EXHIBIT 10.4
SECURITY AGREEMENT
between
MEDALLION BUSINESS CREDIT, LLC, as debtor
and
FLEET BANK, N.A., as Agent
and secured party,
for the benefit of
THE BANKS AND SWING LINE LENDER SIGNATORY TO
THE AMENDED AND RESTATED LOAN AGREEMENT, DATED AS OF JUNE 29, 1999,
AMONG MEDALLION FINANCIAL CORP.,
MEDALLION BUSINESS CREDIT, LLC,
THE BANKS SIGNATORY THERETO, THE SWING LINE LENDER
AND FLEET BANK, N.A., AS ARRANGER AND AGENT
______________________________
dated as of June 29, 1999
______________________________
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of June 29, 1999, is between MEDALLION
BUSINESS CREDIT, LLC, a Delaware limited liability company ("Borrower"), and
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FLEET BANK, N.A., a national banking association, as agent (the "Agent") for the
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banks that from time to time are signatories to the Loan Agreement (hereinafter
defined) (collectively, the "Banks" and individually, a "Bank;" which term as
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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).
RECITALS
WHEREAS, the Agent and the Banks have entered into an Amended and Restated
Loan Agreement, dated as of even date herewith, (as the same may be amended or
supplemented from time to time, the "Loan Agreement"), with Borrower providing
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for revolving credit loans (including the Initial Revolving Credit Loan) (the
"Revolving Credit Loans," which term as used in this Security Agreement shall be
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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
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to exceed the amounts provided in the Loan Agreement.
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 Borrower
grant to the Agent perfected, security interests in all of the Collateral to
secure the payment and performance of all of the obligations of Borrower owing
to the Agent and the Banks pursuant to the Loan Agreement and other documents.
WHEREAS, in partial satisfaction of 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 or Term Loans to Borrower, Borrower
agrees to grant to the Agent a security interest in the Collateral pursuant to
the terms set forth herein.
NOW, THEREFORE, in consideration of the willingness of the 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 or Term Loans to
Borrower pursuant thereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, 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 106 of the UCC.
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"Books and Records" shall mean books, records, computer files and other
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Information relating to any of the Collateral.
"Chattel Paper" shall have the meaning assigned to it in Section
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9-105(1)(b) of the UCC.
"Collateral" shall mean all the following property now owned or at any time
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hereafter acquired by Borrower or in which 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 Loans;
(c) all Books and Records;
(d) all amounts deposited in any Collateral
Account;
(e) all Contracts;
(f) all rights and remedies of 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;
(1) all Investments;
(m) all Investment Property;
(n) all Accounts
(o) all Receivables;
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(p) 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 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;
(q) 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;
(u) all cash and Short-Term Investments; 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 that account of Borrower maintained with
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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
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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 Borrower containing any
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deposits or other sums credited to Borrower, whether in regular or special
depository accounts or otherwise.
"Equipment" shall mean all machinery, equipment, fixtures, vehicles,
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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
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9-106 of the UCC and shall include, but not be limited to, all interests in and
to Permits and Licenses, Medallion Rights, patents, trademarks, tradenames,
copyrights, trade secrets, licenses and know-how.
"Information" shall mean books, records, delivery receipts, copies of
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checks and stubs, security documents, division of interest files, bank
reconciliation statements, remittances, revenue accounting records, invoices,
leases, licenses, authorizations for expenditures,
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contracts and such other documents, information and data as any Bank may request
pursuant to the Loan Agreement.
"Instruments" shall have the meaning assigned to it in Section 9-105(1)(i)
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of the UCC.
"Inventory" shall mean all inventory, goods, raw materials, components and
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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
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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.
"Investment Property" shall have the meaning assigned to it in Section
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9-115 of the UCC.
"Laws" shall have the meaning set forth in Section 2.2 hereof.
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"Loan" shall mean any loan, advance or extension of credit made in the
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ordinary course of business by Borrower to or for the account of any client or
customer of 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
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(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 Borrower and/or delivered to the 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
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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
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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 and
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all performance obligations which may at any time be owing by Borrower to the
Agent or any Bank, however arising, under the Loan Agreement, this Agreement or
any other Loan Document between the Agent and/or any Bank and Borrower in
connection with any of the
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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 Borrower, or any other Person, whether such
indebtedness or other obligation is absolute or contingent, joint or several,
matured or unmatured, direct or indirect, and whether the 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 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 or any Bank in connection therewith, and, in
connection with this Agreement or the Loan Agreement, (i) indebtedness owing by
Borrower to the Agent or any Bank, (ii) the liability of Borrower to the 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 Borrower to the Agent or any
Bank under any instrument of guaranty or indemnity, or arising under any
guarantee, endorsement, or undertaking which the Agent or any Bank may make or
issue to others for the account of Borrower, including without limitation, any
accommodation extended to Borrower with respect to letters of credit, acceptance
of drafts, or endorsement of notes or other instruments by the Agent or such
Bank for the account and benefit of 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 costs and expenses of
filing, perfecting, preserving, retaking, holding, and preparing any of the
Collateral for sale chargeable to Borrower and due from Borrower under this
Agreement, the Loan Agreement or under any other agreement or arrangement which
may be now or hereafter entered into between Borrower and the Agent or the
Banks.
"Other Agreements" shall mean collectively any of the Loan Documents other
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than this Agreement.
"Percentage of the Obligations" shall mean with respect to the Agent or any
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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
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,
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consents, certificates, licenses, rights-of-way permits, approvals, waivers,
exemptions, encroachment agreements, variances, franchises, permissions, and
permits of any Governmental Authority 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
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of the Loan Agreement.
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"Proceeds" shall have the meaning assigned to it in Section 9-306(1) of the
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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
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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
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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
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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
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Code as then in effect in that jurisdiction.
"Underlying Collateral" shall mean all of Borrower's rights with respect
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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 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"
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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,
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and the term "heretofore" shall mean
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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.
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(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 or Term Loans to Borrower and, as security for
any and all Obligations of Borrower, Borrower hereby grants to the Agent for the
ratable benefit of the Agent and the Banks a continuing lien on and security
interest in the Collateral, which shall be a first priority lien (except for the
Permitted Liens) and, in furtherance of such grant, Borrower hereby assigns for
security all of the Collateral to the Agent for the ratable benefit of the Agent
and the Banks.
SECTION 2.2. Perfection. At any time or times after (i) a Default or
an Event of Default has occurred or (ii) any change in any existing 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 (collectively, "Laws"), or the proposal by any
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Governmental Authority, of a new Law, which, in the Agent's opinion, adversely
affects the validity, security or perfection of the security interests and liens
granted herein, 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
(i) after a Default or an Event of Default has occurred, (ii) after any change
in any existing Law
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or the proposal by any Governmental Authority of a new Law which, in the Agent's
opinion, adversely affects the validity, security or perfection of the security
interests and liens granted herein or (iii) when the Agent reasonably deems it
necessary, 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; and
(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
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 Borrower's title to same.
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), Borrower shall deliver to the Agent all instruments evidencing all
Loans (collectively, the "Collateral Notes") of Borrower then outstanding and if
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any such Loan is secured by Real Property, a Mortgage Assignment with respect to
each such Loan. In addition, each time Borrower shall make a new Loan, 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 principal office in New York City in a vault or other place of similar
security. 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) Borrower and/or its authorized agent shall have
given the Agent at least 24 hours 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, Borrower shall immediately deliver to
the Agent or its designee, at Borrower's expense, copies of all documents,
chattel paper, security
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agreements, guarantees and other writings evidencing any Loan or its related
Underlying Collateral.
(c) At any time on or after a Default or Event of Default, upon the
Agent's request, Borrower shall immediately 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 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
Borrower hereunder, and shall be entitled to assume, and shall be fully
protected in assuming, without inspection or examination, that Borrower has
complied in full with its delivery obligations hereunder.
SECTION 2.5. Further Assurances. (a) At any time or times after (i) a
Default or an Event of Default has occurred or (ii) any change in any existing
Law or the proposal by any Governmental Authority of a new Law which, in the
Agent's opinion, adversely affects the validity, security or perfection of the
security interests and liens granted herein, then, in addition to the acts
specifically required to be performed by Borrower elsewhere under this
Agreement, 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 Borrower and the Agent, including, without limitation, the Loan
Documents. Such acts shall include but not be limited to the marking of
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. Upon the occurrence of
any of the events specified in subclauses (i) and (ii) of this Section 2.5(a),
Borrower authorizes the Agent to execute, file and/or record, alone 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 Borrower's name on the same. Upon payment in full by Borrower of
all the Obligations in accordance with the terms thereof, the security interests
and liens granted by Borrower hereunder shall terminate, except that if, at any
time, all or part of the payment of the monetary Obligations theretofore made by
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 Borrower or such other Person), the
security interests and liens granted hereunder or under any other present or
future agreement between Borrower and the Agent, and all rights of the Agent and
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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 Borrower shall sign and deliver to the Agent all
documents and things necessary to perfect all terminated liens subject to the
intervening liens, if any, granted by 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 in any appropriate
office in lieu thereof.
(c) Upon the occurrence of any of the events specified in subclauses (i)
and (ii) of Section 2.5(a), to the extent requested by the Agent, 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. Upon the
occurrence of any of the events specified in subclause (i) of Section 2.5(a),
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
Borrower with power to:
(a) sign the name of 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;
(b) receive, endorse, assign and deliver, in 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 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 Borrower's name on any notices to any of Borrower's clients or
customers; and
(d) upon the occurrence and during the continuance of an Event of Default,
take or bring at Borrower's cost, in 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 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.
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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 and Banks'
other rights and remedies under the Loan Documents, Borrower will hold the Banks
and the Agent harmless from and indemnify the Banks 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.
SECTION 2.8. Borrower Remains Liable. Anything herein to the contrary
notwithstanding, (i) 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 or the Banks of
any rights under this Agreement or any of the other Loan Documents shall not
release Borrower from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (iii) neither the 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 or any Bank be obligated to perform any of the
obligations or duties of Borrower thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 2.9. Agent May Perform. If Borrower fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by Borrower, 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.
SECTION 2.10. Agent's Duties. The powers conferred on the Agent hereunder
are solely to protect its interest and the interests of the Banks 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
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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.
ARTICLE III
PRIORITY OF SECURITY INTERESTS
SECTION 3.1. Priority of Security Interests. Borrower warrants and
represents to the 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. Borrower further warrants and represents that the Agent's
security interests in the Collateral 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. Borrower shall not grant (without the
prior written approval of the Agent) a security interest in or permit a lien or
encumbrance upon any of the Collateral to anyone except the Agent as long as any
of the Obligations remain unpaid, except for the Permitted Liens.
ARTICLE IV
COLLATERAL
SECTION 4.1. Representations, Covenants and Warranties. Borrower hereby
makes the following representations, warranties and covenants to the 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 Revolving Credit Loans or Term Loans are
requested by Borrower or made by any Bank:
(a) 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 and the Banks granted herein, of indefeasible
title to all of the Collateral, except for that portion of Borrower's rights
and/or obligations under any Loan in which Borrower has granted a participation
to any Person in accordance with Section 2.14 of the Loan Agreement;
(b) To the best of 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 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 and the
Banks may rely on all statements or representations made by Borrower on or with
respect to such Loans delivered hereunder or under the Loan Agreement, and,
unless otherwise indicated in writing by Borrower, each outstanding Loan is, and
each future Loan will be, genuine and in all respects what it purports to be,
and, to Borrower's knowledge, there are no, and, at the time
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of creation of each Loan there will not be any, to 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 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 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
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 Borrower;
(f) If requested by the Required Banks at any time or from time to time,
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 Borrower has a Lien, other than
Liens in favor of Borrower which have been assigned to the Agent or the Banks or
Liens in favor of the Agent or the Banks and other than Permitted Liens;
(g) Borrower has not extended and will not 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 Borrower has indicated on and has
had evidenced by, or will indicate or have evidenced by, in the case of future
Loans, 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;
(i) To the best knowledge of 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 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
- - - -13-
full force and effect in accordance with the terms of all agreements between
Borrower and such Person or guarantor;
(j) Borrower has no 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 Obligers of
such Loans.
SECTION 4.2. Collections. (a) Subject to the provisions of this
Agreement and the other Loan Documents, Borrower shall service, manage, enforce,
and make Collections in connection with the Loans. "Collections," as used
-----------
herein, means 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: Borrower shall collect all
Collections, receive all payments thereon and immediately deposit the proceeds
thereof into a Depository Account. Borrower 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 Borrower, (a) notify, and upon
the direction of the Agent to Borrower, the Borrower will notify, (i) all
Persons to whom Borrower has made Loans that the Agent has a security interest
in such Collateral and direct all such Persons to make 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 Borrower, and (ii) all banks in which 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 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 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 Borrower, whether by suit or
otherwise, notification of Persons to whom 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.
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ARTICLE V
DEFAULT
SECTION 5.1. Events of Default. Any one of the following events will
constitute an "Event of Default":
----------------
(a) failure of 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 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 Borrower;
(c) the occurrence of an Event of Default under the Loan Agreement; or
(d) any of the Loan Documents shall cease to be in full force and effect.
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 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 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 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 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. 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 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 the Borrower shall remain liable to the Agent and
the Banks for any deficiency, together with interest thereon at the rate
provided in the Loan Agreement with respect to the Obligations and the cost and
expenses of collection of such deficiency, including (to the extent permitted by
- - - -15-
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 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 Borrower in any way relating to any of the Collateral or to the
Obligations or to enforce any rights of the Agent, any Bank or liabilities of
Borrower, any Person to whom 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 or any
Bank by or for the benefit of 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 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 Borrower without cost or charge to the Agent, and to use the
same, together with materials, supplies, books and records of 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 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 Borrower (or any of its Affiliates, subsidiaries, stockholders, directors,
officers, employees or agents) shall receive any monies, checks, notes, drafts
or any other items of payment relating to, or proceeds of, the Loans, Borrower
agrees with the Agent as follows:
(i) Borrower shall hold all such items of payment in trust for the
Agent and the Banks and as the property of Agent and the Banks, separate
from the funds of Borrower, and 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;
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(ii) Borrower shall forward to the Agent, on a daily basis, deposit
slips related to all such items of payment received by 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 immediately upon the
earlier of receipt of such items by the Agent or the receipt of such items
by 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 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.
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, 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, 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 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.
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Any deficiency remaining, after application of such cash or cash proceeds to the
Obligations, shall continue to be Obligations for which Borrower remains liable.
(b) In making the determinations and allocations required by this Section
5.3, the Agent may rely upon information supplied by the Banks as to the amounts
of the Obligations held by them, and the Agent shall have no liability to any of
the Banks 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 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(c), be obligated to, adjust subsequent
allocations and distributions hereunder so that, on a cumulative basis, the
Banks receive the distributions to which they would have been entitled if such
mistake of fact had not been made.
(c) 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, the Agent shall
nonetheless apply the proceeds for the benefit of the Banks in the proportion
and subject to the priorities of Section 5.3(a). 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 obtains the equivalent of proceeds
through the exercise of any right of setoff, 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.
SECTION 5.4. Waiver by Agent or Banks. The Agent's or any Bank's failure
at any time or times hereafter to require strict performance by 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 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 or any Bank, or their respective
agents, officers or employees except by an instrument in writing signed by an
officer of the Agent or such Bank and directed to Borrower 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 Borrower. There is included
within the term "Collateral," as used herein, all other property and all
----------
interests therein of any kind hereafter acquired by 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 Borrower. (a) 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 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) Borrower also waives any and all notices of demand, notice or protest
that 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 or the Banks on which
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 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. 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 6.5. WAIVER OF JURY TRIAL AND SETOFF. EACH OF BORROWER AND THE
AGENT 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
BORROWER AND ANY OF THE BANKS OR THE AGENT, BETWEEN ANY BANKS AND BETWEEN THE
AGENT AND ANY BANKS AND BORROWER HEREBY WAIVES THE RIGHT TO INTERPOSE ANY
SETOFF,
- - - -19-
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 6.6. Jurisdiction; Service of Process. 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 Agreements, or any document or instrument delivered pursuant to this
Agreement or the Other Agreements. Nothing herein shall affect the right of any
Bank to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Borrower in any other jurisdiction.
SECTION 6.7. Survival of Representations and Warranties. All
representations and warranties of Borrower and all terms, provisions, conditions
and agreements to be performed by 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 6.8. 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 6.9. Successor Agent. 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.
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SECTION 6.10. Termination. This Agreement and the security interest in
the Collateral created hereby will terminate when the Obligations have been
irrevocably paid and finally discharged in full in accordance with the terms of
the Loan Agreement, and the Banks are no longer obligated to make Revolving
Credit Loans or Term Loans under the Loan Agreement. No waiver by the Agent or
any Bank or any other holder of the Revolving Credit Notes or the Term Notes of
any default will be effective unless in writing nor 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 Agent in its capacity as a Bank
but not as 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. Borrower may not
assign this Agreement without the express written consent of the Agent and the
Banks.
SECTION 6.11. 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 6.12. 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 6.13. 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.
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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 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 BANK, N.A.,
as Agent
By:________________________________
Name
Title:
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