretary of State of each of Massachusetts and Illinois as to MFC's
qualification to do business in such jurisdiction;
(e) deliver to the Agent no later than October 6, 2000, a certificate
of the insurer of each Borrower to the effect that such Borrower has in effect
all insurance coverage required pursuant to Section 6.3 hereof;
(f) deliver to the Agent and each Bank no later than October 6, 2000,
a copy of its then operative credit policy manual; and
(g) no later than fifteen Business Days after the direct or indirect
formation or acquisition of a new Subsidiary by either Borrower, (i) execute a
stock pledge agreement or an amendment to the Security Agreement, in form and
substance satisfactory to the Agent, pledging or confirming the pledge of all of
the Capital Stock of such Subsidiary to the Agent for the benefit of itself and
the Banks, subject to limitations imposed by applicable law with respect to any
particular Subsidiary, and to the receipt of consents (including lender
consents) as may be required under other loan documents for any particular
Subsidiary, provided that the Borrowers shall have used their best efforts to
obtain such consents, and (ii) in connection therewith, deliver to the Agent (A)
all stock certificates or other certificates evidencing such Borrower's equity
interests together with undated stock powers or other instruments of endorsement
duly
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executed in blank, (B) resolutions authorizing such pledge(s), and (C) opinions
of counsel, in each case as the Agent deems appropriate and in form and
substance satisfactory to the Agent.
ARTICLE 7. FINANCIAL COVENANTS
Each Borrower covenants and agrees that, until the Notes, together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under this Agreement and the other Loan Documents, are
paid in full and the Aggregate Revolving Credit Commitment, the Swing Line
Commitment and all Term Loan Commitments are terminated, neither Borrower shall,
without the prior written consent of the Agent and the Required Banks:
Section 7.1. Maximum Consolidated Leverage Ratio.
-----------------------------------
Suffer or permit as of the end of any fiscal quarter the ratio of (A)
Consolidated Total Liabilities of MFC to (B) Consolidated Tangible Net Worth of
MFC to be more than 4:1 at any time.
Section 7.2. Maximum Combined Leverage Ratio.
-------------------------------
Suffer or permit the ratio of (A) the sum of Unconsolidated Total
Liabilities of MFC plus Unconsolidated Total Liabilities of MBC to (B) Combined
MFC/MBC Tangible Net Worth to be more than 3:1 at any time.
Section 7.3. Borrowing Base.
--------------
Suffer or permit at any time (A) the aggregate unpaid balance of all
Swing Line Loans plus the aggregate unpaid balance of all Revolving Credit Loans
plus the aggregate unpaid balance of all Term Loans to exceed the sum of the MFC
Borrowing Base and the MBC Borrowing Base, or (B) the aggregate unpaid balance
of all Swing Line Loans plus the aggregate unpaid balance of all Revolving
Credit Loans plus the aggregate unpaid balance of all Term Loans that have been
used directly or indirectly by MBC to exceed the MBC Borrowing Base, (C) the
aggregate unpaid balance of all Swing Line Loans plus the aggregate unpaid
balance of all Revolving Credit Loans plus the aggregate unpaid balance of all
Term Loans that have been used directly or indirectly by MFC to exceed the MFC
Borrowing Base, or (D) the aggregate unpaid balance of all Senior Debt to exceed
the MFC Borrowing Base plus the MBC Borrowing Base.
Section 7.4. Minimum EBIT to Interest Expense Ratio.
--------------------------------------
(a) Suffer or permit the ratio, at the end of each fiscal
quarter of MFC, of (a) the sum of Consolidated EBIT of MFC for such
fiscal quarter plus Consolidated Interest Expense of MFC for such
fiscal quarter to (b) Consolidated Interest Expense of MFC for such
fiscal quarter to be less than 1.50:1.
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(b) Suffer or permit the ratio, at the end of each fiscal
quarter of MFC, of (a) the sum of Unconsolidated EBIT of MFC for such
fiscal quarter plus Unconsolidated Interest Expense of MFC for such
fiscal quarter plus Unconsolidated EBIT of MBC for such fiscal quarter
plus Unconsolidated Interest Expense of MBC for such fiscal quarter to
(b) the sum of Unconsolidated Interest Expense of MFC for such fiscal
quarter plus Unconsolidated Interest Expense of MBC for such fiscal
quarter to be less than 1.20:1.
Section 7.5. Minimum Asset Quality.
---------------------
Suffer or permit as of the end of any fiscal quarter, on a rolling
twelve-month period, its aggregate Net Realized Loss to be greater than (i) with
respect to Medallion Loans, 3% of the average aggregate principal balances of
all outstanding Medallion Loans during any applicable period of determination,
or (ii) with respect to Commercial Loans, 5% of the average aggregate principal
balances of all outstanding Commercial Loans during any applicable period of
determination.
ARTICLE 8. NEGATIVE COVENANTS
Each Borrower covenants and agrees that until the Notes together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under this Agreement are paid in full and the
Aggregate Revolving Credit Commitment, the Swing Line Commitment and all Term
Loan Commitments are terminated, neither Borrower shall, without the prior
written consent of the Agent and the Required Banks:
Section 8.1. Liens.
-----
Create, assume or suffer to exist any Lien upon any of its property or
assets, whether now owned or hereafter acquired; provided, however, that the
foregoing restriction and limitation shall not apply to the following Liens (the
"Permitted Liens"):
(a) Liens created under the Security Agreement and other Liens
in favor of the Agent or the Banks;
(b) Liens existing on property at the time acquired by a
Borrower after the date of the financial statements referred to in
Section 4.18 hereof, provided that such Lien was not incurred, directly
or indirectly, in anticipation or contemplation of such acquisition;
(c) Liens constituting renewals, extensions or refundings of
Liens permitted by clause (b) above, provided that the principal amount
of the Indebtedness secured by any such new Lien does not exceed the
principal amount of the Indebtedness being renewed, extended or
refunded at the time
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of renewal, extension or refunding thereof and that such new Lien
attaches only to the same property theretofore subject to such earlier
Lien;
(d) Liens securing taxes, assessments or governmental charges
or levies, or the claims or demands of materialmen, mechanics,
carriers, workmen, repairmen, warehousemen, landlords and other like
Persons, not yet delinquent or which are being actively contested in
good faith by appropriate proceedings and in respect of which adequate
reserves in conformity with GAAP have been provided on the books of the
applicable Borrower;
(e) other Liens incidental to the conduct of its business or
the ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit, and which do not in the aggregate materially detract from the
value of its property or assets, or materially impair the use thereof
in the operation of its business;
(f) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided that execution or other
enforcement of such Liens is effectively stayed, the claims secured
thereby are being actively contested in good faith by appropriate
proceedings and adequate reserves in conformity with GAAP have been
provided on the books of the applicable Borrower; and
(g) Liens arising in connection with, and securing the cost
of, the acquisition of Equipment, provided, that such Lien attaches to
such Equipment concurrently with or within 90 days after the
acquisition thereof (by purchase, construction or otherwise), and
provided, further, that the aggregate amount of Indebtedness securing
all such Liens shall not at any time exceed $1,000,000.
Section 8.2. Indebtedness.
------------
Create, incur, assume or suffer to exist, contingently or otherwise,
any Indebtedness, except:
(a) Indebtedness of the Borrowers to the Agent, the Swing Line
Lender and the Banks arising hereunder or under any of the other Loan
Documents;
(b) Subordinated Debt of the Borrowers in an aggregate amount
not to exceed fifty percent (50%) of the Aggregate Revolving Credit
Commitment;
(c) Permitted Debt;
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(d) Indebtedness secured by Liens described in Section 8.1(b),
(c) or (g) hereof;
(e) Unsecured current liabilities incurred in the ordinary
course of business and paid within 90 days after the due date thereof
(unless diligently contested in good faith by appropriate proceedings
and, if requested by the Agent, reserved against in conformity with
GAAP) other than liabilities that are for money borrowed or are
evidenced by bonds, debentures, notes or other similar instruments;
(f) Indebtedness in respect of Derivative Contracts which are
incurred in the ordinary course of business in order to protect against
interest rate or currency fluctuations, and which are non-speculative
in nature, and with notional amounts not exceeding $50,000,000 in the
aggregate or such other amount as may be approved by the Agent; and
(g) Indebtedness of any Subsidiary or Affiliate reflecting
Investments permitted under Section 8.3(e) hereof.
Section 8.3. Limitation on Loans and Investments.
-----------------------------------
(a) Make, or obligate itself to make, any loan or advance or
Investment that is not a Domestic Loan or a Domestic Investment.
(b) Make, or obligate itself to make, any loan or advance or
Investment that is not in compliance with the Registration Statement
with respect to MFC and any rules and regulations promulgated by any
Governmental Authority to which it is subject, including, without
limitation, the SBI Act and the SBA Regulations promulgated thereunder
and the 1940 Act.
(c) Make, or obligate itself to make, any Loan if, after
giving effect to such Loan, the aggregate outstanding principal amount
of all Loans made to any one Person together with its Affiliates would
exceed 20% of Unconsolidated Tangible Net Worth of such Borrower.
(d) Make, or commit to make, or acquire or commit to acquire,
any Commercial Loan to or from any Person if, as a result of such Loan,
the applicable Borrower's Commercial Loan concentration in any given
industry (determined in accordance with the Standard Industrial
Classification promulgated by the Office of Management and Budget)
would exceed in principal amount 35% of such Borrower's total Loans
outstanding.
(e) Make any Investment in any Subsidiary or Affiliate, or any
Person that after taking into account such Investment would become a
Subsidiary or Affiliate, other than (i) Investments of MFC in MBC or of
MBC in MFC, (ii) such Investments existing on the Second Restatement
Effective Date listed on Schedule III hereto, provided that to the
extent that the
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aggregate amount of Investments listed on Schedule III exceeds
$100,000,000 (the amount of such excess amount is hereinafter referred
to as the "Excess Amount"), the Borrowers may repay Investments listed
on Schedule III and subsequently reinvest the proceeds of Investments
listed on Schedule III in Subsidiaries from time to time in an
aggregate amount not to exceed the Excess Amount, (iii) Investments
made after the Second Restatement Effective Date which do not in the
aggregate at any time for both Borrowers exceed $15,000,000, (iv)
Investments in Subsidiaries or Affiliates made after the Second
Restatement Effective Date where the consideration for such Investment
is (A) the stock of MFC, or (B) cash proceeds of additional equity
issued by MFC provided that the total consideration (whether cash,
stock or otherwise) paid by the Borrowers with respect to each such
Investment permitted by this subclause (B) shall not exceed
$25,000,000, provided further that the total consideration (whether
cash, stock or otherwise) paid by the Borrowers with respect to all
Investments permitted by this clause (iv) when aggregated with the
total consideration paid by the Borrowers with respect to all other
Investments permitted by this clause (iv), shall not exceed
$50,000,000.
(f) Make, or commit to make, or acquire or commit to acquire,
any Residential Construction Real Estate Loan to or from any Person if,
as a result of such Loan, the aggregate amount of all Residential
Construction Real Estate Loans made by the Borrowers would exceed in
principal amount 7% of the Borrowers' total Loans outstanding.
(g) Sell, discount or otherwise dispose of Loans or any
Collateral; sell, discount or otherwise dispose of other Receivables or
obligations owing to a Borrower or any of its Subsidiaries, with or
without recourse, otherwise than (i) in connection with the grant of
any participation in accordance with and to the extent permitted by
Section 2.14 hereof, (ii) for collection in the ordinary course of
business or (iii) to the Agent for the benefit of the Banks.
(h) Make, or commit to make, or acquire or commit to acquire,
any Loan to or from any Person unless the applicable Borrower
reasonably believes that such Loan constitutes, or upon funding or
acquisition will constitute, an Eligible Loan; provided, that, it shall
not be a breach of this covenant if the Loan that would otherwise cause
the breach is not in a material amount and in any event is not included
in the MBC Borrowing Base or the MFC Borrowing Base.
(i) Fail to file upon making or acquiring a Loan, all required
Borrower Financing Statements and Mortgage Assignments, deliver to the
Agent all instruments and chattel paper with respect to such Loans, or
take such other actions as may be required in order to assure that the
Agent for the benefit of the Banks receives a first priority perfected
security interest or mortgage interest therein; provided, that, it
shall not be a breach of this covenant if the Loan that would otherwise
cause the breach is not in a
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material amount and in any event is not included in the MBC Borrowing
Base or the MFC Borrowing Base.
Section 8.4. [Reserved].
--------
Section 8.5. Restricted Payments.
-------------------
Make, or obligate itself to make, any Restricted Payment.
Section 8.6. Merger, Consolidation, Sale or Transfers of Assets.
--------------------------------------------------
(a) Sell, discount or otherwise dispose of Loans or any
Collateral if a Default or Event of Default has occurred and is
continuing or if the effect of such sale, discount or disposal would be
to put the applicable Borrower in violation of any of the covenants and
agreements contained in this Agreement;
(b) Sell or otherwise dispose of an amount of Loans which, in
aggregate principal amount, exceeds 10% of the aggregate principal
amount of all Loans of the applicable Borrower then outstanding unless,
immediately upon such sale or disposition, the Borrowers make, in
accordance with the provisions of Section 2.5(a) hereof, a voluntary
prepayment on all then outstanding Revolving Credit Loans and Term
Loans owing by them equal to the aggregate principal amount, plus
accrued interest, of the Loans so sold or disposed of;
(c) Enter into any transaction of merger or consolidation, or
transfer, sell, assign, lease, or otherwise dispose of all or
substantially all of its properties or assets to any Person, except
that either Borrower may merge or consolidate with any other Person,
provided that (A) a Borrower shall be the surviving and continuing
corporation, (B) no Default or Event of Default shall have occurred and
be continuing and (C) after giving effect to such consolidation or
merger, each Borrower would be Solvent and, except for good will
adjustments, would have Consolidated Tangible Net Worth at least equal
to the Consolidated Tangible Net Worth such Borrower had immediately
before such consolidation or merger;
(d) Sell, discount or otherwise dispose of, to any Subsidiary
or Affiliate of either Borrower, any Medallion Loan originated by such
Borrower, except that MFC may make such transfers to MBC, provided that
no such transfer shall cause the principal amount of the Revolving
Credit Loans, Swing Line Loans and Term Loans outstanding to MFC to
exceed the MFC Borrowing Base or of Revolving Credit Loans, Swing Line
Loans and Term Loans to MBC to exceed the MBC Borrowing Base; or
(e) Sell, transfer or otherwise dispose of any assets
(including the Capital Stock of Subsidiaries, but excluding Loans)
having a book value (when aggregated with the book value of all other
sales, transfers and
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dispositions under this subsection (e)) in excess of ten percent (10%)
of the book value of the total assets (as of the Second Restatement
Effective Date) owned by the Borrower making such sale, transfer or
other disposal.
Section 8.7. Transfer of Proceeds.
--------------------
Except in accordance with the provisions of Section 8.3(e) hereof,
transfer, or commit itself to transfer, any portion of the proceeds of the
Revolving Credit Loans, Swing Line Loans and Term Loans to be made to the
Borrowers from time to time hereunder to any Affiliate.
Section 8.8. Compliance with ERISA.
---------------------
Take any of the following actions or permit any of the following events
to exist if, as a result thereof, a Borrower would, or would be likely to, incur
a liability in excess of $50,000: terminate, or permit or suffer any of its
ERISA Affiliates to terminate (other than a standard termination, as defined in
Section 4041 (b) of Title IV of ERISA, of a Single Employer Plan), any Plans
maintained by a Borrower or any of its ERISA Affiliates so as to incur any
liability to the PBGC; permit or suffer to exist any Prohibited Transaction
involving any of such Plans or any trust created thereunder which would subject
a Borrower to a tax, liability or penalty on Prohibited Transactions imposed
under Code Section 4975 or ERISA; fail to pay, or permit or suffer any of its
ERISA Affiliates to fail to pay, to any such Plan (including any Multiemployer
Plan) any contribution which it or such ERISA Affiliate is obligated to pay
under the terms of such Plan; permit any Accumulated Funding Deficiency, whether
or not waived, with respect to any Plan; or permit or suffer to exist any
occurrence of a Reportable Event, or any other event or condition, which
presents a material risk of termination by the PBGC of any such Plan.
Section 8.9. Change in Business.
------------------
Materially change or alter the nature of its business as conducted as
of the Original Effective Date.
Section 8.10. Amendments of Agreements.
------------------------
Consent to any amendment, supplement, or other modification of any of
the terms (including acceleration, covenant, default, subordination, sinking
fund, repayment, interest rate or redemption provisions) contained in, or
applicable to, or any security for, any Permitted Debt or other instrument
evidencing or applicable to Permitted Debt if such amendment, supplement, or
other modification materially adversely affects the interests of the Agent, the
Swing Line Lender or any Bank.
Section 8.11. Transactions with Affiliates.
----------------------------
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(a) Enter into, or cause, suffer, or permit to exist, any material
transactions, including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service, with any Affiliate on
terms that are less favorable to such Borrower than those that would be
obtainable at the time from any Person who is not an Affiliate; or (b) become an
Affiliated Person of any Bank or any Affiliated Person of any Bank known to the
Borrowers and the Borrowers will use their best efforts to ensure that none of
their Affiliated Persons is or becomes an Affiliated Person of any Bank or an
Affiliated Person of any Bank known to the Borrowers.
Section 8.12. Negative Pledges.
----------------
Enter into any agreement (excluding this Agreement and the other Loan
Documents) prohibiting the creation or assumption of any Lien upon its
properties, revenues, or assets, whether now owned or hereafter acquired, except
any agreement providing for the creation or assumption of any Lien permitted
under Section 8.1(b), (c) or (g) hereof.
Section 8.13. Inconsistent Agreements.
-----------------------
Enter into any agreement containing any provisions which would be
violated or breached by any borrowing hereunder or by the performance by either
Borrower of its obligations under any of the Loan Documents where the potential
consequences of such violation or breach would have a Material Adverse Effect.
Section 8.14. Capital Expenditures.
--------------------
Expend or commit to expend for itself more than an aggregate of
$1,000,000 in any fiscal year for capital expenditures, for the acquisition of
Equipment or for leasehold improvements.
Section 8.15. [Reserved].
--------
Section 8.16. Portfolio Purchases.
-------------------
Make, or obligate itself to make, any Portfolio Purchase unless:
(i) no Default or Event of Default exists or would
exist after giving effect to the applicable Portfolio Purchase;
(ii) the applicable Borrower has provided the Agent and
each of the Banks with a pro forma certificate of the chief
financial officer of such Borrower evidencing each Borrower's
computation of compliance with each of the financial ratios,
tests or covenants specified in Article VII and Sections 8.2, 8.3
and 8.14 hereof after giving effect to the applicable Portfolio
Purchase;
(iii) the applicable Portfolio Purchase has the approval
of the seller;
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(iv) (1) the seller of the loans constituting such
Portfolio Purchase is in the business of making loans secured by
New York City taxicab medallions and the loans to be acquired in
connection therewith are secured by New York City taxicab
medallions, or (2) the Portfolio Purchase is being made from a
Person in any other line of business; provided, that, to the
extent the Portfolio Purchase does not entirely involve loans
secured by New York City taxicab medallions, in addition to the
foregoing, each such Portfolio Purchase shall be subject to the
following additional limitations:
(A) if the consideration for such Portfolio Purchase
shall be Capital Stock of MFC, the fair market value of such
Capital Stock, less the aggregate outstanding principal balances
of all loans included in such Portfolio Purchase that are secured
by New York City taxicab medallions, if any, shall not exceed
$50,000,000 with respect to any one such Portfolio Purchase or
$100,000,000 in any fiscal year with respect to all such
Portfolio Purchases in the aggregate in such fiscal year; and
(B) if the consideration for such Portfolio Purchase
shall be other than Capital Stock of MFC, the consideration
therefor, less the aggregate outstanding principal balances of
all loans included in such Portfolio Purchase that are secured by
New York City taxicab medallions, if any, shall not exceed
$25,000,000 with respect to any one such Portfolio Purchase or
$50,000,000 in any fiscal year with respect to all such Portfolio
Purchases in the aggregate in such fiscal year.
ARTICLE 9. DEFAULTS AND REMEDIES
Section 9.1. Events of Default.
-----------------
If any one or more of the following events (herein called "Events of
Default") shall occur for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body), that is to say:
(a) if default shall be made by either Borrower in the due and
punctual payment of the principal of or interest on any of its
Revolving Credit Loans, Swing Line Loans or Term Loans or any other
amounts due and owing by such Borrower to the Agent, the Swing Line
Lender or the Banks, when and as the same shall become due and payable
and, with respect to defaults in payment other than payment of
principal, such default shall continue for more than five days;
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(b) if default shall be made in the performance or observance
of, or shall occur under, any covenant, agreement or provision
contained in Article VII or Sections 6.9(d), 6.13, 6.14, 6.19, 8.1,
8.2, 8.5, 8.6, 8.9, 8.10 or 8.12 hereof;
(c) if default shall be made by either Borrower in the
performance or observance of, or shall occur under, any other covenant,
agreement or provision of this Agreement (other than Section 6.7
hereof) and such default shall not have been remedied within 30 days
after such failure shall first have become known to any officer of
either Borrower;
(d) if default shall be made by either Borrower in the
performance or observance of, or shall occur under, any covenant,
agreement or provision of any other Loan Document or in any other
agreement, instrument or document delivered to the Agent, the Swing
Line Lender or the Banks and such default shall not have been remedied
within such grace or cure period, if any, as may be provided therefor;
(e) if a Default or an Event of Default shall occur and
continue under and as defined in that certain Amended and Restated Loan
Agreement dated as of December 24, 1997 by and among MFC's Subsidiary,
Medallion Funding, the Lenders party thereto, Fleet National Bank, as
Swing Line Lender, Administrative Agent, Arranger and Collateral Agent
and the Bank of New York as Documentation Agent, as the same has been
or may hereafter be amended, modified, restated or supplemented from
time to time;
(f) if either Borrower shall (i) default in the payment of any
principal, interest or premium with respect to any Indebtedness for
borrowed money or any obligation which is the substantive equivalent
thereof in excess of $250,000, other than Indebtedness under the
Revolving Credit Loans, the Swing Line Loans, or the Term Loans, and
such default shall continue for more than the period of grace, if any,
therein specified or (ii) default in the performance or observance of
any other term, condition or agreement contained in any such obligation
or in any agreement relating thereto if the effect thereof is to cause,
or permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due prior to its stated maturity;
(g) if any representation or warranty or any other statement
of fact herein or in the other Loan Documents, or in connection with
the transactions contemplated hereby or thereby, or in any writing,
certificate, report or statement at any time furnished by either
Borrower to the Agent, the Swing Line Lender or any Bank pursuant to or
in connection with this Agreement or the other Loan Documents shall
prove to have been false or misleading in any material respect when
made;
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(h) if either Borrower shall file a petition or seek relief
under or take advantage of any insolvency law; make an assignment for
the benefit of its creditors; commence a proceeding for the appointment
of a receiver, trustee, liquidator, custodian or conservator of itself
or of the whole or substantially all of its property; file a petition
or an answer to a petition under any chapter of the United States
Bankruptcy Code, as amended (11 U.S.C. ss.101 et seq.), or file a
petition or seek relief under or take advantage of any other similar
law or statute of the United States of America, any state thereof or
any foreign country;
(i) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing or authorizing a receiver, trustee,
liquidator, custodian or conservator of either Borrower or of the whole
or substantially all of its property, or enter an order for relief
against either Borrower in any case commenced under any chapter of the
United States Bankruptcy Code, as amended, or grant relief under any
other similar law or statute of the United States of America, any state
thereof or any foreign country; or if, under the provisions of any law
for the relief or aid of debtors, a court of competent jurisdiction or
a receiver, trustee, liquidator, custodian or conservator shall assume
custody or control or take possession of either Borrower or of the
whole or substantially all of its property; or if there is commenced
against either Borrower any proceeding for any of the foregoing relief
or if a petition is filed against either Borrower under any chapter of
the United States Bankruptcy Code, as amended, or under any other
similar law or statute of the United States of America or any state
thereof or any foreign country and such proceeding or petition remains
undismissed for a period of 60 days; or if either Borrower by any act
indicates its consent to, approval of or acquiescence in any such
proceeding or petition;
(j) if any judgment or judgments against either Borrower or
any attachment or execution against any of its property for any amount
or amounts in excess of $250,000 in the aggregate remains unpaid,
unstayed, undismissed or unbonded for a period of more than 30 days;
(k) (i) any Person shall engage in any Prohibited Transaction
involving any Plan, (ii) any Accumulated Funding Deficiency, whether or
not waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in
the reasonable opinion of the Required Banks likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA
(other than a standard termination as defined in Section 4041(b)
thereof), (v) either Borrower or any of its ERISA Affiliates shall, or
is, in the reasonable opinion of the Agent or the Required Banks,
likely to, incur any liability in connection with a withdrawal from, or
the insolvency or reorganization of, a Multiemployer Plan or (vi) any
other event
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or condition shall occur or exist with respect to a Plan; and in case
in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could subject either
Borrower to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial
or other condition of either Borrower;
(l) if there shall occur any change in the Collateral or in
the business of either Borrower, or the operation, conduct or prospects
thereof, that individually or in the aggregate, could have or result in
a Material Adverse Effect and the Agent has been directed to declare
such Event of Default by the Super-majority Banks as set forth below in
this Section 9.1;
(m) a Change of Control shall have occurred; or
(n) (i) if the Agent and the Banks have not received by
December 15, 2000 a written progress report by Arthur Andersen LLP with
respect to issues raised in the March 29, 2000 management letter, or
(ii) if such written progress report is unsatisfactory to the
Super-majority Banks in their sole discretion;
then, (A) in the case of an Event of Default described in clause
(h) or (i) above, the Aggregate Revolving Credit Commitment, the Swing
Line Commitment, and each Term Loan Commitment shall automatically
terminate and (i) the unpaid balance of the Revolving Credit Notes, the
Swing Line Notes, the Term Notes and all interest accrued thereon, and
(ii) any accrued and unpaid fees and expenses due and payable hereunder
or under any other Loan Document shall automatically (without any
action on the part of the Agent or the Banks and without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived) forthwith become due and payable, and, (B) in the
case of an Event of Default described in clause (l) above, at any time
thereafter, if such Event of Default shall then be continuing the
following action may be taken: the Agent, upon the direction of the
Super-majority Banks, shall, declare (i) the Aggregate Revolving Credit
Commitment, the Swing Line Commitment and all Term Loan Commitments to
be terminated, whereupon the obligation of the Agent, the Banks and the
Swing Line Lender to make further Revolving Credit Loans or Term Loans
or Swing Line Loans, as the case may be, hereunder shall terminate
immediately and (ii) the Revolving Credit Notes, Swing Line Notes and
Term Notes to be due and payable, whereupon the maturity of the then
unpaid balance of the Revolving Credit Notes, Swing Line Notes and Term
Notes shall be accelerated and the same, and all interest accrued
thereon and any accrued and unpaid fees and expenses due and payable
hereunder, shall forthwith become due and payable without presentment.
demand, protest or notice of any kind, all of which are hereby
expressly waived, anything contained herein or in Revolving Credit
Notes, Swing Line Notes or Term Notes to the contrary notwithstanding,
and, (C) in the case of any other Event of Default, then and in any
such event, and at
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any time thereafter, if such or any other Event of Default shall then
be continuing the following action may be taken: the Agent may (but
shall not be obligated to), and upon the direction of the Required
Banks shall, declare (i) the Aggregate Revolving Credit Commitment, the
Swing Line Commitment and all Term Loan Commitments to be terminated,
whereupon the obligation of the Agent, the Banks and the Swing Line
Lender to make further Revolving Credit Loans or Term Loans or Swing
Line Loans, as the case may be, hereunder shall terminate immediately
and (ii) the Revolving Credit Notes, Swing Line Notes and Term Notes to
be due and payable, whereupon the maturity of the then unpaid balance
of the Revolving Credit Notes, Swing Line Notes and Term Notes shall be
accelerated and the same, and all interest accrued thereon and any
accrued and unpaid fees and expenses due and payable hereunder, shall
forthwith become due and payable without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived,
anything contained herein or in Revolving Credit Notes, Swing Line
Notes or Term Notes to the contrary notwithstanding.
Section 9.2. Suits for Enforcement.
---------------------
In case any one or more Events of Default shall occur and be
continuing, the Agent may (but shall not be obligated to), and at the request of
the Required Banks shall, proceed to protect and enforce the rights or remedies
of the Agent, the Swing Line Lender and the Banks either by suit in equity or by
action at law, or both, whether for the specific performance of any covenant,
agreement or other provision contained herein, in the other Loan Documents, or
in any document or instrument delivered in connection with or pursuant to this
Agreement or the other Loan Documents or to enforce the payment of the Notes or
any other legal or equitable right or remedy.
Section 9.3. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon the Banks, the Swing Line
Lender or the Agent is intended to be exclusive of any other right or remedy
contained herein or in the other Loan Documents or in any instrument or document
delivered in connection with or pursuant to this Agreement or the other Loan
Documents, and every such right or remedy shall be cumulative and shall be in
addition to every other such right or remedy contained herein and therein or now
or hereafter existing at law or in equity or by statute, or otherwise.
Section 9.4. Rights and Remedies Not Waived.
------------------------------
No course of dealing between either Borrower and any of the Banks, the
Swing Line Lender or the Agent or any failure or delay on the part of any Bank,
the Swing Line Lender or the Agent in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of such or any
other Bank, the Swing Line Lender or the Agent and no single or partial exercise
of any rights or
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remedies hereunder shall operate as a waiver or preclude the exercise of any
other rights or remedies hereunder.
Section 9.5. Further Payments.
----------------
In the event that the Revolving Credit Commitments, the Swing Line
Commitment and the Term Loan Commitments shall have been terminated or the
Revolving Credit Loans, Swing Line Loans and the Term Loans and all other
amounts owing under the Loan Documents shall have been declared due and payable
pursuant to the provisions of this Section, any funds received by the Agent, the
Swing Line Lender and the Banks from or on behalf of the Borrowers shall be
remitted to, and applied by, the Agent in the following manner and order: (a)
first, to the payment of interest on, and then the principal portion of, any
Revolving Credit Loans or Term Loans which the Agent may have advanced on behalf
of any Bank for which the Agent has not then been reimbursed by such Bank or the
Borrowers; (b) second, to reimburse the Agent and the Swing Line Lender for any
expenses due from the Borrowers pursuant to the provisions of Section 10.6, (c)
third, to the payment of the outstanding principal amount of the Swing Line
Loans (together with all interest thereon), (d) fourth, to the payment of the
Fees, (e) fifth, to the payment of any other fees, expenses or amounts (other
than the principal of and interest on the Revolving Credit Loans, Swing Line
Loans or Term Loans) payable by the Borrowers to the Agent, the Swing Line
Lender or any of the Banks under the Loan Documents, (f) sixth, to the payment,
pro rata according to the Exposure Percentage of each Bank, of interest due on
the Revolving Credit Loans and Term Loans, (g) seventh, to the payment, pro rata
according to Exposure Percentage of each Bank, of principal on the Revolving
Credit Loans and Term Loans, of such principal, (h) eighth, any remaining funds
shall be paid to whomsoever shall be entitled thereto or as a court of competent
jurisdiction shall direct.
ARTICLE 10. MISCELLANEOUS
Section 10.1. Collection Costs.
----------------
In the event that the Banks, the Swing Line Lender or the Agent or any
of them shall retain or engage an attorney or attorneys to collect or enforce or
protect its interests with respect to this Agreement, any of the other Loan
Documents, or any instrument or document delivered pursuant to this Agreement or
the other Loan Documents, including, without limitation, each of the documents
referred to in Section 5.1 hereof, or to protect the rights of any holder or
holders with respect thereto, the Borrowers shall pay, within 10 days after
demand therefor, all of the costs and expenses of such collection, enforcement
or protection, including reasonable attorneys' fees actually incurred
(including, without limitation, the reasonable allocated costs of in-house
counsel) and disbursements, and the Agent on behalf of such Banks, the Agent on
behalf of the Swing Line Lender, the Swing Line Lender, the Agent or the holders
of such Notes, as the case may be, may take judgment for all such amounts, in
addition to the unpaid principal balance of the
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Notes and accrued interest thereon and any accrued and unpaid fees and expenses
due and payable hereunder.
Section 10.2. Modification and Waiver.
-----------------------
With the written consent of the Required Lenders, the Agent and the
Borrowers may, from time to time, enter into written amendments, supplements or
modifications of the Loan Documents and, with the consent of the Required
Lenders, the Agent on behalf of the Banks and the Swing Line Lender may execute
and deliver to the Borrowers a written instrument waiving or a consent to a
departure from, on such terms and conditions as the Agent may specify in such
instrument, any of the requirements of the Loan Documents or any Default and its
consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or
consent shall, without the consent of each Bank affected thereby, (i)
increase the Revolving Credit Commitment or Term Loan Commitment of any
Bank or the Aggregate Revolving Credit Commitment (except as expressly
permitted by Section 2.1(d) hereof, (ii) decrease the rate or extend
the time of payment of interest on, or change or forgive the principal
amount or extend the time of payment of, any Revolving Credit Loan or
Term Loan, or decrease the rate, or extend the time of payment, of the
Facility Fee, (iii) change the provisions of Sections 3.3, 9.1, this
10.2, or 10.9, change the definition of "Eligible Loan," "Required
Banks," "Event of Default," "Prime Rate," "Adjusted LIBOR Rate"
"Revolving Credit Commitment Periods," "Revolving Credit Loans," "Term
Loans," "Term Loan Commitment" or any defined terms included in such
definitions, (iv) change any of the provisions of Article II (other
than Section 2.14 thereof) or Article III hereof, or (v) release all or
substantially all of the Collateral and no such amendment, supplement,
modification, waiver or consent shall, without the consent of each of
the Banks affected thereby, change any provision hereof which expressly
requires the consent, approval or waiver by each Bank affected thereby;
(b) without the written consent of the Agent, no such
amendment, supplement, modification or waiver shall amend, modify or
waive any provision of Article 11 or otherwise change any of the rights
or obligations of the Agent hereunder or under the Loan Documents;
(c) without the written consent of the Swing Line Lender, no
such amendment, supplement, modification or waiver shall change the
Swing Line Commitment or change any other term or provision that
relates to the Swing Line Commitment or the Swing Line Loans; and
(d) none of the following shall require the consent,
authorization or approval of the Borrowers: (i) amendment or
modification of any agreement to which neither Borrower is a party, and
(ii) with respect to the
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agency relationship between the Agent and the Banks, Article XI (other
than Section 11.5) hereof.
Any such amendment, supplement, modification or waiver shall apply
equally to the Agent, the Swing Line Lender, and each of the Banks and shall be
binding upon the parties to the applicable Loan Document, the Banks, the Swing
Line Lender and all future holders of the Revolving Credit Loans, Term Loans
and/or Swing Line Loans. In the case of any waiver, the parties to the
applicable Loan Document, the Banks, the Swing Line Lender and the Agent shall
be restored to their former position and rights hereunder and under the Loan
Documents to the extent provided for in such waiver, and any Default waived
shall not extend to any subsequent or other Default, or impair any right
consequent thereon. The Loan Documents may not be amended orally or by any
course of conduct. No notice to or demand on either Borrower in any case shall
entitle either Borrower to any other or further notice or demand in similar or
other circumstances.
Section 10.3. Governing Law.
-------------
THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE SWING LINE NOTES AND
THE TERM NOTES AND THE RIGHTS AND DUTIES OF THE PARTIES THEREUNDER AND WITH
RESPECT TO INTEREST, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE TO THE EXERCISE OF REMEDIES OR THE PERFECTION OF SECURITY INTERESTS
UNDER THE UCC.
Section 10.4. Notices.
-------
All notices, requests, consents, demands or other communications
provided for herein shall be in writing and shall be deemed to have been given
(i) five Business Days after the date mailed if sent by registered or certified
mail, postage prepaid, return receipt requested, or (ii) on the day of delivery
if personally delivered or sent by overnight courier service, or (iii) on the
day of transmission if sent by telecopier and confirmed, on the same day as such
notice is sent, by telephonic notice or by one of the other two methods listed
above, and shall be addressed, as the case may be, as follows: to the Agent at
its address set forth on Exhibit A, with a copy to Bingham Dana LLP, 150 Federal
Street, Boston, Massachusetts 02114 (Attention: Marijane Benner Browne, Esq.),
Telecopier No. (617) 951-8736, and to any Bank at its address specified for such
Bank on Exhibit A; and to the Borrowers c/o Medallion Financial Corp., 437
Madison Avenue, 38th Floor, New York, New York 10022 (Attention: Alvin Murstein,
Chief Executive Officer and Daniel Baker, Treasurer and Chief Financial
Officer), Telecopier No. (212) 328-2121, or to such other person or address as
either party shall designate to the other from time to time in writing forwarded
in like manner.
Section 10.5. Accounting Terms.
----------------
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All accounting terms not specifically defined herein shall be construed
in accordance with GAAP, consistently applied. Where any accounting
determination or calculation is required to be made under this Agreement, such
determination or calculation (unless otherwise provided) will be made in
accordance with GAAP, consistently applied except that if because of a change in
GAAP, the Borrowers would have to alter a previously utilized accounting method
or policy in order to remain in compliance with GAAP, such determination or
calculation will continue to be made in accordance with the Borrowers' previous
accounting methods or policy. Unless otherwise specified herein all financial
statements required to be delivered hereunder, shall be prepared and all
financial records shall be maintained in accordance with GAAP.
Section 10.6. Costs and Expenses; Indemnity.
-----------------------------
(a) The Borrowers agree to pay on demand all reasonable
out-of-pocket costs and expenses incurred by the Banks, the Swing Line
Lender and the Agent in connection with the preparation, negotiation,
administration, filing and recording of any amendments, waivers or
consents which may be requested by the Borrowers, all out-of-pocket
costs and expenses, if any, in connection with the preparation,
negotiation, syndication, administration and enforcement (whether in
the context of a civil action, adversary proceeding, workout or
otherwise) of this Agreement, the other Loan Documents, and such other
instruments and documents, including, without limitation, reasonable
attorneys' fees actually incurred, audit charges (provided, that audit
charges will be subject to a cap agreed to between the Agent and the
Borrowers prior to the audit being conducted), appraisal fees, search
fees and filing fees and all out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys' fees) of the
Agent in connection with its duties as Agent under this Agreement, the
Security Agreement and the other Loan Documents. The Borrowers also
agree to pay on demand all reasonable attorneys' fees actually
incurred, and any expenses, costs and charges relating thereto of the
Agent if at any time or times hereafter the Agent employs counsel for
advice with respect to this Agreement or the other Loan Documents, or
to intervene, file a petition, answer, motion or other pleading in any
suit or proceeding relating to this Agreement or any other Loan
Document (including, without limitation, the interpretation or
administration, or the amendment, waiver or consent with respect to any
term, of this Agreement or the other Loan Documents) or to represent
the Agent in any pending or threatened litigation with respect to the
affairs of the Borrowers in any way relating to any of the Borrowers'
obligations hereunder or to enforce any rights of the Agent or any Bank
or the Swing Line Lender or liabilities of the Borrowers, any Person to
whom either Borrower has made a Loan, or any Person which may be
obligated to the Agent or the Banks or the Swing Line Lender by virtue
of this Agreement or any other Loan Document, instrument or document
now or hereafter delivered to the Agent or any Bank or the Swing Line
Lender by or for the benefit of the Borrowers. The Borrowers agree to
be responsible for payment of the amounts referred to in this Section
10.6(a) whether or not any
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Revolving Credit Loans, Swing Line Loans or Term Loans are made
hereunder.
(b) The Borrowers further agree to indemnify and save harmless
each Bank, the Swing Line Lender and the Agent and each of their
respective officers, directors, employees, agents and Affiliates (each
an "Indemnified Party" and collectively the "Indemnified Parties") from
and against any and all actions, causes of action, suits, losses,
liabilities and damages and expenses (including, without limitation,
reasonable attorneys' fees actually incurred) in connection therewith
(herein called the "Indemnified Liabilities") incurred by any
Indemnified Party as a result of, or arising out of or relating to any
of the transactions contemplated hereby or by the other Loan Documents
or relating to the use of any proceeds of the loans made hereunder or
any of the other Loan Documents, except for any Indemnified Liabilities
arising on account of the gross negligence or willful misconduct of the
Indemnified Party seeking indemnity under this Section 10.6(b);
provided, however, that, if and to the extent such agreement to
indemnify may be unenforceable for any reason, the Borrowers shall make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which shall be permissible under applicable
law. The agreements in this Section 10.6(b) shall survive the payment
of the Revolving Credit Notes, the Swing Line Notes and the Term Notes
and related obligations and the termination of the Revolving Credit
Commitment, Swing Line Commitment and Term Loan Commitment.
Section 10.7. Waiver of Jury Trial and Setoff; Consequential Damages.
------------------------------------------------------
EACH OF MFC, MBC, THE AGENT, THE SWING LINE LENDER AND EACH BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TRIAL BY JURY IN ANY LITIGATION
IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY INSTRUMENT OR DOCUMENT DELIVERED
PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR THE VALIDITY,
PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR ANY OTHER
CLAIM OR DISPUTE, HOWSOEVER ARISING, BETWEEN EITHER OR BOTH BORROWERS AND ANY OF
THE BANKS, THE SWING LINE LENDER OR THE AGENT, BETWEEN ANY BANKS, AND BETWEEN
THE AGENT AND/OR ANY BANKS; AND EACH BORROWER HEREBY WAIVES THE RIGHT TO
INTERPOSE ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH
LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, COUNTERCLAIM OR
CROSS-CLAIM (UNLESS SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY
REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
PLEADED OR ALLEGED IN ANY OTHER ACTION). TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH BORROWER 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
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OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH WAIVER SET FORTH IN THIS
SECTION 10.7 CONSTITUTES A MATERIAL INDUCEMENT FOR EACH OF THE AGENT, THE SWING
LINE LENDER AND EACH BANK TO EXTEND CREDIT HEREUNDER.
Section 10.8. Captions.
--------
The captions of the various sections and paragraphs of this Agreement
have been inserted only for the purpose of convenience; such captions are not a
part of this Agreement and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Agreement.
Section 10.9. Lien; Setoff by Banks.
---------------------
(a) Each Borrower hereby grants to the Agent, the Swing Line
Lender and the Banks a continuing lien for its Indebtedness to each of
the Agent, the Swing Line Lender and the Banks upon any and all monies,
securities and other property of such Borrower and the proceeds
thereof, now or hereafter held or received by or in transit to, the
Agent, the Swing Line Lender or any of the Banks from or for such
Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general or
special) and credits of such Borrower with, and any and all claims of
such Borrower against the Swing Line Lender or the Banks, at any time
existing. Upon the occurrence of any Event of Default, the Agent, the
Swing Line Lender and the Banks are hereby authorized at any time and
from time to time, without notice to the Borrowers, to setoff,
appropriate and apply any or all items hereinabove referred to with
respect to each Borrower against all Indebtedness of such Borrower to
the Agent, the Swing Line Lender and the Banks, whether under this
Agreement, the Revolving Credit Notes, the Term Notes, the Swing Line
Notes or otherwise, and whether now existing or hereafter arising. The
Agent, the Swing Line Lender and each Bank agree promptly to notify the
Borrowers after any such set-off and application is made by such Bank
or Swing Line Lender, as the case may be, provided, that, the failure
to give such notice shall not affect the validity of such setoff and
application.
(b) Each holder of a Note agrees that if it shall, through the
exercise of a right of banker's lien, setoff, counterclaim or
otherwise, obtain payment with respect to any Note which results in its
receiving more than its pro rata share of the aggregate payments or
reductions of all Notes (based on such holder's Exposure Percentage),
it shall forthwith purchase from such other holders a participation in
all of the Notes held by such other holders so that the amount of all
unpaid Notes and participations therein held by all holders shall be
pro rata (based on each holder's Exposure Percentage).
(c) Each Borrower expressly consents to the foregoing
arrangements in Section 10.9(b) hereof and agree that any holder of a
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participation in a Note so acquired may exercise any and all rights of
banker's lien, setoff, counterclaim or otherwise with respect to any
and all monies owing by such holder to such Borrower as fully as if
such holder were a holder of a Note in the amount of such
participation. If all or any portion of any such excess payment is
thereafter recovered from the holder which received the same, the
purchase provided for in Section 10.9(b) hereof shall be rescinded to
the extent of such recovery, without interest.
(d) Each Bank and the Swing Line Lender agrees that if and to
the extent that any amount received by the Agent, the Swing Line Lender
or any Bank from a Borrower or any other obligor or from the Collateral
is subsequently invalidated, declared to be fraudulent or preferential,
set aside or judicially required to be repaid to a trustee, receiver or
any other Person under any applicable creditors' remedy proceeding,
including without limitation any bankruptcy proceeding, the other Banks
hereto shall purchase from the Bank or Swing Line Lender from which
said amount is recovered an additional participation in such amount
equal to such Bank's Exposure Percentage of that amount. The amount
invalidated, declared to be fraudulent or preferential, set aside or
judicially required to be repaid to a trustee, receiver or any other
person under any applicable creditors' remedy proceeding shall be
deemed to be an amount immediately due and owing from such Borrower.
Section 10.10. Security; Continued Effectiveness.
---------------------------------
(a) As security for the payment of any and all sums owing
under the Notes and all other obligations of each Borrower hereunder
and under the other Loan Documents, each Borrower shall execute and
deliver to the Agent, the Banks and the Swing Line Lender, on the
Second Restatement Effective Date the Security Agreement, which shall
amend and restate the Original MBC Security Agreement and the Original
MFC Security Agreement and pursuant to which each Borrower confirms and
continues (and each Borrower hereby confirms and continues) its grant
to the Agent, on behalf of the Banks and the Swing Line Lender, a valid
and perfected first priority (except as otherwise permitted hereunder)
security interest in all of its interests in the Collateral and
Underlying Collateral described therein, and each Borrower shall cause
to be properly filed in all pertinent jurisdictions the additional
Borrower Financing Statements contemplated by Section 5.1(a)(iv)
hereof.
(b) No transfers of the proceeds of the Revolving Credit
Loans, Swing Line Loans or Term Loans were made by MFC to BL prior to
the Restatement Effective Date.
Section 10.11. Jurisdiction; Service of Process.
--------------------------------
Each Borrower hereby irrevocably consents to the non-exclusive
jurisdiction of the courts of the State of New York, County of New York and of
any Federal
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Court located in the Southern District of New York, and agrees that venue in
each of such Courts is proper, in connection with any action or proceeding
arising out of or relating to this Agreement, the other Loan Documents, or any
document or instrument delivered pursuant to this Agreement or the other Loan
Documents. In any such action or proceeding, each Borrower waives personal
service of any summons, complaint or other process and agrees that the service
thereof may be made by certified or registered mail directed to the Borrowers at
the address set forth in Section 10.4 hereof. Nothing herein shall affect the
right of the Agent, the Swing Line Lender or any Bank to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against a Borrower in any other jurisdiction.
Section 10.12. Benefit of Agreement.
--------------------
This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Agent, the Swing Line Lender and the Banks and their respective
successors and assigns, and all subsequent holders of the Notes except that the
obligation of the Banks to make Revolving Credit Loans or Term Loans hereunder
and the obligation of the Swing Line Lender to make any Swing Line Loan
hereunder shall not inure to the benefit of any successors or assigns of either
Borrower.
Section 10.13. Counterparts.
------------
This Agreement may be executed by the parties hereto individually or in
any combination, in one or more counterparts, each of which shall be an original
and all of which shall together constitute one and the same agreement.
Section 10.14. Interest.
--------
(a) Usury Limitation. It is the intention of the parties
hereto to conform strictly to the usury laws now in force in the
appropriate controlling jurisdiction. Accordingly, if the transactions
contemplated hereby would be usurious, under any controlling law, then,
in that event, notwithstanding anything to the contrary in this
Agreement, the Notes or any other instrument or agreement entered into
in connection therewith, it is agreed as follows: (i) the aggregate of
all charges which constitute interest under the laws of the controlling
jurisdiction that are contracted for, chargeable or receivable under
this Agreement or under any of the other aforesaid instruments or
agreements or otherwise in connection with the Notes ("Interest") shall
under no circumstances exceed the maximum amount of interest permitted
by law (the "Maximum Amount"), and any Interest in excess of the
Maximum Amount shall be cancelled automatically and shall not be
payable under this Agreement, the Notes or the aforesaid instruments or
agreements and, if theretofore paid, shall be either refunded to the
Borrowers or credited ratably on the principal of the Notes; and (ii)
in the event that the maturity of the Notes is accelerated by reason of
an election of the Required Banks resulting from any Event of Default
under
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this Agreement or otherwise, or in the event of any voluntary or
mandatory prepayment by the Borrowers permitted or required by this
Agreement, the Notes or any of the other aforesaid instruments or
agreements, then Interest may never include more than the Maximum
Amount, and excess Interest, if any, shall be cancelled automatically
as of the date of such acceleration or prepayment, and if theretofore
paid, shall be either refunded to the Borrowers or credited ratably on
the principal of the Notes; provided, that, nothing contained in this
Section 10.14 shall be deemed to imply that the laws of any state other
than the State of New York shall govern this Agreement or the Notes.
(b) Recapture. If, at any time, Interest would exceed the
Maximum Amount but for the foregoing limitation, Interest shall remain
at the Maximum Amount, notwithstanding any subsequent reduction of
Interest, until the total amount of Interest equals the amount of
Interest which would have accrued if Interest had not been limited to
the Maximum Amount, but nothing in this paragraph shall affect or
extend the maturity of any of the Notes. If, at maturity or final
payment of any of the Notes, the total amount of Interest paid is less
than the total amount of Interest which would have accrued had Interest
not been limited to the Maximum Amount, the Borrowers agree, to the
full extent permitted by law, to pay to the Agent for the ratable
benefit of the Banks and the Swing Line Lender, as the case may be, an
amount equal to the positive difference, if any, derived by subtracting
(x) the amount of Interest which accrued on the Notes pursuant to the
provisions of the foregoing two paragraphs from (y) the lesser of (i)
the amount of Interest which would have accrued on such Notes if the
Maximum Amount had at all times been in effect, and (ii) the amount of
Interest which would have accrued if Interest on such Notes, not
limited to the Maximum Amount, had at all times been in effect.
Section 10.15. Attorneys' Fees.
---------------
As used in this Agreement, "attorneys' fees" shall include, without
limitation, all reasonable fees of counsel (including, without limitation, those
incurred on appeals) actually incurred arising from such services and all
reasonably incurred expenses, costs, charges and other fees of such counsel, and
all such fees shall constitute Indebtedness of the Borrowers to the Agent, the
Swing Line Lender and the Banks under this Agreement. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
paralegal fees, costs and expenses; accountants' fees, costs and expenses; court
costs and expenses; photocopying and duplicating expenses; long distance
telephone charges; air express and courier charges; telegram and telecopier
charges; secretarial overtime charges; and, expenses for travel, lodging and
food paid or incurred in connection with the performance of such legal services.
Section 10.16. Severability.
------------
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Any provision of this Agreement prohibited by the laws of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, or modified to conform with such laws, without invalidating
the remaining provisions of this Agreement, and any such prohibition in any
jurisdiction shall not invalidate such provisions in any other jurisdiction.
Section 10.17. Confidentiality.
---------------
The Agent, the Swing Line Lender and each Bank are hereby authorized to
deliver a copy of any financial statement or any other information relating to
the business, operations or financial condition of either or both of the
Borrowers which may be furnished to it hereunder or otherwise, to any regulatory
body or agency having jurisdiction over the Agent, the Swing Line Lender or such
Bank or to any Person which shall, or shall have any right or obligation to,
succeed to all or any part of the interest of the Agent, the Swing Line Lender
or such Bank in, this Agreement, the other Loan Documents and any security
herein or therein provided for or otherwise securing the Notes, including,
without limitation, any assignee or participant (or prospective assignee or
participant). Except as provided above, the Agent, the Swing Line Lender and the
Banks agree that from the date hereof, they will not, without the prior written
consent of the Borrowers, submit or disclose to or file with any Person other
than the Agent, the Swing Line Lender or a Bank or any of its or such Bank's
Affiliates or a Person that may become a Bank, or such Person's Affiliates, any
confidential or non-public information relating to either Borrower, except where
disclosure may be required by law or pursuant to valid legal process, or where
such disclosure is to such Person's professionals or regulators.
Section 10.18. Loss, Theft, Etc. of Notes.
--------------------------
Upon receipt by the Borrowers of (i) an affidavit of an authorized
officer of any Bank or the Swing Line Lender setting forth the fact of loss,
theft or destruction of any Note and of its ownership of the Note at the time of
such loss, theft or destruction or (ii) a mutilated Note, such affidavit or
mutilated Note shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note of like tenor in lieu of such lost, stolen, destroyed or mutilated Note
without expense to the holder thereof, provided that such Bank, or the Swing
Line Lender, as the case may be, agrees in writing to indemnify the Borrowers
from all expenses, claims and liabilities (including without limitation,
reasonable attorneys' fees actually incurred) in the defense of any such claims
resulting from the loss, theft, destruction or mutilation of the old Note and
the execution and delivery of the new Note.
ARTICLE 11. AGENCY
Each Borrower, the Banks and the Swing Line Lender agree with the Agent
as follows:
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Section 11.1. Appointment and Actions.
-----------------------
(a) Each of each Bank and the Swing Line Lender hereby
irrevocably designates and appoints Fleet National Bank as the Agent of
such Bank and the Swing Line Lender under the Loan Documents (including
any additional documents referred to therein as "Loan Documents"), and
each of such Bank and the Swing Line Lender hereby irrevocably
authorizes the Agent to take such action on its behalf under the
provisions hereof and thereof and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms hereof
and thereof together with such other powers as are reasonably
incidental thereto. The Agent shall hold the security pledged under the
Security Agreement in accordance with the terms thereof.
Notwithstanding any provision to the contrary in this Agreement or any
of the other Loan Documents, the Agent shall not have any duties or
responsibilities except those expressly set forth herein or therein,
nor any fiduciary relationship with any Bank or the Swing Line Lender,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents or
otherwise exist against the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Agreement or the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
(d) The Agent may execute any of its duties by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
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(e) Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable
for any action lawfully taken or omitaken by it or such person under or
in connection with any of the Loan Documents (except for its or such
person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any Bank or the Swing Line Lender or any
Participant for any recitals, statements, representations or warranties
made by either Borrower contained herein or in any certificate, report,
statement or other document referred to or provided for in, or received
by the Agent under or in connection with any of the Loan Documents, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of either
Borrower to perform its obligations under any of the Loan Documents.
The Agent shall not be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of any of the Loan Documents, or to inspect
the properties, books or records of either Borrower.
(f) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or persons and upon advice and statements
of legal counsel (including, without limitation, counsel to a
Borrower), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent.
(g) The Agent shall be fully justified in failing or refusing
to take any action under any of the Loan Documents unless it shall
first receive such advice or concurrence of the Banks as it deems
appropriate or as required by the specific terms of this Agreement or
it shall first be indemnified to its satisfaction by the Banks 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
any of the Loan Documents in accordance with a request of the Required
Banks (or all Banks if specifically required by the terms of this
Agreement), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks, the Swing Line
Lender and all future holders of the Notes and all Participants.
(h) The Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default or any default
under any document, agreement or instrument delivered in connection
therewith, unless the Agent shall have actual knowledge thereof or
shall have received
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notice from any Bank or either Borrower, describing such event, act or
condition, Default or Event of Default and stating that such notice is
a "notice of default." In the event that the Agent has such actual
knowledge or receives such a notice, the Agent shall give notice
thereof to the Swing Line Lender and the Banks. The Agent shall take
such action with respect to such event, act or condition or Default or
Event of Default as shall be reasonably directed by the Required Banks
(or all Banks if specifically required by the terms of this Agreement)
in writing; provided, that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to
such event, act or condition, Default or Event of Default as it shall
deem advisable in the best interests of the Banks and the Swing Line
Lender.
(i) Until such time as the Agent shall have been notified in
writing duly executed on behalf of any Bank by an officer thereof duly
authorized to take such action, that such Bank has sold all or a
portion of the Revolving Credit Loans or the Term Loans made by, or
Revolving Credit Commitment or Term Loan Commitment of, such Bank, the
Agent may treat such Bank as the owner or holder of such Bank's share
of the Revolving Credit Loans or Aggregate Revolving Credit Commitment,
or of such Bank's Term Loan or Term Loan Commitment, as applicable, in
accordance with the percentages thereof advanced by such Bank. The
foregoing shall also apply to the Swing Line Lender with respect to the
Swing Line Loans and the Swing Line Commitment.
(j) At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Agent may appoint another bank or
trust company or one or more other Persons, either to act as co-agent
or co-agents, jointly with the Agent, or to act as separate agent or
agents on behalf of the Banks with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may
be specified in the instrument of appointment (which may, in the
discretion of the Agent, include provisions for the protection of such
co-agent or separate agent similar to the provisions of this Article
XI).
(k) Each Bank party to the Original Agreement expressly
consented to the Agent's, on behalf of such Bank, entering into the
Original MFC Security Agreement and each other Bank expressly agrees
that the Agent shall act as agent for such Bank in connection
therewith. Each Bank party to the First Restatement expressly (i)
consented to the Agent's, on behalf of such Bank, entering into the
Original MBC Security Agreement, provided the Original MBC Security
Agreement was substantially similar to the form of such document
attached as an Exhibit thereto and (ii) agreed that to the extent
either the Original MFC Security Agreement or the Original MBC Security
Agreement expressly imposed any obligation on any Bank it would comply
with each such obligation. Each Bank party hereto expressly (i)
consents to the Agent's, on behalf of such Bank, entering into the
Security
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Agreement, which amends and restates the Original MFC Security
Agreement and the Original MBC Security Agreement, provided the
Security Agreement is substantially similar to the form of such
document attached as an Exhibit hereto and (ii) agrees that to the
extent the Security Agreement expressly imposes any obligation on any
Bank it shall comply with each such obligation.
Section 11.2. Independent Credit Decisions.
----------------------------
Each Bank and the Swing Line Lender expressly acknowledges that neither
the Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of either Borrower shall be deemed to constitute any representation or
warranty by the Agent to any Bank or the Swing Line Lender. Each of each Bank
and the Swing Line Lender represents to the Agent that it has, independently and
without reliance upon the Agent, or the Swing Line Lender, or the other Banks,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of each Borrower and made its
own decision to enter into this Agreement. Each of each Bank and the Swing Line
Lender also represents that it will, independently and without reliance upon the
Agent, the Swing Line Lender, or the other Banks, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
hereunder, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of each Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks and/or the Swing Line
Lender by the Agent hereunder, the Agent shall have no duty or responsibility to
provide any Bank or the Swing Line Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of either Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates, provided that the Agent shall supply the Banks and the Swing Line
Lender with a copy of any financial audit of the Borrowers actually received by
the Agent.
Section 11.3. Indemnification of Agent.
------------------------
Each Bank jointly and severally agrees to indemnify Fleet and its
Affiliates, in Fleet's capacity as Agent (to the extent not reimbursed by the
Borrower), ratably according to its percentage of the sum of (i) the Aggregate
Revolving Credit Commitment and (ii) the principal amount of the outstanding
Term Loans from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of any of the Notes) be imposed on, incurred by
or asserted against the
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Agent in any way relating to or arising out of this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's bad faith,
willful misconduct or gross negligence. The agreements in this subsection shall
survive the payment of the Notes and the related obligations and the termination
of the Revolving Credit Commitment, the Swing Line Commitment and the Term Loan
Commitment.
Section 11.4. Closing Documentation, etc.
--------------------------
For purposes of determining compliance with the conditions set forth in
Section 5.1 hereof, each Bank that has executed this Agreement shall be deemed
to have consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent to such Bank
for consent, approval, acceptance or satisfaction, unless an officer of the
Agent active upon the Borrowers' account shall have received notice from such
Bank prior to the Second Restatement Effective Date specifying such Bank's
objection thereto and such objection shall not have been withdrawn by notice to
the Agent to such effect on or prior to the Second Restatement Effective Date.
Section 11.5. Resignation and Succession.
--------------------------
The Agent may resign as Agent upon ten days' written notice to the
Banks, the Swing Line Lender and the Borrowers, provided, however, that such
resignation shall not become effective until a successor agent shall have
accepted its appointment hereunder; and provided, further, that if no successor
shall have so accepted within 30 days from the date of such notice, the Agent
may apply to a court of competent jurisdiction for the appointment of a
successor agent. If the Agent shall resign as Agent, then the Borrowers (or the
Required Banks, if the Borrowers fail to do so) shall appoint a successor agent,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of the
Notes. Any such successor agent selected by the Borrowers shall require the
prior written consent of the Required Banks, which consent shall not be
unreasonably withheld. Any successor agent must be a bank or trust company
incorporated and doing business within the United States of America having a
combined capital and surplus of at least $250,000,000. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. In the event that the Agent becomes subject
to the receivership of the Federal Deposit Insurance Corporation or any
successor entity, such receiver commences the liquidation of the Agent, and
Banks holding at least 10% of the sum of the Aggregate Revolving Credit
Commitment plus the amount of all Term Loans then outstanding request the Agent
to resign
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because of such receivership, the Agent's agency under this Agreement shall
terminate.
ARTICLE 12. SALES AND TRANSFERS
Section 12.1. Sales and Transfers.
-------------------
(a) Subject to the provisions of this Section 12.1, any Bank
may execute an assignment and acceptance, which assignment and
acceptance shall be substantially in the form of Exhibit I hereto
(herein individually called an "Assignment" and collectively called the
"Assignments"), whereby such Bank (herein individually called an
"Assignor" and collectively called the "Assignors") shall assign,
without recourse and without representation or warranty except as
specifically set forth in said Assignment, to one or more banks or
other entities (herein individually called an "Assignee" and
collectively called the "Assignees") all or any part of the Assignor's
rights and benefits, and delegate all or any part of the Assignor's
obligations, under this Agreement, such Assignor's Revolving Credit
and/or Term Loan Commitment, the Revolving Credit Loans and Term Loans
and the Notes.
(b) Any Assignment pursuant to this Section 12.1 shall (i) be
in an aggregate principal amount of not less than $5,000,000; (ii) be
of a constant, and not a varying percentage of the Assignor's rights
and obligations under the Loan Documents; (iii) require the prior
written consent of the Borrowers, which consent shall not be
unreasonably withheld (it being the understanding of the parties hereto
that a refusal to consent to an Assignment to an entity which is a
significant competitor of either Borrower shall not be considered
unreasonable); provided, that, such consent shall not be required if a
Default shall have occurred and then be continuing, or such Assignee is
a subsidiary or affiliate of such Assignor, or such Assignee is a
subsidiary or affiliate of another Bank, or such Assignee is another
Bank; (iv) require the prior written consent of the Agent and the Swing
Line Lender, which consent shall not be unreasonably withheld;
provided, that, such consent shall not be required if such Assignee is
another Bank; (v) be subject to the requirement that after giving
effect to such Assignment, the Revolving Credit Commitment and Term
Loan Commitment of such Assignor remaining is not less than $5,000,000
and (vi) be subject to the delivery to the Agent of an Assignment
signed by the Assignor and the Assignee, along with an assignment fee
in the sum of $3,500 for the account of the Agent.
(c) Upon execution, delivery and acceptance of each Assignment
and the satisfaction of the conditions set forth in subclauses (a) and
(b) above, from and after the effective date specified therein, which
effective date shall be at least five Business Days after the execution
thereof, the Borrowers, the Agent, and the Banks agree that, to the
extent of any such Assignment,
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(i) the Assignee shall, in addition to any rights,
benefits and obligations hereunder held by it immediately prior
to such effective date, have the rights, benefits and obligations
of a Bank under this Agreement, the Assignor's Revolving Credit
and/or Term Loan Commitment, the Revolving Credit Loans, the Term
Loans and the Notes as it would have if it were a Bank hereunder
to the extent that the same have been assigned and delegated to
it pursuant to such Assignment, and
(ii) the Assignor shall, to the extent that rights,
benefits and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment, relinquish its
rights and benefits and be released from its obligations under
this Agreement (and, in the case of an Assignment covering all or
the remaining portion of the Assignor's rights, benefits and
obligations under this Agreement, the Assignor shall cease to be
a Bank hereunder), except that in all cases the Assignor shall
remain entitled to the rights and benefits arising under Section
10.6, and shall remain liable with respect to any of its
obligations arising under Article XI, with respect to any matters
arising prior to the effective date of any such Assignment;
provided, that the Agent, the Borrowers and each Bank shall be entitled
to continue to deal solely and directly with the assigning Bank in connection
with the interests so assigned and delegated to the Assignee until written
notice of such Assignment, together with addresses and related information with
respect to the Assignee, shall have been given to the Agent, the Borrowers and
each Bank by the assigning Bank and the Assignee.
(d) Upon its receipt of an Assignment executed by the Assignor
and an Assignee, together with the Note(s) subject to such Assignment,
the Agent shall, if such Assignment has been completed and conforms to
the requirements of this Section 12.1, forward a photostatic copy
thereof to the Borrowers. Within 5 Business Days after its receipt of a
photostatic copy of such Assignment, the Borrowers shall execute and
deliver to the Agent, to be exchanged for the applicable Note(s)
delivered to the Agent by the Assignor, a new Note or new Notes payable
to the order of the Assignee in an amount equal to and of the same type
as the Note or Notes assumed by it pursuant to such Assignment and, if
the Assignor has retained a Revolving Credit Commitment or a portion of
the Term Loan hereunder, a new Revolving Credit Note or Term Note, as
the case may be, payable to the order of the Assignor in an amount
equal to the Revolving Credit Commitment or the amount of the Term Loan
retained by it hereunder. Such new Note or Notes shall be of the same
type as, and in aggregate principal amount equal to the aggregate
principal amount of, such Note or Notes, shall be dated the effective
date of such Assignment, shall be payable to the order of the Assignee
and, if applicable, the Assignor, shall otherwise be in substantially
the form of such surrendered Note(s), and shall constitute Revolving
Credit Note(s) or a Term Note under this Agreement, as the case may be.
Such new
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Revolving Credit Note(s) or Term Note shall be in replacement and
substitution for, and not in payment of, the Revolving Credit Note(s)
or Term Note delivered to the Agent by the Assignor. The Agent shall
deliver such new Revolving Credit Note(s) or Term Note to the payee or
payees thereof and shall mark the Revolving Credit Note(s) or Term Note
previously held by the Assignor as "replaced" and shall deliver the
same to the Borrower.
(e) Within five Business Days after each Assignment has been
accepted by the Agent in accordance with the terms hereof, the
Borrowers and the Agent shall revise Exhibit A hereto to set forth (i)
the Percentage or amount of the Term Loan of each Assignee and such
Assignee's name and address and (ii) the Percentage or amount of the
Term Loan, if any, retained by the Assignor, and the appropriate
officer of each Borrower and the Agent shall initial each such
revision.
(f) The foregoing provisions shall be equally applicable to
the Swing Line Lender, Swing Line Notes and Swing Line Commitment with
such changes necessary to conform the foregoing to the Swing Line
Lender, Swing Line Notes and Swing Line Commitment.
(g) In addition to the participations provided for in this
Agreement, including those set forth in Section 2.1(c) and Section 10.9
hereof, each Bank may grant participations in all or any part of its
rights under the Loan Documents to one or more parties that would be
eligible to be an Assignee, provided that (i) such Bank's obligations
under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other
parties to this Agreement and the other Loan Documents for the
performance of such obligations, (iii) the Borrowers, the Agent, the
Swing Line Bank and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents, (iv)
neither the granting nor the offering of such participation would
require that any additional loss, cost or expense be borne by the
Borrowers at any time or would require any registration or
qualification under any applicable federal or state securities laws,
and (v) the voting rights of any holder of any participation shall be
limited to the those matters requiring the consent of all Banks as set
forth under Section 10.2 hereof.
(h) No Bank shall, as between and among the Borrowers, the
Agent, the Swing Line Lender and such Bank, as the case may be, be
relieved of any of its obligations under the Loan Documents as a result
of any Assignment (except as provided in Section 12.1(c)(ii)) hereof or
the granting of any participation in all or any part of its rights
under the Loan Documents.
(i) Subject to Section 12.1(h) hereof, any Bank may at any
time or from time to time assign all or any portion of its rights under
the Loan
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Documents to any Federal Reserve Bank organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341, provided that any such
assignment shall not release such assignor from its obligations
thereunder.
Section 12.2. New Banks.
---------
Any financial institution approved by the Borrowers, the Agent and the
Required Banks may join this Agreement as an additional Bank (such Person being
herein referred to as the "New Bank") and be entitled to all the rights and
interests and obligated to perform all of the obligations and duties of a Bank
with respect to a specified additional amount of Revolving Credit Commitment
hereunder, provided, that (a) the Borrowers shall, in its sole discretion, have
given their prior written consent to the addition of the New Bank as a party to
this Agreement, (b) the Agent, the Swing Line Lender and the Required Banks
shall have given their prior written consent (which consent shall not be
unreasonably withheld; provided, that, if the joinder of such New Bank would
result in an increase to the Aggregate Revolving Credit Commitment, other than
as permitted by Section 2.1(d) hereof, or the Term Loan Commitment; such joinder
shall require the consent of each Bank and such consent shall be in the sole and
absolute discretion of each Bank), (c) such New Bank and the Borrowers shall
have executed and delivered an instrument of adherence (the "Instrument of
Adherence") in form and substance satisfactory to the Borrowers and the Agent
pursuant to which such New Bank shall agree to be bound as a Bank by the terms
and conditions hereof and the other Loan Documents, and to make Revolving Credit
Loans and a Term Loan to the Borrowers in accordance with this Agreement, and
which Instrument of Adherence shall specify the maximum amount of additional
Revolving Credit Loans that such New Bank agrees to provide hereunder (the
"Additional Commitment Amount") and the New Bank's address for notices, (d) the
Additional Commitment Amount provided by any New Bank must be at least
$5,000,000, (e) such New Bank shall have received such opinions of counsel to
the Borrowers, such evidence of proper corporate organization, existence,
authority and appropriate corporate proceedings with respect to the Borrowers,
and such other certificates, instruments, and documents, as it shall have
requested in connection with such Instrument of Adherence, (f) such New Bank
shall have paid to the Agent an administrative fee in the sum of $3,500 for the
account of the Agent, and (g) such New Bank shall have confirmed to and agreed
with the Agent, the Swing Line Lender and the Banks and the Borrowers as
follows:
(i) the Agent, the Swing Line Lender and the Banks 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 this Agreement or
the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency, collectability or value
of this Agreement, the other Loan Documents, and Collateral, or
any other Instrument or document furnished pursuant hereto;
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(ii) the Agent, the Swing Line Lender and the Banks have
made no representation or warranty and shall have no
responsibility with respect to the financial condition of either
Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of their obligations under
this Agreement or any of the other Loan Documents, or the
performance or observance by either Borrower and its Subsidiaries
or any other Person primarily or secondarily liable in respect of
their obligations under this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant
hereto or thereto;
(iii) such New Bank confirms that it has received a copy
of this Agreement and the other Loan Documents, together with
copies of the most recent financial statements referred to in
Sections 4.18 and 6.1 hereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Instrument of Adherence;
(iv) such New Bank will, independently and without
reliance upon the other Banks, the Swing Line Lender, 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 this Agreement;
(v) such New Bank appoints and authorizes the Agent to
take such action as Agent on its behalf and to exercise such
powers under this 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 New Bank agrees that it will perform in
accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a
Bank; and
(vii) such New Bank represents and warrants that it is
legally authorized to enter into such Instrument of Adherence.
Upon any New Bank's execution of an Instrument of Adherence and the
Borrowers', the Agent's, the Swing Line Lender's and the Required Banks' consent
thereto, the Percentage of each Bank and the Aggregate Revolving Credit
Commitment shall be adjusted appropriately. Promptly thereafter, the Borrowers
shall notify each of the Banks and the Agent of the joinder hereunder of such
New Bank, the resulting increase in the Aggregate Revolving Credit Commitment
and each Bank's new Percentage and provide each of the Banks and the Agent with
a copy of the executed Instrument of Adherence and a copy of Exhibit A
reflecting the necessary adjustments.
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Upon the effective date of any Instrument of Adherence, the New Bank
shall make all (if any) such payments to the other Banks as may be necessary to
result in the Revolving Credit Loans made by such New Bank being equal to such
New Bank's Percentage (as then in effect) of the aggregate principal amount of
all Revolving Credit Loans outstanding to the Borrowers as of such date. The
Borrowers hereby agree that any New Bank so paying any such amount to the other
Banks pursuant to this Section 12.2 shall be entitled to all the rights of a
Bank hereunder and such payments to the other Banks shall constitute Revolving
Credit Loans held by such New Bank hereunder and that such New Bank may, to the
fullest extent permitted by law, exercise all of its right of payment (including
the right of set-off) with respect to such amounts as fully as if such New Bank
had initially advanced the Borrowers the amount of such payments.
Section 12.3. Joint and Several Liability.
---------------------------
Except to the extent otherwise expressly provided, the liability of the
Borrowers under this Agreement and each other Loan Document shall be joint and
several without regard to which party receives the proceeds of the loans. Each
Borrower hereby acknowledges that it expects to derive substantial economic
benefit from the loans.
ARTICLE 13. GUARANTEE
Section 13.1. Guarantee.
---------
(a) Subject to the limitations of Section 13.1(b) hereof, each
Borrower hereby absolutely, irrevocably and unconditionally guarantees
the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations of the other
Borrower. This guaranty constitutes a guaranty of payment and neither
the Agent nor any Bank shall have any obligation to enforce any Loan
Document or exercise any right or remedy with respect to any collateral
security thereunder by any action, including making or perfecting any
claim against any Person or any collateral security for any of the
Borrower Obligations, prior to being entitled to the benefits of this
Article 13. The Agent may, at its option, proceed against any Borrower
in the first instance, to enforce the Borrower Obligations without
first proceeding against the other Borrower or any other Person, and
without first resorting to any other rights or remedies, as the Agent
may deem advisable. In furtherance hereof, if the Agent or any Bank is
prevented by law from collecting or otherwise hindered from collecting
or otherwise enforcing any Borrower Obligation from any Borrower in
accordance with its terms, the Agent or such Bank, as the case may be,
shall be entitled to receive hereunder from the other Borrower after
demand therefor, the sums which would have been otherwise due had such
collection or enforcement not been prevented or hindered.
(b) Notwithstanding anything to the contrary contained herein,
the maximum aggregate amount of the obligations of each Borrower under
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this Section 13.1 shall not, as of any date of determination, exceed
the lesser of (i) the greatest amount that is valid and enforceable
against such Borrower under principles of New York State contract law
and (ii) the greatest amount that would not render such Borrower's
liability hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or
any provisions of applicable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other
liabilities of such Borrower, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding,
however (provided that, as to either Borrower, each such exclusion
shall apply only to the extent such exclusion would result in this
Agreement's being enforceable against such Borrower under Fraudulent
Transfer Laws), any liability (A) in respect of intercompany
indebtedness to either Borrower, any Subsidiary or any other Affiliate
of either Borrower, to the extent that such intercompany indebtedness
would be discharged in an amount equal to the amount paid by such
Borrower hereunder, and (B) under any guarantee of (1) senior unsecured
indebtedness or (2) indebtedness subordinated in right of payment to
any Borrower Obligation, in either case which contains a limitation as
to maximum liability similar to that set forth in this Section 13.1(b)
and pursuant to which the liability of such Borrower hereunder is
included in the liabilities taken into account in determining such
maximum liability) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights of such Borrower pursuant to applicable law
or any agreement providing for an equitable allocation among such
Borrower, the Subsidiaries and the other Affiliates of the Borrowers of
obligations arising under guarantees by such parties. NOTWITHSTANDING
THE LIMITATION OF LIABILITY PROVIDED IN THIS SECTION 13.1(b), IT IS
EXPRESSLY AGREED THAT SUCH LIMITATION SHALL ONLY APPLY TO A BORROWER'S
OBLIGATIONS AS GUARANTOR UNDER THIS ARTICLE 13 AND SHALL NOT IN ANY
CIRCUMSTANCE LIMIT OR IN ANY WAY AFFECT ANY BORROWER'S OTHER
LIABILITIES OR OBLIGATIONS UNDER OR IN CONNECTION WITH ANY LOAN
DOCUMENT.
(c) Each Borrower agrees that the Borrower Obligations may at
any time and from time to time exceed the maximum liability of such
Borrower hereunder without impairing this Article 13 or affecting the
rights and remedies of the Agent or any Bank hereunder.
Section 13.2. Absolute Obligation.
-------------------
No Borrower shall be released from liability hereunder unless and until
the Termination Date shall have occurred and the outstanding principal balance
of all Revolving Credit Loans, Swing Line Loans and Term Loans shall have been
paid in full in cash, together with all accrued interest thereon and all other
sums then due and owing under the Loan Documents. Each Borrower acknowledges and
agrees that (i) neither the Agent nor any Bank has made any representation or
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warranty to such Borrower with respect to the other Borrower, its Subsidiaries,
any Loan Document, or any agreement, instrument or document executed or
delivered in connection therewith, or any other matter whatsoever, and (ii) such
Borrower shall be liable hereunder, and such liability shall not be affected or
impaired, irrespective of (A) the validity or enforceability of any Loan
Document, or any agreement, instrument or document executed or delivered in
connection therewith, or the collectability of any of the Borrower Obligations,
(B) the preference or priority ranking with respect to any of the Borrower
Obligations, (C) the existence, validity, enforceability or perfection of any
security interest or collateral security under any Loan Document, or the
release, exchange, substitution or loss or impairment of any such security
interest or collateral security, (D) any failure, delay, neglect or omission by
the Agent or any Bank to realize upon, enforce or protect any direct or indirect
collateral security, indebtedness, liability or obligation, any Loan Document,
or any agreement, instrument or document executed or delivered in connection
therewith, or any of the Borrower Obligations, (E) the existence or exercise of
any right of set-off by the Agent or any Bank, (F) the existence, validity or
enforceability of any other guaranty with respect to any of the Borrower
Obligations, the liability of any other Person in respect of any of the Borrower
Obligations, or the release of any such Person or any other guarantor of any of
the Borrower Obligations, (G) any act or omission of the Agent or any Bank in
connection with the administration of any Loan Document, or any of the Borrower
Obligations, (H) the bankruptcy, insolvency, reorganization or receivership of,
or any other proceeding for the relief of debtors commenced by or against, any
Person, (I) the disaffirmance or rejection, or the purported disaffirmance or
purported rejection, of any of the Borrower Obligations, any Loan Document, or
any agreement, instrument or document executed or delivered in connection
therewith, in any bankruptcy, insolvency, reorganization or receivership, or any
other proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith or any of
the Borrower Obligations, or which might cause or permit to be invoked any
alteration in the time, amount or manner of payment or performance of any of the
Borrower Obligations and liabilities, (K) the merger or consolidation of either
Borrower into or with any Person, (L) the sale by either Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to the Agent or any Bank,
(N) any amendment or modification of, or supplement to, any Loan Document or (O)
any other reason or circumstance which might otherwise constitute a defense
available to or a discharge of a Borrower in respect of their respective
obligations or liabilities (including the Borrower Obligations), or any other
fact or circumstance which would excuse the obligation of a guarantor or surety,
other than by the performance in full thereof. Each Borrower waives, in its
capacity as a guarantor hereunder, (i) presentment, demand, protest and notice
of any kind (including, without limitation, notice of dishonor); (ii) any
defense based upon or arising out of any defense which the other Borrower may
have to the payment or performance of any part of its Borrower Obligations;
(iii) any defense
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based upon any disbursements by the Agent or the Banks to either Borrower
pursuant to any agreements or instruments governing the Borrower Obligations
whether same be deemed an additional advance or be deemed to be paid out of any
special interest or other fund accounts, as constituting unauthorized payments
hereunder or amounts not guaranteed by this guaranty; (iv) all suretyship
defenses generally, (v) until the indefeasible payment in full of the Borrower
Obligations, all rights of each Borrower in its capacity as guarantor to proceed
against the other Borrower, including but not limited to all rights of
subrogation and all rights to enforce any remedy that the Agent or any Bank may
have against such Borrower and (vi) all rights to participate in any security
held by the Agent on behalf of the Banks or by any Bank for the Borrower
Obligations.
Section 13.3. Repayment in Bankruptcy.
-----------------------
If, at any time or times subsequent to the payment of all or any part
of the Borrower Obligations, any Bank shall be required to repay any amounts
previously paid by or on behalf of a Borrower in reduction thereof by virtue of
an order of any court having jurisdiction in the premises, including as a result
of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the other Borrower unconditionally agrees to pay to the
Agent, within 10 days after demand, a sum in cash equal to the amount of such
repayment, together with interest on such amount from the date of such repayment
by Bank to the date of payment to the Agent at the applicable Default Rate.
Section 13.4. Miscellaneous.
-------------
Each Borrower agrees that any statement of account with respect to the
Borrower Obligations from any Bank that binds either Borrower shall be binding
upon both Borrowers, and that copies of said statements of account maintained in
the regular course of such Bank's business may be used in evidence against each
Borrower in order to establish its obligations in respect of its guaranty
provided for in this Article 13.
Section 13.5. Subordination.
-------------
Each Borrower agrees that any and all Indebtedness owed to it by, and
claims it may have against, the other Borrower, whether such Indebtedness or
claims are in connection with the guaranty contemplated by this Article 13 or
the Borrower Obligations, or are completely independent thereof, will be
subordinate to the claims of the Agent and the Banks under this Article 13 and
all Indebtedness guaranteed hereby, and that such Borrower will not assert any
such claim against, or collect any amounts in respect thereof from, the other
Borrower until all Borrower Obligations have been indefeasibly satisfied in full
in cash. Notwithstanding such subordination, and without affecting or impairing
in any manner the liability of either Borrower under the other provisions of
this Article 13, any Indebtedness of either Borrower to the other Borrower, if
the Agent so requests, shall be collected, enforced and received by such
Borrower as trustee for
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the Agent and the Banks and paid over to the Agent on account of the Borrower
Obligations.
ARTICLE 14. BORROWER AGENCY
Section 14.1. Appointment and Actions.
-----------------------
Each Borrower hereby irrevocably designates and appoints the other
Borrower as the agent of such Borrower under the Loan Documents for the purpose
of taking any action, giving or receiving any notice, making any election,
exercising any other rights or powers and fulfilling any obligations of a
Borrower under this Agreement or any other Loan Document, all as effectively as
such Borrower could do, and agrees that any notice given to or received by one
Borrower shall be deemed to have been given to or received by (as the case may
be) both Borrowers.
ARTICLE 15. TRANSITIONAL ARRANGEMENTS
15.1. Prior Credit Agreement Superseded. This Agreement shall supersede
the First Restatement in its entirety, except as provided in this ss.15. On the
Second Restatement Effective Date, the rights and obligations of the parties
under the First Restatement and the "Notes" (as defined in the First
Restatement) issued in favor of the "Banks" (as defined in the First
Restatement) under the First Restatement (other than any rights available to the
"Agent" and the "Banks" (each as defined in the First Restatement) under Section
10.6 of the First Restatement), shall be subsumed within and be governed by this
Agreement and the other Loan Documents, provided, however, that each of the
"Revolving Credit Loans", "Swing Line Loans" and "Term Loans" (each as defined
in the First Restatement) outstanding under the First Restatement on the Second
Restatement Effective Date shall, for purposes of this Agreement, be loans
hereunder, and shall continue to bear interest or be subject to fees at the
respective rates in effect immediately prior to the Second Restatement Effective
Date, with each Borrower being responsible for, and hereby confirming its
obligation to pay, any breakage costs associated with the payment of "LIBO Rate
Loans" (as defined in the First Restatement) under the First Restatement on a
date which is not the last day of the applicable "Interest Period" (as defined
in the First Restatement) with respect thereto.
15.2. Return and Cancellation of Notes. Upon its receipt of its Note or
Notes hereunder on the Second Restatement Effective Date, each Bank will
promptly return to the Borrowers, marked "Canceled", any notes of the Borrowers
held by such Bank pursuant to the First Restatement.
15.3. Fees Under Superseded Agreement. All Facility, Agent's and other
fees and expenses owing or accruing under or in respect of the First Restatement
through the Second Effective Restatement Date shall be calculated as of the
Second Effective Restatement Date (prorated in the case of any fractional
periods), and shall be paid in accordance with the method, and on the dates,
specified in the First Restatement, as if the First Restatement were still in
effect.
-110-
ARTICLE 16. ACTION BY CONSENT OF THE SOLE MEMBER
As of the date hereof, MFC, as the sole member and through its officers
Alvin Murstein and Daniel F. Baker, hereby consents to MBC's entering into this
Agreement and the other Loan Documents, the assumption by MBC of all Obligations
hereunder and the consummation of all transactions contemplated hereby,
effective as of the date first set forth above.
THIS AGREEMENT CONTAINS A WAIVER OF TRIAL BY JURY.
SEE SECTION 10.7 HEREOF.
[Remainder of page intentionally left blank]
-111-
IN WITNESS WHEREOF, the Borrowers, the Agent, the Swing Line Lender and
the Banks have caused this Agreement to be duly executed by their respective
officers hereunto duly authorized as of the day and year first above written.
MEDALLION FINANCIAL CORP.
By: /s/ ALVIN MURSTEIN
-------------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ DANIEL F. BAKER
-------------------------------------
Name: Daniel F. Baker
Title: Treasurer and Chief Financial
Officer
MEDALLION BUSINESS CREDIT, LLC
By: /s/ ALVIN MURSTEIN
-------------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ DANIEL F. BAKER
-------------------------------------
Name: Daniel F. Baker
Title: Chief Financial Officer
FLEET NATIONAL BANK (f/k/a Fleet Bank,
National Association), as Agent, as Swing
Line Lender and as one of the Banks
By: Illegible
--------------------------------------
Title: Vice President
-112-
HSBC BANK USA
By: /s/ Bruce Wicks
--------------------------------------
Name: Bruce Wicks
Title: Vice President
CITIZENS BANK
By: /s/ Marie C. Duprey
--------------------------------------
Name: Marie C. Duprey
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Scott E. Silverstein
--------------------------------------
Name: Scott E. Silverstein
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ William F. Saya
--------------------------------------
Name: William F. Saya
Title: Vice President
ISRAEL DISCOUNT BANK
By: /s/ Robert J. Fainelli
--------------------------------------
Name: Robert J. Fainelli
Title: Vice President
By: /s/ Barry Shivak
--------------------------------------
Name: Barry Shivak
Title: Vice President
EUROPEAN AMERICAN BANK
By: Illegible
--------------------------------------
Title: Vice President
-113-
BANK LEUMI USA
By: /s/ Paul Tine
--------------------------------------
Name: Paul Tine
Title: Vice President
By: /s/ John Koenigsbery
--------------------------------------
Name: John Koenigsbery
Title: F.V.P
THE BANK OF TOKYO - MITSUBISHI TRUST
COMPANY
By: /s/ Jeffrey Millar
--------------------------------------
Name: Jeffrey Millar
Title: Vice President
-114-
Schedule I
Locations, Chief Executive Office
437 Madison Avenue, 38th Fl New York, NY 10022
-115-
Schedule II
Subsidiaries
Medallion Taxi Media, Inc., a New York corporation
Medallion Funding Corp., a New York corporation
Medallion Capital, Inc., a Minnesota corporation
Business Lenders, LLC, a Delaware limited liability company
Medallion Business Credit, LLC, a Delaware limited liability company
FS Merger Corp., a Delaware corporation
AMTC Merger Corp., a Delaware corporation
Firestone Financial, LLC, a Delaware limited liability company
Medallion Taxi LLC, a Delaware limited liability
-116-
Schedule III
Investments
EQUITY BREAKDOWNS
MEDALLION FUNDING CORP 75,703,000
MEDALLION CAPITAL CORP 17,800,000
BUSINESS LENDERS LLC 6,400,000
MEDALLION TAXI MEDIA, INC 4,153,000
INTERCO RECEIVABLES
BUSINESS LENDERS LLC 25,700,000
-117-
EXHIBIT A
Revolving Credit
Name and Address of Bank Facility Available Percentage
Fleet National Bank. $35,000,000 31.8181%
1185 Avenue of the Americas
New York, New York 10036
The Bank of New York $10,000,000 9.0909%
1290 Avenue of the Americas
New York, New York 10104
European American Bank $10,000,000 9.0909%
335 Madison Avenue
New York, New York 10017
Israel Discount Bank $10,000,000 9.0909%
511 Fifth Avenue
New York, New York 10022
Bank of Tokyo-Mitsubishi Trust $10,000,000 9.0909%
1251 Avenue of the Americas
New York, NY 10020
The Chase Manhattan Bank $10,000,000 9.0909%
600 Fifth Avenue
New York, New York 10036
Citizens Bank of Massachusetts $10,000,000 9.0909%
One Citizens Plaza
Providence, RI 02903
HSBC Bank USA $10,000,000 9.0909%
140 Broadway
New York, NY 10005
Bank Leumi USA $5,000,000 4.5454%
562 Fifth Avenue
New York, New York 10036
-118-
EXHIBIT B
REVOLVING CREDIT NOTE
$__________________ No. ____
September 22, 2000
FOR VALUE RECEIVED, the undersigned, [MEDALLION BUSINESS CREDIT, LLC, a
Delaware limited liability company] [MEDALLION FINANCIAL CORP., a Delaware
corporation] (the "Borrower"), hereby unconditionally promises to pay on the
date of Maturity, as defined in the Loan Agreement (hereinafter referred to) or
on such earlier date as may be required under the Loan Agreement, to the order
of ______________________ (the "Bank") at the Agent Payment Office (as defined
in the Loan Agreement), in lawful money of the United States of America and in
immediately available funds, an amount equal to the lesser of (a)
________________ DOLLARS ($______________) and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Bank to the Borrower
pursuant to the Second Amended and Restated Loan Agreement, dated as of
September 22, 2000, as amended, among the Borrower, [Medallion Financial
Corp./Medallion Business Credit, LLC], the banks that from time to time are
signatories thereto, the Swing Line Lender and Fleet National Bank, as Arranger
and Agent (as amended, modified or supplemented from time to time in accordance
with its terms, the "Loan Agreement"). The Borrower further promises to pay
interest (computed on the basis of a 360-day year for the actual number of days
elapsed) in like money on the unpaid principal balance of this Note from time to
time outstanding at such rates and times as provided in the Loan Agreement.
All Revolving Credit Loans made by the Bank pursuant to the Loan
Agreement and all payments of the principal thereof shall be endorsed by the
holder of this Note on the schedule annexed hereto (including any additional
pages such holder may add to such schedule), which endorsement shall constitute
prima facie evidence of the accuracy of the information so endorsed; provided,
however, that the failure of the holder of this Note to insert any date or
amount or other information on such schedule shall not in any manner affect the
obligation of the Borrower to repay any Revolving Credit Loans in accordance
with the terms of the Loan Agreement.
On and after the stated or any accelerated maturity hereof, and until
paid in full (whether before or after the occurrence of any Event
of Default described in Sections 9.1 (h) and 9.1(i) of the Loan Agreement), (a)
the outstanding principal amount of this Note which at such time is a Prime Rate
Loan (including, to the extent permitted by law, unpaid interest thereon) shall
bear interest at an annual rate equal to the sum of 2% plus the rate of interest
then applicable to such Prime Rate Loan then in effect and (b) the outstanding
principal amount of this Note which is a LIBOR Rate Loan (including, to the
extent permitted by law, unpaid interest thereon) shall bear interest at an
annual rate equal to the sum of 2% plus the rate of interest then applicable to
such LIBOR Rate Loan then in effect, in each case payable on demand, but in no
event shall such rate of interest (the "Default Rate") be in excess of the
maximum rate of interest permitted under applicable law. The Default Rate shall
be computed on the basis of a 360-day year for the actual number of days
elapsed. If the Default Rate is to be based on the Prime Rate, the Prime Rate to
be charged shall change when and as the Prime Rate is changed, and any such
change in the Prime Rate shall become effective .at the opening of business on
the day on which such change is adopted. At the end of the applicable Interest
Period for a LIBOR Rate Loan on which the Default Rate is being charged, such
LIBOR Rate Loan shall be automatically converted to a Prime Rate Loan, and the
Default Rate to be charged in respect of such Loan shall be computed based on
the Prime Rate.
This Note is one of the Revolving Credit Notes referred to in the Loan
Agreement, is secured as provided therein, is entitled to the benefits thereof
and is subject to optional and mandatory prepayment, in whole or in part, as
provided therein. [This Note has been issued as a replacement and in exchange
for (but not in payment or satisfaction of) the Revolving Credit Note dated [ ]
by the Borrower in favor of the Bank in the aggregate principal amount of
$[__________].] The Borrower shall make when due any and all payments and
prepayments on this Revolving Credit Note required under the Loan Agreement.
Reference is herein made to the-Loan Agreement for the rights of the holder to
accelerate the unpaid balance hereof prior to maturity.
Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, release, surrender or substitution of security, or
forbearance or other indulgence, without notice.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Loan Agreement.
-2-
This Note may not be changed, modified, or terminated orally, but only
by an agreement in writing signed by the party to be charged.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS REVOLVING CREDIT
NOTE, THE BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE
EXTENT PERMITTED BY LAW) THE RIGHT TO A TRIAL BY JURY, ALL RIGHTS OF SETOFF AND
RIGHTS TO INTERPOSE COUNTERCLAIMS AND CROSS-CLAIMS AGAINST THE BANK (UNLESS SUCH
SETOFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE
FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER
ACTION) AND THE DEFENSES OF FORUM NON CONVENIENS AND IMPROPER VENUE. THE
BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, COUNTY OF NEW YORK AND OF ANY FEDERAL COURT
LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS REVOLVING CREDIT NOTE. THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES, AND SHALL BE BINDING
UPON THE SUCCESSORS AND ASSIGNS OF BORROWER AND INURE TO THE BENEFIT OF THE BANK
AND ITS SUCCESSORS AND ASSIGNS. If any term or provision of this Revolving
Credit Note shall be held invalid, illegal or unenforceable, the validity of all
other terms and provisions herein shall in no way be affected thereby.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note on
the date first above written.
[MEDALLIONFINANCIAL CORP.]
[MEDALLION BUSINESS CREDIT, LLC]
a Delaware [corporation]
[limited liability company]
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
Grid Schedule for Revolving Credit Note
Attached to and made part of the Revolving Credit Note,
dated September 22, 2000,
by [Medallion Financial Corp.] [Medallion Business Credit, LLC] to the order of
____________ (the "Bank") pursuant to the Second Amended and Restated Loan
Agreement, dated as of September 22, 2000 among Medallion Financial Corp.
Medallion Business Credit, LLC, the banks that from time to time are signatories
thereto and Fleet National Bank, as
Arranger,
Swing Line Lender and Agent
- ------------------------------------------------------------------------------------------------------------------------------------
Loan Type Unpaid
(LIBOR Rate Loan or Interest Period Amount of Principal
Prime Rate Loan) and Interest Rate Principal Paid Balance Name of
Principal (Borrowed or (LIBOR Rate or Prepaid or (Balance Person Making
Date Amount (Converted to) Loans only) Converted Continued) Notation
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT C
TERM NOTE
$________________ No.___________
[Date]
FOR VALUE RECEIVED, the undersigned, [MEDALLION FINANCIAL CORP., a
Delaware corporation] [MEDALLION BUSINESS CREDIT, LLC, a Delaware limited
liability company] (the "Borrower"), hereby unconditionally promises to pay on
_________________, or on such earlier date as may be required under the Loan
Agreement (hereinafter referred to), to the order of __________________ (the
"Bank") at the Agent Payment Office (as defined in the Loan Agreement), in
lawful money of the United States of America and in immediately available funds,
an amount equal to the lesser of (a) _________________ DOLLARS ($____________)
and (b) the aggregate unpaid principal amount of the Term Loan made by the Bank
to the Borrower pursuant to the Second Amended and Restated Loan Agreement,
dated as of September 22, 2000, among the Borrower, [Medallion Financial
Corp./Medallion Business Credit, LLC], the banks that from time to time are
signatories thereto, Fleet National Bank as Arranger, Swing Line Lender and
Agent (as amended, modified or supplemented from time to time in accordance with
its terms, the "Loan Agreement"). The Borrower further promises to pay interest
(computed on the basis of a 360-day year for the actual number of days elapsed)
in like money on the unpaid principal balance of this Note from time to time
outstanding at such rates and times as provided in the Loan Agreement.
All payments of the principal on the Term Loan represented by this Note
("Principal Payments") shall be made at such times as provided in the Loan
Agreement. All Principal Payments shall be endorsed by the holder of this Note
on the schedule annexed hereto (including any additional pages such holder may
add to such schedule), which endorsement shall constitute prima facie evidence
of the accuracy of the information so endorsed; provided, however, that the
failure of the holder of this Note to insert any date or amount or other
information on such schedule shall not in any manner affect the obligation of
the Borrower to repay the Term Loan in accordance with the terms of the Loan
Agreement.
Amounts repaid on this Term Note cannot be reborrowed.
On and after the stated or any accelerated maturity hereof, and until
paid in full (whether before or after the occurrence of any Event of Default
described in Sections 9.1(h) and 9.1(i) of the Loan Agreement), (a) the
outstanding principal amount of this Note which at such time is a Prime Rate
Loan (including, to the extent permitted by law, unpaid interest thereon) shall
bear interest at an annual rate equal to the sum of 2% plus the rate of interest
then applicable to such Prime Rate Loan then in effect and (b) the outstanding
principal amount of this Note which is a LIBOR Rate Loan (including, to the
extent permitted by law, unpaid interest thereon) shall bear interest at an
annual rate equal to the sum of 2% plus the rate of interest then applicable to
such LIBOR Rate Loan then in effect, in each case payable on demand, but in no
event shall such rate of interest (the "Default Rate") be in excess of the
maximum rate of interest permitted under applicable law. The Default Rate shall
be computed on the basis of a 360-day year for the actual number of days
elapsed. If the Default Rate is to be based on the Prime Rate, the Prime Rate to
be charged shall change when and as the Prime Rate is changed, and any such
change in the Prime Rate shall become effective at the opening of business on
the day on which such change is adopted. At the end of the applicable Interest
Period for a LIBOR Rate Loan on which the Default Rate is being charged, such
LIBOR Rate Loan shall be automatically converted to a Prime Rate Loan, and the
Default Rate to be charged in respect of such Loan shall be computed based on
the Prime Rate.
This Note is one of the Term Notes referred to in the Loan Agreement,
is secured as provided therein, is entitled to the benefits thereof and is
subject to optional and mandatory prepayment, in whole or in part, as provided
therein. [This Note has been issued as a replacement and in exchange for (but
not in payment or satisfaction of) the Term Note dated [ ] by the Borrower in
favor of the Bank in the aggregate principal amount of $[__________].] The
Borrower shall make when due any and all payments and prepayments on this Term
Note required under the Loan Agreement. Reference is herein made to the Loan
Agreement for the rights of the holder to accelerate the unpaid balance hereof
prior to maturity.
Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, release, surrender or substitution of security, or
forbearance or other indulgence, without notice.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Loan Agreement.
-2-
This Note may not be changed, modified, or terminated orally, but only
by an agreement in writing signed by the party to be charged.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS TERM LOAN NOTE, THE
BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT
PERMITTED BY LAW) THE RIGHT TO A TRIAL BY JURY, ALL RIGHTS OF SETOFF AND RIGHTS
TO INTERPOSE COUNTERCLAIMS AND CROSS-CLAIMS AGAINST THE BANK (UNLESS SUCH
SETOFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE
FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER
ACTION) AND THE DEFENSES OF FORUM NON CONVENIENS AND IMPROPER VENUE. THE
BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK COUNTY OF NEW YORK AND OF ANY FEDERAL COURT
LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS TERM NOTE. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES, AND SHALL BE BINDING UPON THE
SUCCESSORS AND ASSIGNS OF BORROWER AND INURE TO THE BENEFIT OF THE BANK AND ITS
SUCCESSORS AND ASSIGNS. If any term or provision of this Term Note shall be held
invalid, illegal or unenforceable, the validity of all other terms and
provisions herein shall in no way be affected thereby.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note on
the date first above written.
[MEDALLION FINANCIAL CORP.]
[MEDALLION BUSINESS CREDIT, LLC]
a Delaware [corporation]
[limited liability company]
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
Grid Schedule for Term Note
Attached to and made part of the Term Note, dated _____________,
by [Medallion Financial Corp.] [Medallion Business Credit, LLC] to the order of
____________ (the "Bank") pursuant to the Second Amended and Restated Loan
Agreement, dated as of September 22, 2000 among Medallion Financial Corporation,
Medallion Business Credit, LLC, the banks that from time to time
are signatories thereto and Fleet National Bank,
as Arranger, Swing Line Lender and Agent
- ------------------------------------------------------------------------------------------------------------------------------------
Loan Type Unpaid
(LIBOR Rate Loan or Interest Period Amount of Principal
Prime Rate Loan) and Interest Rate Principal Paid Balance Name of
Principal (Borrowed or (LIBOR Rate or Prepaid or (Balance Person Making
Date Amount (Converted to) Loans only) Converted Continued) Notation
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT D
SWING LINE NOTE
$5,000,000.00 No.
September 22,
2000
FOR VALUE RECEIVED, the undersigned, [MEDALLION FINANCIAL CORP., a
Delaware corporation] [MEDALLION BUSINESS CREDIT, LLC, a Delaware limited
liability company] (the "Borrower"), hereby unconditionally promises to pay on
the date of Swing Line Maturity Date, as defined in the Loan Agreement
(hereinafter referred to) or on such earlier date as may be required under the
Loan Agreement, to the order of FLEET NATIONAL BANK (the "Bank") at the Agent
Payment Office (as defined in the Loan Agreement), in lawful money of the United
States of America and in immediately available funds, an amount equal to the
lesser of (a) FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) and (b) the
aggregate unpaid principal amount of all Swing Line Loans made by the Bank to
the Borrower pursuant to the Second Amended and Restated Loan Agreement, dated
as of September 22, 2000, as amended, among the Borrower, [Medallion Financial
Corp./Medallion Business Credit, LLC], the banks that from time to time are
signatories thereto, the Swing Line Lender and Fleet National Bank as Arranger
and Agent (as amended, modified or supplemented from time to time in accordance
with its terms, the "Loan Agreement"). The Borrower further promises to pay
interest (computed on the basis of a 360-day year for the actual number of days
elapsed) in like money on the unpaid principal balance of this Note from time to
time outstanding at such rates and times as provided in the Loan Agreement.
All Swing Line Loans made by the Bank pursuant to the Loan Agreement
and all payments of the principal thereof shall be endorsed by the holder of
this Note on the schedule annexed hereto (including any additional pages such
holder may add to such schedule), which endorsement shall constitute prima facie
evidence of the accuracy of the information so endorsed; provided, however, that
the failure of the holder of this Note to insert any date or amount or other
information on such schedule shall not in any manner affect the obligation of
the Borrower to repay any Swing Line Loans in accordance with the terms of the
Loan Agreement.
On and after the stated or any accelerated maturity hereof, and until
paid in full (whether before or after the occurrence of any Event of Default
described in Sections 9.1(h) and 9.1(i) of the Loan Agreement), the outstanding
principal amount of this Note (including, to the extent permitted by law, unpaid
interest thereon) shall bear interest (the "Default Rate") at an annual rate
equal to the sum of 2% plus the Prime Rate then in effect and the Prime Rate to
be charged shall change when and as the Prime Rate is changed, and any such
change in the Prime Rate shall become effective at the opening of business on
the day on which such change is adopted. In each case, interest at the Default
Rate shall be payable on demand, but in no event shall such rate of interest be
in excess of the maximum rate of interest permitted under applicable law. The
Default Rate shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
This Note is the Swing Line Note referred to in the Loan Agreement, is
secured as provided therein, is entitled to the benefits thereof and is subject
to optional and mandatory prepayment, in whole or in part, as provided therein.
[This Note has been issued as a replacement and in exchange for (but not in
payment or satisfaction of) the Swing Line Note dated [ ] by the Borrower in
favor of the Bank in the aggregate principal amount of $[__________].] The
Borrower shall make when due any and all payments and prepayments on this Swing
Line Note required under the Loan Agreement. Reference is herein made to the
Loan Agreement for the rights of the holder to accelerate the unpaid balance
hereof prior to maturity.
Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, release, surrender or substitution of security, or
forbearance or other indulgence, without notice.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Loan Agreement.
This Note may not be changed, modified, or terminated orally, but only
by an agreement in writing signed by the party to be charged.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS SWING LINE NOTE,
THE BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT
PERMITTED BY LAW) THE RIGHT TO A TRIAL BY JURY, ALL RIGHTS OF SETOFF AND RIGHTS
TO INTERPOSE COUNTERCLAIMS AND CROSS-CLAIMS AGAINST THE BANK
(UNLESS SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY
APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED
IN ANY OTHER ACTION) AND THE DEFENSES OF FORUM NON CONVENIENS AND IMPROPER
VENUE. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, COUNTY OF NEW YORK AND OF
ANY FEDERAL COURT LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK 1N CONNECTION
WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SWING LINE
NOTE. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES, AND
SHALL BE BINDING UPON THE SUCCESSORS AND ASSIGNS OF BORROWER AND INURE TO THE
BENEFIT OF THE BANK AND ITS SUCCESSORS AND ASSIGNS. If any term or provision of
this Swing Line Note shall be held invalid, illegal or unenforceable, the
validity of all other terms and provisions herein shall in no way be affected
thereby.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note on
the date first above written.
[MEDALLION FINANCIAL CORP.]
[MEDALLION BUSINESS CREDIT, LLC]
a Delaware [corporation]
[limited liability company]
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
Grid Schedule for Swing Line Note
Attached to and made part of the Swing Line Note, dated September 22, 2000,
by [Medallion Business Credit, LLC][Medallion Business Credit, LLC] to the
order of Fleet National Bank (the "Bank") pursuant to the Second Amended and
Restated Loan Agreement, dated as of September 22, 2000 among Medallion
Financial Corporation, Medallion Business Credit, LLC, the banks that from
time to time are signatories thereto and Fleet National Bank, as Arranger,
Swing Line Lender and Agent
- --------------------------------------------------------------------------------
Unpaid
Principal
Amount of Balance Name of
Principal Principal Paid (Balance Person Making
Date Amount or Prepaid Continued) Notation
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT E
FORM OF LOAN REQUEST
--------------------
___________, 200_
Fleet National Bank, as Agent for
the Banks referred to below
100 Federal Street
Boston, MA 02110
Attention:_________________
Re: Second Amended and Restated Loan Agreement, dated as of September
22, 2000 by and among Medallion Financial Corp. ("MFC"),
Medallion Business Credit, LLC ("MBC"), the banks that from
time to time are signatories thereto and Fleet National Bank as
Swing Line Lender. Arranger and Agent the "Loan Agreement")
-----------------
Dear Sir or Madam:
Reference is made to the Loan Agreement (capitalized terms used but not
defined herein having the meaning ascribed thereto in the Loan Agreement).
I. Advances
-----------
[In case all or a portion of a Revolving Credit borrowing is made as a Prime
Rate Loan.]
Please advance $____________ as a Prime Rate Loan effective on
__________________, 20__. [Note: loan request must be received by no later than
11:00 a.m.,. New York City time, on the Business Day prior to this day in order
for the loan to be advanced on the day requested.]
[In the case all or a portion of a Revolving Credit borrowing is made as a LIBOR
Rate Loan.]
Please advance $_____________ as a LIBOR Rate Loan effective on
_________________, 20__ (which is not less than three Banking Days from the date
hereof). The Interest Period for such LIBOR Rate Loan
will commence on and include the date of advance and will end, subject to the
limitations applicable to Interest Periods contained in the definition of
Interest Period in the Loan Agreement, on the numerically corresponding date
that is [one] [two] [three] [six] months thereafter.
[In the case all or a portion of a borrowing is made as a Swing Line Loan.]
Please advance $____________ as a Swing Line Loan effective on
__________________, 20__. [Note: loan request must be received by no later than
3:00 p.m.,. New York City time in order for the loan to be advanced on the same
day as the request.] The Swing Line Interest Period for such Swing Line Loan
will commence on and include the date of advance and will end on the numerically
corresponding date that is [insert number between one and ten, inclusive] days
thereafter.
II. Conversions
---------------
[In the case of the conversion of all [or a portion] of a Prime Rate Loan into a
LIBOR Rate Loan.]
Please convert $____________ [, which amount represents the entire
outstanding principal amount] of the Prime Rate Loan or Loans of the
undersigned, into a LIBOR Rate Loan effective on __________________, 20__ (which
is not less than three Banking Days from the date hereof). The Interest Period
for such LIBOR Rate Loan will commence on and include the date of such
conversion and will end, subject to the limitations applicable to Interest
Periods contained in the definition of Interest Period in the Loan Agreement, on
the numerically corresponding date that is [one] [two] [three] [six] months
thereafter. [Note: Term Loans that are LIBOR Rate Loans may only have an
Interest Period of one month.]
[Please continue $ ____________ (the balance) of such Prime Rate Loan
or Loans not so converted as a Prime Rate Loan.]
[In the case of the conversion of all [or a portion] of a LIBOR Rate Loan into a
Prime Rate Loan.]
Please convert $____________ , which amount represents the entire
outstanding principal amount] of the LIBOR Rate Loan or Loans of the
undersigned, the Interest Period with respect to which ends on (the "Conversion
Date"), into a Prime Rate Loan effective on the Conversion Date (which is not
less than three Banking Days from the date hereof).
All of the proceeds of the advance described above will be used
directly or indirectly by [MFC] [MBC].
III. Continuations
------------------
[In the case of the continuation of all [or a portion] of a LIBOR Rate Loan.]
Please continue $____________ [, which amount represents the entire
outstanding principal amount] of the LIBOR Rate Loan or Loans of the
undersigned, the Interest Period with respect to which ends on _________________
(which is not less than three Banking Days from the date hereof), as a LIBOR
Rate Loan with an Interest Period commencing on and including such date and
ending, subject to the limitations applicable to Interest Periods contained in
the definition of Interest Period in the Loan Agreement, on the numerically
corresponding date that is [one] [two] [three] [six] months thereafter. [Note:
Term Loans that are LIBOR Rate Loans may only have an Interest Period of one
month].
[MFC] [MBC] hereby represents and warrants to the Bank that:
(a) Each and every of the representations and warranties set
forth in the Loan Agreement and the other Loan Documents is true as of the date
hereof and with the same effect as though made on the date hereof, and is hereby
incorporated herein in full by reference as if fully restated herein in its
entirety.
(b) No Default or Event of Default and no event or condition
which, with the giving of notice or lapse of time or both, would constitute such
a Default or Event of Default, now exists or, after giving effect to the
borrowings contemplated hereby, would exist.
(c) Each request for a loan as provided above, after taking
into account the loans) requested, are within the [MFC] [MBC] Borrowing Base
limitations set forth in the Loan Agreement.
[MEDALLION FINANCIAL CORP.]
[MEDALLION BUSINESS CREDIT, LLC]
a Delaware [corporation]
[limited liability company]
By:______________________________________
By:______________________________________
Exhibit F
SECURITY AGREEMENT
among
MEDALLION FINANCIAL CORP., as debtor,
MEDALLION BUSINESS CREDIT, LLC, as debtor
and
FLEET NATIONAL BANK (f/k/a, Fleet Bank, National Association) as
Agent
and secured party,
for the benefit of
THE BANKS AND SWING LINE LENDER SIGNATORY TO
THE SECOND AMENDED AND RESTATED LOAN AGREEMENT,
DATED AS OF SEPTEMBER 22, 2000,
AMONG MEDALLION FINANCIAL CORP.,
MEDALLION BUSINESS CREDIT, LLC,
THE BANKS SIGNATORY THERETO, THE SWING LINE LENDER
AND FLEET NATIONAL BANK, AS ARRANGER AND
ADMINISTRATIVE AGENT
and
THE HOLDERS OF COMMERCIAL PAPER ISSUED BY MEDALLION
FINANCIAL CORP.
-------------------------------
dated as of September 22, 2000
-------------------------------
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of September 22, 2000, is among
MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
CREDIT, LLC, a Delaware limited liability company ("MBC" and, together with MFC,
the "Borrowers" and, each of MFC and MBC individually, a "Borrower"), and FLEET
NATIONAL BANK (f/k/a FLEET BANK, National Association), a national banking
association, as collateral agent for the banks that from time to time are
signatories to the Loan Agreement (hereinafter defined) (collectively, the
"Banks" and individually, a "Bank;" which term as used in this Security
Agreement shall be deemed to include the Swing Line Lender set forth in such
Loan Agreement, unless the context clearly indicates otherwise) and as
collateral agent for the CP Holders (as defined in the Loan Agreement) (in such
capacity, the "Agent").
RECITALS
WHEREAS, Fleet National Bank, as Agent (in such capacity, the
"Administrative Agent") and the Banks have entered into a Second Amended and
Restated Loan Agreement, dated as of even date herewith (as the same may be
amended, modified, supplemented or restated from time to time, or replaced in
connection with any refinancing thereof, the "Loan Agreement"), with the
Borrowers providing for revolving credit loans (including the Initial Revolving
Credit Loan) (the "Revolving Credit Loans," which term as used in this Security
Agreement shall be deemed to include the Swing Line Loans (as defined in the
Loan Agreement) unless the context clearly indicates otherwise) and term loans
(the "Term Loans") not to exceed the amounts provided in the Loan Agreement.
WHEREAS, the Loan Agreement is an amendment and restatement of the
First Restatement dated as of the First Restatement Date, which is an amendment
and restatement of the Original Agreement dated as of the Original Effective
Date.
WHEREAS, in connection with the Original Agreement, MFC entered into a
Security Agreement (as the same may have been amended, modified, supplemented or
restated prior to the effectiveness hereof, the "MFC Security Agreement") with
the Administrative Agent to secure the "Obligations" as defined in the MFC
Security Agreement, including, without limitation, its
obligations under the Original Agreement and the "Notes" as defined in the
Original Agreement.
WHEREAS, in connection with the First Restatement, MBC entered into a
Security Agreement (as the same may have been amended, modified, supplemented or
restated prior to the effectiveness hereof, the "MBC Security Agreement") with
the Administrative Agent to secure the "Obligations" as defined in the MBC
Security Agreement, including, without limitation, its obligations under the
First Restatement and the "Notes" as defined in the First Restatement.
WHEREAS, in connection with the First Restatement, MFC confirmed that
the MFC Security Agreement continued to secure its obligations under the First
Restatement and under the "Notes" as defined in the First Restatement.
WHEREAS, a condition precedent to the obligation of the Banks to make
the Revolving Credit Loans or Term Loans under the Loan Agreement is that each
of the Borrowers confirm and continue its grant to the Administrative Agent of
perfected security interests in all of the Collateral to secure the payment and
performance of all of the obligations of each Borrower owing to the
Administrative Agent and the Banks under the Loan Agreement and other Loan
Documents by amending and restating the MFC Security Agreement and MBC Security
Agreement in their entirety pursuant hereto.
WHEREAS, in partial satisfaction of each Borrower's obligation under
Sections 5.1 and 5.2 of the Loan Agreement and otherwise as an inducement
necessary to the Banks' making the Revolving Credit Loans and/or Term Loans to
the Borrowers under the Loan Agreement, each Borrower agrees to confirm its
prior grant and grant to the Administrative Agent in favor of the Banks a
security interest in the Collateral pursuant to the terms set forth herein.
WHEREAS, the Banks are willing to consent to the grant of the security
interest in the Collateral to the Agent for the benefit of the CP Holders (in
addition to the Banks and the Administrative Agent), provided that in the case
of each of the CP Holders such security interest granted to the Agent for such
CP Holder's benefit shall only be effective to the extent that such CP Holder
has (a) designated the Agent as collateral agent for such CP Holder for purposes
of this Agreement on terms and conditions satisfactory to the Agent and with
duties consistent with those necessary to enable the Agent (in its
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opinion) to perform its duties as collateral agent under this Agreement, (b)
consented to and agreed to be bound by the terms of this Agreement and to the
Agent, in its capacity as collateral agent, entering into this Agreement on such
CP Holder's behalf, and (c) agreed to indemnify the Agent, in its capacity as
collateral agent, in a manner satisfactory to the Agent, with respect to the
Agent's responsibilities as collateral agent under this Agreement on such CP
Holder's behalf.
WHEREAS, by accepting the security granted by, and the other benefits
of, this Agreement, each CP Holder shall be deemed to have (a) designated the
Agent as collateral agent for such CP Holder for purposes of this Agreement on
the terms and conditions set forth herein, (b) consented to the terms of this
Agreement and to the Agent, in its capacity as collateral agent, entering into
this Agreement on such CP Holder's behalf, and (c) agreed to indemnify the
Agent, in its capacity as collateral agent, pursuant to the terms of this
Agreement, with respect to the Agent's responsibilities as collateral agent
under this Agreement on such CP Holder's behalf.
NOW, THEREFORE, in consideration of the willingness of the
Administrative Agent and the Banks to enter into the Loan Agreement and to
agree, subject to the terms and conditions thereof, to make the Revolving Credit
Loans and/or Term Loans to the Borrowers pursuant thereto, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Borrower and the Agent hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. Capitalized terms defined in the foregoing
caption and recitals shall have the respective meanings ascribed thereto.
Capitalized terms defined in the Loan Agreement and not otherwise defined in
this Agreement shall have the meanings ascribed to those terms in the Loan
Agreement. In addition, as used herein, the following terms shall have the
following meanings:
"Accounts" shall have the meaning assigned to it in Section 9-106 of
the UCC.
"Books and Records" shall mean all books, records, computer files and
other Information relating to any of the Collateral.
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"Chattel Paper" shall have the meaning assigned to it in Section
9-105(1)(b) of the UCC.
"Collateral" shall mean all of the following property and to the extent
otherwise not included, all other personal and fixture property of every kind
and nature, now owned or at any time hereafter acquired by either Borrower or in
which either Borrower now has or at any time in the future may acquire any
right, title or interest:
(a) all Loans;
(b) all property and rights, including, but not limited to,
Underlying Collateral, which now or hereafter secure any of the Loans;
(c) all Books and Records;
(d) all amounts deposited in any Collateral Account;
(e) all Contracts;
(f) all rights and remedies of each Borrower with respect to, or in
connection with, any contract, security interest, guaranty or other document,
instrument or agreement relating to or affecting any Loans or any Underlying
Collateral;
(g) all General Intangibles;
(h) all Instruments;
(i) all Chattel Paper;
(j) all Equipment;
(k) all Inventory;
(l) all Investments;
(m) all Investment Property;
(n) all Accounts;
(o) all Receivables;
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(p) all Documents;
(q) all property and rights, including, but not limited to, items
described in clauses (b) through (o) hereof, repossessed, or otherwise acquired
in connection with any Loans or the exercise by either Borrower of any rights of
a secured party under or with respect to any of the Loans or this Agreement or
arising out of the sale or disposition of any Loans, any other Collateral, or in
connection with the sale of any repossessed property;
(r) all parts, accessions, accessories, goods, appurtenant or related
to any of the foregoing, replacement parts, trade names, closes in action, now
or hereafter affixed thereto, arising therefrom, used in connection therewith,
or related to the use, possession or operation thereof;
(s) all cash and Short-Term Investments;
(t) all Depository Accounts,
(u) rights to the payment of money, insurance refund claims and all
other insurance claims and proceeds, tort claims and rights to the proceeds of
letters of credit, and
(v) to the extent not otherwise included, all Proceeds, products,
substitutions and replacements of any and all of the foregoing.
"Collateral Account" shall mean the one or more accounts of the
Borrowers maintained with the Agent and containing such reasonable terms as
shall be agreed to by the Agent.
"Contracts" shall mean all contracts and agreements, including, but not
limited to, loan agreements, security agreements, guaranties, intercreditor
agreements, office leases, lease agreements for mobile goods (as defined in the
UCC) (whether or not covered by a certificate of title), indemnity agreements,
license agreements, rental agreements and all other contracts and agreements of
every kind and nature whatsoever.
"Depository Accounts" shall mean accounts of either Borrower containing
any deposits or other sums credited to such Borrower, whether in regular or
special depository accounts or otherwise.
-5-
"Documents" shall have the meaning assigned to it in Section
9-105(1)(i) of the UCC.
"Equipment" shall mean all machinery, equipment, fixtures, vehicles,
office equipment, furniture, furnishings, inventories, supplies, computer
equipment and all other equipment whatsoever, wherever located, together with
all attachments, components, parts, equipment and accessories installed therein
or affixed thereto, including, but not limited to, all equipment as defined in
Section 9-109(2) of the UCC and all products, profits, rents and proceeds of any
of the foregoing; all whether now owned or hereafter created or acquired.
"General Intangibles" shall have the meaning assigned to it in Section
9-106 of the UCC and shall include, but not be limited to, all interests in and
to Permits and Licenses, Medallion Rights, tax refund claims, patents, patent
applications, rights to sue and recover for past infringement of patents,
trademarks, tradenames, trademark applications, copyrights, copyright
applications, trade secrets, licenses and know-how.
"Information" shall mean books, records, delivery receipts, copies of
checks and stubs, security documents, division of interest files, bank
reconciliation statements, remittances, revenue accounting records, invoices,
leases, licenses, authorizations for expenditures, contracts and such other
documents, and all other recorded information and data of any kind or nature,
regardless of the medium or recording, including software, writings, plans,
specifications and schematics.
"Instruments" shall have the meaning assigned to it in Section
9-105(1)(i) of the UCC.
"Inventory" shall mean all inventory, goods, raw materials, components
and other personal property, wherever located, including, but not limited to,
all inventory as defined in Section 9-109(4) of the UCC.
"Investment" in any Person shall mean any loan, advance, or extension
of credit to or for the account of; any guaranty, endorsement or other direct or
indirect contingent liability in connection with the obligations, Capital Stock
or dividends of; any ownership, purchase or acquisition of any assets, business,
Capital Stock, obligations or
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securities of; or any other interest in or capital contribution to; such Person.
"Investment Property" shall have the meaning assigned to it in Section
9-115 of the UCC, including, without limitation, securities as defined in the
UCC.
"Law" shall mean any law, regulation, guideline, treaty or directive or
condition or interpretation thereof, including without limitation, any request,
guideline or policy, whether or not having the force of law.
"Loan" shall mean any loan, advance or extension of credit made in the
ordinary course of business by either Borrower to or for the account of any
client or customer of such Borrower. Any loan, advance or extension of credit
made at a different point in time shall be deemed to be a separate and distinct
Loan.
"Loan Documents" shall mean and collectively refer to the Loan
Documents (as defined in the Loan Agreement) and all other agreements,
instruments and documents, including, without limitation, notes, guaranties,
mortgages, deeds to secure debt, deeds of trust, chattel mortgages, pledges,
powers of attorney, consents, assignments, contracts, notices, security
agreements, trust account agreements and all other written matters whether
heretofore, now or hereafter executed by or on behalf of either Borrower and/or
delivered to the Agent, the Administrative Agent or the Banks, with respect to
this Agreement, or the transactions contemplated by this Agreement.
"Medallion" shall mean the plate which displays the license number of a
licensed Taxicab on the outside of the vehicle and which is issued by the New
York City Taxi and Limousine Commission or by any other Governmental Authority
for a jurisdiction other than New York City with the authority to issue licenses
for the operation of Taxicabs.
"Medallion Rights" shall mean (a) all license, operating and/or
subscription rights to Taxicab Medallion(s), and all license, operating and/or
subscription rights evidenced by such Medallion(s) and (b) all renewals thereof.
"Obligations" shall mean any and all present and future indebtedness,
liabilities and all performance obligations which may at any time be owing by
either Borrower to the Agent, the
-7-
Administrative Agent or any Bank, however arising, under the Loan Agreement,
this Agreement or any other Loan Document between or among the Agent, the
Administrative Agent and/or any Bank and any Borrower in connection with any of
the foregoing or in connection with any Loan Document, whether now in existence
or incurred hereafter, whether incurred directly or incurred by others and
assumed by Borrower, whether secured by mortgage, pledge, or lien upon or
security interest in any property of either Borrower, or any other Person,
whether such indebtedness or other obligation is absolute or contingent, joint
or several, matured or unmatured, direct or indirect, fixed, absolute or
contingent, liquidated or unliquidated, now existing or hereafter arising,
created, assumed, incurred or acquired and whether either Borrower is liable for
such indebtedness or other obligation as principal, surety, endorser, guarantor,
or otherwise. Without limiting the generality of the foregoing, the Obligations
shall include the liability of each Borrower to any Bank for all balances owing
to any Bank in any account maintained on such Bank's books under the Loan
Agreement or under any other agreement or arrangement now or hereafter entered
into between Borrower and the Agent, the Administrative Agent or any Bank in
connection therewith, and, in connection with this Agreement or the Loan
Agreement, (i) indebtedness owing by either Borrower to the Agent, the
Administrative Agent or any Bank, (ii) the liability of either Borrower to the
Agent, the Administrative Agent or any Bank as maker or endorser of any
promissory note or other instrument for the payment of money, and (iii) the
liability of either Borrower to the Agent, the Administrative Agent or any Bank
under any instrument of guaranty or indemnity, or arising under any guarantee,
endorsement, or undertaking which the Agent, the Administrative Agent or any
Bank may make or issue to others for the account of either Borrower, including
without limitation, any accommodation extended to either Borrower with respect
to letters of credit, acceptance of drafts, or endorsement of notes or other
instruments by the Agent, the Administrative Agent or such Bank for the account
and benefit of such Borrower. The Obligations shall also include interest,
premium (if any), commissions, financing and service charges, and expenses and
fees, including but not limited to the costs and expenses of collection of the
Obligations (including the fees and disbursements of accountants), the costs and
expenses of the Agent and the Administrative Agent and the costs and expenses of
filing, perfecting, preserving, retaking, holding, and preparing any of the
Collateral for sale chargeable to either Borrower and due from either Borrower
under this Agreement, the Loan Agreement or under any other agreement or
arrangement which may be now or hereafter entered
-8-
into between either Borrower and the Agent, the Administrative Agent or the
Banks and shall also include (i) any obligation or liability in respect of any
breach of any representation or warranty, and (ii) all post-petition interest
and funding losses.
"Other Agreements" shall mean collectively any of the Loan Documents
other than this Agreement.
"Percentage of the Obligations" shall mean with respect to the
Administrative Agent or any Bank the percentage which is equal to the product of
(x) 100 times (y) a fraction, the numerator of which is the total amount of
Obligations owing to the Administrative Agent or such Bank, as the case may be,
at the time of computation and the denominator of which is the total amount of
the Obligations as of such time.
"Permits and Licenses" shall mean (a) all applicable authorizations,
consents, certificates, licenses, rights-of-way permits, approvals, waivers,
exemptions, encroachment agreements, variances, franchises, permissions, and
permits of any Governmental Authority or any other Person and all documents and
applications filed in connection therewith, and (b) all renewals thereof.
"Permitted Liens" shall mean the Liens permitted pursuant to Section
8.1 of the Loan Agreement.
"Proceeds" shall have the meaning assigned to it in Section 9-306(1) of
the UCC and shall include, but not be limited to, (a) any and all proceeds of
any insurance, indemnity, warranty or guaranty existing from time to time with
respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority) and (c) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral.
"Real Property" shall mean real property of a Person or an ultimate
beneficial owner of such Person or machinery or Equipment of such Person or
beneficial owner forming a part of, or affixed to, such real property.
-9-
"Receivables" shall mean, with respect to any Person, all present and
future rights to payment for goods sold or leased or for services rendered by
such Person whether or not evidenced by an instrument or chattel paper.
"Taxicab" shall mean a motor vehicle carrying passengers for hire, duly
licensed as a taxicab by the New York City Taxi and Limousine Commission, or any
other Governmental Authority for a jurisdiction other than New York City, and
permitted to accept hails from passengers in the street.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as then in effect in that jurisdiction. Unless the context
otherwise requires, references to the UCC contained herein shall mean the
Uniform Commercial Code as then in effect in the State of New York.
"Underlying Collateral" shall mean all of each Borrower's rights with
respect to, or interest in, any and all present and future Medallion Rights,
Equipment, Real Property, machinery, Inventory, Receivables, Accounts, future
accounts, accounts receivable, contracts, contract rights, General Intangibles,
books, desks, notes, bills, drafts, acceptances, choses in action, Chattel
Paper, Instruments, Documents and other forms of obligations, and property,
real, personal or mixed, tangible or intangible, at any time owing to or owned
by any Person to whom either Borrower has made a Loan, or any guarantor of such
Person.
SECTION 1.2. Accounting Terms. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP.
SECTION 1.3. Rules of Construction. (a) Words of the masculine gender
shall mean and include correlative words of the feminine and neuter genders, and
words importing the singular number shall mean and include the plural number and
vice versa.
(b) The terms "hereby," "hereto," "hereof," "herein," and "hereunder"
and any similar words refer to this Agreement as a whole and not to any
particular provisions of this Agreement. The term "hereafter" shall mean after,
and the term "heretofore" shall mean before, the date of this Agreement, and
"Article," "Section," "Schedule,"
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"Exhibit" and like references are to this Agreement unless otherwise specified.
(c) Any defined term that relates to a document shall include within
its definition any amendments, modifications, renewals, restatements,
extensions, supplements, or substitutions which may have been heretofore or may
be hereafter executed in accordance with the terms thereof.
(d) References in this Agreement to particular sections of the UCC or
to any other legislation shall be deemed to refer also to any successor sections
thereof or other redesignations for codification purposes. Unless otherwise
indicated, references in this Agreement to the UCC shall mean the UCC as in
effect in the State of New York.
(e) All terms used in this Agreement that are not capitalized shall
have the meanings provided by the UCC as in effect in the State of New York to
the extent the same are used or defined therein.
ARTICLE II
CREATION OF SECURITY INTEREST
SECTION 2.1. Grant of Security Interest to Agent. To induce the Banks
to make the Revolving Credit Loans and/or Term Loans to the Borrowers and, as
security for any and all Obligations of each Borrower, and as security for the
Borrowers' Permitted Debt owing to the CP Holders, each Borrower hereby grants
to the Agent for the ratable benefit of the Agent, the Administrative Agent, the
Banks and the CP Holders a continuing lien on and security interest in the
Collateral, which shall be a first priority lien (except for the Permitted Liens
entitled to priority under applicable law) and, in furtherance of such grant,
each Borrower hereby assigns for security all of the Collateral to the Agent for
the ratable benefit of the Agent, the Administrative Agent, the Banks and the CP
Holders. Without limiting the foregoing, each of the Borrowers confirms and
continues in favor of the Agent its prior grant to the Administrative Agent of
perfected security interests in all of the Collateral to secure the payment and
performance of all of the Obligations pursuant to the MFC Security Agreement and
MBC Security Agreement, which security agreements are hereby restated in their
entirety pursuant to this Agreement.
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SECTION 2.2. Perfection. At any time or times each Borrower shall
execute and deliver to the Agent, at the Agent's request, all assignments,
certificates of title, conveyances, assignment statements, financing statements,
renewal financing statements, security agreements, affidavits, mortgages,
mortgage assignments, trust deeds, notices and all other agreements, instruments
and documents that the Agent reasonably may request, in form satisfactory to the
Agent, and shall take any and all other steps reasonably requested by the Agent,
in order to perfect and maintain the security interests and liens granted
herein, and to consummate fully all of the transactions contemplated under this
Agreement and any Other Agreements.
SECTION 2.3. Recording, Registering, Filing, Etc. At any time or times
when the Agent reasonably deems it necessary, each Borrower will perform, or
will cause to be performed, each of the following:
(a) Record, register and file such notices, certificates of title,
financing statements, mortgage assignments, trust deeds and other documents or
instruments as may, from time to time, be requested by the Agent to carry out
fully the intent of this Agreement, with such administrations or governmental
agencies as may be necessary or advisable in order to perfect, establish,
confirm, and maintain the security interests and liens created hereunder, as
legal, valid, and binding security interests and liens upon the Collateral;
(b) Furnish to the Agent evidence of every such recording,
registration and filing;
(c) Execute and deliver or perform, or cause to be executed and
delivered or performed, such further and other instruments or acts as the Agent
reasonably determines are necessary or desirable to carry out fully the intent
and purpose of this Agreement or to subject the Collateral to the security
interest and lien created hereunder, including, without limitation, defending
the title of each Borrower to the Collateral by means of negotiation with and,
if necessary, appropriate legal proceedings against, each party claiming an
interest therein contrary or adverse to either Borrower's title to same; and
(d) In case of certain revisions to Article 9 of the UCC described in
Section 6.16 hereof, comply with all of the requirements of and its agreements
contained within such Section 6.16.
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SECTION 2.4. Delivery of Documents. (a) As promptly as practicable
after the date hereof (but in no event later than 10 Business Days after the
date hereof), each Borrower shall deliver to the Agent all instruments
evidencing all Loans (collectively, the "Collateral Notes") of each Borrower
then outstanding and if any such Loan is secured by Real Property, a Mortgage
Assignment with respect to each such Loan. In addition, each time either
Borrower shall make a new Loan, such Borrower shall immediately deliver to the
Agent the Collateral Note evidencing such Loan and if such Loan is secured by
Real Property, a Mortgage Assignment with respect to each Loan. The Agent shall
keep all Collateral Notes and Mortgage Assignments at its office in Farmington,
Connecticut in a vault or other place of similar security. Each Borrower and its
authorized agents and representatives, which shall include its Independent
Public Accountants, shall at all times, during normal business hours, have full
access to examine, but not to remove, without the prior consent of the Agent,
the Collateral Notes and Mortgage Assignments; provided, however, that (i) the
Borrowers and/or their authorized agent shall have given the Agent at least one
(1) Business Day's prior notice, or such other notice as may be required by
applicable provisions of the Investment Company Act of 1940, as amended, before
seeking access to the Collateral Notes and Mortgage Assignments and (ii) the
Agent shall, in its sole discretion, be entitled to have one of its employees,
agents or representatives present at all times or from time to time during any
such period of access.
(b) Upon the Agent's request, each Borrower shall immediately deliver
to the Agent or its designee, at the Borrowers' joint and several expense,
copies of all Documents, Chattel Paper, security agreements, guarantees and
other writings evidencing any Loan or its related Underlying Collateral.
(c) Upon the Agent's request, each Borrower shall immediately endorse
and deliver to the Agent or its designee all Documents, Instruments, Chattel
Paper, security agreements, guarantees and other writings so requested by the
Agent evidencing any Collateral of either Borrower, such Documents, Instruments,
Chattel Paper, security agreements, guarantees and other writings to be held as
Collateral under the terms of this Agreement.
(d) The Agent shall have no obligation to inspect or examine any of
the Collateral Notes, Mortgage Assignments or other documents delivered to it by
either Borrower hereunder, and shall be entitled to assume, and shall be fully
protected in assuming, without
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inspection or examination, that each Borrower has complied in full with its
delivery obligations hereunder.
SECTION 2.5. Further Assurances. (a) At any time or times, upon request
by the Agent, in addition to the acts specifically required to be performed by
either Borrower elsewhere under this Agreement, each Borrower shall do all other
things and sign and deliver all other documents and instruments reasonably
requested by the Agent to perfect, protect, maintain and enforce the security
interests and liens of the Agent in the Collateral, and the first priority of
such security interests and liens, and other rights granted hereunder or under
any other present or future agreement between or among either Borrower or both
Borrowers and the Agent, including, without limitation, the Loan Documents. Such
acts shall include but not be limited to the marking of each Borrower's Books
and Records, Chattel Paper and Instruments to show the Agent's security
interests and liens and the recording of Mortgage Assignments and/or the filing
of financing, renewal and/or continuation statements under the UCC or other
documents evidencing the Agent's liens under applicable law and the delivery of
any Collateral the physical possession of which is necessary or desirable in
order for the Agent to perfect its liens. Each Borrower authorizes the Agent to
execute, file and/or record, any financing, renewal and/or continuation
statement, any Mortgage Assignment or any other document or instrument which the
Agent may require to perfect, protect, continue or enforce in accordance
herewith any security interest, lien or other right hereunder or under any of
the other Loan Documents and authorizes the Agent to sign either Borrower's name
on the same. Upon payment in full by each Borrower of all the Obligations in
accordance with the terms thereof, the security interests and liens granted by
the Borrowers hereunder shall terminate, except that if, at any time, all or
part of the payment of the monetary Obligations theretofore made by either
Borrower or any other Person is rescinded or otherwise must be returned by the
Agent or any Bank for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of either Borrower or such other
Person), the security interests and liens granted hereunder or under any other
present or future agreement between or among either Borrower and the Agent, and
all rights of the Agent and all Obligations shall be reinstated as to monetary
Obligations which were satisfied by the payment to be rescinded or returned, all
as though such payment had not been made, and each Borrower shall sign and
deliver to the Agent all documents and things necessary to perfect all
terminated liens
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subject to the intervening liens, if any, granted by either Borrower to any
Person.
(b) A carbon, photographic, or other reproduction of this Agreement
shall be sufficient as a UCC financing statement and may be filed at any time in
any appropriate office in lieu thereof.
(c) To the extent requested by the Agent, each Borrower will use its
best efforts to cause each mortgagee of any and all real estate under any lease
included in any Underlying Collateral and each landlord under any lease included
in any Underlying Collateral to execute and deliver to the Agent assignments, in
form and substance satisfactory to the Agent, by which such mortgagee or
landlord waives its rights, if any, to the Collateral.
SECTION 2.6. Appointment of Agent as Attorney-in-Fact. Each Borrower
does hereby irrevocably make, constitute and appoint the Agent and any of its
officers, employees or agents as the true and lawful attorneys of such Borrower
with power to:
(a) sign the name of such Borrower on any financing statement,
renewal financing statement, notice or other similar document that in the
Agent's opinion must be filed in order to perfect or continue perfected the
security interests granted in this Agreement or any Other Agreements and to
effect such filing;
(b) receive, endorse, assign and deliver, in such Borrower's name or
in the name of the Agent, all checks, notes, drafts and other instruments
relating to any Collateral, including receiving, opening and properly disposing
of all mail addressed to such Borrower concerning the Collateral and, during the
existence of an Event of Default (as hereinafter defined), to notify postal
authorities to change the address for delivery of mail to such address as the
Agent may designate;
(c) sign such Borrower's name on any notices to any of such
Borrower's clients or customers; and
(d) upon the occurrence and during the continuance of an Event of
Default, take or bring at such Borrower's cost, in such Borrower's name or in
the name of the Agent, all steps, actions and suits deemed by the Agent
necessary or desirable to effect collections in connection with any Loans, to
enforce payment in connection with any Loans, to settle, compromise or release
in whole or in part, any
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amounts owing in connection with any Loans, to prosecute any action or
proceeding with respect to any Loans, to extend the time of payment in
connection with any Loans, to make allowances and adjustments with respect
thereto, to secure credit in the name of the Agent, and to do all other things
necessary or desirable to realize upon the Collateral, including but not limited
to the Underlying Collateral, and to carry out this Agreement and all Other
Agreements.
Neither the Agent nor its agents or attorneys will be liable for any
act or omission nor for any error of judgment or mistake of fact unless such
act, omission, error or mistake shall occur as a result of their gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable so long as the Obligations remain unpaid.
SECTION 2.7. Indemnity. In addition to all of the Agent's, the
Administrative Agent's and Banks' other rights and remedies under the Loan
Documents, each Borrower will hold the Banks, the Administrative Agent and the
Agent harmless from and indemnify the Banks, the Administrative Agent and the
Agent or other designee of the Agent against all losses, damages, costs and
expenses (including, without limitation, attorneys' fees, costs and expenses)
incurred by any of them, whether prior to or from and after the date hereof,
whether direct, indirect or consequential, as a result of or arising from or
relating to any suit, investigation, action or proceeding by any Person, whether
threatened or initiated, asserting a claim for any legal or equitable remedy
against any Person under any statute or regulation, including without
limitation, any Federal or state antitrust laws, or under any common law or
equitable cause or otherwise, all to the extent arising from or in connection
with this Agreement or the other Loan Documents or the enforcement of the rights
of the Agent hereunder, other than losses, damages, costs and expenses resulting
from, but only to the extent resulting from, the willful misconduct or gross
negligence of the Person seeking indemnification.
Each of the Banks and the CP Holders (with the CP Holders being deemed
to so agree by accepting the security interests granted hereunder and the other
benefits provided hereby) severally agree (i) to reimburse the Agent, on demand,
in the amount of its pro rata share, for any expenses referred to in this
Section 2.7 which shall not have been reimbursed or paid by the Borrowers or
paid from the proceeds of Collateral as provided herein and (ii) to indemnify
and hold harmless the Agent and its directors, officers, employees and
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agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements referred to in this Section
2.7, to the extent the same shall not have been reimbursed by the Borrowers or
paid from the proceeds of Collateral as provided herein; provided that no Bank
or CP Holder shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of the Agent or any of its directors, officers, employees or agents
as determined by a final non-appealable order of a court of competent
jurisdiction. For the purposes of this Section 2.7, pro rata shares at any time
shall be determined based upon the aggregate Exposures (in the case of the
Banks), or the Commercial Paper (in the case of the CP Holders) at the time such
expenses were incurred.
SECTION 2.8. Borrowers Remain Liable. Anything herein to the contrary
notwithstanding, (i) each Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (ii) the exercise by the Agent, the
Administrative Agent or the Banks of any rights under this Agreement or any of
the other Loan Documents shall not release either Borrower from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (iii) neither the Agent, the Administrative Agent nor the Banks
shall have any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement or any of the other Loan
Documents nor shall the Agent, the Administrative Agent or any Bank be obligated
to perform any of the obligations or duties of either Borrower thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.9. Banks' Freedom of Dealing. Each CP Holder agrees, with
respect to the Obligations, any and all guaranties thereof and any and all
Collateral, that the Borrowers and the Banks may agree to increase the amount of
the Obligations or otherwise modify or waive the terms of any of the Loan
Agreement, the Obligations or the other Loan Documents, and the Banks may grant
extensions of the time of payment or performance to and make compromises,
including releases of guaranties, collateral which is not Collateral, and
settlements with the Borrowers and all other Persons, in each case without the
consent of any CP Holder or the Paying Agent for which it
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acts and without affecting the agreements of the CP Holders or the Borrowers
contained in this Agreement.
SECTION 2.10. Agent May Perform; Actions of Agent. If either Borrower
fails to perform any agreement contained herein, the Agent may (but shall not be
required to) itself perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be jointly and
severally payable by the Borrowers, together with interest thereon at the rate
specified in Section 2.6 of the Loan Agreement, and until so paid shall be
deemed part of the Obligations. The Agent shall not be obligated to take any
action under this Agreement except for the performance of such duties as are
specifically set forth herein. Subject to the other provisions of this
Agreement, the Agent shall take any action under or with respect to this
Agreement which is requested by the Required Banks and which is not inconsistent
with or contrary to the provisions of this Agreement or the Loan Documents. The
Agent shall have the right to decline to follow any such direction if the Agent,
being advised by counsel, determines that the directed action is not permitted
by the terms of this Agreement or the other Loan Documents, may not lawfully be
taken or would involve it in personal liability, and the Agent shall not be
required to take any such action unless any indemnity which is required
hereunder in respect of such action has been provided. Subject to the other
requirements of this Agreement, the Agent may rely on any such direction given
to it by the Required Banks and shall be fully protected, and shall under no
circumstances (absent the gross negligence and willful misconduct of the Agent)
be liable to the Borrower, any Bank, any CP Holder, the Paying Agent or any
other Person for taking or refraining from taking action in accordance
therewith. The Agent may consult with counsel and shall be fully protected in
taking any action hereunder in accordance with any advice of such counsel. The
Agent shall have the right but not the obligation at any time to seek
instructions concerning the administration of this Agreement, the duties created
hereunder, or any of the Collateral from any court of competent jurisdiction.
At such time as all Obligations have been repaid in full and there are
no commitments to incur further Obligations, the Agent shall take instructions
from the holders of a majority of CP Debt or their representative.
SECTION 2.11. Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest and the interests of
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the Banks and the CP Holders in the Collateral and shall not impose any duty
upon it to exercise any such powers except as provided herein. Except for the
safe custody of any Collateral in its possession and the accounting for monies
actually received by it hereunder and performing its other express duties
hereunder, the Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. The Agent shall not be responsible in any
manner whatsoever for the correctness of any recitals, statements,
representations or warranties contained herein, except for those made by it
herein. The Agent makes no representation as to the value or condition of the
Collateral or any part thereof, as to the title of the Borrowers to the
Collateral, as to the security afforded by this Agreement or as to the validity,
execution, enforceability, legality or sufficiency of this Agreement, and the
Agent shall incur no liability or responsibility in respect of any such matters.
The Agent shall not be responsible for insuring the Collateral, for the payment
of taxes, charges, assessments or liens upon the Collateral or otherwise as to
the maintenance of the Collateral.
The Agent may execute any of the powers granted under this Agreement
and perform any duty hereunder or thereunder either directly or by or through
agents or attorneys-in-fact, and shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. In no event will the Agent or any officer, agent or representative thereof
be responsible for the consequences of any oversight or error of judgment
whatsoever, or personally liable for any action taken or omitted to be taken,
except that such Person may be liable due to its willful misconduct or gross
negligence. Neither the Agent nor any officer, agent or representative thereof
shall be personally liable for any action taken by any such Person in accordance
with any notice given by the Required Banks pursuant to the terms of this
Agreement even if, at the time such action is taken by any such Person, the
Required Banks are not entitled to give such notice, except where the account
officer of the Agent active upon the Borrowers' accounts has actual knowledge
that such Required Banks are not entitled to give such notice.
SECTION 2.12. Perfection of Security Interest. All filings,
assignments, pledges and deposits of documents or instruments have been made and
all other actions have been taken that are necessary or advisable, under
applicable law, to establish and perfect the Agent's security interest in the
Collateral for the benefit of itself, the
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Administrative Agent, the Banks and the CP Holders. The Collateral and the
Agent's rights with respect to the Collateral (to the extent such Collateral is
included in the MFC Borrowing Base or the MBC Borrowing Base) are not subject to
any setoff, claims, withholdings or other defenses. One or both of the Borrowers
is the owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand, except for Permitted Liens.
ARTICLE III
PRIORITY OF SECURITY INTERESTS
SECTION 3.1. Priority of Security Interests. Each Borrower warrants and
represents to the Agent, the Administrative Agent and the Banks that, as to
those assets for which perfection may be accomplished by filing or by possession
under the UCC, the security interests granted to the Agent hereunder constitute
and will constitute at all times a valid and perfected security interest vested
in the Agent in and upon the Collateral. Each Borrower further warrants and
represents that the Agent's security interests in the Collateral for the benefit
of itself, the Administrative Agent, the Banks and the CP Holders are not and
hereinafter shall not become subordinate or junior to the security interests,
liens or claims of any other Person, firm or corporation, including the United
States or any department, agency or instrumentality thereof, or any state,
county or local governmental agency, except for the Permitted Liens. Neither
Borrower shall grant (without the prior written approval of the Required Banks)
a security interest in or permit a lien or encumbrance upon any of the
Collateral to anyone except the Agent for the benefit of itself, the
Administrative Agent, the Banks and the CP Holders as long as any of the
Obligations remain unpaid or any commitments to lend have not been terminated,
except for the Permitted Liens.
ARTICLE IV
COLLATERAL
SECTION 4.1. Representations, Covenants and Warranties. Each Borrower
hereby makes the following representations, warranties and covenants to the
Agent, the Administrative Agent and the Banks, which shall survive the execution
and delivery of the Loan Documents and (except to the extent that any of such
representations, and warranties and covenants expressly relate to earlier dates)
shall be deemed repeated and confirmed as of each date on which any
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Revolving Credit Loans or Term Loans are requested by either Borrower or made by
any Bank:
(a) Each Borrower is now and at all times hereafter shall be the
absolute owner, free and clear of all Liens (other than Permitted Liens) except
security interests and rights of the Agent, the Administrative Agent, the Banks
and the CP Holders granted herein, of indefeasible title to all of the
Collateral belonging to it (as opposed to the other Borrower), except for that
portion of such Borrower's rights and/or obligations under any Loan in which
such Borrower has granted a participation to any Person in accordance with
Section 2.14 of the Loan Agreement;
(b) To the best of each Borrower's knowledge, each outstanding Loan
does, and each future Loan will, represent a bona fide, valid and legally
enforceable indebtedness according to its terms, and each Loan, at the time of
creation thereof, except with the consent of the Agent, the Administrative Agent
and the Banks, will be subject to no offsets, discounts, counterclaims,
contra-accounts or any other defense of any kind or character that materially
adversely affects the value of the Loan;
(c) With respect to each outstanding and future Loan, the Agent, the
Administrative Agent and the Banks may rely on all statements or representations
made by either Borrower on or with respect to such Loans delivered hereunder or
under the Loan Agreement, and, unless otherwise indicated in writing by the
Borrowers, each outstanding Loan is, and each future Loan will be, genuine and
in all respects what it purports to be, and, to each Borrower's knowledge, there
are no, and, at the time of creation of each Loan there will not be any, to
either Borrower's knowledge, facts, events or occurrences that would in any way
materially impair the validity or enforcement thereof;
(d) All of the outstanding Loans have been, and all future Loans will
be, created, and are (or in the case of future Loans, will be) in compliance in
all material respects with, and the form and content of each document related to
all outstanding and future Loans, the security related thereto, and the
transactions from which they arose comply (or, in the case of future Loans, will
comply) in all material respects with, any and all applicable laws, ordinances,
rules and regulations, Federal, state and/or local, with respect to the
extension of credit and charging of interest, including, without limitation, as
applicable, the Federal Consumer Credit Protection Act, the Federal
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Fair Credit Reporting Act, the Federal Trade Commission Act, the Federal Equal
Credit Opportunity Act and all Federal, state and local laws related to
licensing, usury, truth in lending, real estate settlement procedures, consumer
protection, equal credit opportunity, fair debt collection, unfair and deceptive
trade practices, rescission rights and disclosures, and with all rules and
regulations thereunder, all as amended, and any disclosures required with
respect to any Loan the failure to make which would have a Material Adverse
Effect on either Borrower were and will continue to be made properly and in a
timely manner;
(e) The original amount and unpaid balance of each Loan shown on each
Borrower's books and records and on any statement or schedule delivered to the
Agent are and will be true and correct, and the unpaid balance is and will be
the amount actually owing to such Borrower;
(f) If requested by the Required Banks at any time or from time to
time, each Borrower shall cause a Lien search against each Person to whom a Loan
has been made, satisfactory to the Agent, to be performed and delivered directly
to the Agent, which Lien search shall indicate the absence of any Liens against
such Person or the property of the Person on which such Borrower has a Lien,
other than Liens in favor of such Borrower which have been assigned to the
Agent, the Administrative Agent or the Banks or Liens in favor of the Agent, the
Administrative Agent or the Banks and other than Permitted Liens;
(g) Neither Borrower has extended or will extend any credit of any
kind or in any manner to any Person in connection with the transactions from
which the Loans arose or will arise other than as such Borrower has indicated on
and has had evidenced by, or will indicate or have evidenced by, in the case of
future Loans, such Borrower's files related to the Loans;
(h) Each security agreement, UCC filing, mortgage, title retention
instrument, and other document and instrument, if any, which is security for the
Loans contains, or will contain, in the case of future Loans, a correct and
sufficient description of the Underlying Collateral covered thereby and each
lien, mortgage or security interest which secures any outstanding Loan is, or
any future Loan will be, valid;
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(i) To the best knowledge of each Borrower, except as disclosed to
the Agent, any and all policies of insurance related to the property securing
any obligation of a Person to whom such Borrower has made a Loan, or any
guarantor of such Loan, in connection with any Loan and any credit life
insurance, credit disability insurance, or credit unemployment insurance are in
full force and effect in accordance with the terms of all agreements between
such Borrower and such Person or guarantor;
(j) Neither Borrower has any knowledge of any fact which would impair
in any material respect the value or validity of any Loan except as disclosed to
the Agent; and
(k) The transactions contemplated herein, including the granting of
security interests herein and the enforcement by the Agent of its rights
hereunder if a Default or Event of Default occurs, do not and will not affect
the validity of the pledges of the Underlying Collateral and the Loans secured
by the Underlying Collateral are and will still be valid against the Obligors of
such Loans.
SECTION 4.2. Collections. (a) Subject to the provisions of this
Agreement and the other Loan Documents, each Borrower shall service, manage,
enforce, and make Collections in connection with the Loans. "Collections," as
used herein, means the collection of payment of principal and interest on the
Loans, other payments made with respect to Loans, the cash proceeds realized
from the enforcement of Loans and any security therefor, or the collateral,
proceeds of credit or group life insurance, and all proceeds of insurance of any
real or personal property which secures any of the Loans.
(b) With respect to each of the Collections, each Borrower shall
collect all Collections, receive all payments thereon and immediately deposit
the proceeds thereof into a Depository Account. The Borrower in whose name such
account is kept may withdraw funds from such account to use in the ordinary
course of its business.
SECTION 4.3. Rights of Agent Regarding Collateral. Upon the occurrence
and during the continuance of an Event of Default, the Agent shall have the
right to, and upon the direction of the Required Banks shall, at any time and
from time to time thereafter, without notice to either Borrower, (a) notify, and
upon the direction of the Agent to the Borrowers, each Borrower will notify, (i)
all Persons to whom either Borrower has made Loans that the Agent has a security
interest in such Collateral and direct all such Persons to make
-23-
payments to the Agent or its designee, and to such banks and accounts (which may
be the Collateral Account) as designated by the Agent or such designee, of all
sums owing by them to either Borrower, and (ii) all banks in which either
Borrower has any Depository Accounts of the occurrence of an Event of Default
and direct all such Banks to transfer into the Collateral Account, or to such
other account at such bank as shall be designated by the Agent or its designee,
all amounts on deposit from time to time in the related Depository Accounts; (b)
to settle, compromise, sell, assign, extend or renew any debt owing by any
Persons to whom either Borrower has made a Loan; (c) to sell or assign such
Collateral upon such terms as the Agent may deem advisable; and (d) to discharge
and release in the name of either Borrower and the Agent any such debt. Any and
all disbursements for costs and expenses incurred or paid by the Agent with
respect to the enforcement, collection or protection of its interest in the
Collateral, or against either Borrower, whether by suit or otherwise,
notification of Persons to whom either Borrower has made Loans, including
reasonable attorneys' fees actually incurred, court costs and similar expenses,
if any, shall become a part of the Obligations secured by the Collateral,
payable on demand.
ARTICLE V
DEFAULT
SECTION 5.1. Events of Default. Any one of the following events will
constitute an "Event of Default":
(a) failure of either Borrower to observe, perform or comply with any
of the terms, provisions, conditions or covenants, or, in any material respect,
any warranties or representations, contained in this Agreement other than in
Section 4.1 hereof;
(b) failure of either Borrower to observe, perform or comply with any
of the terms, provisions, conditions, covenants, warranties or representations
contained in Section 4.1 of this Agreement, which failure shall not have been
remedied within 30 days after such failure shall first have become known to any
officer of either Borrower;
(c) the occurrence of an "Event of Default" as defined in the Loan
Agreement; or
(d) any of the Loan Documents shall cease to be in full force and
effect.
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SECTION 5.2. Remedies. (a) Upon the occurrence of any Event of Default,
the Agent shall have, in addition to any other rights and remedies contained in
this Agreement or in any of the Other Agreements, all the rights and remedies of
a secured party under the UCC, and all other rights and remedies provided by
law, all of which shall be cumulative to the extent permitted by law. Upon the
occurrence of any Event of Default and at any time thereafter if such or any
other default shall then be continuing, the Agent shall have the right without
further notice to either Borrower to, and upon the direction of the Required
Banks shall, appropriate, take possession and control of, set off and apply to
the payment of any or all of the Obligations, any or all Collateral, subject to
and in the manner set forth in Section 5.3 hereof to enforce payment in
connection with the Loans or any other Collateral to settle, compromise or
release, in whole or in part, any amounts owing on the Collateral, to prosecute
any action, suit or proceeding with respect to the Collateral, to extend the
time of payment of any and all Collateral, to make allowances and adjustment
with respect thereto, to issue credits in the name of either Borrower or the
Agent, to sell, assign and deliver the Collateral (or any part thereof), at
public or private sale, at broker's board, for cash, upon credit or otherwise,
at the Agent's sole option and discretion and the Agent, the Administrative
Agent and any Bank or other Person interested in the Obligations may bid or
become purchaser at any such sale, if public, free from any right of redemption,
which is hereby expressly waived. Each Borrower agrees that the giving of ten
days notice by the Agent, sent by certified mail, return receipt requested
postage prepaid, to the address set forth below, designating the place and time
of any public sale or of the time after which any private sale or other intended
disposition of the Collateral is to be made, shall be deemed to be reasonable
notice thereof and each Borrower waives any other notice with respect thereto.
The net cash proceeds resulting from the exercise of any of the foregoing rights
or remedies shall be applied by the Agent in accordance with Section 5.3 hereof,
and each Borrower shall remain liable to the Agent, the Administrative Agent,
the Banks and the CP Holders for any deficiency, together with interest thereon
at the rate provided in the Loan Agreement with respect to the Obligations and
in the Commercial Paper with respect to the CP Debt and the cost and expenses of
collection of such deficiency, including (to the extent permitted by law),
without limitation, reasonable attorneys' fees actually incurred, expenses and
disbursements.
(b) If at any time or times hereafter the Agent employs counsel for
advice with respect to this Agreement or any Other
-25-
Agreements, or to intervene, file a petition, answer, motion or other pleading
in any suit or proceeding relating to this Agreement or any Other Agreements
(including, without limitation, the interpretation or administration, or the
amendment, waiver or consent with respect to any term, of this Agreement or any
Other Agreements), or relating to any Collateral; or to protect, take possession
of, or liquidate any Collateral, or to attempt to enforce any security interest
or lien in any Collateral, or to represent the Agent in any pending or
threatened litigation with respect to the affairs of either Borrower in any way
relating to any of the Collateral or to the Obligations or to enforce any rights
of the Agent, the Administrative Agent, any Bank, the Paying Agent or the CP
Holders or liabilities of either Borrower, any Person to whom either Borrower
has made a Loan, or any Person which may be obligated to the Agent or such Bank
by virtue of this Agreement or any Other Agreement, instrument or document now
or hereafter delivered to the Agent, the Administrative Agent, any Bank, the
Paying Agent or any CP Holder by or for the benefit of either Borrower, then in
any of such events, all of the reasonable attorneys' fees actually incurred
arising from such services, and any expenses, costs and charges relating
thereto, shall be Obligations secured by the Collateral.
(c) Upon the occurrence of an Event of Default, the Agent shall have
the right to require each Borrower to assemble all Collateral not already in the
Agent's possession and make it reasonably available to the Agent at one or more
places to be designated by the Agent which are reasonably convenient to both
parties, and to take possession of such Collateral and to enter and remain upon
the various premises of each Borrower without cost or charge to the Agent, and
to use the same, together with materials, supplies, books and records of each
Borrower for the purpose of collecting such Collateral or liquidating such
Collateral (plus any Collateral already in the Agent's possession), whether by
foreclosure, auction or otherwise. In addition, the Agent may remove from such
premises such Collateral, and any records with respect thereto, to the premises
of the Agent or any Custodian for such time as the Agent may desire, in order to
effectively collect or liquidate such Collateral.
(d) Upon the occurrence of an Event of Default, the Agent shall have
the right to, and upon the direction of the Required Banks shall, require each
Borrower to establish and maintain a lockbox service (which may be the
Collateral Account) with such bank or banks as may be acceptable to the Agent.
In the event either Borrower (or any of its Affiliates, subsidiaries,
stockholders, directors, officers,
-26-
employees or agents) shall receive any monies, checks, notes, drafts or any
other items of payment relating to, or proceeds of, the Loans, such Borrower
agrees with the Agent as follows:
(i) such Borrower shall hold all such items of payment in
trust for the Agent, the Administrative Agent, the Banks and the CP
Holders and as the property of Agent, the Administrative Agent, the
Banks and the CP Holders, separate from the funds of such Borrower, and
such Borrower shall immediately forward, or cause to be forwarded, the
same to the lockbox service for application to the Revolving Credit
Loans or Term Loans;
(ii) such Borrower shall forward to the Agent, on a daily
basis, deposit slips related to all such items of payment received by
such Borrower and, if requested by the Agent, copies of such checks and
other items, together with a statement showing the application of that
portion of such items of payment relating to payment in connection with
the Loans and a collection report with regard thereto in form and
substance satisfactory to the Agent;
(iii) All such items of payment shall be the sole and exclusive
property of the Agent for the benefit of the Banks, the Administrative
Agent and the CP Holders immediately upon the earlier of receipt of
such items by the Agent or the receipt of such items by such Borrower;
(iv) The lockbox service shall be subject to the sole control
of the Agent and the Agent shall have the right at all times in its
sole discretion to apply all or part of such items of payment to the
payment in accordance with Section 5.3 hereof. The Agent may, and upon
the direction of the Required Banks shall, release to such Borrower all
or any part of such items of payment; and
(v) The Agent assumes no responsibility for such lockbox
arrangement, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.
(e) Each of the Banks and CP Holders (with the CP Holders being
deemed to so agree by accepting the security interests granted hereunder and the
other benefits provided hereby) acknowledges and
-27-
agrees that (i) it shall only have recourse to the Collateral through the Agent
and that it shall have no independent recourse to the Collateral and (ii) the
Agent shall have no obligation to take any action, or refrain from taking any
action, except upon instructions from the Required Banks in accordance with the
provisions hereunder. To the extent that the Agent, acting as Agent hereunder,
exercises any rights or omits to exercise any rights under this Agreement at any
time for the benefit of the Administrative Agent or the Banks (whether requested
by the Required Banks thereunder or otherwise) with respect to any of the
Collateral, such exercise or omission shall likewise be deemed to be authorized
by the CP Holders and the Paying Agent for performance (or omission) by the
Agent hereunder for the benefit of the CP Holders. In furtherance of the
foregoing, the Agent may exercise (or omit to exercise) all rights requested by
the Required Banks under this Agreement without first giving notice or
consulting with any CP Holder or the Paying Agent.
SECTION 5.3. Application of Proceeds. (a) The proceeds of any lockbox
collection or sale of, or other realization upon, all or any part of the
Collateral shall be applied by the Agent in the following order of priority:
first, to payment of the expenses of such lockbox or sale or
other realization, including reasonable compensation to the Agent and
its agents and counsel and all expenses, liabilities, advances incurred
or made by the Agent in connection therewith, and any other
unreimbursed expenses for which the Agent is to be reimbursed under
this Agreement;
second, to the payment of the Obligations and the CP Debt (to the
extent it constitutes Permitted Debt), pro rata in accordance with the
respective outstanding balances thereof (including principal, interest,
fees and all other amounts due thereunder); and
third, after indefeasible payment in full of all Obligations and
all CP Debt, to payment to Borrower or its successors and assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
The Agent may make distributions hereunder in cash or in kind, but such
distributions to the Banks shall in all events be made pro rata on the basis of
the respective Exposure Percentages of the Obligations. Distributions made under
clause "second" above may
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also be made in a combination of cash or property, but distributions to the
Banks shall be made pro rata on the basis of the respective Exposure Percentages
of the Obligations. Distributions made under clauses "first" and "third" may
also be made in a combination of cash or property. Any deficiency remaining,
after application of such cash or cash proceeds to the Obligations, shall
continue to be Obligations for which each Borrower remains liable.
(b) In making the determinations and allocations required by this
Section 5.3 or otherwise by this Agreement, the Agent may rely upon information
supplied by the Banks as to the amounts of the Obligations held by them and
supplied by the CP Holders or the Paying Agent as to the amounts owed on the CP
Debt, or as to other matters (with each such matter being conclusively deemed to
be proved or established by a certificate executed by an officer of such
Person), and the Agent shall have no liability to any of the Banks, the Paying
Agent or any of the CP Holders for actions taken in reliance upon such
information. All distributions made by the Agent pursuant to this Section 5.3
shall be final, and the Agent shall have no duty to inquire as to the
application by the Banks, the Paying Agent or the CP Holders of any amount
distributed to them. However, if at any time the Agent determines that an
allocation was based upon a mistake of fact (including without limitation,
mistakes based on an assumption that principal or interest or any other amount
has been paid by payments that are subsequently recovered from the recipient
thereof through the operation of any bankruptcy, reorganization, insolvency or
other laws or otherwise), the Agent may in its discretion, but shall not,
subject to Section 5.3(d), be obligated to, adjust subsequent allocations and
distributions hereunder so that, on a cumulative basis, the Banks and the CP
Holders receive the distributions to which they would have been entitled if such
mistake of fact had not been made. If any dispute or disagreement shall arise as
to the allocation of any sum of money received by the Agent hereunder or under
any Security Document, the Agent shall have the right to deliver such sum to a
court of competent jurisdiction and therein commence an action for interpleader.
(c) If any Bank, the Paying Agent or any CP Holder (with the CP
Holders being deemed to so agree by accepting the security interests granted
hereunder and the other benefits provided hereby) acquires custody, control or
possession of any Collateral or proceeds therefrom, other than pursuant to the
terms of this Agreement, such Bank, the Paying Agent or such CP Holder shall
promptly cause such Collateral or proceeds to be delivered to or put in the
custody,
-29-
possession or control of the Agent or, if the Agent shall so designate, an agent
of the Agent (which agent may be a branch or affiliate of the Agent, the
Administrative Agent or any Bank) in the same form of payment received, with
appropriate endorsements, in the country in which such Collateral is held for
distribution in accordance with the provisions of this Section 5.3. Until such
time as the provisions of the immediately preceding sentence have been complied
with, such Bank, the Paying Agent or such CP Holder shall be deemed to hold such
Collateral and proceeds in trust for the Agent.
(d) If, through the operation of any bankruptcy, reorganization,
insolvency or other laws or otherwise, the security interests created hereby are
enforced with respect to some, but not all, of the Obligations and the CP Debt,
the Agent shall nonetheless apply the proceeds for the benefit of the Banks and
the CP Holders in the proportion and subject to the priorities of Section 5.3(a)
hereof. To the extent that the Agent distributes proceeds collected with respect
to one Obligation to or on behalf of the holder of another Obligation or a Bank
or the Administrative Agent obtains the equivalent of proceeds through the
exercise of any right of setoff, counterclaim, cross action, voluntary payment
by the Borrowers, enforcement of claim, proceedings in bankruptcy,
reorganization, liquidation or otherwise, the holder of the former Obligation
shall be deemed to have purchased a participation in the latter Obligation or
shall be subrogated to the rights of the holder thereof to receive any
subsequent payments and distributions made with respect to the portion thereof
paid or to be paid by the application of such proceeds; provided that if all or
any part of such excess payment is thereafter recovered, such distribution and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, without interest. If any Bank or CP Holder exercises any right of
setoff, banker's lien or similar right with respect to any Collateral for
payment of any Obligations or any Commercial Paper, each of the Banks and CP
Holders (with the CP Holders being deemed to so agree by accepting the security
interests granted hereunder and the other benefits provided hereby) agrees with
each other Bank and CP Holder that if an amount to be set off is to be applied
to Indebtedness of the Borrowers to such Bank or CP Holder, other than
Indebtedness evidenced by the Notes or Commercial Paper held by such Bank or CP
Holder, as applicable, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes or Commercial
Paper held by such Bank or CP Holder.
-30-
SECTION 5.4. Release of Collateral; Subordination of Lien. The Agent
for the benefit of itself, the Administrative Agent, the Banks and the CP
Holders is hereby authorized, upon receipt of instructions from the Required
Banks or such other percentage of the Banks as may be required by the Loan
Agreement, to release any Collateral and to provide such releases and
termination statements with respect to any Collateral in connection with any
sale, exchange or other disposition thereof so long as (i) the Agent obtains a
perfected security interest in any non-cash proceeds of such sale, exchange or
other disposition and (ii) any net cash proceeds of such sale, exchange or other
disposition are paid in accordance with the provisions hereunder. Whether or not
so instructed by the Required Banks, the Agent may release any Collateral and
may provide any release, termination statement or instrument of subordination
required by order of a court of competent jurisdiction or otherwise required by
applicable law. To the extent permitted by the Loan Agreement, the Agent shall,
on the written instructions of the Required Banks, subordinate by written
instrument the Lien on all or any portion of the Collateral to any other lender
extending to the Borrowers indebtedness permitted by the terms of the Loan
Agreement.
SECTION 5.5. Waiver by Agent or Banks. The Agent's or any Bank's
failure at any time or times hereafter to require strict performance by either
Borrower of any of the provisions, warranties, terms and conditions contained in
this Agreement or any of the Other Agreements shall not waive, affect or
diminish any right of the Agent, the Administrative Agent or any Bank at any
time or times hereafter to demand strict performance therewith and with respect
to any other provisions, warranties, terms and conditions contained in this
Agreement or any of the Other Agreements, and any waiver of any Event of Default
shall not waive or affect any other Event of Default, whether prior or
subsequent thereto, and whether of the same or a different type. None of the
warranties, conditions, provisions and terms contained in this Agreement or any
Other Agreement shall be deemed to have been waived by any act or knowledge of
the Agent, the Administrative Agent or any Bank, or their respective agents,
officers or employees except by an instrument in writing signed by an officer of
the Agent, the Administrative Agent or such Bank and directed to the Borrowers
specifying such waiver.
ARTICLE VI
MISCELLANEOUS
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SECTION 6.1. Continuing Lien. The Collateral described in this
Agreement secures all present and future Obligations of each Borrower. There is
included within the term "Collateral;" as used herein, all other property and
all interests therein of any kind hereafter acquired by each Borrower, meeting
or falling within the general description of the Collateral set forth herein and
also the proceeds and products thereof.
SECTION 6.2. Waivers by Borrowers. (a) Each Borrower irrevocably waives
the right to direct the application of any and all payments which may be
received by the Agent during the continuance of an Event of Default, and each
Borrower does hereby irrevocably agree that, during the continuance of an Event
of Default, the Agent shall have the continuing exclusive right to apply and
reapply any and all such payments received in such manner as the Agent may deem
advisable, notwithstanding any entry upon any of its books and records.
(b) Each Borrower also waives any and all notices of demand, notice
or protest that such Borrower might be entitled to receive with respect to this
Agreement by virtue of any applicable statute or law, and waives demand,
protest, notice of protest, notice of default, release, compromise, settlement,
extension or renewal of all commercial paper, accounts, contract rights,
instruments, guaranties, and otherwise, at any time held by the Agent, the
Administrative Agent or the Banks on which either Borrower may in any way be
liable, notice of nonpayment at maturity of any and all Loans, and notice of any
action taken by the Agent, the Administrative Agent or the Banks unless
expressly required by this Agreement.
SECTION 6.3. Parties. This Agreement and any of the Other Agreements,
instruments and documents executed and delivered pursuant hereto or to
consummate the transactions contemplated hereunder shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto.
SECTION 6.4. CP Holders. By accepting the security granted by, and the
other benefits of, this Agreement, each CP Holder is hereby deemed to have (a)
designated the Agent as collateral agent for such CP Holder for purposes of this
Agreement on the terms and conditions set forth herein, (b) consented to and
agreed to be bound by the terms of this Agreement and to the Agent, in its
capacity as collateral agent, entering into this Agreement on such CP Holder's
behalf, and (c)
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agreed to indemnify the Agent, in its capacity as collateral agent, pursuant to
the terms of this Agreement, with respect to the Agent's responsibilities as
collateral agent under this Agreement on such CP Holder's behalf.
SECTION 6.5. GOVERNING LAW. THIS AGREEMENT AND ANY OTHER AGREEMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE TO THE
EXERCISE OF REMEDIES OR THE PERFECTION OF SECURITY INTERESTS UNDER THE UCC.
SECTION 6.6. WAIVER OF JURY TRIAL AND SETOFF. EACH OF THE AGENT AND
EACH BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE OTHER
AGREEMENTS OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT OR
THE OTHER AGREEMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE, HOWSOEVER ARISING, BETWEEN
OR AMONG EITHER BORROWER AND ANY OF THE BANKS, THE ADMINISTRATIVE AGENT, THE CP
HOLDERS, THE PAYING AGENT OR THE AGENT, BETWEEN OR AMONG ANY BANKS, THE
ADMINISTRATIVE AGENT, THE PAYING AGENT AND ANY CP HOLDERS AND BETWEEN OR AMONG
THE AGENT, THE ADMINISTRATIVE AGENT AND ANY BANKS AND ANY CP HOLDERS AND EACH
BORROWER HEREBY WAIVES THE RIGHT TO INTERPOSE ANY SETOFF, COUNTERCLAIM OR
CROSS-CLAIM IN CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE
OF SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SETOFF, COUNTERCLAIM OR
CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL
LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION).
SECTION 6.7. Jurisdiction; Service of Process. Each Borrower hereby
irrevocably consents to the jurisdiction of the courts of the State of New York,
County of New York and of any Federal Court located in the Southern District of
New York, and agrees that venue in each of such Courts is proper in connection
with any action or proceeding arising out of or relating to this Agreement, the
Other
-33-
Agreements, or any document or instrument delivered pursuant to this Agreement
or the Other Agreements. Nothing herein shall affect the right of any Bank or
the Administrative Agent to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against either Borrower in
any other jurisdiction.
SECTION 6.8. Survival of Representations and Warranties. All
representations and warranties of each Borrower and all terms, provisions,
conditions and agreements to be performed by each Borrower contained in this
Agreement and in the other Loan Documents shall be true and correct, and
satisfied, where applicable, at the time of the execution of this Agreement, and
shall survive the execution and delivery of this Agreement and all Other
Agreements.
SECTION 6.9. Obligations Secured by Property Other Than Collateral. To
the extent that the Obligations are now or hereafter secured by property other
than the Collateral, or by a guarantee, endorsement or property of any other
Person, then the Agent shall have the right to, and upon the direction of the
Required Banks shall, proceed against such other property, guarantee or
endorsement upon the occurrence and during the continuance of an Event of
Default, and the Agent shall have the right, with the consent of the Required
Banks, to determine which rights, security, liens, security interests or
remedies the Agent shall at any time pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way modifying or
affecting any of them or any of the Agent's rights or any of the Banks' rights
under the Obligations, this Agreement or any Other Agreements.
SECTION 6.10. Resignation of Agent; Successor Agent.
(a) The Agent may at any time resign by giving ten (10) days prior
written notice thereof to each Bank, the Paying Agent and the Borrowers,
provided that no resignation shall be effective until a successor for the Agent
is appointed. Upon such resignation, the Required Banks (or, if the Obligations
have been paid in full and the Revolving Credit Commitments have terminated, the
Paying Agent) shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Required Banks or the
Paying Agent, as applicable, appoint a successor Agent, which shall be a bank or
trust company incorporated
-34-
and doing business within the United States of America having a combined capital
and surplus of at least $250,000,000. 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.
(b) In the event a successor agent is appointed pursuant to the
provisions of Section 11.4 of the Loan Agreement, such successor agent shall
succeed to the rights, powers and duties of the Agent hereunder, and the term
"Agent" shall mean such successor agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to the Loan Agreement or any holders of the Revolving Credit Notes or
Term Notes. Such former Agent agrees to take such actions as are reasonably
necessary to effectuate the transfer of its rights, powers and duties to such
successor agent.
SECTION 6.11. Amendment and Waiver. No modification or amendment of
this Agreement shall be effective unless the same shall be in writing and signed
by the Agent (acting with the requisite consent of the Banks as required by the
Loan Agreement) and the Borrowers; provided, however, (i) no amendment or waiver
shall adversely affect any of the Agent's rights, immunities or rights to
indemnification hereunder or under any of the Loan Documents or expand its
duties or reduce any amount payable to the Agent hereunder without the written
consent of the Agent; and (ii) any provisions of this Agreement affecting the
rights and obligations of the Agent hereunder may not be amended without the
written consent of the Agent. No waiver of any provision of this Agreement and
no consent to any departure by any party hereto from the provisions hereof shall
be effective unless such waiver or consent shall be set forth in a written
instrument executed by the party against which it is sought to be enforced, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any party hereto in
any case shall entitle such party to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 6.12. Termination. This Agreement and the security interest in
the Collateral created hereby will terminate when the
-35-
Obligations and the CP Debt have been irrevocably paid and finally discharged in
full in accordance with the terms of the Loan Agreement or the documents
evidencing the CP Debt, as the case may be, and the Banks are no longer
obligated to make Revolving Credit Loans or Term Loans under the Loan Agreement,
and the dealer of the Commercial Paper is no longer required to sell Commercial
Paper.
No waiver by the Agent, the Administrative Agent or any Bank or any
other holder of the Revolving Credit Notes or the Term Notes or any CP Holder or
the Paying Agent of any default will be effective unless in writing or operate
as a waiver of any other default or of the same default on a future occasion. In
the event of a sale or assignment by any Bank (including the Administrative
Agent in its capacity as a Bank but not as Administrative Agent) of a Revolving
Credit Note(s) or a Term Note(s) or any portion thereof, such Bank may assign or
transfer its rights and interest under this Agreement in whole or in part to the
purchaser or purchasers of the Revolving Credit Note(s) or Term Note(s),
whereupon such purchaser or purchasers will become vested with all of the
powers, rights and responsibilities of such Bank hereunder, and such Bank will
thereafter be forever released and fully discharged from any liability or
responsibility hereunder with respect to the rights, interest and
responsibilities so assigned, other than liabilities arising out of actions
taken prior to the date of assignment. Neither Borrower may assign this
Agreement without the express written consent of the Administrative Agent and
the Banks.
SECTION 6.13. Notices. All notices, requests, consents, demands or
other communications provided for herein shall be given in accordance with the
terms of Section 10.4 of the Loan Agreement.
SECTION 6.14. Severability. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
SECTION 6.15. Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which shall be an original and both of
which shall together constitute one and the same agreement.
-36-
SECTION 6.16. Concerning Revised Article 9 of the Uniform Commercial
Code. The parties acknowledge and agree to the following provisions of this
Agreement in anticipation of the possible application, in one or more
jurisdictions to the transactions contemplated hereby, of the revised Article 9
of the UCC in the form or substantially in the form approved by the American Law
Institute and the National Conference of Commissioners on Uniform State Law and
contained in the 1999 official text of Revised Article 9 ("Revised Article 9").
6.16.1. Attachment. In applying the law of any jurisdiction in
which Revised Article 9 is in effect, the Collateral is all assets of
the Borrowers, whether or not within the scope of Revised Article 9.
The Collateral shall include, without limitation, the following
categories of assets as defined in Revised Article 9: goods (including
inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter-of-credit rights (whether or not
the letter of credit is evidenced by a writing), commercial tort
claims, securities and all other investment property, general
intangibles (including payment intangibles and software), supporting
obligations and any and all proceeds of any thereof, wherever located,
whether now owned and hereafter acquired. If either Borrower shall at
any time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, acquire a commercial tort claim, as defined in
Revised Article 9, such Borrower shall immediately notify the Agent in
a writing signed by such Borrower of the brief details thereof and
grant to the Agent for the benefit of itself, the Administrative Agent,
the Banks and the CP Holders in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory
to the Agent.
6.16.2. Perfection by Filing. The Agent may at any time and from
time to time, pursuant to the provisions of Sections 2.3(d) or 2.6
hereof, file financing statements, continuation statements and
amendments thereto that describe the Collateral as all assets of each
Borrower or words of similar effect and which contain any other
information required by Part 5 of Revised Article 9 for the sufficiency
or filing office acceptance of any financing statement, continuation
statement or
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amendment, including whether either Borrower is an organization, the
type of organization and any organization identification number issued
to the such Borrower. Each Borrower agrees to furnish any such
information to the Agent promptly upon request. Any such financing
statements, continuation statements or amendments may be signed by the
Agent on behalf of each Borrower, as provided in Section 2.6 hereof,
and may be filed at any time in any jurisdiction whether or not Revised
Article 9 is then in effect in that jurisdiction.
6.16.3. Other Perfection, etc. Each Borrower shall at any time
and from time to time, whether or not Revised Article 9 is in effect in
any particular jurisdiction, take such steps as the Agent may
reasonably request for the Agent (a) to obtain an acknowledgement, in
form and substance satisfactory to the Agent, of any bailee having
possession of any of the Collateral that the bailee holds such
Collateral for the Agent for the benefit of the Adminstrative Agent,
the Banks and the CP Holders, (b) to obtain "control" of any investment
property, deposit accounts, letter-of-credit rights or electronic
chattel paper (as such terms are defined in Revised Article 9 with
corresponding provisions in Rev. ss.ss. 9-104, 9-105, 9-106 and 9-107
relating to what constitutes "control" for such items of Collateral),
with any agreements establishing control to be in form and substance
satisfactory to the Agent, and (c) otherwise to insure the continued
perfection and priority of the Agent's security interest for the
benefit of itself, the Administrative Agent, the Banks and the CP
Holders in any of the Collateral and of the preservation of its rights
therein, whether in anticipation and following the effectiveness of
Revised Article 9 in any jurisdiction.
6.16.4 Other Provisions. In applying the law of any jurisdiction
in which Revised Article 9 is in effect, the following references to
sections in this Agreement to existing Article 9 of that jurisdiction
shall be to the Revised Article 9 Section of that jurisdiction
indicated below:
--------------------------- ----------------------- --------------------
Agreement Section Existing Article 9 Revised Article 9
--------------------------- ----------------------- --------------------
1.1 ss. 9-105(1)(b) Rev.ss.9-102(a)(11)
--------------------------- ----------------------- --------------------
1.1 ss. 9-105(1)(i) Rev.ss.9-102(a)(47)
--------------------------- ----------------------- --------------------
1.1 ss. 9-106 Rev. ss.9-102(a)(2)
(for the definition
of "accounts") or
Rev. ss.
-38-
--------------------------- ----------------------- --------------------
9-102(a)(46) (for
the definition of
general intangibles)
--------------------------- ----------------------- --------------------
1.1 ss. 9-109(2) Rev.ss.9-102(a)(33)
--------------------------- ----------------------- --------------------
1.1 ss. 9-109(4) Rev.ss.9-102(a)(48)
--------------------------- ----------------------- --------------------
1.1 ss. 9-115 Rev.ss.9-102(a)(49)
--------------------------- ----------------------- --------------------
1.1 ss. 9-306(1) Rev.ss.9-102(a)(64)
--------------------------- ----------------------- --------------------
6.16.5 Savings Clause. Nothing contained in this Section 6.16
shall be construed to narrow the scope of the Agent's security interest
hereunder in any of the Collateral or the perfection or priority
thereof or to impair or otherwise limit any of the rights, powers,
privileges or remedies of the Agent, the Administrative Agent, any Bank
or any CP Holders hereunder except (and then only to the extent)
mandated by Revised Article 9 to the extent then applicable.
SECTION 6.17. Transitional Arrangements. This Agreement shall supersede
the MFC Security Agreement and the MBC Security Agreement in their entirety,
provided that each Borrower hereby (a) confirms its prior grant to the
Administrative Agent in favor of the Banks of a security interest in the
"Collateral" (as defined in the MFC Security Agreement and the MBC Security
Agreement, respectively), and (b) grants a continuing lien on such "Collateral"
(as defined in the MFC Security Agreement and the MBC Security Agreement,
respectively).
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written by the duly authorized officers of the parties hereto.
MEDALLION FINANCIAL CORP.
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
MEDALLION BUSINESS CREDIT, LLC
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
FLEET NATIONAL BANK (f/k/a Fleet Bank,
National Association) as Agent
By:______________________________________
Name:
Title:
-40-
EXHIBIT G
BORROWING BASE CERTIFICATE
200__
To: Fleet National Bank (f/k/a Fleet Bank, National Association), as Agent (as
defined below ) under a Second Amended and Restated Loan Agreement (the "Loan
Agreement"), dated as of September 22, 2000, among Medallion Financial
Corporation, a Delaware corporation ("MFC"), Medallion Business Credit, LLC, a
Delaware limited liability company ("MFC"), the banks that from time to time are
signatories thereto (including Assignees (as hereinafter defined), collectively,
the "Banks" and individually, a "Bank"), and Fleet National Bank (f/k/a Fleet
Bank, National Association), as a Bank ("Fleet"), as Swing Line Lender (the
"Swing Line Lender"), and as Arranger and as Agent for the Banks (including any
successor, the "Agent").
Terms used in this certificate shall have the same meaning as ascribed thereto
in the Loan Agreement.
The undersigned officers of the Borrowers certify that the information furnished
herein as of ___________, 200__ as to the MFC Borrowing Base and the MBC
Borrowing Base and Eligible Loans of MFC and MBC is true and correct and that as
of the date hereof no Event of Default, or event which after notice or lapse of
time or both would be an Event of Default exists under the Loan Agreement.
I. MFC Borrowing Base
A. MFC's Eligible Medallion Loans*/ $____________
-
B. Loans in Line A not collectible or 60+ days past due $____________
C. Line A minus Line B $____________
D. 83.3% of Line C $____________
E. MFC's Eligible Commercial Loans*/ $____________
-
(excluding Section 7a Loans)
F. Loans in Line F not collectible or 60+ days past due $____________
G. Line E minus Line F $____________
H. 75% of Line G $____________
I. MFC's Eligible Section 7a Loans*/ $____________
-
J. Loans in Line I not collectible or 60+ days past due $____________
K. Line I minus Line J $____________
L. 75% of Line K $____________
- -------------------------
*/ without excluding Loans not collectible or 60+ days
- past due
M. Line D plus Line H plus Line L $____________
N. MFC's Cash and Short-Term Investments $____________
O. MFC BORROWING BASE - Line M plus Line N $____________
P. Amount outstanding to MFC $____________
Q. Line O minus Line P $____________
(if positive, amount available to MFC; if negative amount due)
II. MBC Borrowing Base
A. MBC's Eligible Medallion Loans*/ $____________
-
B. Loans in Line A not collectible or 60+ days past due $____________
C. Line A minus Line B $____________
D. 83.3% of Line C $____________
E. MBC's Eligible Commercial Loans*/ $____________
-
F. Loans in Line F not collectible or 60+ days past due $____________
G. Line E minus Line F $____________
H. 80% of Line G $____________
I. Line D plus Line H $____________
J. MBC's Cash and Short-Term Investments $____________
K. MBC BORROWING BASE - Line I plus Line J $____________
L. Amount outstanding to MBC $____________
M. Line K minus Line L $____________
(if positive, amount available to MBC; if negative amount due)
III. Total Borrowing Base
A. Line I.O. plus Line II.K. $____________
B. Total amount of outstanding Revolving Credit Loans, $____________
Term Loans and Swing Line Loans
C. Line A minus Line B $____________
(if positive, amount available (subject to I and II);
if negative, amount due)
IV. Senior Debt Coverage
A. Indebtedness of MFC and MBC with respect to
Commercial paper $____________
B. Line I.P. plus Line II.L. $____________
C. Line A plus Line B $____________
D. Line III.A. minus Line C $____________
(if positive, amount available (subject to I, II and III);
if negative, amount due)
- -------------------------
*/ (if positive, amount available to NEC; if negative
- amount due)
-2-
Very truly yours,
MEDALLION FINANCIAL CORP.
By: /s/ ALVIN MURSTEIN
-------------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ DANIEL F. BAKER
-------------------------------------
Name: Daniel F. Baker
Title: Treasurer and Chief Financial
Officer
MEDALLION BUSINESS CREDIT, LLC
By: /s/ ALVIN MURSTEIN
-------------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ DANIEL F. BAKER
-------------------------------------
Name: Daniel F. Baker
Title: Chief Financial Officer
EXHIBIT I
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated______________
Reference is hereby made to the Second Amended and Restated Loan
Agreement dated as of September 22, 2000 (the "Loan Agreement") by and among
MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
CREDIT, LLC, a Delaware limited liability company ("MBC"), the banks that from
time to time are signatories thereto (including Assignees (as hereinafter
defined), collectively, the "Banks" and individually, a "Bank"), and FLEET
NATIONAL BANK, as swing line lender (the "Swing Line Lender"), as Arranger and
as Agent for the Banks (including any successor, the "Agent"). Capitalized terms
used herein that are defined in the Loan Agreement that are not otherwise
defined herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
__________________________ a ______________ (the "Assignor") and
______________________________, a ______________, (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 Loan Agreement as of
the Effective Date (as defined below) (including, without limitation, such
percentage interest in the Assignor's Revolving Credit Commitment and Term Loan
Commitment as in effect on the Effective Date, and the Revolving Credit Loans
and/or Term Loans owing to the Assignor on the Effective Date, and the Note(s)
held by the Assignor).
2. The Assignor: (i) represents and warrants that as of the date
hereof its Revolving Credit and Term Loan Commitment (without giving effect to
assignments thereof that have not yet become effective) is $___________ and the
aggregate outstanding principal amount of Revolving Credit Loans and Term Loans
owing to it (without giving effect to assignments thereof that have not yet
become effective) is $_____________ (ii) represents and warrants that it 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; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Loan Agreement or any other instrument or document furnished
pursuant thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Person or the performance or observance by the Borrower or any other
Person of any of its obligations under the Loan Agreement or any other
instrument or document furnished pursuant thereto; and (v) attaches the Notes
referred to in paragraph 1 above and requests that the Agent exchange such Notes
for new Notes as follows: [a Revolving Credit Note dated the Effective Date (as
such term is defined below) in the principal amount of $_______________ payable
to the order of the Assignee, a Revolving Credit Note dated the Effective Date
in the principal amount of $________________ payable to the order of the
Assignor, a Term Note dated the Effective Date in the principal amount of
$_________________ payable to the order of the Assignee and a Term Note dated
the Effective Date in the principal amount of $________________ payable to the
order of the Assignor.]
3. The Assignee: (i) confirms that it has received a copy of the
Loan Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank 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 Loan Agreement; (iii) confirms that it is an Assignee permitted
by the Loan Agreement; (iv) appoints and authorizes the Agent to take such
action as its agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Bank; and (vi) specifies
as its addresses for Prime Rate Loans and LIBOR Rate Loans (and address for
notices) the offices set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment shall be ________________
(the "Effective Date"). Following the execution of this Assignment, it will be
delivered to the Agent for acceptance by the Agent.
5. Upon such acceptance, as of the Effective Date: (i) the Assignee
shall be a party to the Loan Agreement and, to the extent
-1-
provided in this Assignment, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
Loan Agreement.
6. Upon such acceptance, from and after the Effective Date, the
Agent shall make all payments under the Loan Agreement and the Notes in respect
of the interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Loan Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By_______________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By_______________________________________
Name:
Title:
Lending Office for Prime Rate Loans:
Lending Office for LIBOR Rate Loans:
Attention:
Address for Notices:
Attention:
Telephone No.:
Telex No.:
Accepted this _____ day
of ___________________, 199_
FLEET NATIONAL BANK, as Agent
By__________________________________________
Title