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EXHIBIT 10.5
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
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SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this
"Amendment") made as of the 6th day of August, 1996 by and among LEASECOMM
CORPORATION, a Massachusetts corporation (the "Borrower"), FLEET BANK, N.A.
(formerly known as NatWest Bank N.A.), in its individual corporate capacity,
SANWA BUSINESS CREDIT CORPORATION, a Delaware corporation, CORESTATES BANK,
N.A., a national banking association, and PNC BANK, NATIONAL ASSOCIATION, a
national banking association (individually, a "Lender" and, collectively, the
"Lenders"), and FLEET BANK, N.A. (formerly known as NatWest Bank N.A.), as agent
for the Lenders (the "Agent"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
WHEREAS:
A. The Borrower, the Lenders and the Agent are parties to a Loan
Agreement dated as of July 29, 1993, as amended and restated as of July 28, 1995
and as further amended by the First Amendment to Loan Agreement made as of
October 30, 1995 (the "Loan Agreement") pursuant to which, INTER ALIA, the
Lenders agreed to make available to the Borrower a revolving credit and term
loan facility;
B. The Borrower has requested that the Loan Agreement be amended as
hereinafter set forth;
C. The Lenders are willing to amend the Loan Agreement on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
1. AMENDMENTS. The Loan Agreement is hereby amended as follows:
(a) The definition of "Commitment" set forth in Section 1.1 of
the Loan Agreement is hereby amended by deleting the names of the Lenders and
the amounts set forth opposite the Lenders' names at the end of such definition
and replacing such names and amounts with the following:
"Fleet Bank, N.A. $ 40,000,000
Sanwa Business Credit corporation 25,000,000
CoreStates Bank, N.A. 22,000,000
PNC Bank, National Association 13,000,000
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Total: $100,000,000"
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(b) The definition of "Commitment Termination Date" in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
as follows:
"'COMMITMENT TERMINATION DATE' - July 31, 1998, unless
extended pursuant to Section 2.14 hereof."
(c) The following definition is hereby added to Section 1.1 of
the Loan Agreement after the definition of "Guaranty":
"'HEDGE LENDER' - the Agent or any Lender (or any
Affiliate of the Agent or any Lender) in its capacity as a party
to a Lender Hedge Agreement."
(d) The following definition is hereby added to Section 1.1 of
the Loan Agreement after the definition of "Indebtedness":
"'INTERCREDITOR AGREEMENT' - that certain Amended and
Restated Intercreditor Agreement made as of August 6, 1996 among
the First National Bank of Boston, Commerzbank AG, New York
Branch and the Agent."
(e) The definition of "Interest Period" in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety as follows:
"'INTEREST PERIOD' - with respect to any Libor Loan, each
period commencing on the date such Libor Loan is made or
converted from a Prime Rate Loan or the last day of the
immediately preceding Interest Period for such Loan and ending
on the numerically corresponding day in the first, second,
third, sixth or twelfth calendar month thereafter, except that
each Interest Period that commences on the last Libor Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Libor Business Day of the
appropriate subsequent calendar month. Notwithstanding the
foregoing: (i) each Interest Period that would otherwise end on
a day which is not a Libor Business Day shall end on the next
succeeding Libor Business Day (or, if such next succeeding Libor
Business Day falls in the next succeeding calendar month, on the
immediately preceding Libor Business Day); (ii) no Interest
Period may commence before and end after any date on which the
Borrower is required to make a payment or prepayment of the
principal of the Loans unless, after giving effect thereto, the
aggregate principal amount of the Loans having Interest Periods
that end after such date shall be equal to or less than the
aggregate principal amount of the Loans scheduled to be
outstanding after giving effect to the payments or prepayments
of principal required to be made on such date; and (iii) no
Interest Period shall extend beyond the Maturity Date for such
Loan."
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(f) The following definition is hereby added to Section 1.1 of
the Loan Agreement after the definition of "Lease":
"'LENDER HEDGE AGREEMENT' - any interest rate swap, cap or
collar agreement, and any other similar agreement entered into
by and between Borrower and the Agent or any Lender (or any
Affiliate of the Agent or any Lender) the purpose of which is to
hedge Indebtedness of the Borrower against fluctuations in
interest rates."
(g) The definition of "Libor Term Loan" in Section 1.1 of the
Loan Agreement is hereby deleted in its entirety and the following definition is
hereby added to Section 1.1 of the Loan Agreement in substitution therefor:
"'LIBOR LOAN' - a Loan the interest on which is determined
on the basis of Libor."
(h) Each reference to the term "Libor Term Loan" in the Loan
Agreement is hereby deleted and the term "Libor Loan" is hereby substituted in
each place therefor.
(i) The definition of "Loan Documents" in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety as follows:
"'LOAN DOCUMENTS' - this Agreement, the Notes, the
Security Documents, the Intercreditor Agreement and all other
documents, except Lender Hedge Agreements, executed and
delivered in connection herewith or therewith, including all
amendments, modifications and supplements of or to all such
documents."
(j) The definition of "Prime Rate Term Loans" in Section 1.1
of the Loan Agreement is hereby deleted in its entirety and each reference to
the term "Prime Rate Term Loan" in the Loan Agreement is hereby deleted and the
term "Prime Rate Loan" is hereby substituted in each place therefor.
(k) The definition of "Sub-limit" in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety as follows:
"'SUB-LIMIT' - 10% of the aggregate Commitment outstanding
from time to time."
(1) Section 2.1(b) of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"(b) Subject to the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow amounts
in respect of the Revolving Credit Loans available under the
Commitment during the Credit Period by means of Prime Rate Loans
and Libor Loans. Amounts
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repaid on or after the Commitment Termination Date may not be
reborrowed. Subject to the terms and conditions hereof, the
Borrower may borrow amounts in respect of the Term Loans by
means of Prime Rate Loans and Libor Loans and repay amounts in
respect of such Loans."
(m) Section 2.2 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 2.2 NOTICES.
The Borrower shall give the Agent written notice in the
form of EXHIBIT A hereto (a "Notice") of each borrowing of a
Loan, each conversion and prepayment of a Loan and, in the case
of the borrowing, continuation or prepayment of, or conversion
of a Prime Rate Loan into, a Libor Loan, the duration of each
Interest Period applicable thereto; PROVIDED, that (i) if a
Notice shall fail to specify the interest rate option applicable
to the requested Loan, then the Borrower shall be deemed to have
requested a Prime Rate Loan and (ii) if the Borrower fails to
specify the duration of an Interest Period with respect to a
Libor Loan, then the next Interest Period applicable to such
Libor Loan shall automatically continue as an Interest Period
with one month's duration. Each Notice shall be irrevocable and
shall be effective only if received by the Agent no later than
1:00 P.M. New York City time, on the date which is, in the case
of the borrowing of a Libor Loan, at least three (3) Business
Days or, in the case of the borrowing of a Prime Rate Loan, at
least two (2) Business Days, prior to the date of such borrowing
designated in the Notice and, in the case of the prepayment,
conversion or continuation of a Loan, at least three (3)
Business Days prior to the date of such prepayment or conversion
designated in the Notice or, with respect to continuation of a
Libor Loan, the last day of the Interest Period then in effect
for such Loan. Each such Notice of a borrowing, conversion,
continuation or prepayment shall specify (a) the amount and type
of Loan to be borrowed, converted, continued or prepaid, (b) the
date of such borrowing, conversion or prepayment (which shall be
a Business Day) and (c) in the case of a continuation, the
duration of the new Interest Period. Promptly upon its receipt
thereof, the Agent shall send to each of the Lenders copies of
all Notices received pursuant to this Section 2.2."
(n) Subsections (i) and (ii) of Section 2.9(a) of the Loan
Agreement are hereby amended and restated in their entirety as follows:
"(i) with respect to any Revolving Credit Loan, (x) during
such periods that such Loan (or any portion thereof) is a Prime
Rate Loan, the Prime Rate plus .50%; and (y) during such periods
that such Loan (or any portion thereof) is a Libor Loan, Libor
plus 2.50%
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(ii) with respect to any Term Loan, (x) during such
periods that such Loan (or any portion thereof) is a Prime Rate
Loan, the Prime Rate plus 2.25% and (y) during such periods that
such Loan (or any portion thereof) is a Libor Loan, Libor plus
2.50%."
(o) Section 2.9(c) of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"(c) Accrued interest on each Loan shall be payable
monthly in arrears on the first Business Day of each month,
commencing with the first month immediately following the date
of the making of such Loan and continuing on the first Business
Day of each month thereafter until the maturity of such Loan or
the payment or prepayment thereof in full; PROVIDED, that (x)
with respect to Libor Loans, accrued interest shall be payable
on the earlier of (i) the first Business Day of each month or
(ii) the last day of the Interest Period applicable to such
Libor Loan and (y) interest which is payable at a Post-Default
Rate shall be payable from time to time on demand of the Agent."
(p) The second sentence of Section 2.11(a) of the Loan
Agreement is hereby modified by deleting the words "clause (ii) to" therefrom.
(q) The word "indemnities" in the first line of the first
sentence of Section 2.19 of the Loan Agreement is hereby deleted and replaced
with the word "indemnifies."
(r) Section 2.20(b) of the Loan Agreement is hereby amended by
inserting the following proviso immediately after the word "thereof":
"; PROVIDED, HOWEVER, that any Libor Loans outstanding as
of August 6, 1996 shall be repaid based on the ratio which the
outstanding principal balance of such Libor Loans of each Lender
bears to the aggregate outstanding principal amount of such
Libor Loans, after giving effect to the withdrawal from the Loan
Agreement of Commerzbank AG, New York Branch."
(s) The fourth sentence of Section 2.21 of the Loan Agreement
is hereby amended and restated in its entirety as follows:
"Notwithstanding the foregoing, in the event the Agent
shall have made an advance on behalf of a Lender without prior
notice not to do so, the Borrower shall, on demand from the
Agent, repay to the Agent the amount so made available with
interest thereon, in respect of each day during the period
commencing on and including the date such advance was so made by
the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) with respect to any Revolving Credit
Loan, (x) during such periods that such Loan (or any portion
thereof) is a Prime
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Rate Loan, the Prime Rate plus .50%; and (y) during such periods
that such Loan (or any portion thereof) is a Libor Loan, Libor
plus 2.50% or (ii) with respect to any Term Loan, (x) during
such periods that such Loan (or any portion thereof) is a Prime
Rate Loan, the Prime Rate plus 2.25% and (y) during such periods
that such Loan (or any portion thereof) is a Libor Loan, Libor
plus 2.50%."
(t) Section 2.22(a) of the Loan Agreement is hereby amended by
inserting after the phrase "or any of the other Loan Documents" and immediately
before the open parenthetical following such phrase the phrase "or under any
Lender Hedge Agreements".
(u) Section 3.6 of the Loan Agreement is hereby amended by
inserting the phrase "Except as set forth on Schedule 3.6 hereto," immediately
before the words "There are no outstanding judgments, actions or proceedings
pending" at the beginning of such Section.
(v) Section 5.6 of the Loan Agreement is hereby amended by
deleting clause (ii) thereof and replacing such clause with the following: "(ii)
nothing has come to their attention which would indicate that there was any
failure to comply with the Borrowing Base limitation hereunder."
(w) Section 6.9(a)(i) of the Loan Agreement is hereby amended
and restated in its entirety as follows:
"(i) a ratio of Consolidated Indebtedness to Consolidated
Tangible Capital Funds of not more than 6:1; PROVIDED, HOWEVER,
that in the event the Borrower shall amend Section 5.10(a)(4)(i)
of the Note Agreement dated as of July 1, 1994 with respect to
the Guarantor's 12% Senior Subordinated Notes solely to increase
the percentage set forth therein to 650% or greater, then the
ratio in this subsection (a)(i) shall, effective as of the date
of such amendment, but provided no Default or Event of Default
shall have occurred and be continuing, increase to 6.5:1."
(x) Section 7.1(f) of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"(f) Indebtedness of the Borrower to The First National
Bank of Boston pursuant to the Bank of Boston Facility, provided
that the principal amount thereof shall not at any time exceed
$50,000,000."
(y) A new subsection (h) is hereby added to Section 7.1 of the
Loan Agreement as follows:
"(h) Indebtedness in respect of Lender Hedge Agreements."
(z) Section 7.5 of the Loan Agreement is hereby amended and
restated in its entirety-as follows:
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"SECTION 7.5 DIVIDENDS.
Declare or pay any cash dividends or make any cash
distribution of any kind on the outstanding stock of any Loan
Party, except to the extent that such declarations and payments
(without duplication) are of cash dividends and distributions
not in excess of 50% of Consolidated Net Income for the
immediately preceding fiscal year, or set aside any sum for any
such purpose, except upon the express prior written consent of
the Majority Lenders, which consent shall not be unreasonably
withheld."
(aa) A new Section 8.11 is hereby added to the Loan Agreement
after Section 8.10 as follows:
"SECTION 8.11 MATERIAL CHANGE.
The occurrence of any material change in the condition or
affairs (financial or otherwise) of the Borrower or any of its
Subsidiaries or of any endorser, guarantor or surety for any
Obligations which causes the Majority Lenders to deem themselves
insecure."
(ab) Section 10.2(c) of the Loan Agreement is hereby deleted in
its entirety.
(ac) A new Section 11.14 is hereby added to the Loan Agreement
after Section 11.13 as follows:
"SECTION 11.14 CONFIDENTIALITY.
The Agent and the Lenders shall hold all confidential
information delivered by Borrower to the Agent or any Lender
pursuant to this Agreement relating to the Borrower or its
business in accordance with such entity's customary procedures
for handling confidential information of this nature and in
accordance with safe and sound business practices and in any
event may make disclosure to such of its respective Affiliates,
officers, directors, employees, agents and representatives as
need to know such information in connection with the Loans. If
the Agent or any Lender is otherwise a creditor of Borrower, the
Agent or such Lender, as the case may be, may use the
information in connection with its other credits. The Agent or
any Lender may also make disclosure reasonably required by any
bona fide Participant, potential assignee or potential
Participant (each, a "Transferee") or as required or requested
by any governmental authority or representative thereof, or
pursuant to legal process, or to its accountants, lawyers and
other advisors, and shall require any Transferee to agree, in a
writing to which Borrower shall be the third party beneficiary,
to agree to hold all such information as confidential to the
extent required by the first sentence of this Section 11.14."
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(ad) Exhibit A to the Loan Agreement is hereby deleted in its
entirety and Exhibit A attached hereto is hereby substituted in lieu thereof.
(ae) Exhibit C-3 to the Loan Agreement is hereby deleted in its
entirety and Exhibit C-3 attached hereto is hereby substituted in lieu thereof.
(af) Schedule 3.1 to the Loan Agreement is hereby deleted in its
entirety and Schedule 3.1 attached hereto is hereby substituted in lieu thereof.
(ag) Schedule 3.2 to the Loan Agreement is hereby deleted in its
entirety and Schedule 3.2 attached hereto is hereby substituted in lieu thereof.
(ah) Schedule 3.5 to the Loan Agreement is hereby deleted in its
entirety and Schedule 3.5 attached hereto is hereby substituted in lieu thereof.
(ai) Schedule 3.6 attached hereto is hereby attached to the Loan
Agreement as Schedule 3.6 thereof.
(aj) Schedule 3.16 to the Loan Agreement is hereby deleted in
its entirety and Schedule 3.16 attached hereto is hereby substituted in lieu
thereof.
(ak) Schedule 3.20 to the Loan Agreement is hereby deleted in
its entirety and Schedule 3.20 attached hereto is hereby substituted in lieu
thereof.
2. CONDITIONS PRECEDENT. Prior to or simultaneously with the entry
by the Borrower into this Amendment and as a condition precedent to the
effectiveness of this Amendment:
(a) DOCUMENTS. The Borrower shall have executed and delivered
to the Agent with sufficient original counterparts for each Lender (i) this
Amendment, (ii) an amendment to the Security Agreement and the Assignment of
Leases in form and substance satisfactory to the Agent and (iii) such UCC
financing statements and related documents as the Agent shall require in
connection therewith, and the Guarantor shall have executed and delivered to the
Agent with sufficient original counterparts for each Lender the Confirmation of
Guaranty annexed to this Amendment.
(b) CORPORATE ACTION. The Borrower shall have taken all
corporate action required to be taken to authorize the execution, delivery and
performance of this Amendment, the agreements, documents and instruments
referred to herein and the transactions contemplated hereby and thereby.
(c) CORPORATE DOCUMENTS AND CERTIFICATES. The Borrower and the
Guarantor shall have delivered to the Agent, with sufficient original
counterparts for each Lender, an officer's certificate, in form and substance
satisfactory to the Agent, confirming the following:
(A) None of its organizational documents have been
amended since the date(s) as of which copies of said
organizational documents were certified to the Agent;
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(B) Specimen signature(s) of the person(s) authorized to
execute this Amendment;
(C) The execution, delivery and performance of this
Amendment has been authorized by resolutions of the Board of
Directors of the Borrower and the Guarantor, copies of which
shall be attached to such officer's certificate; and
(D) Each of the Borrower and the Guarantor remains in
good standing in its respective jurisdiction of incorporation
and in each jurisdiction in which it is qualified to do
business.
(E) There shall have been no amendment, waiver or other
modification to the Bank of Boston Facility except for the
Amendments dated as of even date herewith to the Credit
Agreement governing the Bank of Boston Facility and certain
documents related thereto, true and complete copies of which
shall have been delivered to the Agent (the "Bank of Boston
Amendments").
(d) PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Amendment and all documents incident
thereto, including, without limitation, the Bank of Boston Amendments, shall be
reasonably satisfactory in form and substance to the Agent, and the Agent and
each Lender, upon request by such Lender, shall have received all information
and such counterpart originals or certified or other of such documents as the
Agent may reasonably request prior to the date hereof.
(e) COMPLIANCE.
(i) The Borrower and the Guarantor shall have complied
and shall then be in compliance with all of the terms, covenants and conditions
of the Loan Agreement as amended by this Amendment; and
(ii) The representations and warranties contained in
Article 3 of the Loan Agreement shall be true and correct on the date hereof;
and
(iii) No Default or Event of Default shall have occurred,
and the Agent and each Lender shall have received a Compliance Certificate dated
the date hereof certifying, INTER ALIA, that the conditions set forth in this
Section 2(e) are satisfied on such date.
(f) LEGAL MATTERS. All legal matters incident to the
effectiveness of this Amendment shall be satisfactory to counsel to the Agent.
(g) LETTER OF WITHDRAWAL. The Agent shall have received a
letter of withdrawal duly executed and delivered by Commerzbank AG, New York
Branch ("Commerzbank"), evidencing Commerzbank's agreement to withdraw as a
Lender under the Loan Agreement.
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3. REAFFIRMATION OF SECURITY INTEREST.
The Borrower hereby reaffirms as of the date hereof each and every
security interest and lien granted in favor of the Agent and the Lenders under
the Loan Documents, and agrees and acknowledges that such security interests and
liens shall continue from and after the date hereof, in each case after giving
effect to the Loan Agreement as amended by this Amendment, and the obligations
secured thereby and thereunder shall include Borrower's obligations under the
Loan Agreement as amended by this Amendment. Each such reaffirmed security
interest and lien remains and shall continue to remain in full force and effect
and is hereby in all respects ratified and confirmed.
4. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like
import, and each reference in the other Loan Documents, shall mean and be a
reference to the Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan Agreement
shall remain in full force and effect in accordance with its terms.
5. GOVERNING LAW. This Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
without reference to its principles of conflict of laws.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties on different counterparts, but all such
counterparts shall together constitute but one agreement.
7. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
BORROWER:
LEASECOMM CORPORATION
By: /s/ Peter Bleyleben
______________________________
Name:
Title:
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LENDERS:
FLEET BANK, N.A.(formerly known as
NatWest Bank N.A.)
Address:
Fleet Bank, N.A.
175 Water Street
New York, New York 10038
Attention: Mr. Robert Young
Vice President
Telecopier: (212) 602-2180
By: /s/ Robert F. Young
------------------------------
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION
Address:
Sanwa Business Credit Corporation
One South Wacker Drive
Chicago, Illinois 60606
Attention: Ms. M. Gail Fitzpatrick
Vice President
Telecopier: (312) 853-1366
By: /s/ Mary Gail Fitzpatrick
------------------------------
Name:
Title:
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CORESTATES BANK, N.A.
Address:
Corestates Bank PNB
1500 Market Street West Tower
Philadelphia, Pennsylvania 19101-7618
Attention: Ms. Verna R. Prentice
Vice President
Telecopier: (215) 973-6054
By: /s/ Velma R. Prentice
---------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
Address:
PNC Bank, National Association
100 South Broad Street
Philadelphia, Pennsylvania 19919
Attention: Ms. Ann Fryland
Vice President
Telecopier: (215) 585-8351
By: /s/ Ann Fryland
---------------------------------
Name:
Title:
AGENT:
FLEET BANK, N.A.(formerly known as
NatWest Bank N.A.), as Agent
By: /s/ [Signature Illegible]
---------------------------------
Name:
Title:
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