Exhibit 10.1
AMENDED AND RESTATED LOAN AGREEMENT
by and among
MEDALLION FINANCIAL CORP.,
MEDALLION BUSINESS CREDIT, LLC
THE LENDERS PARTY HERETO,
FLEET BANK, NATIONAL ASSOCIATION
AS AGENT AND SWING LINE LENDER
and
FLEET BANK, NATIONAL ASSOCIATION
AS ARRANGER
Dated as of June 29, 1999
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS..................................................................... 1
Section 1.1 Defined Terms................................................................... 1
Section 1.2 Other Definitional Provisions................................................... 22
ARTICLE 2 AMOUNT AND TERMS OF REVOLVING
CREDIT LOANS................................................................... 23
Section 2.1 Commitments and Loans........................................................... 23
Section 2.2 Revolving Credit, Term Loan and Swing Line Notes................................ 25
Section 2.3 Procedures Applicable to Borrowings and
Conversions..................................................................... 29
Section 2.4 Termination and Reduction of Aggregate Revolving
Credit Commitment............................................................... 32
Section 2.5 Prepayments..................................................................... 34
Section 2.6 Interest on Delinquent Payments................................................. 35
Section 2.7 Increased Costs................................................................. 36
Section 2.8 Use of Proceeds................................................................. 38
Section 2.9 Payment on Non-Business Days.................................................... 38
Section 2.10 Term of Revolving Credit Commitments............................................ 38
Section 2.11 Funding Losses.................................................................. 40
Section 2.12 Alternate Rate of Interest...................................................... 41
Section 2.13 Changes In Legality............................................................. 41
Section 2.14 Participations.................................................................. 41
ARTICLE 3 FEES AND PAYMENTS............................................................... 42
Section 3.1 Fees............................................................................ 42
Section 3.2 Payments........................................................................ 42
Section 3.3 Taxes........................................................................... 43
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.................................................. 44
Section 4.1 Corporate Status................................................................ 45
Section 4.2 Subsidiaries.................................................................... 45
Section 4.3 Location of Offices, Books and Records.......................................... 45
Section 4.4 Corporate Power; Authorization.................................................. 45
Section 4.5 Enforceable Obligations......................................................... 46
Section 4.6 No Violation of Agreements; Compliance with Law................................. 46
Section 4.7 Agreements...................................................................... 46
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Section 4.8 No Material Litigation.......................................................... 46
Section 4.9 Good Title to Properties........................................................ 47
Section 4.10 Margin Regulations.............................................................. 47
Section 4.11 [Reserved]...................................................................... 47
Section 4.12 Investment Company.............................................................. 47
Section 4.13 Disclosure...................................................................... 47
Section 4.14 Taxes and Claims................................................................ 48
Section 4.15 Licenses and Permits............................................................ 48
Section 4.16 Consents........................................................................ 48
Section 4.17 Employee Benefit Plans.......................................................... 48
Section 4.18 Financial Condition............................................................. 49
Section 4.19 Environmental Laws, Etc......................................................... 50
Section 4.20 Event of Default................................................................ 50
Section 4.21 Solvency........................................................................ 50
Section 4.22 Priority; Continued Effectiveness............................................... 50
Section 4.23 Advertising, Origination and Servicing Activities............................... 51
Section 4.24 Activities...................................................................... 51
Section 4.25 Year 2000 Issue................................................................. 51
Section 4.26 No Transfer to BL............................................................... 51
ARTICLE 5 CONDITIONS PRECEDENT............................................................ 52
Section 5.1 Conditions to Initial Revolving Credit Loan and Initial
Swing Line Loan................................................................. 52
Section 5.2 Conditions to All Revolving Credit and Term Loans............................... 54
ARTICLE 6 AFFIRMATIVE COVENANTS........................................................... 55
Section 6.1 Financial Statements and Other Information...................................... 55
Section 6.2 Taxes and Claims................................................................ 58
Section 6.3 Insurance....................................................................... 58
Section 6.4 Books and Records............................................................... 59
Section 6.5 Properties in Good Condition.................................................... 59
Section 6.6 Inspection by the Banks......................................................... 59
Section 6.7 Pay Indebtedness to Agent and Perform Other
Covenants....................................................................... 59
Section 6.8 Compliance With Laws............................................................ 60
Section 6.9 Notice of Certain Events........................................................ 60
Section 6.10 Environmental Laws, Etc......................................................... 60
Section 6.11 Further Assurances.............................................................. 61
Section 6.12 ERISA........................................................................... 61
Section 6.13 Corporate or Limited Liability Company Existence................................ 61
Section 6.14 Maintenance of Security Interest................................................ 61
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Section 6.15 Maximum Percentage of Commercial Loans.......................................... 62
Section 6.16 Year 2000 Issue................................................................. 62
Section 6.17 Borrowers' Manuals.............................................................. 62
Section 6.18 Principal Office of Clients..................................................... 62
ARTICLE 7 FINANCIAL COVENANTS............................................................. 63
Section 7.1 Maximum Leverage Ratio.......................................................... 63
Section 7.2 Maximum Adjusted Leverage Ratio................................................. 63
Section 7.3 Borrowing Base.................................................................. 63
Section 7.4 Minimum EBIT to Interest Expense Ratio.......................................... 63
Section 7.5 Minimum Asset Quality........................................................... 64
ARTICLE 8 NEGATIVE COVENANTS.............................................................. 64
Section 8.1 Liens........................................................................... 64
Section 8.2 Indebtedness.................................................................... 65
Section 8.3 Limitation on Loans and Investments............................................. 65
Section 8.4 [Reserved]...................................................................... 66
Section 8.5 Restricted Payments............................................................. 66
Section 8.6 Merger, Consolidation, Sale or Transfers Assets................................. 67
Section 8.7 Transfer of Proceeds............................................................ 67
Section 8.8 Compliance with ERISA........................................................... 67
Section 8.9 Change in Business.............................................................. 68
Section 8.10 Amendments of Agreements........................................................ 68
Section 8.11 Transactions with Affiliates.................................................... 68
Section 8.12 Negative Pledges................................................................ 68
Section 8.13 Inconsistent Agreements......................................................... 68
Section 8.14 Capital Expenditures............................................................ 68
Section 8.15 [Reserved]...................................................................... 69
ARTICLE 9 DEFAULTS AND REMEDIES........................................................... 69
Section 9.1 Events of Default............................................................... 69
Section 9.2 Suits for Enforcement........................................................... 73
Section 9.3 Rights and Remedies Cumulative.................................................. 73
Section 9.4 Rights and Remedies Not Waived.................................................. 73
Section 9.5 Further Payments................................................................ 73
ARTICLE 10 MISCELLANEOUS................................................................... 74
Section 10.1 Collection Costs................................................................ 74
Section 10.2 Modification and Waiver......................................................... 74
Section 10.3 GOVERNING LAW................................................................... 75
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Section 10.4 Notices......................................................................... 75
Section 10.5 Accounting Terms................................................................ 76
Section 10.6 Costs and Expenses; Indemnity................................................... 76
Section 10.7 WAIVER OF JURY TRIAL AND SETOFF................................................. 77
Section 10.8 Captions........................................................................ 78
Section 10.9 Lien; Setoff by Banks........................................................... 78
Section 10.10 Security; Continued Effectiveness............................................... 79
Section 10.11 Jurisdiction; Service of Process................................................ 79
Section 10.12 Benefit of Agreement............................................................ 80
Section 10.13 Counterparts.................................................................... 80
Section 10.14 Interest........................................................................ 80
Section 10.15 Attorneys' Fees................................................................. 81
Section 10.16 Severability.................................................................... 81
Section 10.17 Confidentiality................................................................. 81
Section 10.18 Loss, Theft, Etc. of Notes...................................................... 82
ARTICLE 11 AGENCY.......................................................................... 82
Section 11.1 Appointment and Actions......................................................... 82
Section 11.2 Independent Credit Decisions.................................................... 84
Section 11.3 Indemnification of Agent........................................................ 85
Section 11.4 Resignation and Succession...................................................... 85
ARTICLE 12 SALES AND TRANSFERS............................................................. 86
Section 12.1 Sales and Transfers............................................................. 86
Section 12.2 New Banks....................................................................... 88
Section 12.3 Joint and Several Liability..................................................... 90
ARTICLE 13 GUARANTEE....................................................................... 90
Section 13.1 Guarantee....................................................................... 90
Section 13.2 Absolute Obligation............................................................. 92
Section 13.3 Repayment in Bankruptcy......................................................... 93
Section 13.4 Miscellaneous................................................................... 93
Section 13.5 Subordination................................................................... 93
ARTICLE 14 BORROWER AGENCY................................................................. 94
Section 14.1 Appointment and Actions......................................................... 94
Exhibits and Schedules
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Exhibit A Percentages
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Exhibit B Form of Revolving Credit Note
Exhibit C Form of Term Note
Exhibit D Form of Swing Line Note
Exhibit E Form of Loan Request
Exhibit F Form of MBC Security Agreement
Exhibit G Form of Borrowing Base Certificate
Exhibit H Form of Opinion of Counsel to Borrower
Exhibit I Form of Assignment and Acceptance
Schedule I Locations, Chief Executive Office
Schedule II Subsidiaries
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AMENDED AND RESTATED LOAN AGREEMENT, dated as of June 29, 1999, among
MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
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CREDIT, LLC, a Delaware limited liability company ("MBC;" MBC and MFC are
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sometimes hereinafter referred to individually as a "Borrower" and together as
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the "Borrowers"), the banks that from time to time are signatories hereto
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(including Assignees (as hereinafter defined), collectively, the "Banks" and
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individually, a "Bank"), FLEET BANK, NATIONAL ASSOCIATION , as a Bank ("Fleet"),
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as Swing Line Lender (the "Swing Line Lender"), as Arranger and as Agent for the
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Banks (including any successor, the "Agent").
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WHEREAS, MFC, the Agent, the Swing Line Lender and the Banks are parties to
a Loan Agreement dated as of July 31, 1998 and amended as of May 6, 1999 and
June 1, 1999 (as so amended, the "Original Agreement");
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WHEREAS, the parties to the Original Agreement wish to amend and restate
the Original Agreement in its entirety as set forth herein to, among other
things, add MBC as an additional Borrower and extend the maturity of the
Original Agreement, all on the terms and conditions hereinafter set forth; and
WHEREAS, for convenience, this Agreement is dated as of June 29, 1999, and
references to certain matters related to the period prior thereto have been
deleted;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1 DEFINITIONS
Section 1.1 Defined Terms.
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As used in this Agreement, the terms defined in the recitals hereto shall
have the respective meanings ascribed thereto in said recitals and the following
terms shall have the following respective meanings:
"Account Debtor" shall mean any Person which is or which may become
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obligated to a Client under or on account of a Receivable.
"Accumulated Funding Deficiency" shall have the meaning set forth in
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Section 302 of ERISA.
"Additional Commitment Amount" shall have the meaning set forth in Section
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12.2 hereof.
"Adjusted LIBO Rate" shall mean, with respect to any Interest Period
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applicable to any LIBO Rate Loan, the rate of interest per annum, as determined
by the Agent, equal to the quotient (rounded to the nearest 1/100 of 1.00% or,
if there is no nearest 1/100 of 1.00%, then to the next higher 1/100 of 1.00%)
obtained by dividing the LIBO Base Rate by an amount equal to the result
obtained by subtracting the Eurodollar Reserve Percentage (expressed as a
decimal) from 1.00. The
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Adjusted LIBO Rate shall be adjusted automatically on and as of the opening of
business on the effective date of any change in the Eurodollar Reserve
Percentage.
"Adjusted Net Income" shall mean, with respect to either Borrower, the
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aggregate income (or loss) of such Borrower for such period which shall be an
amount equal to net revenues and other proper items of income less the aggregate
----
for such Borrower of any and all items that are treated as expenses under GAAP,
and less, without duplication, Federal, state and local income taxes as
----
determined in accordance with GAAP.
"Adjusted Tangible Net Worth" shall mean, as to MFC and MBC taken together,
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but otherwise on an unconsolidated basis, the sum of capital surplus, earned
surplus, capital stock and Satisfactory Subordinated Debt minus deferred
charges, intangibles, treasury stock, Investments in Subsidiaries (other than
Investments by MFC in MBC) and amounts due to MFC and/or MBC from any
Subsidiary(ies) of any of them, all determined in accordance with GAAP
consistently applied.
"Affiliate" shall mean any Person which, directly or indirectly, controls
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or is controlled by or is under common control with any other Person and,
without limiting the generality of the foregoing, shall include any Person who
(a) beneficially owns or holds 20% or more of the Voting Interests of such other
Person (determined either by number of shares or number of votes) or (b) is an
associate (as such term is defined in Rule 405 of the Securities Act of 1933, as
in effect on the Restatement Effective Date) of such other Person. For purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agent Payment Office" shall mean with respect to all amounts owing under
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the Loan Documents, initially, the office, branch, affiliate, or correspondent
bank of the Agent designated as its "Payment Office" below its signature to this
Agreement and, thereafter, such other office, branch, affiliate, or
correspondent bank thereof as it may from time to time designate in writing as
such to the Borrowers, the Swing Line Lender and each Bank.
"Aggregate Revolving Credit Commitment" shall mean $100,000,000, as the
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same may be reduced, terminated or increased from time to time pursuant to
Sections 2.4, 2.10, 9.1 or 12.2 hereof.
"Agreement" shall mean this Loan Agreement, as the same may be amended and
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supplemented from time to time.
"Amount" shall mean, (a) with respect to any Loan, the principal amount of,
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plus all accrued and unpaid interest on, and all other amounts due in respect
of, such Loan and (b) with respect to any Receivable, all amounts due in respect
of such Receivable.
"Applicable Facility Percentage" means 0.15%.
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"Applicable Cost of Funds Margin" means 1.15%.
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"Applicable LIBO Margin" means 1.10%.
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"Assignee" or "Assignees" shall have the meaning set forth in Section 12.2
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hereof.
"Assignment" or "Assignments" shall have the meaning set forth in Section
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12.2 hereof.
"Assignor" or "Assignors" shall have the meaning set forth in Section 12.2
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hereof.
"Authorized Representative" shall mean, with respect to either Borrower,
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its chairman, president, chief executive officer, chief operating officer, chief
accounting officer, vice president or chief financial officer, or any other
officer of such Borrower designated as such from time to time by such Borrower
in a written notice to the Agent, accompanied by an incumbency certificate with
specimen signature included.
"Banking Day" shall mean any Business Day on which dealings in deposits in
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Dollars are transacted in the London interbank market.
"BL" shall mean Business Lenders, LLC a Delaware limited liability company
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the sole member of which is MFC.
"Board" shall mean the Board of Governors of the Federal Reserve System.
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"Borrowing Base Certificate" shall mean a certificate substantially in the
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form of Exhibit G hereto, which Borrowing Base Certificate shall identify all
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such information separately for MFC and MBC.
"Borrower Financing Statements" shall mean financing statements approved
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for filing in accordance with the Uniform Commercial Code, and all other titles,
certificates, assignments and other documents that the Agent or any Bank may
require to perfect the security interests to be granted under the MFC Security
Agreement and the MBC Security Agreement.
"Borrower Obligations" shall mean, with respect to MFC, all of the
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obligations and liabilities of MFC under the Loan Documents and, with respect to
MBC, all of the obligations and liabilities of MBC under the Loan Documents, in
each case whether fixed, contingent, now existing or hereafter arising, created,
assumed, incurred or acquired including (i) any obligation or liability in
respect of any breach of any representation or warranty, and (ii) all post-
petition interest and funding losses.
"Business Day" shall mean any day other than a Saturday, Sunday or other
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day on which the Agent is not open for business at its offices set forth in this
Agreement.
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"Capital Stock" with respect to any corporation, shall mean common stock,
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preferred stock, and any and all shares or other equivalents (however
designated) of any other corporate stock, of such corporation.
"Client" shall mean, with respect to any Loan, any Person, not disapproved
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by the Agent or the Required Banks in writing in its or their sole discretion,
which is obligated to make payments in respect of such Loan (other than any
Account Debtor). For purposes of this Agreement and the other Loan Documents,
any Client that is an Affiliate of another Client shall be deemed to be one and
the same Client.
"Code" shall mean the Internal Revenue Code of 1986, and all rules and
----
regulations promulgated pursuant thereto, as the same may be amended or
supplemented from time to time.
"Code Section 4975" shall mean, at any date, Section 4975 of the Code.
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"Collateral" shall mean and include the assets, property or interests in
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property of whatever nature whatsoever, real, personal or mixed, tangible or
intangible, of MFC and/or MBC securing the Revolving Credit Loans, Swing Line
Loans and/or Term Loans and all other property and interests in personal
property that shall, from time to time, secure the Revolving Credit Loans, Swing
Line Loans and/or Term Loans.
"Commercial Loans" shall mean Loans that are secured in whole or in part by
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Real Property, Inventory, Equipment and/or Receivables and that are not
Medallion Loans.
"Cost of Funds" means the per annum rate of interest which Fleet is
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required to pay, or is offering to pay, for wholesale liabilities, adjusted for
reserve requirements and such other requirements as may be imposed by federal,
state or local government and regulatory agencies, as determined in the sole
discretion of Fleet and agreed to by the Required Lenders.
"Cost of Funds Loan" shall mean a Revolving Credit Loan or Term Loan
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hereunder that bears interest for the Interest Period applicable thereto at a
fixed rate of interest determined by reference to the Cost of Funds plus the
applicable margin.
"Default" shall mean any of the events specified in Section 9.1 hereof,
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whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Default Rate" shall have the meaning set forth in Section 2.6 hereof.
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"Delinquent Receivables Loan" shall mean a Loan secured by Receivables as
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to which any payment with respect to any amount due in connection with any such
Receivable is not made within 90 calendar days after such payment was originally
due (without regard to any stated grace period).
"Distressed Person" shall mean any Person (a) that files a petition or
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seeks relief under or takes advantage of any insolvency law; makes an assignment
for the benefit of its creditors;
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commences a proceeding for the appointment of a receiver, trustee, liquidator,
custodian or conservator of itself or of the whole or substantially all of its
property; files a petition or an answer to a petition under any chapter of the
United States Bankruptcy Code, as amended (11 U.S.C. (S) 101 et seq.), or files
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a petition or seeks relief under or takes advantage of any other similar law or
statute of the United States of America, any state thereof or any foreign
country; or
(b) as to which a court of competent jurisdiction shall enter an order,
judgment or decree appointing or authorizing a receiver, trustee, liquidator,
custodian or conservator of such Person or of the whole or substantially all of
its property, or enters an order for relief against such Person in any case
commenced under any chapter of the United States Bankruptcy Code, as amended, or
grants relief under any other similar law or statute of the United States of
America, any state thereof or any foreign country; or as to which, under the
provisions of any law for the relief or aid of debtors, a court of competent
jurisdiction or a receiver, trustee, liquidator, custodian or conservator shall
assume custody or control or take possession of such Person or of the whole or
substantially all of its property; or as to which there is commenced against
such Person any proceeding for any of the foregoing relief or as to which a
petition is filed against such Person under any chapter of the United States
Bankruptcy Code, as amended, or under any other similar law or statute of the
United States of America or any state thereof or any foreign country and such
proceeding or petition remains undismissed for a period of 60 days; or as to
which such Person by any act indicates its consent to approval of or
acquiescence in any such proceeding or petition.
"Dividends" shall mean, for the most recently completed four fiscal
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quarters of the applicable Borrower, the sum of all paid and accrued and unpaid
cash dividends on Capital Stock plus any paid and accrued and unpaid repurchase
or redemption for cash of Capital Stock.
"Dollars" and "$" shall mean dollars in lawful currency of the United
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States of America.
"Domestic Investment" shall mean an Investment in respect of a Person which
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is a resident of the United States, Canada or Bermuda or a Person (other than a
Governmental Authority) organized or qualified under the laws of any State,
excluding any Domestic Investment that is a Portfolio Purchase.
"Domestic Loan" shall mean a Loan that is denominated and payable only in
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Dollars, the Person in respect of which is a resident of the United States,
Canada or Bermuda or a Person (other than a Governmental Authority) organized or
qualified under the laws of any State.
"EBIT" shall mean, with respect to either Borrower for any period, the sum
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of (i) Adjusted Net Income, (ii) Interest Expense and (iii) Federal, state and
local income taxes, in each case of such Borrower for such period, computed in
accordance with GAAP.
"▇▇▇▇▇▇▇ Debt" shall mean the outstanding amount owed by Medallion Funding
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to the SBA under the following notes, originally given by ▇▇▇▇▇▇▇ Capital Corp.,
a Delaware corporation (which merged with and into Medallion Funding), to the
SBA: two debentures dated September 23, 1992, in the original principal amount
of $3,500,000 and $6,050,000, respectively; a debenture
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dated June 29, 1994, in the original principal amount of $4,600,000; and a
debenture dated September 28, 1994, in the original principal amount of
$5,100,000.
"Eligibility Requirements" with respect to any Loan, shall mean the
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following requirements:
(a) such Loan is made to, and is a recourse obligation of, the Person to
whom such Loan is made,
(b) such Loan is a Domestic Loan,
(c) [Reserved],
(d) such Loan is pledged in accordance with the MFC Security Agreement or
the MBC Security Agreement,
(e) such Loan is made to an Eligible Client,
(f) the representations, warranties and covenants contained in the MFC
Security Agreement and the MBC Security Agreement are true and correct, and have
been complied with, with respect to such Loan,
(g) the Agent, on behalf of the Banks, has a perfected, first priority
security interest in such Loan, and
(h) such Loan is made in accordance with the credit policy in existence at
the time of such Loan of the applicable Borrower.
Notwithstanding the foregoing, no Loan shall be deemed to have satisfied
the Eligibility Requirements if the Agent or the Required Banks believe that
such Loan may not be paid in accordance with its original terms or are insecure
for any reason, including, without limitation, because of the Eligible Client's
financial inability to pay or because the Eligible Client has disputed the
liability, asserted any right of set-off or has made a claim with respect to any
other Loan made to such Eligible Client by the applicable Borrower, other than
as a nominal adjustment in the ordinary course of business and in accordance
with regular commercial practice.
"Eligible Client" shall mean, on any date, any Client that meets all the
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following criteria:
(a) such Client is not an Affiliate of a Borrower or its Subsidiaries,
(b) less than 50% of the Amount of all Loans to such Client constitute
Delinquent Receivables Loans, and
(c) the Amount of Loans to such Client in the aggregate does not exceed 20%
of the applicable Borrower's Tangible Net Worth as of such date.
"Eligible Commercial Loan" shall mean any Commercial Loan that satisfies
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the Eligibility Requirements and (a) that is secured by Eligible Equipment,
Eligible Inventory, Eligible Real Estate or Eligible Receivables and (b) that is
made to an Eligible Client that is an ongoing business concern; provided, that,
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no Loan shall be an Eligible Commercial Loan (i) if a Borrower, in its
reasonable business judgment, deems such Eligible Commercial Loan to be
uncollectible or subject
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to classification as non-accruing and for which it has not made appropriate
credits to its reserves, or (ii) if the Loan or accrued interest thereon is more
than 60 days past due.
"Eligible Equipment" of any Borrower shall mean Equipment in which a
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perfected security interest has been obtained by such Borrower in accordance
with its standard credit policy and underwriting criteria at such time to secure
the obligations of a Client under a Loan by such Borrower to such Client, or in
the case of a beneficial owner of such Client, to secure a guaranty which shall
have been made by such beneficial owner guaranteeing such Loan, and the same has
been assigned to the Agent, for the benefit of the Banks, pursuant to the MFC
Security Agreement or MBC Security Agreement and the same is otherwise
satisfactory to the Agent.
"Eligible Inventory" of any Borrower shall mean Inventory in which a first
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priority perfected security interest has been obtained by such Borrower to
secure the obligations of a Client under a Loan by such Borrower to such Client,
or in the case of a beneficial owner of such Client, to secure a guaranty which
shall have been made by such beneficial owner guaranteeing such Loan, and the
same has been assigned to the Agent, for the benefit of the Banks, pursuant to
the MFC Security Agreement or the MBC Security Agreement. Notwithstanding the
foregoing, Eligible Inventory does not include any of the following: (a)
catalogs and other promotional materials of any kind; (b) work in process; (c)
any returned items; (d) any damaged, defective or recalled items; (e) any
obsolete items; (f) any items used as demonstrators, prototypes or salesmen's
samples; (g) any items of inventory which have been consigned to a Client or as
to which a Person claims a Lien; (h) any items of inventory which have been
consigned by the Client to a consignee; (i) packing and shipping materials; (j)
inventory located on premises leased by the Client from a landlord with whom the
applicable Borrower has not entered into a landlord's waiver on terms
satisfactory to such Borrower; and (k) inventory which in the reasonable
judgment of the applicable Borrower, in accordance with its standard criteria,
is considered to be slow-moving or otherwise not merchantable. Eligible
Inventory shall be valued at the lower of (a) cost, (b) market value, or (c) the
valuation consistent with that employed in the preparation of the financial
statements of the applicable Client.
"Eligible Loans" shall mean any Loan that constitutes or comprises either
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an Eligible Medallion Loan or Eligible Commercial Loan.
"Eligible Medallion Loan" shall mean any Medallion Loan that satisfies the
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Eligibility Requirements and (a) that is secured by Medallion Rights and (b)
that is made to an Eligible Client that is an ongoing business concern;
provided, that, no Loan shall be an Eligible Medallion Loan (i) if a Borrower,
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in its reasonable business judgment, deems such Eligible Medallion Loan to be
uncollectible or subject to classification as non-accruing and for which it has
not made appropriate credits to its reserves, or (ii) if the Loan or accrued
interest thereon is more than 60 days past due.
"Eligible Real Estate" of either Borrower shall mean Real Property in which
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a mortgage interest has been obtained (and continuously maintained) by such
Borrower to secure the obligations of the Client under a Loan by such Borrower
to such Client, or in the case of a beneficial owner of such Client, to secure a
guaranty which shall have been made by such beneficial owner
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guaranteeing the Loan, and assigned to the Agent, for the benefit of the Banks,
pursuant to a Mortgage Assignment.
"Eligible Receivables" of either Borrower shall mean Receivables (i) that
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are reasonably determined in good faith to be eligible by such Borrower, (ii)
that arise in the ordinary course of a Person's business, (iii) that are net of
credits, rebates, offsets, holdbacks or adjustments and (iv) in which a first
priority perfected security interest has been obtained by such Borrower to
secure the obligations of such Person under a Loan by such Borrower to such
Person, or in the case of a beneficial owner of such Client, to secure a
guaranty which shall have been made by such beneficial owner guaranteeing such
Loan, and the same has been assigned to the Agent, for the benefit of the Banks,
pursuant to the MFC Security Agreement or the MBC Security Agreement.
Notwithstanding the foregoing, no Receivable shall be an Eligible Receivable
(a) if payment with respect to any amount due in connection therewith
is not made within 90 calendar days after such payment was originally due
(without regard to any stated grace period);
(b) to the extent that such Receivable is subject to any offset,
discount, counterclaim, contra-account or any other defense of any kind or
character; or
(c) if the Agent or the Required Banks believe that such Receivable
may not be paid in accordance with its original terms or are insecure for
any reason, including, without limitation, because of the Account Debtor's
bankruptcy, death, incapacity or financial inability to pay or because the
Account Debtor has disputed the liability, asserted any right of set-off or
has made a claim with respect to any other Receivable payable by such
Account Debtor to such Client, other than as a nominal adjustment in the
ordinary course of business and in accordance with regular commercial
practice.
"Equipment" shall mean all machinery, equipment, fixtures, vehicles, office
---------
equipment, furniture, furnishings, inventories, supplies, computer equipment,
and all other equipment whatsoever, wherever located, together with all
attachments, components, parts, equipment and accessories installed therein or
affixed thereto, including, but not limited to, all equipment as defined in
Section 9-109(2) of the UCC and all products, profits, rents and proceeds of any
of the foregoing; all whether now owned or hereafter created or acquired.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ERISA Affiliate" shall mean an entity, whether or not incorporated, which
---------------
controls, is controlled by, or is under common control with, either Borrower
within the meaning of Section 4001 of ERISA.
"ERISA Termination Event" shall mean (i) a Reportable Event, (ii) the
-----------------------
withdrawal of either Borrower or any of its ERISA Affiliates from a Plan during
a plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (iii) the filing of a notice of
-8-
intent to terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings to terminate a
Plan by the PBGC, or (v) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Eurodollar Reserve Percentage" shall mean, with respect to the calculation
-----------------------------
of the Adjusted LIBO Rate for any Interest Period, the percentage (expressed as
a decimal) that is in effect on the date such calculation is made, as prescribed
by the Board for determining the maximum reserve requirement (including without
limitation any basic, marginal, special, supplemental or emergency reserves and
determined without benefit of any credits for proration, exceptions, or offsets
that may be available from time to time) for a member bank of the Federal
Reserve System applicable to Eurocurrency funding by such member bank, currently
referred to as "Eurocurrency liabilities" in Regulation D of the Board (or in
respect of any other category of liabilities, which includes deposits by
reference to which the interest rate on LIBO Rate Loans is determined, or any
category of extensions of credit or other assets, including loans by a non-
United States office of any Bank to United States residents).
"Event of Default" shall mean any of the events specified in Section 9.l
----------------
hereof.
"Exposure Percentage" shall mean as of any date and with respect to the
-------------------
Swing Line Lender or any Bank, as the case may be, a fraction the numerator of
which is the Exposures on such date of the Swing Line Lender or such Bank, as
applicable, and the denominator of which is the aggregate Exposures on such date
of the Swing Line Lender and all Banks.
"Exposures" shall mean, as of any date, with respect to the Swing Line
---------
Lender or any Bank, as the case may be, and, as the context requires, the
Revolving Credit Loans, Swing Line Loans and/or Term Loans (each a "Loan Type"),
an amount equal to (i) the outstanding principal amount on such date of all
loans of such Loan Type owed to such Bank, plus (ii) with respect to the Swing
----
Line Lender only and only when the Loan Type is a Swing Line Loan, the excess of
(a) the outstanding principal amount on such date of all Swing Line Loans, over
(b) all payments made to the Swing Line Lender by the Borrowers and the Banks in
repayment thereof or participation therein, as the case may be, plus (iii) with
----
respect to each Bank, the excess of (a) the aggregate sum of all payments by
such Bank in participation of the Swing Line Loans, over (b) all reimbursements
of such Bank in respect thereof.
"Facility Fee" shall mean the fee required to be paid pursuant to Section
------------
3.1 hereof.
"Federal Funds Rate" shall mean, for any day, a rate per annum (expressed
------------------
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that, (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding
-9-
Business Day, and (ii) if such rate is not so published for any day, the Federal
Funds Rate for such day shall be the average of the quotations for such day on
such transactions received by the Agent.
"Fee Letter" shall mean that certain letter agreement between MFC and the
----------
Agent dated as of July 31, 1998.
"Fixed Rate Loan shall mean any LIBO Rate Loan and/or any Cost of Funds
---------------
Loan and/or any Negotiated Rate Loan.
"GAAP" shall mean generally accepted accounting principles in the United
----
States of America as in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
----------------------
other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any government, and any corporation or other entity owned or
controlled (through ownership of Capital Stock or otherwise) by any of the
foregoing.
"Guaranteed Obligations" shall mean the obligation of Medallion Funding to
----------------------
pay to the SBA on September 1, 1999 in respect of the SBA Debt a principal
amount not in excess of $20,000,000 together with interest thereon accrued
through the date of payment and prepayment penalties (if any) due pursuant to
the terms of the SBA Debt.
"Guaranty and Security Agreement" shall mean the Guaranty and Security
-------------------------------
Agreement dated the Original Effective Date, between BL, as guarantor, and the
Agent for the benefit of the Banks and the Swing Line Lender, substantially in
the form of Exhibit K to the Original Agreement, as the same may be amended or
---------
supplemented from time to time.
"Hazardous Materials" shall mean and include, without limitation, gasoline,
-------------------
petroleum products, explosives, radioactive materials, hazardous materials,
hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or
related or similar materials, asbestos or any material containing asbestos, or
any other substance or material as may be defined as a hazardous or toxic
substance by any Federal, state or local environmental law, ordinance, rule or
regulation.
"Indebtedness" of a Person shall mean and include, without duplication, (i)
------------
all items which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of a balance sheet as at the date
Indebtedness of such Person is to be determined, other than dividends on Capital
Stock declared but not paid to the extent such dividends are not Restricted
Payments, (ii) any liability secured by any Lien on property owned or acquired
by such Person, whether or not such liability shall have been assumed by such
Person, and (iii) guaranties, endorsements (other than for collection in the
ordinary course of business), reimbursement obligations in respect of undrawn
letters of credit and other contingent obligations of such Person in respect of
the obligations of others.
"Independent Public Accountants" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or such
------------------------------
other nationally recognized firm of independent certified public accountants
selected by the Borrowers.
-10-
"Initial Revolving Credit Loan" shall mean the Revolving Credit Loan or
-----------------------------
Revolving Credit Loans made by the Banks to either or both of the Borrowers on
the Restatement Effective Date.
"Initial Term" shall mean the period from and including the Restatement
------------
Effective Date to and including June 26, 2000.
"Instrument of Adherence" shall have the meaning set forth in Section 12.2
-----------------------
hereof.
"Intercompany Demand Loan Collateral" shall mean all of the Loans,
-----------------------------------
Underlying Collateral and other property now or hereafter securing payment of
the Intercompany Demand Note.
"Intercompany Demand Loan Documents" shall mean the Intercompany Demand
----------------------------------
Note, the Intercompany Demand Loan Security Documents and each other document,
instrument and agreement executed pursuant to or in connection with any of the
foregoing, each as amended, supplemented or modified from time to time, as
pledged to the Agent pursuant to the MFC Security Agreement and/or the Guaranty
and Security Agreement.
"Intercompany Demand Loan Security Documents" shall mean the security
-------------------------------------------
documents executed by BL in favor of MFC in order to grant MFC a first Lien in
the Intercompany Demand Loan Collateral.
"Intercompany Demand Note" shall mean one or more negotiable demand
------------------------
promissory notes made by BL to the order of MFC evidencing loans by MFC to BL,
substantially in the form of Exhibit L to the Original Agreement.
"Interest Expense" shall mean, for any period, all interest paid or
-----------------
scheduled to be paid (including amortization of original issue discount and non-
cash interest payments or accruals and the interest component of leases that, in
accordance with GAAP, are capitalized leases) by either Borrower or any of its
Subsidiaries during such period on Indebtedness of either Borrower or any of
such Subsidiaries (determined on a consolidated basis).
"Interest Period" shall have the meaning set forth in Section 2.2(d)
---------------
hereof.
"Inventory" shall mean, with respect to any Person, all goods held by such
---------
Person for sale or lease by such Person, or to be furnished under contracts of
service, in each case in the ordinary course of such Person's business.
"Inventory Loans" shall mean Loans secured in whole or in part by
---------------
Inventory.
"Investment" in any Person shall mean any loan, advance, or extension of
----------
credit to or for the account of; any guaranty, endorsement or other direct or
indirect contingent liability in connection with the obligations, Capital Stock
or dividends of; any ownership, purchase or acquisition of any assets, business,
Capital Stock, obligations or securities of; or any other interest in or capital
-11-
contribution to; such Person, but shall not include (a) any Loan, (b) any
Investment permitted by Section 8.14 hereof and (c) any Portfolio Purchase.
"LIBO Base Rate" shall mean, with respect to any Interest Period, the rate
--------------
reported by the Agent as the rate per annum (rounded to the nearest 1/100 of
1.00% or, if there is no nearest 1/100 of 1.00%, then to the next higher 1/100
of 1.00%) at which deposits in Dollars are offered by Fleet or any of its
Affiliates to prime commercial banks in the London interbank market at
approximately 11:00 a.m., prevailing New York time (or as soon thereafter as
practicable), or, if Fleet is not making offers in the London interbank market,
at a rate quoted as "London Eurodollar deposits 11:00 hours offered side,"
currently shown on Telerate Page 3750 or subsequent page, or if such quotation
is no longer available, such other similar quotation for Eurodollar deposits as
the Agent and the Borrowers reasonably agree, on the second Banking Day prior to
the commencement of such Interest Period, in an amount comparable to the
principal amount of the LIBO Rate Loan and having a scheduled maturity
comparable to such Interest Period (as set forth in the Loan Request) for
delivery in immediately available funds on the first day of such Interest
Period.
"LIBO Rate Loan" shall mean a Revolving Credit Loan or Term Loan bearing
--------------
interest during an Interest Period applicable to such Revolving Credit Loan or
Term Loan at a fixed rate of interest determined by reference to the Adjusted
LIBO Rate plus the applicable margin as specified in Section 2.2(c)(i) hereof in
the case of a Revolving Credit Loan and as specified in Section 2.2(c)(iii)
hereof in the case of a Term Loan.
"Lien" shall mean any interest in property securing an obligation owed to a
----
Person, whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other similar title exceptions and encumbrances,
including but not limited to mechanics', materialmen's, warehousemen's,
carriers' and other similar encumbrances, affecting property.
"Loan" shall mean any loan or advance made in the ordinary course of
----
business by a Borrower (which for purposes of this definition shall include
those acquired pursuant to a Portfolio Purchase that is permitted pursuant to
the terms of this Agreement) to or for the account of any Client or customer of
such Borrower, which loan, advance or extension of credit is permitted pursuant
to the terms of this Agreement. Any loan, advance or extension of credit made
at a different point in time than another loan, advance or extension of credit
shall be deemed to be a separate and distinct Loan.
"Loan Documents" shall mean and include this Agreement, the Revolving
--------------
Credit Notes, the Term Notes, the Swing Line Note, the MFC Security Agreement,
the MBC Security Agreement, any Mortgage Assignment, the Borrower Financing
Statements, the Borrowing Base Certificates. and each other document, instrument
or agreement executed pursuant to, or in connection with, any Loan Document.
-12-
"Loan Request" shall mean a request for one or more Revolving Credit Loans
------------
or Swing Line Loans or for the continuation or conversion of any Revolving
Credit Loan, Term Loan or Swing Line Loan substantially in the form of Exhibit E
---------
hereto, executed by an Authorized Representative on behalf of a Borrower.
"Material Adverse Effect" shall mean an event, action or condition
-----------------------
affecting any Person or any of its properties or revenues that would (i)
adversely affect the validity or enforceability of, or the authority of such
Person to perform its obligations under, any of the Loan Documents to which it
is a party, or (ii) materially adversely affect the business, operations, assets
or condition (financial or otherwise) of such Person or the ability of such
Person to perform its obligations under any of the Loan Documents to which it is
a party or (iii) materially adversely affect the value of the Collateral.
Unless the context otherwise requires, any reference to Material Adverse Effect
shall mean and refer to a Material Adverse Effect with respect to either
Borrower.
"Maturity" shall have the meaning set forth in Section 2.2(b) hereof.
--------
"MBC" shall mean Medallion Business Credit, LLC, a Delaware limited
---
liability company the sole member of which is MFC.
"MBC Borrowing Base" shall mean, as determined pursuant to the most
------------------
recently required Borrowing Base Certificate
(i) cash and Short Term Investments shown on MBC's balance sheet as
of such date, plus
----
(ii) 83.3% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MBC's Eligible Medallion Loans from time to
time outstanding that are Retained Loans, plus
----
(iii) 75% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MBC's Eligible Commercial Loans from time to
time outstanding that are Retained Loans;
provided, that, if all or any part of any Loan would be excluded as an
-------- ----
Eligible Commercial Loan or Eligible Medallion Loan under any of the provisions
of this Agreement, then the entire outstanding principal amount of, plus accrued
interest on, such Loan shall be excluded.
"MBC Security Agreement" shall mean the Security Agreement dated the
----------------------
Restatement Effective Date, between MBC and the Agent for the benefit of the
Banks and the Swing Line Lender, substantially in the form of Exhibit F hereto,
---------
as the same may be amended or supplemented from time to time.
"Medallion" shall mean the plate which displays the license number of a
---------
licensed Taxicab on the outside of the vehicle and which is issued by the New
York City Taxi and Limousine
-13-
Commission, or by any other similar Governmental Authority for a jurisdiction
other than New York City charged with the authority to issue licenses for the
operation of Taxicabs.
"Medallion Funding" shall mean Medallion Funding Corp., a New York
-----------------
corporation which is a wholly owned Subsidiary of MFC.
"Medallion Funding Debt" shall mean the outstanding amount owed by
----------------------
Medallion Funding to the SBA under the following notes to the SBA: a debenture
dated September 26, 1990, in the original principal amount of $510,000; a
debenture dated December 19, 1990, in the original principal amount of $640,000;
a debenture dated September 23, 1992, in the original principal amount of
$1,950,000; a debenture dated June 29, 1994, in the original principal amount of
$900,000; a debenture dated March 29, 1995, in the original principal amount of
$1,700,000 and a debenture dated September 27, 1995, in the original principal
amount of $500,000;
"Medallion Loans" shall mean Loans secured in whole or in part by Medallion
---------------
Rights.
"Medallion Rights" shall mean, as to either Borrower, all license,
----------------
operating and/or subscription rights to Taxicab Medallion(s), and all license,
operating and/or subscription rights evidenced by such Medallions, and all
renewals thereof, in which a perfected security interest has been obtained by
such Borrower to secure the Loan made by such Borrower to such Person, and
assigned to the Agent, for the benefit of the Banks, pursuant to the MFC
Security Agreement or the MBC Security Agreement, as the case may be.
"MFC Borrowing Base" shall mean, as determined pursuant to the most
------------------
recently required Borrowing Base Certificate
(i) cash and Short Term Investments shown on MFC's balance sheet as
of such date, plus
----
(ii) 83.3% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MFC's Eligible Medallion Loans from time to
time outstanding that are Retained Loans, plus
----
(iii) 75% of the aggregate outstanding principal balances of, plus
accrued interest on, all of MFC's Eligible Commercial Loans from time to
time outstanding that are Retained Loans;
provided, that, if all or any part of any Loan would be excluded as an
-------- ----
Eligible Commercial Loan or Eligible Medallion Loan under any of the provisions
of this Agreement, then the entire outstanding principal amount of, plus accrued
interest on, such Loan shall be excluded.
"MFC Security Agreement" shall mean the Security Agreement dated the
----------------------
Original Effective Date, between MFC and the Agent for the benefit of the Banks
and the Swing Line Lender, substantially in the form of Exhibit F to the
---------
Original Agreement, as the same may be amended or supplemented from time to
time.
-14-
"Mortgage Assignment" shall mean a Mortgage Assignment between a Borrower
-------------------
and the Agent for the benefit of the Banks, in such form as the Agent shall
determine as necessary or desirable under the law applicable to the property
covered by such Mortgage Assignment, delivered from time to time by such
Borrower to the Agent as contemplated by the definition of "Eligible Real
Estate."
"Multiemployer Plan" shall mean a Plan that is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate" shall mean with respect to each Swing Line Loan, the rate
---------------
per annum equal to, (i) at all times during the period, if any, commencing on
the date of delivery of a notice of an Event of Default by the Agent to the
Banks with respect to such Swing Line Loan and terminating on the date on which
such Event of Default shall no longer be continuing, the Prime Rate, and (ii) at
all other times, the rate agreed to by the Borrower borrowing such Swing Line
Loan and the Swing Line Lender in accordance with Section 2.2(c)(ii) as the
interest rate that such Swing Line Loan shall bear.
"Negotiated Rate Loan" shall mean any Swing Line Loan that bears interest
--------------------
at a Negotiated Rate.
"Net Realized Loss" as to any Loan shall mean the gross realized loss (as
-----------------
determined by GAAP) with respect to such Loan minus actual cash recoveries with
respect to such Loan.
"New Bank" shall have the meaning set forth in Section 12.2 hereof.
--------
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
--------
"Note(s)" or "Revolving Credit Note(s)" or "Swing Line Note(s)" or "Term
------- ------------------------ ------------------ ----
Notes" shall mean the promissory note(s) of the Borrowers referred to in
-----
Sections 2.2 and 12.2 hereof and shall include any replacement(s) therefor
issued pursuant to Section 10.18 or 12.1 hereof.
"Original Effective Date" shall mean July 31, 1998.
-----------------------
"Participant" or "Participants" shall mean any Person, including a Bank,
----------- ------------
that pursuant to the terms of this Agreement, buys a participation in any of the
Indebtedness owing in connection with the Loan Documents.
"Payments" shall have the meaning set forth in Section 3.2 hereof.
--------
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Percentage" of each Bank shall mean, at any particular time, the
----------
percentage designated as such for such Bank on Exhibit A hereto, as adjusted
---------
from time to time pursuant to Section 12.1(d) and/or 2.4 (b) hereof.
-15-
"Permitted Debt" shall mean (i) all unsecured Indebtedness of a Borrower
--------------
owed to the Permitted Lenders and (ii) Indebtedness of MFC in respect of the
Guaranteed Obligations pursuant to the SBA Guaranty.
"Permitted Lenders" shall mean the financial institutions approved from
-----------------
time to time by the Required Banks, which approval will not be unreasonably
withheld.
"Permitted Liens" shall having the meaning set forth in Section 8.1 hereof.
---------------
"Person" or "person" shall mean any individual, partnership, firm,
------ ------
corporation, limited liability company, association, joint venture, trust or
other entity, or any Governmental Authority.
"Plan" shall mean, as to either Borrower, at any particular time, any
----
employee benefit plan which is covered by ERISA and in respect of which such
Borrower or an ERISA Affiliate is (or, if such plan were terminated at such
time, under Section 4069 of ERISA would be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Portfolio Purchase" shall mean, as to either Borrower, any purchase or
------------------
acquisition by such Borrower, whether for cash, for stock, pursuant to financing
or otherwise, of any assets, business, Capital Stock, obligations or securities
of, any Person; or other interest in or capital contribution to, any Person that
results in, or would result in (after taking into account the applicable
Portfolio Purchase), such Borrower having any additional Loans.
"Prime Rate" shall mean the annual rate of interest designated by Fleet
----------
from time to time as its "prime rate" in effect at its principal office. The
Prime Rate is determined as a means of pricing for United States based customers
and is not directly fixed to any external rate of interest or index, nor is it
necessarily the lowest rate of interest charged by Fleet at any given time for
any particular class of customers or credit extensions.
"Prime Rate Loan" shall mean, as of any date of determination, a Revolving
---------------
Credit Loan, Swing Line Loan or Term Loan bearing interest, as of such date of
determination, at a variable rate of interest determined by reference to the
Prime Rate.
"Principal Payments" shall have the meaning set forth in Section 2.5(b)
-------------------
hereof.
"Prohibited Transaction" shall have the meaning set forth in Section 406 of
----------------------
ERISA or Code Section 4975.
"Property" shall mean all Equipment, Real Property or other real or
--------
personal property, tangible or intangible, owned or operated by a Borrower.
"Real Estate Loans" shall mean Loans that are secured in whole or in part
-----------------
by Real Property.
-16-
"Real Property" shall mean real property of a Person or an ultimate
-------------
beneficial owner of such Person or machinery or Equipment of such Person or
beneficial owner forming a part of, or affixed to, such real property.
"Receivables" shall mean, with respect to any Person, all present and
-----------
future rights to payment for goods sold or leased or for services rendered by
such Person whether or not evidenced by an instrument or chattel paper.
"Receivables Loans" shall mean Loans secured in whole or in part by
-----------------
Receivables.
"Reportable Event" shall mean any of the events set forth in Section
----------------
4043(b) of ERISA, other than those events as to which the 30-day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.
"Renewal Term" shall have the meaning set forth in Section 2.10(b) hereof.
------------
"Required Banks" shall mean, as of any date of determination, the Agent and
--------------
such Bank or Banks as have Revolving Credit Commitments or Term Loans
outstanding in excess of 51% of the sum of the Aggregate Revolving Credit
Commitment plus all Term Loans then outstanding.
"Restatement Effective Date" shall mean June 29, 1999, provided that (i)
--------------------------
counterparts of this Agreement executed and delivered by the parties hereto
shall have been received by the Agent and (ii) the conditions precedent set
forth in Article V hereof shall have been satisfied or waived in writing by all
of the Banks.
"Restricted Investment" shall mean any Investment, to the extent it does
---------------------
not constitute a Short Term Investment.
"Restricted Payment" shall mean, with respect to either Borrower, any of
-------------------
the following when paid (or when the proceeds of which are paid) to any Person
during the continuance of any Default or Event of Default: (i) the payment of
any dividend on or any distribution in respect of any Capital Interests of such
Borrower (other than the payment of Dividends required to be paid in order to
avoid the imposition of income taxes pursuant to the Code, or, for so long as
such Borrower is a registered investment company under the 1940 Act, the payment
of such Dividends as may be required by the 1940 Act), (ii) any defeasance,
redemption, repurchase or other acquisition or retirement for value prior to
scheduled maturity of any Indebtedness ranked pari passu or subordinate in right
---- -----
of payment to the Revolving Credit Notes, Swing Line Note or the Term Notes or
of any Indebtedness having a maturity date subsequent to the maturity of the
Revolving Credit Notes, Swing Line Note or the Term Notes (other than Permitted
Debt), (iii) the redemption, repurchase, retirement or other acquisition of any
Capital Stock of such Borrower or of any warrants, rights or options to purchase
or acquire any Capital Stock of such Borrower, (iv) any expenditure or the
incurrence of any liability to make any expenditure for any Restricted
Investment, (v) the payment of any principal of, interest on, or any amounts due
in respect of, any Indebtedness not permitted by Section 8.2 hereof, and (vi)
the payment of any principal of, or interest on, or any other amounts due in
respect of, any Subordinated Debt,
-17-
"Retained Loans" as to either Borrower shall mean the percentage of each
--------------
Eligible Loan not granted by such Borrower to any other Person as a
participation in the principal amount and accrued interest of such Eligible
Loan.
"Revolving Credit Commitment" of a Bank shall mean, as of any date of
---------------------------
calculation, an amount equal to the product of such Bank's Percentage times the
Aggregate Revolving Credit Commitment.
"Revolving Credit Commitment Period" at any date shall mean with respect to
----------------------------------
any Bank, the period from and including the Restatement Effective Date to, but
excluding, the Term-Out Date with respect to such Bank's Revolving Credit
Commitment.
"Revolving Credit Exposure" shall mean with respect to any Bank as of any
-------------------------
date, the sum as of such date of (i) the outstanding principal amount of such
Bank's Revolving Credit Loans and (ii) such Bank's Swing Line Exposure.
"Revolving Credit Loan" shall mean a loan or advance made pursuant to
---------------------
Section 2.1(a) hereof.
"Revolving Credit Loans" shall mean, collectively, the Revolving Credit
----------------------
Loans from time to time outstanding and unpaid.
"Revolving Credit Obligations" shall have the meaning set forth in Section
-----------------------------
2.10(b) hereof.
"Satisfactory Subordinated Debt" shall mean Subordinated Debt; provided,
------------------------------ --------
that, no such Subordinated Debt shall be deemed Satisfactory Subordinated Debt
----
unless and until the Agent has provided written notice to the Borrowers that
same shall be deemed Satisfactory Subordinated Debt for purposes of this
Agreement.
"SBA" shall mean the Small Business Administration.
---
"SBA Debt" shall mean the ▇▇▇▇▇▇▇ Debt, the TCC Debt and the Medallion
--------
Funding Debt in an aggregate principal amount as of the date of the Second
Amendment of $31,090,000 as set forth in greater detail on Schedule I to the
Second Amendment.
"SBA Guaranty" shall mean that certain Guaranty Agreement dated as of June
------------
1, 1999 by and between MFC and the SBA relating to the Guaranteed Obligations.
"SBA Regulations" shall mean the regulations set forth at 13 CFR 107
---------------
implementing the SBI Act, as the same may be amended from time to time, and all
related guidelines, directives, treaties and interpretations thereof by any
Governmental Authority charged with the administration or interpretation
thereof.
"SBI Act" shall mean Title III of the Small Business Investment Act of
-------
1958, as amended, 15 U.S.C. 681 et seq.
------
-18-
"Scheduled Swing Line Commitment Termination Date" shall mean the fifth
------------------------------------------------
Business Day preceding the Term-Out Date.
"Second Amendment" shall mean Amendment Number Two to Loan Agreement, dated
----------------
as of June 1, 1999, among MFC, the Banks, the Swing Line Lender and the Agent,
relating to the Original Agreement.
"Security Documents" shall mean the MFC Security Agreement, the MBC
------------------
Security Agreement, any Mortgage Assignment, the Borrower Financing Statements
and each other document, instrument or agreement executed pursuant to, or in
connection with, any of the foregoing.
"Senior Debt" shall mean all Indebtedness of either or both of the
-----------
Borrowers other than Subordinated Debt.
"Short Term Investment" shall mean an Investment in (i) direct obligations
---------------------
of the United States of America; (ii) negotiable certificates of deposit issued
by, or negotiable bankers' acceptances (eligible for discount at Federal Reserve
Banks) of, or repurchase agreements in respect of obligations described in
clause (i) with, any bank or trust company organized under the laws of the
United States of America or any State thereof having capital and surplus of not
less than $250,000,000; and (iii) readily marketable commercial paper which, at
the time of acquisition, is rated at least A-1 by Standard & Poor's Corporation
or P-1 by ▇▇▇▇▇'▇ Investor Services, Inc.; provided, that all of such
-------- ----
Investments described in clauses (i), (ii) and (iii) shall be payable in Dollars
and shall mature within twelve months after the date of acquisition thereof.
"Single Employer Plan" shall mean any Plan which is covered by Title IV of
--------------------
ERISA, but is not a Multiemployer Plan.
"Solvent" shall mean, as to any Person, that such Person has capital
-------
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and owns property having a value both at fair valuation and at present
fair saleable value, greater than the amount required to pay its debts
(including contingencies).
"Subordinated Debt" shall mean all Indebtedness of either or both of the
-----------------
Borrowers for borrowed money that is subordinated to the Revolving Credit Loans,
Swing Line Loans and the Term Loans on terms that are, and pursuant to a form of
subordination that is, acceptable in form and substance to the Agent and the
Required Banks.
"Subsidiary" or "Subsidiaries" of a Borrower shall mean any corporation or
---------- ------------
entity more than 50% of the outstanding Voting Interests (or similar rights to
the extent the Subsidiary is not a corporation) of which is at the time owned,
directly or indirectly, by such Borrower and/or by one or more of its
Subsidiaries; provided, however, that the term "Subsidiary" shall be deemed to
----------
exclude all Subsidiaries the Tangible Net Worth of which constitutes less than
5% of the Tangible Net Worth of such Borrower.
-19-
"Super-majority Banks" shall mean, as of any date of determination, the
--------------------
Agent and such Bank or Banks as have Revolving Credit Commitments or Term Loans
outstanding equal to or in excess of 75% of the sum of the Aggregate Revolving
Credit Commitment plus all Term Loans then outstanding.
"Swing Line Commitment" shall mean the undertaking of the Swing Line Lender
---------------------
during the Swing Line Commitment Period to make Swing Line Loans, subject to the
terms and conditions hereof, in an aggregate outstanding principal amount not in
excess of the Swing Line Commitment Amount, and the commitment of the Banks to
participate therein as set forth in Section 2.1(c), as the same may be adjusted
from time to time pursuant to Sections 2.4 and ARTICLE 12.
"Swing Line Commitment Amount" shall mean $5,000,000.
----------------------------
"Swing Line Commitment Period" shall mean the period from the Restatement
----------------------------
Effective Date until the Swing Line Commitment Termination Date.
"Swing Line Commitment Termination Date" shall mean the earlier of the
--------------------------------------
Business Day immediately preceding the Scheduled Swing Line Commitment
Termination Date or such other date upon which the Swing Line Commitment shall
have been terminated in accordance with Section 2.4 or Section 9.1.
"Swing Line Exposure" shall mean at any time, in respect of any Bank, an
-------------------
amount equal to the aggregate outstanding principal amount of the Swing Line
Loans at such time, multiplied by such Bank's Percentage at such time.
-------------
"Swing Line Interest Period" shall mean with respect to any Swing Line Loan
--------------------------
requested by a Borrower, the period commencing on the borrowing date with
respect to such Swing Line Loan and ending not in excess of five days
thereafter, as selected by such Borrower in the applicable Loan Request
therefor, provided, however, that (i) if any Swing Line Interest Period would
-------- -------
otherwise end on a day that is not a Business Day, such Swing Line Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would be a date on or after the Scheduled Swing Line
Commitment Termination Date, in which event such Swing Line Interest Period
shall end on the next preceding Business Day, and (ii) no Swing Line Interest
Period shall end after the Scheduled Swing Line Commitment Termination Date.
Interest shall accrue from and including the first day of a Swing Line Interest
Period to, but excluding, the last day of such Swing Line Interest Period.
"Swing Line Loan" and "Swing Line Loans" shall have the meaning set forth
--------------- ----------------
in Section 2.1(c).
"Swing Line Maturity Date" shall mean the Scheduled Swing Line Commitment
------------------------
Termination Date, or such earlier date on which the Swing Line Loans shall
become due and payable, whether by acceleration or otherwise.
"Swing Line Participation Amount" shall have the meaning set forth in
-------------------------------
Section 2.1(c)(iii).
-20-
"Tangible Net Worth" shall mean, as to any Person on a consolidated basis,
------------------
the sum of capital surplus, earned surplus, capital stock and Satisfactory
Subordinated Debt minus deferred charges, intangibles, treasury stock, all
determined in accordance with GAAP consistently applied.
"Taxicab" shall mean a motor vehicle carrying passengers for hire, duly
-------
licensed as a taxicab by the New York City Taxi and Limousine Commission, or any
other Governmental Authority for a jurisdiction other than New York City, and
permitted to accept hails from passengers in the street.
"TCC Debt" shall mean the outstanding amount owed by Medallion Funding to
--------
the SBA under a debenture dated as of June 24, 1992, originally given by
Transportation Capital Corp., a New York corporation (which merged with and into
Medallion Funding), to the SBA in the original principal amount of $5,600,000.
"Term Loan" shall mean a loan or advance pursuant to Section 2.1 (b)
---------
hereof.
"Term Loans" shall mean, collectively, the Term Loans from time to time
----------
outstanding and unpaid.
"Term Loan Commitment" shall mean, in respect of any Bank, its commitment,
--------------------
pursuant to Section 2.1(b) hereof, to make a Term Loan to each Borrower on such
Bank's Term-Out Date equal to the principal amount of its Revolving Credit Loans
then outstanding to such Borrower.
"Termination Date" shall mean the earlier of (i) the date on which this
----------------
Agreement shall terminate in accordance with the provisions of Section 2.10
hereof or (ii) the Business Day, if any, on which all of the Revolving Credit
Commitments are terminated in accordance with Section 2.4 or 9.1 hereof.
"Term Loan Period" shall mean, with respect to each Term Loan, the period
-----------------
from the Term-Out Date with respect to the Revolving Credit Loan or Loans
replaced by such Term Loan through the date of such Term Loan's Maturity.
"Term-Out Date" shall mean, with respect to each Revolving Credit Loan,
-------------
June 26, 2000, subject, however, in each case, to the renewal provisions set
forth in Section 2.10 hereof.
"Total Adjusted Liabilities" shall mean, as of any date of calculation, the
--------------------------
aggregate unconsolidated outstanding Indebtedness of MFC as of such date plus
----
the aggregate unconsolidated outstanding Indebtedness of MBC (excluding, in each
case, intercompany Indebtedness among any of MFC, MBC or any Subsidiary or
Affiliate of either) as of such date, each determined in accordance with GAAP.
"UCC" shall mean, with respect to any jurisdiction, the Uniform Commercial
---
Code as then in effect in that jurisdiction.
"Underlying Collateral" shall mean, as to either Borrower, all of such
---------------------
Borrower's rights with respect to, or interest in, any and all present and
future Medallion Rights, Equipment,
-21-
Inventory, Real Property, Receivables, machinery, future accounts, accounts
receivable, receivables, 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
Client to whom such Borrower has made a Loan, or any guarantor of such Client.
"Voting Interests" shall mean securities, as defined in Section 2(1) of the
----------------
Securities Act of 1933, as amended, of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of the corporate directors (or Persons performing similar functions).
References in this Agreement to percentages of Voting Interests, unless
otherwise noted, refer to percentages of votes to which such Voting Interests
are entitled in the election of corporate directors (or Persons performing
similar functions) rather than to the number of shares.
"Year 2000 Issue" shall mean failure of computer software, hardware and
---------------
firmware systems and equipment containing embedded computer chips to properly
receive, transmit, process, manipulate, store, retrieve, re-transmit or in any
other way utilize data and information due to the occurrence of the year 2000 or
the inclusion of dates on or after January 1, 2000.
Section 1.2 Other Definitional Provisions.
----------- -----------------------------
(a) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and vice versa.
(b) The words "hereof," "hereby," "herein," and "hereunder" and words of
------ ------ ------ ---------
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provisions of this Agreement, the term
"hereafter" shall mean after, and the term "heretofore" shall mean before, the
--------- ----------
date of this Agreement, and "Article," "Section," "Schedule," "Exhibit," "Annex"
------- ------- -------- ------- -----
and like references are to this Agreement unless otherwise specified.
(c) Any defined term which relates to a document shall include within its
definition any amendments, modifications, renewals, restatements, extensions,
supplements, or substitutions which may have been heretofore or may be hereafter
executed in accordance with the terms thereof and hereof.
(d) References in this Agreement to particular sections of the Code, ERISA
or any other legislation shall be deemed to refer also to any successor sections
thereto or other redesignations for codification purposes.
(e) All terms defined in the UCC and not otherwise defined or modified
herein shall have the same respective meanings as are given to such terms in the
UCC.
-22-
ARTICLE 2 AMOUNT AND TERMS OF REVOLVING CREDIT LOANS
Section 2.1 Commitments and Loans.
----------- ---------------------
(a) Revolving Credit Loans. Subject to the terms and conditions and
----------------------
relying upon the representations, warranties and covenants herein set forth,
each Bank severally (and not jointly) agrees to make one or more Revolving
Credit Loans to each Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate amount at any one time outstanding not to
exceed for both Borrowers such Bank's Revolving Credit Commitment. During the
Revolving Credit Commitment Period, the Borrowers may borrow, prepay and re-
borrow the Revolving Credit Loans, all in accordance with the terms and
conditions hereof; provided, however, that immediately after giving effect
-------- -------
thereto, (i) such Bank's Revolving Credit Exposure shall not exceed such Bank's
Revolving Credit Commitment, (ii) the aggregate unpaid balance of all Swing Line
Loans to MFC plus the aggregate unpaid balance of all Revolving Credit Loans to
----
MFC plus the aggregate unpaid balance of all Term Loans to MFC shall not exceed
----
the MFC Borrowing Base, (iii) the aggregate unpaid balance of all Swing Line
Loans to MBC plus the aggregate unpaid balance of all Revolving Credit Loans to
----
MBC plus the aggregate unpaid balance of all Term Loans to MBC shall not exceed
----
the MBC Borrowing Base, (iv) the aggregate unpaid balance of all Swing Line
Loans to the Borrowers plus the aggregate unpaid balance of all Revolving Credit
----
Loans to the Borrowers shall not exceed the Aggregate Revolving Credit
Commitment and (v) the aggregate unpaid balance of all Swing Line Loans to the
Borrowers plus the aggregate unpaid balance of all Revolving Credit Loans to the
----
Borrowers made by the Swing Line Lender shall not exceed the Revolving Credit
Commitment of the Swing Line Lender.
(b) Term Loan Commitments. Subject to the terms and conditions and relying
---------------------
upon the representations, warranties and covenants herein set forth, each Bank
severally (and not jointly) agrees to make a Term Loan to each Borrower on the
Term-Out Date in a principal amount equal to the principal amount of its
Revolving Credit Loan or Loans outstanding on such Term-Out Date to such
Borrower; provided, that immediately after making each Term Loan (i) the
-------- ----
aggregate unpaid balance of all Term Loans to the Borrowers shall not exceed the
aggregate of the Term Loan Commitments of all the Banks, (ii) the aggregate
unpaid balance of all Swing Line Loans to MFC plus the aggregate unpaid balance
----
of all Revolving Credit Loans to MFC plus the aggregate unpaid balance of all
----
Term Loans to MFC shall not exceed the MFC Borrowing Base, (iii) the aggregate
unpaid balance of all Swing Line Loans to MBC plus the aggregate unpaid balance
----
of all Revolving Credit Loans to MBC plus the aggregate unpaid balance of all
----
Term Loans to MBC shall not exceed the MBC Borrowing Base, (iv) the aggregate
unpaid balance of all Swing Line Loans to the Borrowers plus the aggregate
----
unpaid balance of all Revolving Credit Loans to the Borrowers plus the aggregate
----
unpaid balance of all Term Loans to the Borrowers shall not exceed the sum of
the Aggregate Revolving Credit Commitment and the aggregate unpaid balance of
all outstanding Term Loans and (v) the aggregate unpaid balance of all Swing
Line Loans to the Borrowers plus the aggregate unpaid balance of all Revolving
----
Credit Loans to the Borrowers made by the Swing Line Lender plus the aggregate
----
unpaid balance of all Term Loans to the Borrowers made by the Swing Line Lender
shall not exceed the sum of the Revolving Credit Commitment of the Swing Line
Lender and the aggregate unpaid balance of all outstanding Term Loans of the
Swing Line
-23-
Lender. The proceeds of each Term Loan to a Borrower shall be made available to
such Borrower by such Bank on the applicable Term-Out Date by applying such
proceeds directly to the payment of the amounts owing to such Bank with respect
to such Bank's Revolving Credit Loans to such Borrower and the Aggregate
Revolving Credit Commitment shall be reduced by an amount equal to the aggregate
principal amount of such Term Loans. Prior to each Term Loan's Maturity, each
Borrower may prepay (and is required to prepay) the Term Loans made to it, only
in accordance with the provisions hereof, but thereafter may not reborrow
amounts so prepaid.
(c) Swing Line Loans.
----------------
(i) Subject to the terms and conditions hereof, the Swing Line Lender
agrees to make swing line loans (each a "Swing Line Loan" and, collectively, the
---------------
"Swing Line Loans") to each Borrower in Dollars from time to time during the
----------------
Swing Line Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed for both Borrowers the Swing Line Commitment Amount,
provided, however, that, immediately after making each Swing Line Loan, (v) the
-------- -------
aggregate unpaid balance of the Swing Line Loans to the Borrowers would not
exceed the Swing Line Commitment Amount, (w) the aggregate unpaid balance of all
Swing Line Loans to MFC plus the aggregate unpaid balance of all Revolving
----
Credit Loans to MFC plus the aggregate unpaid balance of all Term Loans to MFC
----
shall not exceed the MFC Borrowing Base, (x) the aggregate unpaid balance of all
Swing Line Loans to MBC plus the aggregate unpaid balance of all Revolving
----
Credit Loans to MBC plus the aggregate unpaid balance of all Term Loans to MBC
----
shall not exceed the MBC Borrowing Base, (y) the aggregate unpaid balance of all
Swing Line Loans to the Borrowers plus the aggregate unpaid balance of all
----
Revolving Credit Loans to the Borrowers shall not exceed the Aggregate Revolving
Credit Commitment and (z) the aggregate unpaid balance of all Swing Line Loans
to the Borrowers plus the aggregate unpaid balance of all Revolving Credit Loans
----
made by the Swing Line Lender to the Borrowers shall not exceed the Revolving
Credit Commitment of the Swing Line Lender. During the Swing Line Commitment
Period, the Borrowers may borrow, prepay in whole or in part and reborrow under
the Swing Line Commitment, all in accordance with the terms and conditions of
this Agreement. No Swing Line Loan shall be made prior to the making of the
first Revolving Credit Loans on the Restatement Effective Date.
(ii) The Swing Line Lender shall not be obligated to make any Swing
Line Loan at a time when any Bank shall be in default of its obligations under
this Agreement unless arrangements to eliminate the Swing Line Lender's risk
with respect to such defaulting Bank's participation in such Swing Line Loan
shall have been made for the benefit of the Swing Line Lender and such
arrangements are in all respects satisfactory to the Swing Line Lender. The
Swing Line Lender will not make any Swing Line Loan if the Agent or any Bank, by
notice to the Swing Line Lender and the Borrowers no later than one Business Day
prior to the borrowing date with respect to such Swing Line Loan, shall have
determined that the conditions set forth in ARTICLE 5 have not been satisfied
and such conditions remain unsatisfied as of the requested time of the making of
such Swing Line Loan. Each Swing Line Loan shall be due and payable on the
earlier to occur of the last day of the Swing Line Interest Period applicable
thereto and the Swing Line Maturity Date.
-24-
(iii) Upon (1) a request by the Swing Line Lender, (2) receipt by a
Bank of notice of an Event of Default from the Agent, or (3) the acceleration of
any loan or termination of the Revolving Credit Commitment, Term Loan Commitment
or the Swing Line Commitment, each Bank shall purchase unconditionally,
irrevocably, and severally (and not jointly) from the Swing Line Lender a
participation in the outstanding Swing Line Loans (including accrued interest
thereon) in an amount (the "Swing Line Participation Amount") equal to the
-------------------------------
product of its Percentage and the aggregate outstanding principal amount of the
Swing Line Loans plus all accrued and unpaid interest thereon. Each Bank shall
also be liable for an amount equal to the product of its Percentage and any
amounts paid by a Borrower pursuant to this Section that are subsequently
rescinded or avoided, or must be otherwise restored or returned. Such
liabilities shall be absolute and unconditional and without regard to the
occurrence of any Default or the compliance by the Borrowers with any of their
obligations under the Loan Documents.
(iv) In furtherance of this Section 2.1(c), upon the occurrence of
any event set forth in Section 2.1(c)(iii) hereof, such Bank shall promptly make
available its Swing Line Participation Amount to the Agent for the account of
the Swing Line Lender at the applicable Agent Payment Office, in Dollars, and in
immediately available funds. The Agent shall deliver the payments made by each
Bank pursuant to the immediately preceding sentence to the Swing Line Lender
promptly upon receipt thereof in like funds as received. Each Bank shall
indemnify and hold harmless the Agent and the Swing Line Lender from and against
any and all losses, liabilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses resulting from any failure on the
part of such Bank to pay, or from any delay in paying the Agent any amount such
Bank is required to pay in accordance with this Section 2.1(c)(iv) (except in
respect of losses, liabilities, actions, suits, judgments, demands, costs and
expenses suffered by the Agent or the Swing Line Lender, as the case may be,
resulting from the gross negligence or willful misconduct of the Agent or the
Swing Line Lender, as the case may be), and such Bank shall be required to pay
interest to the Agent for the account of the Swing Line Lender from the date
such amount was due until paid in full, on the unpaid portion thereof, at a rate
of interest per annum equal to the Federal Funds Rate payable upon demand by the
Swing Line Lender. The Agent shall distribute such interest payments to the
Swing Line Lender upon receipt thereof in like funds as received.
(v) Whenever the Agent is reimbursed by a Borrower, for the account
of the Swing Line Lender, for any payment in connection with Swing Line Loans
and such payment relates to an amount previously paid by a Bank pursuant to this
Section, the Agent will promptly pay over such payment to such Bank.
Section 2.2 Revolving Credit, Term Loan and Swing Line Notes.
----------- ------------------------------------------------
(a) (i) Revolving Credit Notes. The Revolving Credit Loans of each Bank to
----------------------
each Borrower shall be evidenced by a separate Revolving Credit Note of such
Borrower, in substantially the form of Exhibit B hereto, payable to the order of
---------
such Bank and representing the obligation of such Borrower to pay the aggregate
principal amount of the Revolving Credit Loans from time to time outstanding
from such Bank to such Borrower, together with interest thereon. Each Bank is
hereby authorized to endorse the date, amount and loan type of each Revolving
Credit Loan, the
-25-
Interest Periods during which such Revolving Credit Loan is a Prime Rate Loan, a
LIBO Rate Loan or a Cost of Funds Loan, and each payment or prepayment of
principal thereof on the schedule (including additional pages thereto added by
such Bank as required) annexed to and constituting a part of each of its
Revolving Credit Notes, which endorsement shall constitute prima facie evidence
----- -----
of the accuracy of the information so endorsed; provided, however, that the
-------- -------
failure of any Bank to insert any such date or amount or other information on
such schedule shall not in any manner affect the obligation of either Borrower
to repay its Revolving Credit Loans in accordance with the terms of this
Agreement.
(ii) Term Loan Notes. The Term Loan of each Bank to each Borrower
---------------
shall be evidenced by a separate Term Note of such Borrower, in substantially
the form of Exhibit C hereto, payable to the order of such Bank and representing
---------
the obligation of such Borrower to pay the aggregate principal amount of the
Term Loan from time to time outstanding from such Bank to such Borrower,
together with interest thereon. Each Bank is hereby authorized to endorse the
date, amount and loan type of each Term Loan, the Interest Periods during which
such Term Loan is a Prime Rate Loan, LIBO Rate Loan or Cost of Funds Loan, and
each payment or prepayment of principal thereof on the schedule (including
additional pages thereto added by such Bank as required) annexed to and
constituting a part of each of its Term Notes, which endorsement shall
constitute prima facie evidence of the accuracy of the information so endorsed;
----- -----
provided, however, that the failure of any Bank to insert any such date or
-------- -------
amount or other information on such schedule shall not in any manner affect the
obligation of either Borrower to repay its Term Loans in accordance with the
terms of this Agreement.
(iii) Swing Line Note. The Swing Line Loans of the Swing Line Lender
---------------
to each Borrower shall be evidenced by a Swing Line Note of such Borrower, in
substantially the form of Exhibit D, payable to the order of the Swing Line
---------
Lender and representing the obligation of such Borrower to pay the aggregate
principal amount of the Swing Line Loans from time to time outstanding from such
Swing Line Lender to such Borrower, together with interest thereon. The Swing
Line Lender is hereby authorized to endorse the date, amount and Swing Line
Interest Period of each Swing Line Loan, and each payment or prepayment of
principal thereof on the schedule (including additional pages thereto added by
the Swing Line Lender as required) annexed to and constituting a part of each of
its Swing Line Notes, which endorsement shall constitute prima facie evidence of
-----------
the accuracy of the information so endorsed; provided, however, that the failure
-------- -------
of the Swing Line Lender to insert any such date or amount or other information
on such schedule shall not in any manner affect the obligation of either
Borrower to repay its Swing Line Loans in accordance with the terms of this
Agreement.
(b) Date and Maturity of Each Note. The Swing Line Note of MFC and each
------------------------------
Revolving Credit Note issued by MFC on the Original Effective Date pursuant to
the Original Agreement shall continue to be outstanding hereunder and shall, as
of the Restatement Effective Date, be Notes governed by the terms of this
Agreement. Each Note shall, except as otherwise provided in Section 12.1 or
12.2 hereof, be dated (A) the Original Effective Date, in the case of each
Revolving Credit Note and the Swing Line Note of MFC to the Banks party to the
Original Agreement, (B) the Restatement Effective Date, in the case of each
Revolving Credit Note of MFC
-26-
issued to any Bank which is party to this Agreement on the Restatement Effective
Date, but was not party to the Original Agreement, (C) the Restatement Effective
Date, in the case of each Revolving Credit Note and the Swing Line Note of MBC
and (D) the applicable Term-Out Date, in the case of each Term Note issued in
replacement of a Revolving Credit Loan, and shall be payable at its Maturity.
For purposes of this Agreement, the term "Maturity" shall mean, with respect to
--------
(i) any Revolving Credit Loan, the earliest of (A) the Term-Out Date for such
Revolving Credit Loan, (B) the Termination Date and (C) any other date on which
such Revolving Credit Loan shall be or become due and payable, in whole or in
part, in accordance with the terms of this Agreement, whether by required or
optional prepayment, declaration, acceleration, or otherwise, (ii) with respect
to any Swing Line Loan, on the earlier of (A) the date such Swing Line Loan
shall be or become due and payable, in whole or in part, in accordance with the
terms of this Agreement whether by stated maturity, required or optional
prepayment, declaration, acceleration, or otherwise, and (B) the Swing Line
Commitment Termination Date and (iii) with respect to any Term Loan made by a
Bank to replace its existing Revolving Credit Loans pursuant to Section 2.1(b)
hereof, the earlier of (A) the first anniversary of the Term-Out Date applicable
to such replaced Revolving Credit Loans and (B) any other date on which such
Term Loan shall be or become due and payable, in whole or in part, in accordance
with the terms of this Agreement, whether by required or optional prepayment,
declaration, acceleration, or otherwise.
(c)(i) Interest Rate on the Revolving Credit Notes. Each Revolving Credit
-------------------------------------------
Note shall bear interest, subject to the provisions of Section 10.14 hereof,
until its Maturity on the principal amount thereof from time to time outstanding
at an annual rate elected by the Borrower issuing such Revolving Credit Note in
accordance with the notice provisions set forth in Section 2.3 hereof equal to
either (a) the Prime Rate, or (b) the Adjusted LIBO Rate plus the Applicable
LIBO Margin; or (c) the Cost of Funds plus the Applicable Cost of Funds Margin.
The rate of interest of each Revolving Credit Note shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
(c)(ii) Interest Rate on Swing Line Note. Each Swing Line Note shall bear
--------------------------------
interest, subject to the provisions of Section 10.14 hereof, until its Maturity
on the principal amount thereof from time to time outstanding at an annual rate
equal to the Negotiated Rate for the applicable Swing Line Interest Period. The
rate of interest of the Swing Line Note shall be computed on the basis of a 360-
day year for the actual number of days elapsed.
(c)(iii) Interest Rate on the Term Notes. Each Term Note shall bear
-------------------------------
interest, subject to the provisions of Section 10.14 hereof, until its Maturity
on the principal amount thereof from time to time outstanding at an annual rate
elected by the Borrower issuing such term Note in accordance with the notice
provisions set forth in Section 2.3 hereof equal to either (a) the Prime Rate or
(b) the Adjusted LIBO Rate plus the Applicable LIBO Margin or (c) the Cost of
Funds plus the Applicable Cost of Funds Margin.. The rate of interest of each
Term Note shall be computed on the basis of a 360-day year for the actual number
of days elapsed.
(c)(iv) Interest Rate after Maturity. The unpaid principal balance of each
-----------------------------
Note shall bear interest from and including its Maturity until paid at the rate
specified in Section 2.6 hereof.
-27-
(d) The Interest Period. The interest period (the "Interest Period") with
------------------- ---------------
respect to (i) any Prime Rate Loan, shall be a period continued from day to day
until terminated by the Borrower which borrowed such loan, such termination to
be effective two business days after the selection of a LIBO Rate Loan or Cost
of Funds Loan to replace such Prime Rate Loan, (ii) any LIBO Rate Loan, shall be
a period of borrowing commencing on and including the date of advance or
conversion and ending on the numerically corresponding date that is one, two,
three, four, five or six months thereafter, as set forth in the Loan Request and
(iii) any Cost of Funds Loan, shall be a period of borrowing commencing on and
including the date of advance or conversion and ending on the numerically
corresponding date that is 30, 60, 90, 120, 150 or 180 days thereafter, as set
forth in the Loan Request. Notwithstanding the foregoing:
(A) in the case of a Fixed Rate Loan, (I) if the numerically
corresponding date in the appropriate month is not a Banking Day, such
Interest Period shall be extended to the next succeeding day that is a
Banking Day; provided, that, in the case of LIBO Rate Loans if such day
falls in the succeeding calendar month, such Interest Period shall end on
the first preceding day that is a Banking Day and (II) if there is no
numerically corresponding date in the appropriate month, such Interest
Period shall end on the last Banking Day in such month,
(B) in the case of any LIBO Rate Loan made on or after the Term-Out
Date, the Interest Period shall be limited to a period of one month, and
(C) in the case of any Cost of Funds Loan made on or after the Term-
Out Date, the Interest Period shall be limited to a period of 30 days, and
(D) in no case shall the Interest Period of either a Revolving
Credit Loan or a Term Loan end on a date subsequent to such loan's
Maturity.
(e) Payment of Interest. Interest accrued on each Revolving Credit Loan,
-------------------
Swing Line Loan or Term Loan shall be payable, without duplication, on:
(i) the Maturity of such loan;
(ii) with respect to any portion of any Revolving Credit Loan, Swing
Line Loan or Term Loan repaid or prepaid pursuant to this Agreement, the date of
such repayment or prepayment, as the case may be;
(iii) with respect to the Swing Line Loans and with respect to any
portion of the outstanding principal amount of Revolving Credit Loans and Term
Loans maintained as Prime Rate Loans or Cost of Funds Loans, the first Business
Day of each calendar month, payable monthly and in arrears, commencing with the
first such date following the date of the making of such Revolving Credit Loans,
Swing Line Loans or Term Loans as, or, with respect to Revolving Credit Loans
and Term Loans, their conversion into, Prime Rate Loans;
-28-
(iv) with respect to the portion of the outstanding principal amount
of all Revolving Credit Loans or Term Loans maintained as LIBO Rate Loans, the
last day of each applicable Interest Period and, in connection with any such
Revolving Credit Loan having a four, five, or six-month Interest Period, the day
that would be the last day of a three-month Interest Period commencing on the
same day as such four, five, or six-month Interest Period commences; and
(v) with respect to that portion of the outstanding principal
amount of all Revolving Credit Loans or Term Loans that is converted to Prime
Rate Loans, Cost of Funds Loans or LIBO Rate Loans on a day when interest
otherwise would not have been payable pursuant to Section 2.2(c)(iii) or (iv),
the date of such conversion.
Section 2.3 Procedures Applicable to Borrowings and Conversions.
----------- ---------------------------------------------------
(a)(i) Revolving Credit Loans. Subject to the limitations applicable to
----------------------
Interest Periods for LIBO Rate Loans and to the provisions of Section 2.4(b)
hereof, each Borrower may borrow Revolving Credit Loans on any Business Day (in
the case of LIBO Rate Loans, on any Banking Day) during the Revolving Credit
Commitment Period; provided, however, that such Borrower shall give the Agent
-------- -------
irrevocable written notice in the form of a Loan Request (which may be sent via
teletransmission) substantially in the form of Exhibit E hereto, specifying the
---------
aggregate amount of the loan it is seeking as follows:
(A) in the case of a borrowing of a Revolving Credit Loan as a Prime
Rate Loan or Cost of Funds Loan, on or before 10:00 a.m., prevailing New
York City time, on the first Business Day preceding the requested borrowing
date, which borrowing date shall be a Business Day (or irrevocable oral
notice on or before 10:00 a.m., prevailing New York City time, on such
date, confirmed in a Loan Request (which may be sent via teletransmission)
no later than 5:00 p.m., prevailing New York City time, on such first
Business Day preceding such borrowing date; and
(B) in the case of a borrowing of a Revolving Credit Loan as a LIBO
Rate Loan, on or before 11:00 a.m., prevailing New York City time, on the
third Banking Day preceding the first day of the requested Interest Period
(or irrevocable oral notice on or before 11:00 a.m., prevailing New York
City time, on such date, confirmed in a Loan Request (which may be sent via
teletransmission) no later than 5:00 p.m., prevailing New York City time,
on such third Banking Day preceding the first day of the requested Interest
Period).
If a Borrower furnishes a Loan Request to the Agent, but no election is
made as to either the loan type or Interest Period to be applicable thereto, the
Revolving Credit Loan will be made as a Prime Rate Loan. Each borrowing of a
given loan type shall be in an aggregate principal amount, together with
Revolving Credit Loans of the same loan type to be continued as such and
Revolving Credit Loans of other loan types to be converted to such loan type on
the same Business Day, of at least (x) $1,000,000 or any integral multiple of
$100,000 in excess thereof in the case of LIBO Rate
-29-
Loans and Cost of Funds Loans and (y) $100,000 or any integral multiple of
$50,000 in excess thereof in the case of Prime Rate Loans.
(ii) Term Loans. The date on which each Term Loan shall be made shall
----------
be the Term-Out Date applicable to the Revolving Credit Loan or Loans which such
Term Loan shall replace. Each Term Loan shall, for its first Interest Period,
be a Prime Rate Loan unless the Borrower borrowing such Term Loan gives
irrevocable written notice to the Agent that it wants such loan, for its first
Interest Period, to be a LIBO Rate Loan or Cost of Funds Loan. Such notice
specifying a LIBO Rate Loan or Cost of Funds Loan must be received by the Agent
on or before 11:00 a.m., prevailing New York City time, on the third Banking Day
preceding the date on which such Term Loan is to be made (or irrevocable oral
notice must be given on or before 11:00 a.m., prevailing New York City time, on
such date, confirmed in writing (which may be sent via teletransmission) no
later than 5:00 p.m., prevailing New York City time, on such third Banking Day
preceding the date on which such Term Loan is to be made. Such first Interest
Period shall continue until such Borrower has notified the Agent, in accordance
with Section 2.3(c) hereof, of its selection of the next succeeding loan type
and Interest Period. Within five Business Days after any Term Loan has been
made, the Agent shall revise Exhibit A hereto to reflect the corresponding
---------
reduction in the Aggregate Revolving Credit Commitment. Each Term Loan shall be
as provided in Section 2.5(b) hereof.
(iii) Swing Line Loans. Each Borrower may borrow under the Swing Line
----------------
Commitment on any Business Day during the Swing Line Commitment Period, provided
that such Borrower shall notify the Agent and the Swing Line Lender (by
telephone or facsimile confirmed promptly by the delivery to the Agent and the
Swing Line Lender of a Loan Request manually signed by such Borrower) no later
than 3:00 p.m. on the requested borrowing date, specifying a) the aggregate
principal amount to be borrowed under the Swing Line Commitment, b) the
requested borrowing date, and c) the amount of, and the length of the Swing Line
Interest Period for, each Swing Line Loan. The Swing Line Lender will then,
subject to its determination that the terms and conditions of this Agreement
have been satisfied, make the requested amount available, in Dollars and in
immediately available funds, promptly on that same day, to the Agent at the
applicable Agent Payment Office who, thereupon, will promptly make such amount
available to such Borrower at the such Agent Payment Office, in Dollars, and in
immediately available funds. Each borrowing of Swing Line Loans shall be in an
aggregate principal amount equal to $100,000 or such amount plus an integral
multiple of $50,000 in excess thereof or, if less, the unused portion of the
Swing Line Commitment Amount.
(b)(i) Designation of Use of Funds; Funding of Revolving Credit Loans and
------------------------------------------------------------------
Term Loans. Notwithstanding anything to the contrary contained in this
----------
Agreement, each Loan Request shall be executed and acknowledged by the Borrower
requesting the loan(s) to which such Loan Request relates. Upon receipt of each
Loan Request requesting Revolving Credit Loans or Term Loans, the Agent shall
promptly notify each Bank thereof. Subject to its receipt of the notice
referred to in the preceding sentence, each Bank will make the amount of its
Percentage of the requested Revolving Credit Loans, or Term Loans, as the case
may be, available to the Agent for the account of the Borrower requesting such
loan(s) at the applicable Agent Payment Office in Dollars not later than
-30-
2:00 p.m. (New York City time), on the relevant borrowing date requested by such
Borrower, in funds immediately available to the Agent at such Agent Payment
Office. The amounts so made available to the Agent on such borrowing date will
then, subject to the satisfaction of the terms and conditions of this Agreement,
as determined by the Agent, be made available on such borrowing date to such
Borrower by the Agent at such Agent Payment Office, in Dollars, and in
immediately available funds, no later than 3:00 p.m. (New York City time).
(b)(ii) Failure to Fund. Unless the Agent shall have received prior notice
---------------
from a Bank (by telephone or otherwise, such notice to be promptly confirmed by
facsimile or other writing) that such Bank will not make available to the Agent
such Bank's Percentage of the Revolving Credit Loans or Term Loans, as the case
may be, to be made on a borrowing date, the Agent may assume that such Bank has
made such amount available to the Agent on the borrowing date in accordance with
this Section, provided that such Bank received notice thereof from the Agent in
accordance with the terms hereof, and the Agent may, in reliance upon such
assumption, make available on such borrowing date to the Borrower requesting
such loan(s) a corresponding amount. If and to the extent such Bank shall not
have so made such amount available to the Agent, such Bank and the Borrower
requesting such loan(s) severally agree to pay to the Agent, forthwith on
demand, such corresponding amount (to the extent not previously paid by the
other), together with interest thereon for each day from the date such amount is
made available to such Borrower until the date such amount is paid to the Agent,
at a rate per annum equal to, in the case of such Borrower, the applicable
interest rate then applicable to such loan(s), and, in the case of such Bank, to
the extent such amount is paid to the Agent (A) no later than the second day
after the date such amount is made available to such Borrower, the Federal Funds
Rate and (B) after the second day after the date such amount is made available
to such Borrower, the applicable interest rate then applicable to such loan(s).
Such payment by such Borrower, however, shall be without prejudice to its rights
against such Bank. If such Bank shall pay to the Agent such corresponding
amount, such amount so paid shall constitute such Bank's Revolving Credit Loan
or Term Loan, as the case may be, as part of such Revolving Credit Loans and
Term Loans for purposes of this Agreement, which Revolving Credit Loan and Term
Loan, as the case may be, shall be deemed to have been made by such Bank on such
borrowing date. No Bank's obligation to fund any Revolving Credit Loan or Term
Loan shall be affected by any other Bank's failure to fund any Revolving Credit
Loan or Term Loan, nor shall any Bank's Revolving Credit Commitment or Term Loan
Commitment be increased as a result of any such failure of any other Bank.
(c) Subject to the limitations applicable to Interest Periods for LIBO
Rate Loans and Cost of Funds Loans, a Borrower may continue any of its LIBO Rate
Loans or Cost of Funds Loans as such for an additional Interest Period or
convert any of its Revolving Credit Loans or Term Loans of a given loan type
into Revolving Credit Loans or Term Loans of a different loan type on any
Business Day (in the case of LIBO Rate Loans to be continued or converted, on
any Banking Day) during the Revolving Credit Commitment Period or Term Loan
Period applicable to such loan; provided, however, that:
-------- -------
(i) Such Borrower shall give the Agent the irrevocable written notice
in the form of a Loan Request in the manner and by the applicable time specified
in Section 2.3(a) hereof
-31-
for the borrowing of a Revolving Credit Loan of the loan type to be converted to
or continued and, if applicable, the Interest Period therefor;
(ii) in the case of the continuation of less than all of the
outstanding Revolving Credit Loans or of only a portion of a Term Loan of a
given loan type on the same Business Day, the aggregate principal amount of the
Revolving Credit Loans or the Term Loan of such loan type to be continued as
such, together with any Revolving Credit Loans or portion of a Term Loan to be
made as or converted to the same loan type on such Business Day, shall not be
less than $1,000,000 or any integral multiple of $100,000 in excess thereof;
(iii) in the case of the conversion of less than all of the
outstanding Revolving Credit Loans or of only a portion of a Term Loan of a
given loan type to another loan type on the same Business Day, the aggregate
principal amount of Revolving Credit Loans or the portion of the Term Loan of
such loan type to be converted to another loan type together with any Revolving
Credit Loans or any portion of the Term Loan of such other loan type to be made
or continued as such on such Business Day, shall not be less than $1,000,000;
(iv) LIBO Rate Loans and Cost of Funds Loans may be converted only at
the end of the then applicable Interest Period;
(v) no LIBO Rate Loan or Cost of Funds Loan may be continued as
such, nor may any Revolving Credit Loan or Term Loan be converted to a LIBO Rate
Loan or Cost of Funds Loan, for less than the minimum applicable Interest Period
therefor; and
(vi) no LIBO Rate Loan or Cost of Funds Loan may be continued as
such, nor may any Revolving Credit Loan or Term Loan be converted to a LIBO Rate
Loan or Cost of Funds Loan, if any Default or Event of Default shall have
occurred and be continuing as of any date during the period commencing on the
date the Loan Request is required to be submitted to the Agent and ending on the
first day of the requested Interest Period.
If a Borrower fails, in connection with the expiration of an Interest
Period applicable to a Revolving Credit Loan or Term Loan made to such Borrower
that is a LIBO Rate Loan or Cost of Funds Loan, to furnish a Loan Request to the
Agent for the continuation or conversion thereof or fails to elect a loan type
or permitted Interest Period therefor, or if the continuation or conversion of
any Revolving Credit Loan or Term Loan as a LIBO Rate Loan or Cost of Funds Loan
is prohibited due to the occurrence and continuance of a Default or Event of
Default, such Revolving Credit Loan or Term Loan (unless prepaid in accordance
with the provisions of Section 2.5 hereof or accelerated in accordance with
Section 9.1 hereof) shall be converted automatically to a Prime Rate Loan as of
the expiration of the then applicable Interest Period.
Section 2.4 Termination and Reduction of Aggregate Revolving Credit
----------- -------------------------------------------------------
Commitment.
----------
Subject to the provisions of Section 2.5 hereof, the Borrowers shall have
the option to terminate, and from time to time to reduce permanently, the
Aggregate Revolving Credit Commitment, upon irrevocable written notice to the
Agent at least three Business Days prior to the
-32-
proposed Termination Date or reduction date, as the case may be, specifying such
date, whether a termination or reduction is being requested and, if a reduction
is being requested, the amount thereof. On the date specified in such notice,
such termination or reduction shall be effected; provided, however, that (i) in
-------- -------
the case of a termination, such termination must also include a termination of
the Swing Line Commitment and such termination must be accompanied by repayment
of all outstanding Revolving Credit Loans, Swing Line Loans and outstanding Term
Loans in full (which shall include all such loans payable by MFC and all such
loans payable by MBC), together with all other amounts owed to the Agent or any
Bank or the Swing Line Lender pursuant to any of the Loan Documents and (ii) in
the case of any reduction, such reduction is accompanied by (A) repayment of the
Revolving Credit Loans to the extent (if any) that the aggregate principal
amount of the Revolving Credit Loans and Swing Line Loans outstanding exceeds
the amount of the Aggregate Revolving Credit Commitment after taking into
account the Aggregate Revolving Credit Commitment as then reduced (allocated
between the loans of MFC and MBC as they shall specify in the notice of such
reduction, provided that such allocation otherwise complies with the terms of
this Agreement) and (B) repayment of an amount of all Term Loans then
outstanding equal to the percentage by which the Aggregate Revolving Credit
Commitment is to be reduced multiplied by the aggregate principal amount plus
accrued interest of all Term Loans then outstanding (allocated between the loans
of MFC and MBC as they shall specify in the notice of such reduction, provided
that such allocation otherwise complies with the terms of this Agreement). Any
such repayment shall be subject to the provisions of Section 2.5(a) hereof. Any
reduction of the Aggregate Revolving Credit Commitment shall be in an aggregate
amount of $500,000 or an integral multiple thereof and shall be applied by the
Agent pro rata among the Banks in proportion to their Revolving Credit
Commitments. Any repayment of outstanding Term Loans required by a reduction in
the Aggregate Revolving Credit Commitment shall be applied by the Agent pro rata
among the Banks in proportion to the amount of the principal plus accrued
interest of their Term Loans then outstanding. Within five Business Days after
any reduction in the Aggregate Revolving Credit Commitment pursuant to this
Section 2.4(a), the Agent shall revise Exhibit A hereto to reflect such
---------
reduction and shall promptly send a copy thereof to the Banks. Upon termination
of the Aggregate Revolving Credit Commitment pursuant to this Section 2.4(a) and
upon payment of all amounts due by the Borrowers to the Agent, the Swing Line
Lender and the Banks under the Loan Documents, the obligations of the parties
hereto, except as otherwise provided herein, shall be deemed terminated;
provided, however, that this Agreement and the other Loan Documents shall
-------- -------
continue to be effective or shall be reinstated, as the case may be, if any
payment hereunder or in connection with any of the Loan Documents at any time is
rescinded or otherwise must be returned as a result of the bankruptcy,
insolvency or reorganization of either Borrower or otherwise, all as if such
payment had not been made. Upon any reduction of the Aggregate Revolving Credit
Commitment, in the event that the Borrowers shall fail to specify in the notice
of such reduction the allocation of prepayments between the loans of MFC and MBC
in accordance with the terms of this Agreement, it shall be in the Agent's
discretion as to whether to apply any prepayments of loans in connection
therewith against (i) MFC's obligations to the Agent, the Swing Line Lender and
the Banks and/or (ii) MBC's obligations to the Agent, the Swing Line Lender and
the Banks.
-33-
Section 2.5 Prepayments.
----------- -----------
(a) Voluntary. Each Borrower from time to time may prepay its Revolving
----------
Credit Loans, Swing Line Loans, or Term Loans, in whole or in part, without
premium or penalty, upon irrevocable written notice to the Agent given at least
as early before the proposed date of such prepayment as the corresponding time
specified in Section 2.3(a) hereof for notice of the borrowing of a Revolving
Credit Loan of the loan type to be prepaid, specifying the date of prepayment
and the amount of the prepayment; provided, however, that (i) the entire
-------- -------
Aggregate Revolving Credit Commitment may not be terminated (although all
Revolving Credit Loans may be paid off in full) while any Term Loan remains
outstanding, (ii) except for prepayments necessitated by Section 8.6(b) hereof,
each partial prepayment of the Revolving Credit Loans or Swing Line Loans shall
be in an amount not less than $500,000 or any integral multiple of $100,000 in
excess thereof, (iii) except for prepayments necessitated by the Borrowers'
election to reduce the Aggregate Revolving Credit Commitment pursuant to Section
2.4 hereof, without the prior written approval of the Required Banks, neither
Borrower may prepay any Term Loan unless all Revolving Credit Loans have been
paid off in full and the Aggregate Revolving Credit Commitment terminated, (iv)
neither Borrower may prepay any Fixed Rate Loan prior to the last day of the
Interest Period, or Swing Line Interest Period, as the case may be, therefor.
To the extent possible, the Borrowers shall, in connection with any voluntary
prepayment, prepay Prime Rate Loans first and Fixed Rate Loans second. Any
prepayment of Fixed Rate Loans shall be subject to Section 2.11 hereof. If any
notice of prepayment is given, the amount specified in such notice shall be due
and payable in the manner and by the time provided in Section 3.2 hereof on the
date specified in such notice, together with accrued interest thereon to such
date as provided in Section 2.2(c) hereof. Any such prepayment of a Revolving
Credit Loan may be reborrowed, subject to the terms and conditions of this
Agreement, from time to time. Any prepayment of a Term Loan may not be
reborrowed.
(b) Mandatory Prepayment of Term Loans. Principal on each Term Loan shall
----------------------------------
be repaid by the Borrower borrowing such Term Loan in equal monthly installments
in an amount sufficient to amortize such Term Loan over a twelve-month period.
Such payments (the "Principal Payments") shall be paid by such Borrower to the
------------------
Agent on the last day of each month during which such Term Loan is outstanding.
Any prepayments of principal on any Term Loan pursuant to Sections 2.5(a) and
(c) hereof shall not reduce the amount of each monthly Principal Payment. Any
prepayments of principal on the Term Loans pursuant to Sections 2.5(a) and (c)
hereof shall be applied against the monthly Principal Payments in inverse order
of the dates on which such Principal Payments are to be made.
(c) Other Mandatory Prepayments.
----------------------------
(i) If, at any time, (A) the aggregate outstanding principal balance
of the Revolving Credit Loans, plus the aggregate outstanding principal balance
----
of all Swing Line Loans, exceeds the Aggregate Revolving Credit Commitment, or
(B) the aggregate outstanding principal balance of the Swing Line Loans exceeds
the Swing Line Commitment, or (C) the aggregate principal balance of all
Revolving Credit Loans, plus the aggregate principal balance of all Swing Line
----
Loans, plus the aggregate principal balance of all Term Loans, exceeds the sum
----
of the
-34-
Aggregate Revolving Credit Commitment and the aggregate principal balance of all
Term Loans, or (D) the aggregate outstanding principal balance of the Revolving
Credit Loans of the Swing Line Lender, plus the aggregate outstanding principal
----
balance of all Swing Line Loans, exceeds the Revolving Credit Commitment of the
Swing Line Lender, the Borrowers shall make a prepayment of such Revolving
Credit Loans, or Swing Line Loans, as the case may be (or if no such loans shall
then be outstanding, the Borrowers shall make a prepayment of the Term Loans),
in the amount of such excess (rounded upwards to the next higher integral
multiple of $100,000), together with accrued interest thereon to the date of
prepayment as provided in Section 2.2(c) hereof. Such prepayment shall be
allocated between the loans of MFC and MBC as they shall specify in connection
with such prepayment, provided that such allocation otherwise complies with the
terms of this Agreement. In the event that the Borrowers shall fail so to
specify such allocation, it shall be in the Agent's discretion as to whether to
apply any such prepayments against (i) MFC's obligations to the Agent, the Swing
Line Lender and the Banks and/or (ii) MBC's obligations to the Agent, the Swing
Line Lender and the Banks. To the extent possible, the Borrowers shall, in
connection with such mandatory prepayment, prepay Prime Rate Loans first, and
Fixed Rate Loans second. Any prepayment of Fixed Rate Loans shall be subject to
Section 2.11 hereof.
(ii) If, at any time, (A) the aggregate unpaid balance of all Swing
Line Loans plus the aggregate unpaid balance of all Revolving Credit Loans plus
---- ----
the aggregate unpaid balance of all Term Loans made to MBC shall exceed the MBC
Borrowing Base, or (B) the aggregate unpaid balance of all Swing Line Loans plus
----
the aggregate unpaid balance of all Revolving Credit Loans plus the aggregate
----
unpaid balance of all Term Loans made to MFC shall exceed the MFC Borrowing
Base, within five days of the first day there exists any such deficiency the
relevant Borrower shall make payment to the Agent (to be applied against such
Borrower's Swing Line Loans first, then Revolving Credit Loans and then Term
Loans) in an amount necessary to eliminate such excess, together with accrued
interest thereon to the date of prepayment as provided in Section 2.2(c) hereof.
To the extent possible, each Borrower shall, in connection with any such
mandatory prepayment, prepay Prime Rate Loans first, and Fixed Rate Loans
second. Any prepayment of Fixed Rate Loans shall be subject to Section 2.11
hereof.
(d) Application of Prepayments. With respect to all prepayments pursuant
--------------------------
to subsections (a), (b) and (c) above, upon receipt of any notice of prepayment
and/or any such prepayment, the Agent shall promptly notify each Bank thereof
and with respect to Revolving Credit Loans and Term Loans of a Borrower each
such prepayment shall be effected pro rata amongst all the Banks in proportion
to each Bank's then outstanding Revolving Credit Loans or Term Loans to such
Borrower, as the case may be.
Section 2.6 Interest on Delinquent Payments.
----------- -------------------------------
All unpaid amounts due under the Notes or any other Loan Document that are
not paid when due (including, to the extent permitted by law, unpaid interest on
the Notes) shall bear interest, subject to the provisions of Section 10.14
hereof, from and including its due date until paid in full (whether before or
after the occurrence of any Event of Default described in Sections 9.1(h) or
9.1(i) hereof) at an annual rate equal to the sum of (i) in the case of any
Prime Rate Loan, 2%
-35-
plus the Prime Rate applicable to such Prime Rate Loan then in effect, (ii) in
the case of any Fixed Rate Loan, 2% in excess of the rate then applicable to
such Fixed Rate Loan. Such rate of interest (the "Default Rate") shall be
------------
computed on the basis of a 360-day year for the actual number of days elapsed.
If the Default Rate is to be based on the Prime Rate, the Prime Rate to be
charged shall change when and as the Prime Rate is changed, and any such change
in the Prime Rate shall become effective at the opening of business on the day
on which such change is adopted. At the end of the applicable Interest Period
for a LIBO Rate Loan on which the Default Rate is being charged, such LIBO Rate
Loan shall be automatically converted to a Prime Rate Loan, and the Default Rate
to be charged in respect of such Loan shall be computed based on the Prime Rate.
Section 2.7 Increased Costs.
----------- ---------------
(a) In the event any applicable existing or future law, regulation,
guideline, treaty or directive or condition or interpretation thereof
(including, without limitation, any request, guideline or policy; whether or not
having the force of law) by any Governmental Authority charged with the
administration or interpretation thereof, or any change in any of the foregoing:
(i) subjects any Bank, or the Swing Line Lender, to any tax levy,
impost, duty, charge, fee, deduction or withholding of any nature with respect
to its Revolving Credit and/or Term Loan and/or Swing Line Commitment to make
Fixed Rate Loans or any Revolving Credit Loan or Term Loan or Swing Line Loan
that is a Fixed Rate Loan; or
(ii) changes the basis of taxation of payments to such Bank of
principal of and/or interest on its Fixed Rate Loans or its Revolving Credit
and/or Term Loan and/or Swing Line Commitment to make Fixed Rate Loans and/or
fees and other amounts payable hereunder in respect of its Fixed Rate Loans or
its Revolving Credit or Term Loan or Swing Line Commitment to make Fixed Rate
Loans; or
(iii) imposes, modifies or deems applicable or results in the
application of or increases any reserve, special-deposit, assessment, liquidity
or similar requirement (whether or not having the force of law) against assets
held by, or deposits in or for the account of, or loans or commitments to lend
Fixed Rate Loans by any office of any Bank (based upon such Bank's or such
Participant's reasonable allocation of the aggregate of such requirements); or
(iv) imposes upon such Bank any other condition or requirement with
respect to its Revolving Credit and/or Term Loan and/or Swing Line Commitment to
make Fixed Rate Loans or any Revolving Credit Loan or Term Loan or Swing Line
Loan of which any Fixed Rate Loan forms a part;
and the result of any of the foregoing is to increase the actual cost to
such Bank of making or maintaining its Revolving Credit and/or Term Loan and/or
Swing Line Commitment to make Fixed Rate Loans or its Revolving Credit Loans or
Term Loans or Swing Line Loans hereunder that are Fixed Rate Loans or to reduce
the amount of any payment (whether of principal, interest, or otherwise)
received or receivable by such Bank in respect of any Fixed Rate Loan or its
Revolving
-36-
Credit or Term Loan or Swing Line Commitment to make Fixed Rate Loans or to
require such Bank to make any payment, then and in any such case set forth in
paragraphs (i) through (iv) above:
(1) such Bank, or the Swing Line Lender, as the case may be, shall
promptly notify the Borrowers in writing of the happening of such event;
(2) such Bank, or the Swing Line Lender, as the case may be, shall
promptly deliver to the Borrowers a certificate of such Bank, or such Swing
Line Lender, stating the event that has occurred or the reserve or
requirements or other conditions that have been imposed on such Bank, or
such Swing Line Lender, the request, directive, guideline or requirement
with which it has complied, together with the date thereof and the amount
(based upon such Bank's, or such Swing Line Lender's, as the case may be,
reasonable policies as to the allocation of capital and costs, as
applicable) of such increased cost, reduction or payment for one or more
periods ending not later than the date of such certificate; and
(3) The Borrowers shall pay within 10 days after demand therefor such
amount or amounts as will compensate such Bank, or the Swing Line Lender,
as the case may be, for such additional cost, reduction or payment.
(b) If, after the Original Effective Date, any Bank or the Swing Line
Lender, as the case may be, shall have determined that any change in any present
(or any adoption, application, or change in any future) applicable law,
governmental rule, regulation, policy, guideline, or directive or request
(whether or not having the force of law), or any change in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, of general application regarding
capital adequacy, capital maintenance, capital ratios or other similar
requirements (whether or not having the force of law), increases or otherwise
affects the amount of capital required or expected to be maintained by any of
the Banks, or the Swing Line Lender, as the case may be, or any corporation
controlling any of the Banks or the Swing Line Lender, as the case may be, or
such Bank, or the Swing Line Lender, as the case may be, determines that the
amount of capital required is increased by or based upon the existence of the
revolving credit, swing line and term loan facilities or commitments established
hereunder or any loans made pursuant hereto or upon agreements or loans of the
type contemplated hereby, then such Bank or the Swing Line Lender, as the case
may be, may give written notice to the Borrowers of such fact (the "Increased
---------
Costs Notice"). To the extent that the costs of such increased capital
------------
requirements are not then reflected in the Prime Rate, the Cost of Funds or the
LIBO Base Rate, the Borrowers shall thereafter attempt to negotiate in good
faith an adjustment of the compensation payable hereunder which will adequately
compensate such Bank, or the Swing Line Lender, as the case may be, in light of
such changed circumstances. Each Bank and the Swing Line Lender, as the case
may be, hereby agrees that any Increased Cost Notice from it to the Borrowers
shall be delivered to the Borrowers no later than 90 days following the end of
any financial period with respect to which such compensation is sought. If the
Borrowers and such Bank, or the Swing Line Lender, as the case may be, are
unable to agree to an adjustment within 30 days of the day on which the
Borrowers receive such notice, then, commencing on such thirtieth day and
retroactive to the
-37-
date of such notice (but not earlier than the effective date of any such
change), the fees payable to such Bank, or the Swing Line Lender, as the case
may be, hereunder shall increase by an amount which will, in such Bank's, or the
Swing Line Lender's, as the case may be, reasonable determination, provide
adequate compensation. Such Bank, or the Swing Line Lender, as the case may be,
shall allocate such cost increases among its customers in good faith and on an
equitable basis.
(c) The certificate of such Bank, or the Swing Line Lender, as the case may
be as to the additional amounts payable pursuant to this Section 2.7 delivered
to the Borrowers, in the absence of manifest error, shall be conclusive as to
the amount thereof. A claim by any Bank, or the Swing Line Lender, as the case
may be, for all or any part of any additional amount required to be paid by the
Borrowers under this Section 2.7 may be made at any time and from time to time
as the occasion therefor may arise. The protection of this Section 2.7 shall be
available to such Bank and the Swing Line Lender regardless of any possible
contention of invalidity or inapplicability of the law, regulation or condition
that has been imposed. In the event that any such law, regulation or condition
is subsequently held to be invalid or inapplicable and the result thereof is to
eradicate any such additional cost, reduction or payment, such Bank, or the
Swing Line Lender, as the case may be, shall promptly pay to the Borrowers an
amount equal to the amount of compensation paid by the Borrowers to such Bank,
or the Swing Line Lender, as the case may be, for its account as a result of
such invalid or inapplicable law, regulation or condition.
Section 2.8 Use of Proceeds.
----------- ---------------
The proceeds of all Revolving Credit Loans, Swing Line Loans and Term Loans
made to the Borrowers hereunder shall be used only (i) to fund Medallion Loans
and Commercial Loans of MFC and MBC made in the ordinary course of business of
MFC and MBC, and (ii) for other working capital purposes of the Borrowers;
provided, that, in no event shall proceeds of Revolving Credit Loans be used for
the direct or indirect benefit of any Subsidiary of MFC (other than MBC) or of
MBC, except as would otherwise be permitted by Section 8.3(e).
Section 2.9 Payment on Non-Business Days.
----------- ----------------------------
Whenever any payment to be made under the Notes (other than principal of or
any interest on LIBO Rate Loans), this Agreement, or any other Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time in such
case shall be included in the computation of payment of interest or fees, as the
case may be.
Section 2.10 Term of Revolving Credit Commitments.
------------ ------------------------------------
(a) Subject to the other provisions of this Section 2.10, (i) with respect
to the Initial Term, the Revolving Credit Commitment and other obligations of
each Bank under this Agreement with respect to Revolving Credit Loans shall
terminate on the last day of the Initial Term, and (ii) with respect to each
Renewal Term (as defined in Section 2.10(b) below), the Revolving Credit
-38-
Commitment and other obligations of each Bank under this Agreement with respect
to Revolving Credit Loans shall terminate on the date which is 364 days after
the date on which such Renewal Term commenced.
(b) Each Bank's Revolving Credit Commitment and other obligations under
this Agreement with respect to Revolving Credit Loans (collectively, "Revolving
---------
Credit Obligations") shall be terminated on the last day of the Initial Term
------------------
(or, in the event of a renewal, the last day of the then current Renewal Term)
unless such Bank gives written notice of renewal, for a 364-day period, of its
Revolving Credit Obligations to the Borrowers by the date which is 45 days prior
to the date on which such obligations are to be terminated (May 13, 2000, in the
case of the Initial Term) (the "Renewal Deadline"). The Borrowers, shall then
----------------
have until the fifth Business Day following the Renewal Deadline to reject (by
written notice, which must be received by no later than 5:00 p.m., prevailing
New York City time, on such fifth Business Day) any Bank's offer of renewal (the
"Rejection of Renewal Deadline"). If any Bank has elected not to renew its
-----------------------------
Revolving Credit Obligations, then, not later than three Business Days after the
Rejection of Renewal Deadline the Borrowers shall provide each Bank and the
Agent a list indicating each Bank that has elected to renew its Revolving Credit
Obligations and all Banks who originally elected to renew their Revolving Credit
Obligations shall have until the tenth Business Day following the Rejection of
Renewal Deadline to reverse their decision and elect instead (by written notice
to the Borrowers, which must be received by no later than 5:00 p.m., prevailing
New York City time, on such tenth Business Day) not to renew such obligations
(the "Renewal Reconsideration Deadline"). The foregoing procedure with respect
--------------------------------
to the renewal of the Revolving Credit Obligations of each Bank under this
Agreement shall be repeated for each 364-day term following the Initial Term
(each such term, a "Renewal Term") with the Renewal Deadline, the Rejection of
------------
Renewal Deadline and the Renewal Reconsideration Deadline to be applicable with
respect to each such term, until there are no longer any Revolving Credit
Commitments outstanding. In the event that any Bank elects to extend its
Revolving Credit Obligations for a Renewal Term or Terms, (i) the expiration,
termination, Maturity and Term-Out Date of such Obligations outstanding at the
commencement of, or made during, the Renewal Term shall be the date which is 364
days after the date on which such Renewal Term commenced, and (ii) each
Revolving Credit Note shall be deemed amended to reflect the extended Maturity.
If any Bank elects not to renew its Revolving Credit Obligations, or if the
Borrowers reject any Bank's offer to renew its Revolving Credit Obligations,
then, on the Term-Out Date of such Bank's Revolving Credit Loan(s), such Bank
shall make a Term Loan to each Borrower in accordance with the provisions of
Section 2.1(b) hereof and the Aggregate Revolving Credit Commitment shall be
reduced by an amount equal to the aggregate principal amount of such Term Loans.
The procedures set forth above shall also separately apply to the Swing Line
Lender with respect to the Swing Line Commitment; provided, that, in the event
-------- ----
all Banks extending Revolving Credit Loans elect not to renew as set forth
above, the Swing Line Lender shall be deemed to have made a similar election.
(c) Within five Business Days after the commencement of any Renewal Term,
the Agent shall revise Exhibit A hereto if required in connection with any
---------
change in the Aggregate Revolving Credit Commitment.
-39-
(d) Notwithstanding the foregoing provisions of this Section 2.10, upon the
occurrence of an Event of Default, the provisions of Article IX hereof shall
apply and the Agent may take any action permitted or required thereunder.
(e) The occurrence of the Termination Date shall not release, terminate or
limit the rights or remedies of the Agent, or any Bank, or the obligations under
this Agreement or any other Loan Document of the Borrowers, and such rights and
remedies and such obligations shall survive until the Borrowers shall have fully
paid and performed all their obligations hereunder and thereunder in full.
Section 2.11 Funding Losses.
------------ --------------
(a) The Borrowers shall pay, within 10 days after demand therefor, such
amount as will compensate the Banks and the Swing Line Lender for any loss or
reasonable expense they may sustain as a consequence of (i) the receipt or
recovery or conversion for any reason (including, without limitation, as a
consequence of acceleration pursuant to Article IX hereof, a termination,
reduction or increase of the Aggregate Revolving Credit Commitment pursuant to
Section 2.4 hereof, a voluntary or mandatory prepayment pursuant to Section 2.5
hereof, or a mandatory conversion pursuant to Section 2.13 hereof) of all or any
part of a Fixed Rate Loan prior to the last day of the applicable Interest
Period, or Swing Line Interest Period, as the case may be, therefor, or (ii) any
failure to borrow, convert to or continue any Fixed Rate Loan as such after
submitting a Loan Request (whether oral or written) relating thereto, including,
but not limited to, (A) any loss or expense sustained or incurred in liquidating
or employing deposits from third parties acquired to effect or maintain a Fixed
Rate Loan or any part thereof or (B) any loss of margin on reemployment of the
funds so received or recovered.
(b) Each Bank shall be entitled to fund its Revolving Credit Loans and Term
Loans in such manner as it may determine in its sole discretion, including
without limitation the London interbank market and the New York secondary
market; provided, however, that, for the purposes of calculations under this
-------- -------
Section 2.11, each LIBO Rate Loan shall be deemed to have been funded by the
purchase in the London interbank market of a Dollar deposit in an amount
comparable to the principal amount of such LIBO Rate Loan and having a maturity
comparable to the applicable Interest Period therefor.
(c) A certificate of any Bank or the Swing Line Lender, as the case may be,
as to any additional amounts payable pursuant to this Section 2.11 setting forth
in reasonable detail the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by such Bank set
forth therein. A claim by any Bank or the Swing Line Lender for all or any part
of any additional amount required to be paid by the Borrowers under this Section
2.11 may be made at any time and from time to time as often as the occasion
therefor may arise.
-40-
Section 2.12 Alternate Rate of Interest.
------------ --------------------------
(a) In the event, and on each occasion prior to the commencement of any
Interest Period for any LIBO Rate Loans, (i) the Required Banks shall have
notified the Agent that they have determined, or the Agent or Fleet shall have
determined, that Dollar deposits in an amount comparable to the principal amount
of such LIBO Rate Loan and having a scheduled maturity comparable to the
Interest Period set forth in the related Loan Request are not generally
available in the London interbank market or (ii) the Agent or Fleet shall
determine that reasonable means do not exist for ascertaining the LIBO Base
Rate, the Agent, as soon as practicable thereafter, shall give oral notice of
such determination to the Borrowers, promptly confirmed in writing (which may be
by teletransmission). In the event of any such determination and until the
Agent notifies the Borrowers (and provides a copy of this notice to the Banks)
that the circumstances giving rise to such notice no longer exist, no Revolving
Credit Loans or Term Loans will be made as LIBO Rate Loans and no Revolving
Credit Loans or Term Loans will be converted to or continued as LIBO Rate Loans,
but shall convert to Prime Rate Loans at the end of the applicable Interest
Period, if any, therefor. Each determination by a Bank, or the Agent or Fleet,
as the case may be, hereunder shall be conclusive absent manifest error.
Section 2.13 Changes In Legality.
------------ -------------------
(a) If, anything to the contrary herein contained notwithstanding, any
applicable existing or future law, regulation, guideline, treaty or directive or
condition or interpretation thereof (including, without limitation, any request,
guideline or policy, whether or not having the force of law), by any
Governmental Authority charged with the administration or interpretation
thereof, or any change in any of the foregoing shall make it unlawful or
improper for any Bank to make or maintain any Revolving Credit Loans or any Term
Loan as LIBO Rate Loans, then, by oral notice to the Borrowers and the Agent,
promptly confirmed in writing (which may be by teletransmission), such Bank may:
(i) declare that its Revolving Credit Loans or Term Loans thereafter
will not be made by it as LIBO Rate Loans, whereupon the Borrowers shall be
prohibited from requesting Revolving Credit Loans or Term Loans as LIBO Rate
Loans unless and until such declaration is withdrawn; and
(ii) require that all its outstanding Revolving Credit Loans or its
Term Loan that are LIBO Rate Loans be converted to Prime Rate Loans, in which
event all such Revolving Credit Loans or Term Loans shall be converted
automatically to Prime Rate Loan(s) as of the end of their applicable Interest
Periods or as of such earlier date as may be required of such Bank for the
lawful or proper conduct of its lending activities.
Section 2.14 Participations.
------------ --------------
Each Borrower may grant participations to other Persons of such Borrower's
choosing in a portion of its rights and/or obligations under any Loan; provided,
--------
however, that any such
-------
-41-
participation shall be granted pursuant to a form of participation agreement
which shall provide, among other things, that (a) such Borrower shall service
such Loan, (b) any participant thereunder shall be entitled to no more than its
pro rata share of the Underlying Collateral securing such Loan and to no more
--- ----
than principal and interest under such Loan, (c) such Borrower's interest shall
be pari passu or superior in right of payment to the interest of such
participant in such Loan or otherwise in accordance with such Borrower's
standard underwriting criteria and credit policy at the time thereof and (d)
such Borrower's rights to any payment under such Loan shall be prior to, or pro-
rata with, any such participant. Upon request by the Agent or the Required
Banks, the Borrowers shall provide the Banks in writing with a description of
all Loans in respect of which participations have been granted. Notwithstanding
the foregoing, neither Borrower shall grant a participation to any Subsidiary or
Affiliate of either Borrower in any Medallion Loan originated by such Borrower,
except that MFC may grant participations in any of its Medallion Loans to MBC.
ARTICLE 3 FEES AND PAYMENTS
Section 3.1 Fees.
----------- ----
(a) Annual Facility Fee. The Borrowers shall pay to the Agent, for the pro
-------------------
rata benefit of each Bank (based on each Bank's Percentage of the Revolving
Credit Commitment), an annual fee (the "Facility Fee") equal to the Applicable
------------
Facility Percentage of the average daily Aggregate Revolving Credit Commitment
(regardless of usage). Such fee shall be payable to the Agent for the period
from the Restatement Effective Date to and including the last day of the
Revolving Credit Commitment Period, payable quarterly in arrears on the first
day of each calendar quarter during the Revolving Credit Commitment Period,
commencing with the first such date after the Restatement Effective Date, and
ending on the Termination Date. Fees shall be calculated for each month on the
basis of a 360-day year for the actual number of days elapsed in such month.
(b) Agent Fees. The Borrowers agree to pay to the Agent, for its own
----------
account, all the fees set forth in the Fee Letter.
Section 3.2 Payments.
----------- --------
(a) Routine Payments. Except as otherwise specifically provided in this
----------------
Agreement, each payment (including each prepayment) by each Borrower pursuant to
this Agreement or the Notes, whether in respect of principal, interest, or
increased costs and the Facility Fee and all other fees to be paid to the Agent,
the Swing Line Lender and the Banks in connection with the Loan Documents
(collectively, "Payments"; and the portion of such payments that are on account
--------
of the Facility Fee, together with all of such other fees, is sometimes
hereinafter collectively referred to as the "Fees") shall be made by such
----
Borrower without set-off, withholding, deduction, or counterclaim to the Agent
at the applicable Agent Payment Office in funds immediately available to the
Agent at such office by 12:00 noon (local time in the city in which such Agent
Payment Office is located) on the due date for such Payment. The failure of
such Borrower to make any such Payment by such time shall not
-42-
constitute a default hereunder, provided that such payment is made on such due
date, but any such Payment made after 12:00 p.m. (local time in the city in
which such payment is to be made in accordance with the terms hereof) on such
due date shall be deemed to have been made on the next Business Day for the
purpose of calculating interest on amounts outstanding on the applicable loans.
Subject to Section 9.5, promptly upon receipt thereof by the Agent, (a) each
Payment of principal and interest on the Revolving Credit Loans, Term Loans and
Swing Line Loans shall be remitted by the Agent in like funds as received to
each Bank and the Swing Line Lender, as the case may be, pro rata according to
its Exposure Percentage of such loans, and (b) each payment of the Facility Fee
shall be remitted by the Agent in like funds as received to each Bank pro rata
according to such Bank's Revolving Credit Commitment.
(b) Alternate Payment Dates. If any Payment hereunder shall be due and
-----------------------
payable on a day which is not a Business Day, the due date thereof (except as
otherwise provided in this Agreement) shall be extended to the next Business Day
and (except with respect to Payments in respect of the Fees) interest shall be
payable at the applicable rate specified herein during such extension, provided,
however, that, if such next Business Day is after the Maturity of such loan, any
such payment shall be due on the immediately preceding Business Day.
Section 3.3 Taxes.
----------- -----
(a) Any and all payments by the Borrowers pursuant to this Agreement, the
Revolving Credit Notes, the Term Notes or the Swing Line Note shall be made, in
accordance with the terms hereof and thereof, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
franchise taxes imposed on the Agent, the Swing Line Lender or any Bank by the
jurisdiction under the laws of which the Agent, the Swing Line Lender or such
Bank is organized or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If either Borrower shall be required by
-----
law to deduct any Taxes from or in respect of any sum payable hereunder to the
Agent, or the Swing Line Lender or any Bank, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.3) the Agent, the Swing Line Lender or such Bank shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions, (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Borrower shall deliver to the
Agent evidence of such payment to the relevant Governmental Authority.
(b) In addition, the Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any State or political subdivision thereof or any
applicable foreign jurisdiction that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter referred
-43-
to as "Other Taxes") and to deliver to the Agent and the Banks evidence of such
-----------
payment to the relevant Governmental Authority.
(c) The Borrowers will indemnify the Agent, the Swing Line Lender and the
Banks for the full amount of Taxes and Other Taxes (including without limitation
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.3) paid by the Agent, the Swing Line Lender or any Bank (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 10
days after written demand therefor by the Agent, the Swing Line Lender or any
Bank. Should the Borrowers elect to contest whether or not the Taxes or Other
Taxes giving rise to their indemnification obligation hereunder were correctly
or legally asserted, the Agent, the Swing Line Lender or the Bank being
indemnified agrees to cooperate in such contest, at the Borrowers' expense, and
to make available to the Borrowers such books and records as may be reasonably
necessary and useful in connection with such contest.
(d) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 3.3 shall survive the payment in full of principal, interest,
fees and other amounts hereunder and under the other Loan Documents.
(e) Each Bank, if any, that is not organized under the laws of the United
States of America or any State agrees (i) prior to the first payment to such
Bank of any amounts due to such Bank under the Loan Documents, upon request by
the Borrowers, to execute and deliver to the Borrowers completed counterparts of
IRS Form W-8, 1001, or 4224 (or any successor thereto or substitute therefor),
as applicable, and (ii) thereafter, upon request by the Borrowers from time to
time in order to maintain the effectiveness and accuracy of such tax forms and
otherwise to comply with United States tax laws, to execute and deliver to the
Borrowers additional or supplemental tax forms with respect to amounts due to
such Bank under the Loan Documents.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, the Swing Line Lender and the Banks to enter
into this Agreement and to make the Revolving Credit Loans, Swing Line Loans and
Term Loans, each Borrower hereby makes the following representations and
warranties, which shall survive the execution and delivery of the Loan Documents
and (except to the extent that any of such representations and warranties
expressly relates to earlier dates, in which case it shall continue to be true
as of such dates) shall be deemed repeated and confirmed as of each date on
which any Revolving Credit Loans, Swing Line Loans or Term Loans are requested
by either Borrower or made by any Bank or the Swing Line Lender, as the case may
be:
-44-
Section 4.1 Corporate Status.
----------- ----------------
MFC is a duly organized and validly existing corporation and MBC is a duly
organized and validly existing limited liability company, and each is in good
standing under the laws of its state of organization, is properly licensed and
has the corporate, or limited liability company, as the case may be, power and
authority and the legal right to own its property and conduct the business in
which it is engaged or presently proposes to engage and is duly licensed and
qualified as a foreign organization in good standing under the laws of each
jurisdiction where the failure to qualify as such would have a Material Adverse
Effect.
Section 4.2 Subsidiaries.
----------- ------------
Except as set forth on Schedule II hereof (as the same may be amended from
time to time to include entities the Tangible Net Worth of which constitute less
than 5% of the Tangible Net Worth of MFC), there are no corporations of which
MFC owns, directly or indirectly, shares of capital stock having in the
aggregate 50% or more of the total combined voting power of the issued and
outstanding shares of capital stock entitled to vote generally in the election
of directors of such corporation; nor are there any corporations, partnerships,
joint ventures or other entities in which MFC or MBC has, or pursuant to any
agreement has the right to acquire at any time by any means, directly or
indirectly, an equity interest or investment.
Section 4.3 Location of Offices, Books and Records.
----------- --------------------------------------
Schedule I annexed hereto, as amended from time to time pursuant to Section
6.9 hereof, completely and accurately lists all places at which (i) each
Borrower maintains its books and records relating to, among other things, its
Loans, (ii) either Borrower has any places of business and (iii) each Borrower
has its chief executive office.
Section 4.4 Corporate Power; Authorization.
----------- ------------------------------
Each Borrower has the corporate, or limited liability company, as the case
may be, power and authority and the legal right to make, deliver and perform
this Agreement and the other Loan Documents to which it is a party. Each
Borrower has taken all necessary corporate, or limited liability company, as the
case may be, action (including, but not limited to, the obtaining of any consent
of stockholders required by law or by the Certificate of Incorporation or By-
Laws in the case of MFC and obtaining of any consent of members required by law
or by the Certificate of Formation or Operating Agreement in the case of MBC) to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party or by which it is otherwise affected and to authorize the
transactions contemplated hereby and thereby.
-45-
Section 4.5 Enforceable Obligations.
----------- -----------------------
Each Loan Document, and each other instrument and document executed by a
Borrower and delivered to the Agent pursuant to Section 5.1 hereof, constitutes
the legal, valid and binding obligation of such Borrower, enforceable in
accordance with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally, and general principles
of equity, and there are no actions, suits or proceedings pending or, to the
knowledge of such Borrower, threatened against, or affecting, a Borrower or any
of its officers or directors calling into question the legality, validity or
enforceability of any thereof.
Section 4.6 No Violation of Agreements; Compliance with Law.
----------- -----------------------------------------------
Neither Borrower is in default under any indenture, mortgage, deed of
trust, agreement or other instrument to which it is a party or by which it or
any of its properties may be bound. Neither the execution and delivery of the
Loan Documents nor any of the instruments and documents to be delivered by a
Borrower pursuant to this Agreement or the other Loan Documents, nor the
consummation of the transactions herein and therein contemplated, nor compliance
with the provisions hereof or thereof will violate any law or regulation, or any
order or decree of any court or governmental instrumentality, or will conflict
with, or result in the breach of, or constitute a default under, any indenture,
mortgage, deed of trust, agreement or other instrument to which a Borrower is a
party or by which it may be bound, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property of a Borrower except as
expressly permitted by this Agreement, or violate any provision of the
Certificate of Incorporation, By-Laws or any preferred stock provisions of MFC
or violate any provision of the Certificate of Formation or Operating Agreement
of MBC.
Section 4.7 Agreements.
----------- ----------
Neither Borrower is a party to any agreement or instrument or subject to
any corporate or limited liability company (as the case may be) restriction
(including any restriction set forth in the Certificate of Incorporation, By-
Laws or preferred stock provisions in the case of MFC or set forth in the
Certificate of Formation or Operating Agreement in the case of MBC) that could
have a Material Adverse Effect.
Section 4.8 No Material Litigation.
----------- ----------------------
There are no actions, suits or proceedings pending or, to the knowledge of
either Borrower, threatened, against, or affecting either Borrower or any of its
officers or directors before any court, arbitrator or governmental or
administrative body or agency which, if adversely determined, might have a
Material Adverse Effect. No injunction, writ, restraining order or other order
of any nature adverse to either Borrower or the conduct of its business or
inconsistent with the due consummation of such transactions has been issued by
any
-46-
Governmental Authority. Neither Borrower is in default under any applicable
statute, rule, order, decree or regulation of any court, arbitrator or
governmental body or agency having jurisdiction over such Borrower.
Section 4.9 Good Title to Properties.
----------- ------------------------
Each Borrower has good and marketable title to all its properties and
assets, subject to no Liens of any kind (except as expressly permitted under
this Agreement).
Section 4.10 Margin Regulations.
------------ ------------------
Neither Borrower is obligated to register with the Board as a "lender" as
such term is defined in Regulation U as amended (12 C.F.R. Part 207), issued by
the Board. The proceeds of the borrowings made pursuant to this Agreement will
be used by the Borrowers only for the purposes set forth in Section 2.8 hereof.
None of such proceeds and none of the proceeds of any loan or advance made by a
Borrower will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" as such term is defined in Regulation U as amended
(12 C.F.R. Part 221), issued by the Board, or for the purposes of maintaining,
reducing or retiring any Indebtedness that originally was incurred to purchase
or carry margin stock or for any other purpose that might constitute any of the
Revolving Credit Loans, Swing Line Loans or Term Loans under this Agreement or
any such loans or advances a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither a
Borrower nor any agent acting on behalf of either of them has taken or will take
any action that might cause this Agreement or any of the documents or
instruments delivered pursuant hereto or other Loan Documents to violate any
regulation of the Board or to violate the Securities Exchange Act of 1933, as
amended.
Section 4.11 [Reserved]
------------ ----------
Section 4.12 Investment Company.
------------ ------------------
MFC is a "business development company" and an "investment company," as
such term is defined in the 1940 Act. MBC is not a "business development
company" and is not an "investment company," as such term is defined in the 1940
Act. The acquisition of the Notes by the Banks, the application of the proceeds
and repayment thereof by the Borrowers and the performance of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
provision of said Act, or any rule, regulation or order issued by the Securities
and Exchange Commission thereunder.
Section 4.13 Disclosure.
------------ ----------
No representation or warranty made by either Borrower in any Loan Document
or any other document furnished from time to time in connection herewith or
therewith contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein, in light of the circumstances under
-47-
which they were made, not misleading. There is no fact known to either Borrower
or any of its officers or directors which has, or which in the future might
have, in the reasonable judgment of either Borrower, a Material Adverse Effect,
except as set forth or referred to in this Agreement or in another document or
instrument heretofore furnished to the Banks.
Section 4.14 Taxes and Claims.
------------ ----------------
Each Borrower has filed or caused to be filed, all Federal, state and local
tax returns and reports which are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or charges imposed on it or
any of its property by any Governmental Authority (other than those the amount
or validity of which are currently being diligently contested in good faith by
appropriate proceedings and in respect of which adequate reserves in conformity
with GAAP have been provided on the books of the applicable Borrower); and no
tax liens have been filed and, to the knowledge of each Borrower, no claims are
being asserted with respect to any such taxes, fees or other charges. Each
Borrower, to the best of its knowledge, has paid and discharged all lawful
claims for labor, material, supplies and anything else which might or could, if
unpaid, become a Lien on any of its properties (other than those the amount or
validity of which are currently being diligently contested in good faith by
appropriate proceedings and in respect of which adequate reserves in conformity
with GAAP have been provided on the books of the applicable Borrower).
Section 4.15 Licenses and Permits.
------------ --------------------
Each Borrower possesses all the licenses, permits, approvals and consents
of Federal, state and local governments and regulatory authorities and rights in
any thereof, adequate for the conduct of its business as now conducted, without
conflict with the rights or claimed rights of others. Neither Borrower has
received any notice nor does either Borrower have any knowledge or reason to
believe that any appropriate authority intends to cancel, terminate or modify
any of such licenses or permits or that valid grounds for such cancellation,
termination or modification exist.
Section 4.16 Consents.
------------ --------
No consent, authorization or action of, or filing with, any Governmental
Authority or any other Person is required to authorize, or is otherwise required
of either Borrower in connection with, the execution, delivery, performance,
validity or enforceability of the Loan Documents or any of the instruments or
documents to be delivered pursuant to the Loan Documents.
Section 4.17 Employee Benefit Plans.
------------ ----------------------
(a) None of the Plans maintained at any time by either Borrower, or any
ERISA Affiliate thereof or the trusts created thereunder has engaged in a
Prohibited Transaction which
-48-
could subject any such Plan or trust to a material tax, liability or penalty on
or resulting from Prohibited Transactions imposed under Code Section 4975 or
ERISA.
(b) None of the Plans which are employee pension benefit plans maintained
at any time by either Borrower, or any ERISA Affiliate thereof, or the trusts
created thereunder has been terminated in a manner that results or could result
in a liability to either Borrower in excess of $50,000, nor has either Borrower,
any ERISA Affiliate thereof, or any such Plan of either Borrower or any ERISA
Affiliate incurred any liability to the PBGC in excess of $50,000, other than
for required insurance premiums which have been paid when due; neither a
Borrower nor any ERISA Affiliate thereof has withdrawn from or caused a partial
withdrawal to occur with respect to any Multiemployer Plan within the meanings
of Sections 4203 and 4205 of ERISA the effect of which was a liability or
potential liability to either Borrower in excess of $50,000; and each Borrower
and each ERISA Affiliate has made or provided for all contributions to all
employee pension benefit plans which they maintain and which were required under
ERISA or the Code as of the end of the most recent fiscal year under each such
plan; no such employee pension benefit plan has incurred any Accumulated Funding
Deficiency the effect of which was a liability or potential liability to either
Borrower in excess of $50,000, whether or not waived; nor has there been any
Reportable Event, or other event or condition which presents a risk of
termination of any such Plan by the PBGC, which termination could result in a
potential liability to either Borrower in excess of $50,000.
(c) The present value of all accrued benefits under the Plans, if any,
which are employee pension benefit plans did not, as of the most recent
valuation date for each such Plan, exceed by more than $50,000 the then current
value of the assets of such Plans allocable to such accrued benefits.
(d) Each employee pension benefit plan maintained by each Borrower and each
ERISA Affiliate has been administered in accordance with its terms and is in
compliance in all material respects with all applicable requirements of ERISA
and other applicable laws, regulations and rulings.
(e) As used in this Section 4.17 the term "employee Pension benefit Plan"
and "accrued benefits" shall have the respective meanings assigned to them in
ERISA.
Section 4.18 Financial Condition.
------------ -------------------
The consolidated balance sheets of MFC for the fiscal years ended December
31, 1997 and December 31, 1998 and the related consolidated statements of
income, retained earnings and cash flow for the fiscal years ended on said
dates, as certified by the Independent Public Accountants present fairly the
consolidated financial condition of MFC as at the date of such balance sheets,
and the results of its operations for such periods. All such financial
statements have been prepared in accordance with GAAP applied on a basis
consistent with that of the comparable preceding period, and since the dates of
the financial statements relating to the
-49-
fiscal year ended December 31, 1998 mentioned above, there has been no material
adverse change in the consolidated condition, financial or otherwise, of either
Borrower.
Section 4.19 Environmental Laws, Etc.
------------ -----------------------
(a) All Property heretofore, now or hereafter owned or operated by each
Borrower complied, complies and will comply in all material respects with all
applicable Federal, state and local, environmental, health and safety statutes,
guidelines, codes, ordinances and regulations;
(b) such Property does not contain and is not being and has not been used
to generate, manufacture, refine, produce, store, handle, transfer, process,
dispose of, or transport, any Hazardous Materials in violation of any material
applicable Federal, state or local law or regulation;
(c) there are no underground storage tanks or surface impoundments located
on, under, or within such Property in violation of any material applicable
Federal, state or local law or regulation; and
(d) all property that heretofore has secured, is now securing or hereafter
shall secure any Loan shall be subject to the same representations and
warranties as are made in respect of the Property in subsections (a), (b) and
(c) of this Section 4.19.
Section 4.20 Event of Default.
------------ ----------------
No event has occurred and is continuing that constitutes a Default or an
Event of Default or would constitute such a Default or Event of Default after
notice or lapse of time or both.
Section 4.21 Solvency.
------------ --------
Each Borrower is Solvent, and will not, as a result of the transactions
contemplated hereby or by the Loan Documents cease to be Solvent.
Section 4.22 Priority; Continued Effectiveness.
------------ ---------------------------------
Except as otherwise permitted hereunder, the Agent, for the ratable
benefit of the Banks and the Swing Line Lender, has a valid and perfected first
priority security interest in and to all Collateral, enforceable against each
Borrower and all third parties in all relevant jurisdictions and securing the
payment of the Revolving Credit Loans, Swing Line Loans and Term Loans and all
other sums payable under or in connection with the Loan Documents. The MFC
Security Agreement continues to be effective to create in favor of the Agent,
for the ratable benefit of the Banks and the Swing Line Lender, a valid and
perfected first priority (except as otherwise permitted hereunder) security
interest in and to the Collateral described therein securing the payment of the
Revolving Credit Loans, Swing Line Loans and Term
-50-
Loans and all other sums payable under or in connection with the Loan Documents,
whether incurred prior to or after the Restatement Effective Date. No additional
Borrower Financing Statements are required to be filed as of the Restatement
Effective Date in order to maintain the perfection and priority of the security
interests created pursuant to the MFC Security Agreement.
Section 4.23 Advertising, Origination and Servicing Activities.
------------ -------------------------------------------------
All advertising, origination and servicing activities, procedures and
materials used with regard to any Loan made or accounts acquired, collected or
serviced by either Borrower comply with all applicable Federal, state and local
laws, ordinances, rules and regulations, including but not limited to those
related to usury, truth in lending, real estate settlement procedures, consumer
protection, equal credit opportunity, fair debt collection, rescission rights
and disclosures, except where failure to comply would not have a Material
Adverse Effect.
Section 4.24 Activities.
------------ ----------
The only transactions engaged in by each Borrower in the ordinary course of
its business consist of: (i) the making and servicing of Loans and Investments
[(in the case of MBC, in compliance with the SBI Act and the SBA Regulations
promulgated thereunder)]; and (ii) transactions incidental to the foregoing.
Section 4.25 Year 2000 Issue.
------------ ---------------
Each Borrower and its Subsidiaries have reviewed the effect of the Year
2000 Issue on the computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for such Borrower and its
Subsidiaries or used or relied upon in the conduct of their business (including
systems and equipment supplied by others or with which such computer systems of
such Borrower and its Subsidiaries interface). The costs to such Borrower and
its Subsidiaries of any reprogramming required as a result of the Year 2000
Issue to permit the proper functioning of such systems and equipment and the
proper processing of data, and the testing of such reprogramming, and of the
reasonably foreseeable consequences of the Year 2000 Issue to such Borrower or
any of its Subsidiaries (including reprogramming errors and the failure of
systems or equipment supplied by others) are not reasonably expected to result
in a Default or Event of Default or to have a material adverse effect on the
business, assets, operations, prospects or condition (financial or otherwise) of
either Borrower or any of its Subsidiaries.
Section 4.26 No Transfer to BL.
------------ -----------------
No transfers of the proceeds of the Revolving Credit Loans, Swing Line
Loans or Term Loans were made by MFC to BL prior to the Restatement Effective
Date.
51
ARTICLE 5 CONDITIONS PRECEDENT
Section 5.1 Conditions to Initial Revolving Credit Loan and Initial Swing
----------- -------------------------------------------------------------
Line Loan.
---------
The obligation of (i) the Banks to make the initial Revolving Credit Loan
and (ii) the Swing Line Lender to make its first Swing Line Loan under the
Original Agreement, were each subject to the satisfaction on the Original
Effective Date of the conditions precedent set forth in Section 5.1 of the
Original Agreement. The obligation of (i) the Banks to make the Initial
Revolving Credit Loan and (ii) the Swing Line Lender to make its first Swing
Line Loan hereunder, are each subject to the satisfaction on the Restatement
Effective Date of the following conditions precedent:
(a) The Agent and the Swing Line Lender shall have received, on or before
making the initial Swing Line Loan a Swing Line Note conforming to the
requirements hereof in the form of Exhibit D hereto, executed by an Authorized
---------
Representative of MBC; and the Agent and each Bank shall have received, on or
before making the Initial Revolving Credit Loan, the following, each in form and
substance satisfactory to the Agent and each Bank in all respects:
(i) a Revolving Credit Note conforming to the requirements hereof in
the form of Exhibit B hereto, executed by an Authorized Representative of MBC
---------
and, in addition, for each Bank party to this Agreement as of the Restatement
Effective Date which was not party to the Original Agreement, a Revolving Credit
Note conforming to the requirements hereof in the form of Exhibit B hereto,
---------
executed by an Authorized Representative of MFC;
(ii) evidence satisfactory to the Banks that there is no outstanding
Indebtedness or Liens except Permitted Indebtedness and Permitted Liens;
(iii) the MBC Security Agreement in the form of Exhibit F, executed
---------
by an Authorized Representative of MBC;
(iv) evidence satisfactory to the Banks that such additional Borrower
Financing Statements as the Agent and the Banks require in connection with the
amendments effected by this Agreement have been executed and delivered to the
Agent in a form acceptable to the Agent, such that the security interests
described in the Security Documents constitute valid and perfected first
priority security interests, subject only to Liens permitted pursuant to Section
8.1 hereof;
(v) the results of a search of all filings made against MBC under
the UCC as in effect in any relevant state, indicating that the Collateral is
free and clear of any Lien or encumbrance, other than Permitted Liens;
(vi) an opinion of counsel to the Borrowers substantially in the form
of Exhibit H hereto; such opinion shall also cover such other matters incident
---------
to the transactions contemplated by this Agreement and the other Loan Documents
as the Required Banks reasonably may require;
(vii) (A) a copy of the Certificate of Incorporation of MFC and all
amendments thereto, certified as of the date hereof by the Chief Financial
Officer of MFC (or a certificate of even
52
date herewith of the Chief Financial Officer of MFC certifying that there have
been no amendments to the Certificate of Incorporation of MFC since the
amendment thereto filed in the office of the Secretary of State of Delaware on
July 1, 1998, a certified copy of which was delivered to the Agent on the
Original Effective Date), and (B) a copy of the Certificate of Formation of MBC
and all amendments thereto, certified as of the date hereof by the Chief
Financial Officer of MBC;
(viii) (A) a copy of the By-laws of MFC certified as of the date
hereof by the Chief Financial Officer of MFC (or a certificate of even date
herewith of the Chief Financial Officer of MFC certifying that the Bylaws of MFC
adopted on May 22, 1996, a certified copy of which was delivered to the Agent on
the Original Effective Date, remain in full force and effect) and (B) a copy of
the Operating Agreement of MBC in effect as of the Restatement Effective Date,
certified as of the date hereof by the Chief Financial Officer of MBC;
(ix) certified copies of the resolutions of the Board of Directors
of MFC and of the Managers or applicable governing body of MBC, each approving
each of the Loan Documents and each of the other instruments and documents to be
executed by it and delivered to the Banks pursuant to this Agreement or any
other Loan Document, certified by the Chief Financial Officer of the applicable
Borrower, and certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect thereto;
(x) certificates of the Chief Financial Officer of each Borrower
certifying the names and true signatures of the officers of such Borrower
authorized to sign each document to which it is a signatory and which is to be
delivered by it hereunder or pursuant to any other Loan Document to which it is
a party;
(xi) a certificate of the Chief Financial Officer of each Borrower
to the effect that (A) the financial statements referred to in Section 4.18
hereof present fairly the financial condition of such Borrower as of the date
and for the period of such financial statements and (B) no material adverse
change in the condition, financial or otherwise, of such Borrower has occurred
since the date of such financial statements;
(xii) a certificate of an Authorized Representative of each Borrower
to the effect that such Borrower has in effect all insurance coverage required
pursuant to Section 6.3 hereof;
(xiii) originals of instruments and other documents constituting part
of the Collateral or Underlying Collateral as the Agent may request in order to
perfect its security interest, on behalf of the Banks, in such Collateral;
(xiv) copies of all other documents, instruments and agreements
requested by the Agent in connection with the transactions contemplated by this
Agreement and the other Loan Documents;
(xv) a Borrowing Base Certificate in the form of Exhibit G from each
---------
Borrower; and
53
(xvi) the rights of the Agent and the Banks under each of the MFC
Security Agreement, the MBC Security Agreement, the Mortgage Assignments and the
Borrower Financing Statements shall be and continue in full force and effect
after the Restatement Effective Date (subject to the filing of any continuation
statements required by the UCC).
(b) MFC is a corporation, and MBC is a limited liability company, each
duly organized and validly existing, has all licenses, permits and
authorizations necessary to own its properties and to carry on its business as
now conducted and proposed to be conducted and is in good standing in the
jurisdiction of its organization and in each other jurisdiction in which the
nature of its business or ownership or use of its property requires such
qualification and the Agent shall receive such evidence thereof, as it or the
Required Banks may request.
(c) All requisite corporate or limited liability company (as applicable)
action and proceedings in connection with the Loan Documents shall be
satisfactory in form and substance to the Agent and the Banks, and the Agent and
the Banks shall have received all information and copies of all documents,
including without limitation, records of requisite corporate action and
proceedings which the Agent, the Banks and ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, as
counsel to the Agent, may have requested in connection therewith, such
documents, where so requested, to be certified by appropriate corporate officers
or Governmental Authorities.
(d) All necessary approvals, authorizations and consents, if any be
required, of any Governmental Authority having jurisdiction with respect to any
of the Collateral and the transactions contemplated by this Agreement and the
other Loan Documents shall have been obtained. In addition, each Borrower shall
be in compliance with all laws, rules, regulations, orders and administrative
guidelines applicable to the operation of its business, including, without
limitation, those of the SBA.
(e) All representations, warranties, covenants and agreements contained in
any Loan Document shall be true and correct in all material respects, and shall
have been performed (to the extent required to be performed on or prior to the
Restatement Effective Date), as of the Restatement Effective Date.
(f) MFC shall have paid to the Agent and each Bank party to the Original
Agreement all amounts which are required to be paid to the Agent and each such
Bank on or before the Restatement Effective Date pursuant to the Original
Agreement.
(g) The Intercompany Demand Loan Documents shall have been terminated.
Section 5.2 Conditions to All Revolving Credit and Term Loans.
----------- -------------------------------------------------
The obligation of the Banks to make any Revolving Credit Loans (including
the Initial Revolving Credit Loan) and any Term Loans and the obligation of the
Swing Line Lender to make any Swing Line Loan (including any initial Swing Line
Loan) is further subject to the satisfaction of the following conditions
precedent:
54
(a) each of the representations and warranties made by a Borrower in or
pursuant to any Loan Document or which are contained in any agreement,
instrument, certificate, document or other writing furnished at any time under
or in connection herewith or therewith shall be true and correct in all material
respects when made and on and as of the date of the making of such Revolving
Credit Loan or Term Loan or Swing Line Loan (except to the extent any
representation or warranty expressly relates to an earlier date, in which case
it shall continue to be true as of such date);
(b) no Default or Event of Default shall have occurred and be continuing on
such date or after giving effect to the Revolving Credit Loans or Term Loans or
Swing Line Loans to be made on such date;
(c) no event, action or condition has occurred that would adversely affect
the validity or enforceability of, or the authority of either Borrower to
perform its obligations under, any of the Loan Documents to which it is a party.
(d) after taking into account Revolving Credit Loans and/or Term Loans
and/or Swing Line Loans to be made on such date, (i) the aggregate unpaid
balance of all Swing Line Loans to MFC plus the aggregate unpaid balance of all
----
Revolving Credit Loans to MFC plus the aggregate unpaid balance of all Term
----
Loans to MFC shall not exceed the MFC Borrowing Base and (ii) the aggregate
unpaid balance of all Swing Line Loans to MBC plus the aggregate unpaid balance
----
of all Revolving Credit Loans to MBC plus the aggregate unpaid balance of all
----
Term Loans to MBC shall not exceed the MBC Borrowing Base.
Each borrowing by the Borrowers hereunder shall constitute a representation
and warranty by each Borrower as of the date of such borrowing that the
conditions in clauses (a), (b), (c) and (d) of this Section 5.2 have been
satisfied.
ARTICLE 6 AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, until the Notes together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under the Loan Documents are paid in full and the
Aggregate Revolving Credit Commitment, the Swing Line Commitment and all Term
Loan Commitments are terminated, unless specifically waived in writing by the
Agent and the Required Banks:
Section 6.1 Financial Statements and Other Information.
----------- ------------------------------------------
The Borrowers shall furnish to the Agent and each Bank:
(a) as soon as practicable and in any event within 45 days after the close
of each calendar quarter, beginning with the calendar quarter ending June 30,
1999, a detailed schedule of all outstanding Loans of each Borrower setting
forth (i) the aging, on a contractual basis, of each Loan and (ii) the aggregate
dollar amount of Loans as to which any amendments or modifications to
55
or waivers of any terms thereof have been made during the quarter as a result of
the Person to whom such Loan was made being unable to comply (for whatever
reason) with the terms thereof;
(b) at the request of the Agent (which request shall not be made, unless an
Event of Default has occurred and is continuing, on more than one occasion in
each calendar year), a schedule setting forth as to each Borrower (i) the number
of Medallion Rights pledged to such Borrower as security for Loans made by it,
(ii) the then outstanding aggregate principal amount of the Loans secured by
such Medallion Rights and (iii) such Borrower's good-faith best estimate (along
with supporting documentation) of the current fair market value of the operating
rights and licenses evidenced by Medallions included in such Medallion Rights;
(c) monthly, and not later than 10 Business Days after the last day of each
month, a Borrowing Base Certificate indicating a separate computation of the MFC
Borrowing Base and the MBC Borrowing Base, covering the immediately preceding
month;
(d) as soon as practicable and in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of MFC, beginning
with the fiscal quarter ending June 30, 1999, a consolidated and consolidating
balance sheet, a statement of income and retained earnings and a statement of
cash flow of each Borrower, as at the end of and for the quarterly period then
ended and for the period commencing at the end of the previous fiscal year and
ending with such quarter, setting forth the corresponding figures for the
appropriate periods of the previous fiscal year in comparative form, all in
reasonable detail (which detail, if requested by the Agent, shall include data
as to non-accruals and related collateral, repossessions, charge-offs and
reconciliation for allowance for losses) and be reviewed by the Independent
Public Accountants and certified by the chief executive officer, chief operating
officer, chief financial officer, or chief accounting officer of each Borrower
to be true and correct and to have been prepared in accordance with GAAP (except
for the omission of footnotes), subject to normal recurring year-end audit
adjustments;
(e) as soon as practicable and in any event within 90 days after the end of
each fiscal year of MFC commencing with the fiscal year ending December 31,
1999, a consolidated and consolidating balance sheet, a statement of income and
retained earnings and a statement of cash flow of each Borrower, as at the end
of and for the fiscal year just closed, setting forth the corresponding figures
of the previous fiscal year in comparative form, all in reasonable detail (which
detail, if requested by the Agent, shall include data as to non-accruals and
related collateral, repossessions, charge-offs and reconciliation for allowance
for losses), presented in a manner consistent with the financial statements of
each Borrower for the preceding fiscal year, and, with respect to such
consolidated statements, certified (without any qualification or exception
deemed material by the Agent or any Bank) by the Independent Public Accountants;
and concurrently with such financial statements, a written statement, addressed
to the Agent and the Banks, signed by such Independent Public Accountant to the
effect that, in making the examination necessary for their certification of such
financial statements, they have not obtained, as of the end of such fiscal year,
any knowledge of the existence of any Default or Event of Default, or, if such
accountants shall have obtained from such examination any such knowledge, they
shall disclose in such written statement the Default or Event of Default;
56
(f) concurrently with the delivery of the schedules or financial statements
required to be furnished under Sections 6.1(a) or 6.(d) hereof, a certificate
signed by the chief executive officer, chief operating officer, chief financial
officer, or chief accounting officer of each Borrower, and concurrently with the
delivery of the financial statements required to be furnished under Section
6.1(e) hereof, a certificate signed by the Independent Public Accountants, and
promptly upon the occurrence of any Default or Event of Default, a certificate
signed by the chief executive officer, chief operating officer, chief financial
officer, or chief accounting officer of each Borrower or such Independent Public
Accountants, if a Default or Event of Default shall have occurred during the
period of their review, in each case stating (i) that a review of the activities
of each Borrower during such period has been made under his or their, as the
case may be, immediate supervision with a view to determining whether each such
Borrower has observed, performed and fulfilled all of its obligations under this
Agreement, and (ii) that there existed during such period no Default or Event of
Default (provided that, as to a certificate prepared by the Independent Public
Accountants, such period, as it relates to the compliance by each Borrower with
covenants contained in Articles VII and VIII hereof shall apply to the fiscal
period covered by their review) or if any such Default or Event of Default
exists, specifying the nature thereof, the period of existence thereof and what
action the Borrowers propose to take, or have taken, with respect thereto; each
such certificate shall be accompanied by a schedule setting forth the
computations as of the end of such period of each of the financial ratios, tests
or covenants specified in Article VII and Sections 6.15, 8.2, 8.3, and 8.14
hereof;
(g) concurrently with the delivery of the financial statements required to
be furnished under Section 6.1(e) hereof, (i) any management letters prepared by
the Independent Public Accountants described above, setting forth weaknesses in
the accounting and control procedures of either Borrower and (ii) projections
(in a format satisfactory to the Agent) for the fiscal year immediately
following the fiscal year for which such financial statements were provided;
(h) promptly upon receipt thereof with respect to each Borrower, copies of
(i) all financial reports (including, without limitation, management letters),
if any, submitted to such Borrower by its auditors in connection with each
annual, interim or special audit of its books by such auditors, (ii) all "vault
count opinions" submitted to such Borrower in connection with each inspection by
such auditors of the documents evidencing such Borrower's Loans and the
Underlying Collateral securing such Loans, (iii) all audits submitted to such
Borrower by the SBA or any other Governmental Authority and (iv) all reports,
letters or other documents submitted to such Borrower by the SBA or any other
Governmental Authority relating to a material change in such Borrower's business
or the rules and regulations promulgated by any Governmental Authority
applicable thereto, including, without limitation, the SBI Act, the SBA
Regulations, the 1940 Act and the Code;
(i) annually, when furnished to MFC, a copy of the Independent Public
Accountant's annual management letter provided to MFC; and
57
(j) with reasonable promptness, such other information respecting the
business, operations and financial condition of either Borrower as the Agent or
any of the Banks from time to time reasonably may request.
Section 6.2 Taxes and Claims.
----------- ----------------
(a) Each Borrower shall pay promptly when due, (i) all material sales, use,
excise, personal property, income, withholding, corporate franchise and all
other taxes, assessments and governmental charges upon or against or relating to
such Borrower or its ownership or use of any of its properties, assets, income
or gross receipts unless and to the extent that such charges are being
diligently contested in good faith by appropriate proceedings and adequate
reserves in conformity with GAAP have been provided therefor on the books of
such Borrower, and (ii) all lawful claims, whether for labor, materials,
supplies, services or anything else which might or could, if unpaid, become a
Lien or charge upon the properties or assets of such Borrower or any of its
Subsidiaries, which Lien would not be permitted under this Agreement, unless and
to the extent such claims are being diligently contested in good faith by
appropriate proceedings and adequate reserves in conformity with GAAP have been
provided therefor on the books of such Borrower.
(b) Neither Borrower shall permit, or suffer to remain, and will promptly
discharge, any Lien (other than a Permitted Lien) arising from any unpaid tax,
assessment, levy or governmental charge.
(c) In the event either Borrower shall fail to pay any such tax,
assessment, levy or governmental charge or to discharge any such Lien (other
than a Permitted Lien), then the Agent, without waiving or releasing any
obligation or default of the Borrowers hereunder, may at any time or times
hereafter, but shall be under no obligation to do so, make such payment,
settlement, compromise or release or cause to be released any such Lien, and
take any other action with respect thereto which the Agent deems advisable. All
sums paid by the Agent in satisfaction of, or on account of any tax, levy or
assessment or governmental charge, or to discharge or release any Lien, and any
expenses, including reasonable attorneys' fees actually incurred, court costs
and other charges relating thereto, shall become a part of the Obligations
secured by the Collateral, payable on demand.
Section 6.3 Insurance.
----------- ---------
(a) Each Borrower shall (i) keep all of its properties adequately insured
at all times with responsible insurance carriers against loss or damage by fire
and other hazards and (ii) maintain adequate insurance at all times with
responsible carriers against liability on account of damage to persons and
property and under all applicable workers' compensation laws. For the purposes
of this Section 6.3(a), insurance shall be deemed adequate if the same is not
less extensive in coverage and amount than is customarily maintained by other
persons engaged in the same or similar business similarly situated.
58
(b) Each Borrower, from time to time upon request of the Agent or any Bank,
promptly shall furnish or cause to be furnished to the Agent and any such
requesting Bank evidence, in form and substance satisfactory to the Agent and
such Bank (if requested by a Bank), of the maintenance of all insurance required
by this Section 6.3 to be maintained, including, but not limited to, such
originals or copies as the Agent or such Bank may request of policies,
certificates of insurance, riders and endorsements relating to such insurance
and proof of premium payments.
Section 6.4 Books and Records.
----------- -----------------
Each Borrower shall maintain, at all times, true and complete books,
records and accounts in which true and correct entries shall be made of its
transactions in accordance with GAAP consistently applied and in compliance with
the regulations of any governmental regulatory body having jurisdiction over it.
Section 6.5 Properties in Good Condition.
----------- ----------------------------
Each Borrower shall keep its properties in good repair, working order and
condition (subject to such wear and tear as may occur in the ordinary course of
business) and, from time to time, make all needful and proper repairs, renewals,
replacements, additions and improvements thereto, so that the business carried
on may be properly and advantageously conducted at all times in accordance with
prudent business management.
Section 6.6 Inspection by the Banks.
----------- -----------------------
Each Borrower shall allow any representative of the Agent or any of the
Banks to visit and inspect any of the properties of such Borrower to examine and
audit the books of account and other records and files of such Borrower, to make
copies thereof and to discuss the affairs, business, finances and accounts of
such Borrower with its officers and employees, all at such reasonable times and
as often as the Agent any of the Banks may request; provided, that, at least
-------- ----
once each calendar year such an inspection shall be conducted by the Agent at
the request of the Required Banks (or without such a request if the Agent shall
deem it necessary or advisable). Reasonable expenses incurred in connection
with one such audit and inspection requested by the Required Banks or the Agent
each year shall be paid by the Borrowers, with any additional audits to be at
the expense of the Bank performing the same, or at the expense of all Banks if
conducted by the Agent, except that, if an Event of Default shall have occurred
and be continuing, all such additional audits shall be at the expense of the
Borrowers.
Section 6.7 Pay Indebtedness to Agent and Perform Other Covenants.
----------- -----------------------------------------------------
Each Borrower shall (a) make full and timely payments to the Agent, for the
ratable benefit of the Banks, and the Swing Line Lender, as the case may be, of
the principal of and interest on the Notes of such Borrower and all other
amounts owed by such Borrower under or pursuant to the Loan Documents, whether
now existing or hereafter arising and (b) duly comply with all the terms and
covenants contained in each of the instruments and documents furnished in
connection with or
59
pursuant to this Agreement or the other Loan Documents, all at the times and
places and in the manner set forth therein.
Section 6.8 Compliance With Laws.
----------- --------------------
Each Borrower shall comply with all applicable laws and regulations,
including but not limited to, those of the SBA and Federal, state and local laws
and regulations relating to consumer lending, disclosure, collection and
licensing where the failure so to comply would have a Material Adverse Effect
(other than those the validity of which are being diligently contested in good
faith by appropriate proceedings and adequate reserves in conformity with GAAP
have been provided therefor on the books of the applicable Borrower).
Section 6.9 Notice of Certain Events.
----------- ------------------------
Each Borrower shall promptly, but in no event later than three Business
Days after obtaining knowledge thereof, give written notice to the Agent and the
Banks of: (a) any material litigation, including arbitrations, and of any
investigations or proceedings before any Governmental Authority brought against
a Borrower, whether or not the claim is considered by a Borrower to be covered
by insurance, which might, if determined adversely, have a Material Adverse
Effect, or where the amount involved, when added together with all other amounts
involved in any other litigation, investigation, arbitration or proceeding
affecting such Borrower, would exceed $500,000, and each Borrower shall, if
requested by the Agent or the Required Banks, set up such reserves as it deems
necessary (provided, that, such reserves shall be in such amounts such that
neither the Agent nor the Required Banks has informed either such Borrower that
such reserves are not satisfactory to protect the Agent or the Banks against
loss); (b) any written notice of a violation received by a Borrower from any
Governmental Authority which, if such violation were established, might have a
Material Adverse Effect; (c) any material attachment, judgment, lien, levy or
order which may be placed on or assessed against or threatened against a
Borrower or the Collateral; (d) any Default or Event of Default or any event
that, after notice or lapse of time or both, would become a Default or Event of
Default; (e) any other matter that has or causes or may have or cause a Material
Adverse Effect with respect to a Borrower; and (f) any change in the corporate
name or corporate form of a Borrower, or any change in the information disclosed
on Schedule I annexed hereto.
Section 6.10 Environmental Laws, Etc.
------------ -----------------------
(a) Each Borrower shall keep all Property owned or operated by it free of
Hazardous Materials and comply with the requirements of all applicable Federal,
state and local environmental, health, safety and sanitation laws, ordinances,
regulatory and administrative authorities with respect thereto. Except to the
extent it does so on the date hereof and in strict compliance with all
applicable laws, neither Borrower shall use any Property to generate,
manufacture, refine, transport, treat, store, handle, dispose of, transfer,
produce, process or in any manner deal with, Hazardous Materials, and neither
Borrower shall cause or permit, as a result of any intentional or unintentional
act or omission on the part of a Borrower or any occupant, tenant or subtenant,
the installation or placement of Hazardous Materials onto any Property or onto
any other property or suffer the
60
presence of Hazardous Materials on any Property. Each Borrower shall undertake
promptly and pursue diligently to completion appropriate remedial clean-up
action in the event of any release of Hazardous Materials on, upon or into any
real property owned or operated by a Borrower or any real property adjacent
thereto.
(b) Each Borrower agrees to provide the Banks with copies of any
notifications of releases of Hazardous Materials that are given by or on behalf
of a Borrower to any Governmental Authority with respect to any real property
owned or operated by a Borrower. Such copies shall be sent to the Banks
concurrently with the mailing or delivery of such copies to the Governmental
Authority.
Section 6.11 Further Assurances.
------------ ------------------
Upon the request of the Agent or the Required Banks, each Borrower at its
cost and expense shall duly execute and deliver, or cause to be duly executed
and delivered, to the Agent and the Banks such further instruments and do and
cause to be done such further acts as may be reasonably necessary or proper in
the opinion of the Agent or the Required Banks to carry out more effectually the
provisions and purposes of this Agreement and the other Loan Documents.
Section 6.12 ERISA.
------------ -----
Each Borrower shall deliver to the Agent and the Banks, promptly after (i)
the occurrence thereof, notice that an ERISA Termination Event or a Prohibited
Transaction with respect to any Plan has occurred, which notice shall specify
the nature thereof and such Borrower's proposed response thereto, and (ii)
actual knowledge thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any Plan.
Section 6.13 Corporate or Limited Liability Company Existence.
------------ ------------------------------------------------
Each Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate or limited
liability company (as applicable) existence (except as otherwise may be
permitted by Section 8.6 hereof) and all rights, licenses, permits and
franchises, the termination of which would have a Material Adverse Effect;
comply with all laws, regulations, ordinances, rules and orders applicable to
it, noncompliance with which would have a Material Adverse Effect; conduct and
operate its business in substantially the manner in which it is presently
conducted and operated without material alteration or change in the nature of
such business; at all times maintain and preserve all property used or useful in
the conduct of its business and keep the same in appropriate repair and
condition, and from time to time make, or cause to be made, all appropriate
repairs, renewals and replacements thereto, so that the business carried on in
connection therewith may be properly conducted at all times.
Section 6.14 Maintenance of Security Interest.
------------ --------------------------------
Each Borrower shall maintain perfected, first priority security interests
in the Collateral in favor of the Agent for the benefit of the Banks and the
Swing Line Lender in accordance with the
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terms of the MFC Security Agreement and MBC Security Agreement, subject only to
the Liens permitted pursuant to Section 8.1 hereof and taking into account the
time required for such Borrower to deliver Collateral to the Agent (which
Collateral shall be delivered to the Agent promptly upon receipt thereof by such
Borrower); provided, that, the Borrowers shall have no responsibility for a
-------- ----
breach of this covenant if caused by the gross negligence of the Agent.
Section 6.15 Maximum Percentage of Commercial Loans.
------------ --------------------------------------
For so long as amounts are owed by either Borrower to the Banks, the Swing
Line Lender or the Agent under the Loan Documents or any of the Revolving Credit
Commitments remain in effect, not more than 60% of the aggregate principal
amount of all Loans made by the Borrowers and then outstanding shall be
Commercial Loans.
Section 6.16 Year 2000 Issue.
------------ ---------------
Each Borrower shall take, and shall cause each of its Subsidiaries to take,
all necessary action to complete in all material respects by October 31, 1999,
the reprogramming of computer software, hardware and firmware systems and
equipment containing embedded microchips owned or operated by or for such
Borrower and its Subsidiaries or used or relied upon in the conduct of their
business (including systems and equipment supplied by others or with which such
systems of such Borrower or any of its Subsidiaries interface) required as a
result of the Year 2000 Issue to permit the proper functioning of such computer
systems and other equipment and the testing of such systems and equipment, as so
reprogrammed. At the request of the Agent, each Borrower shall provide, and
shall cause each of its Subsidiaries to provide, to the Agent and the Banks
reasonable assurance of its compliance with the preceding sentence.
Section 6.17 Borrowers' Manuals.
------------ ------------------
Not later than 90 days after the Restatement Effective Date, MBC shall
provide to the Agent and each Bank a copy of its then operative credit policy
manual and a copy of its then operative operating manual; not later than July 5,
1999, MFC shall notify the Agent and each Bank of any and all material changes
made to its credit policy manual and/or operating manual from the copies of such
manuals delivered pursuant to Section 6.17 of the Original Agreement and
thereafter each Borrower shall notify the Agent and each Bank of any and all
material changes to such manuals from those most recently delivered.
Section 6.18 Principal Office of Clients.
------------ ---------------------------
Within five Business Days of any request therefor from the Agent, each
Borrower shall update Schedule II to this Agreement to provide, to the best of
such Borrower's knowledge, each location at which each Client has its principal
or chief executive office.
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ARTICLE 7 FINANCIAL COVENANTS
Each Borrower covenants and agrees that, until the Notes, together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under this Agreement and the other Loan Documents, are
paid in full and the Aggregate Revolving Credit Commitment, the Swing Line
Commitment and all Term Loan Commitments are terminated, neither Borrower shall,
without the prior written consent of the Agent and the Required Banks:
Section 7.1 Maximum Leverage Ratio.
----------- ----------------------
Suffer or permit the ratio of (A) Total Adjusted Liabilities of MFC to (B)
Tangible Net Worth of MFC to be more than 1:1 at any time (notwithstanding the
definition of Total Adjusted Liabilities, for purposes of this Section 7.1, such
Total Adjusted Liabilities shall only include the Total Adjusted Liabilities of
MFC and shall exclude the Total Adjusted Liabilities of MBC).
Section 7.2 Maximum Adjusted Leverage Ratio.
----------- -------------------------------
Suffer or permit the ratio of (A) the sum of Total Adjusted Liabilities to
(B) Adjusted Tangible Net Worth to be more than 3:1 at any time.
Section 7.3 Borrowing Base.
----------- --------------
Suffer or permit (A) the aggregate unpaid balance of all Swing Line Loans
plus the aggregate unpaid balance of all Revolving Credit Loans plus the
---- ----
aggregate unpaid balance of all Term Loans to exceed the sum of the MFC
Borrowing Base and the MBC Borrowing Base, or (B) the aggregate unpaid balance
of all Swing Line Loans plus the aggregate unpaid balance of all Revolving
----
Credit Loans plus the aggregate unpaid balance of all Term Loans that have been
----
used directly or indirectly by MBC to exceed the MBC Borrowing Base, or (C) the
aggregate unpaid balance of all Swing Line Loans plus the aggregate unpaid
----
balance of all Revolving Credit Loans plus the aggregate unpaid balance of all
----
Term Loans that have been used directly or indirectly by MFC to exceed the MFC
Borrowing Base.
Section 7.4 Minimum EBIT to Interest Expense Ratio.
----------- --------------------------------------
(a) Suffer or permit the ratio, on a rolling four quarter basis, of (a)
MFC's consolidated EBIT plus MFC's consolidated Interest Expense to (b) MFC's
consolidated Interest Expense to be less than 1.50:1 at any period of
determination.
(b) Suffer or permit the ratio, on a rolling four quarter basis, of (a)
EBIT of MFC (provided that, notwithstanding the definition of EBIT, for purposes
of this Section 7.4(b), Interest Expense included in EBIT of MFC shall include
only the Interest Expense of MFC and shall exclude the Interest Expense of MBC)
plus EBIT of MBC (provided that , notwithstanding the definition of EBIT, for
purposes of this Section 7.4(b), Interest Expense included in EBIT of MBC shall
include only the Interest Expense of MBC) to (b) Interest Expense of MFC (on an
unconsolidated basis, as described in clause (a)) plus Interest Expense of MBC
(on an
-63-
unconsolidated basis as described in clause (a)) to be less than 1.35:1
at any period of determination.
Section 7.5 Minimum Asset Quality.
----------- ---------------------
Suffer or permit, on a rolling twelve-month period, its aggregate Net
Realized Loss to be greater than (i) with respect to Medallion Loans, 3% of the
average aggregate principal balances of all outstanding Medallion Loans during
any applicable period of determination, or (ii) with respect to Commercial
Loans, 5% of the average aggregate principal balances of all outstanding
Commercial Loans during any applicable period of determination.
ARTICLE 8 NEGATIVE COVENANTS
Each Borrower covenants and agrees that until the Notes together with
interest and all other Indebtedness of the Borrowers to the Agent, the Swing
Line Lender and the Banks under this Agreement are paid in full and the
Aggregate Revolving Credit Commitment, the Swing Line Commitment and all Term
Loan Commitments are terminated, neither Borrower shall, without the prior
written consent of the Agent and the Required Banks:
Section 8.1 Liens.
----------- -----
Create, assume or suffer to exist any Lien upon any of its property or
assets, whether now owned or hereafter acquired; provided, however, that the
foregoing restriction and limitation shall not apply to the following Liens (the
"Permitted Liens"):
---------------
(a) Liens created under the MFC Security Agreement or the MBC Security
Agreement or other Liens in favor of the Agent or the Banks;
(b) Liens existing on property at the time acquired by a Borrower after
the date of the financial statements referred to in Section 4.18 hereof,
provided that such Lien was not incurred, directly or indirectly, in
--------
anticipation or contemplation of such acquisition;
(c) Liens constituting renewals, extensions or refundings of Liens
permitted by clause (b) above, provided that the principal amount of the
Indebtedness secured by any such new Lien does not exceed the principal amount
of the Indebtedness being renewed, extended or refunded at the time of renewal,
extension or refunding thereof and that such new Lien attaches only to the same
property theretofore subject to such earlier Lien;
(d) Liens securing taxes, assessments or governmental charges or levies,
or the claims or demands of materialmen, mechanics, carriers, workmen,
repairmen, warehousemen, landlords and other like Persons, not yet delinquent or
which are being actively contested in good faith by appropriate proceedings and
in respect of which adequate reserves in conformity with GAAP have been provided
on the books of the applicable Borrower;
-64-
(e) other Liens incidental to the conduct of its business or the ownership
of its property and assets which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit, and which do not in
the aggregate materially detract from the value of its property or assets, or
materially impair the use thereof in the operation of its business;
(f) attachment, judgment and other similar Liens arising in connection
with court proceedings, provided that execution or other enforcement of such
Liens is effectively stayed, the claims secured thereby are being actively
contested in good faith by appropriate proceedings and adequate reserves in
conformity with GAAP have been provided on the books of the applicable Borrower;
and
(g) Liens arising in connection with, and securing the cost of, the
acquisition of Equipment, provided, that such Lien attaches to such Equipment
concurrently with or within 90 days after the acquisition thereof (by purchase,
construction or otherwise), and provided, further, that the aggregate amount of
Indebtedness securing all such Liens shall not at any time exceed $1,000,000.
Section 8.2 Indebtedness.
----------- ------------
Create, incur, assume or suffer to exist, contingently or otherwise, any
Indebtedness, except:
(a) Indebtedness of the Borrowers to the Agent, the Swing Line Lender and
the Banks arising hereunder or under any of the other Loan Documents;
(b) Permitted Debt and Subordinated Debt of the Borrowers;
(c) Indebtedness secured by Liens described in Section 8.1(b), (c) or (g)
hereof; and
(d) Unsecured current liabilities incurred in the ordinary course of
business and paid within 90 days after the due date thereof (unless diligently
contested in good faith by appropriate proceedings and, if requested by the
Agent, reserved against in conformity with GAAP) other than liabilities that are
for money borrowed or are evidenced by bonds, debentures, notes or other similar
instruments.
Section 8.3 Limitation on Loans and Investments.
----------- -----------------------------------
(a) Make, or obligate itself to make, any loan or advance or Investment
that is not a Domestic Loan or a Domestic Investment, provided that, the
foregoing shall not prohibit the SBA Guaranty.
(b) Make, or obligate itself to make, any loan or advance or Investment
that is not in compliance with the rules and regulations promulgated by any
Governmental Authority to which it is subject, including, without limitation,
the SBI Act and the SBA Regulations promulgated thereunder and the 1940 Act.
-65-
(c) Make, or obligate itself to make, any Loan if, after giving effect to
such Loan, the aggregate outstanding principal amount of all Loans made to any
one Person together with its Affiliates would exceed 20% of Adjusted Tangible
Net Worth plus Satisfactory Subordinated Debt; provided, that, notwithstanding
the definition of Adjusted Tangible Net Worth, as to this covenant as to either
Borrower, such term shall mean the Adjusted Tangible Net Worth of such Borrower
alone without taking into account the Adjusted Tangible Net Worth of the other
Borrower.
(d) Make, or commit to make, or acquire or commit to acquire, any
Commercial Loan to or from any Person if, as a result of such Loan, the
applicable Borrower's Commercial Loan concentration in any given industry
(determined in accordance with the Standard Industrial Classification
promulgated by the Office of Management and Budget) would exceed in principal
amount 35% of such Borrower's total Loans outstanding.
(e) On or after the Restatement Effective Date, make any Investment in any
Subsidiary or Affiliate, or any Person that after taking into account such
Investment would become a Subsidiary or Affiliate, when taking into account all
such Investments in the aggregate the amount or value of such Investments would
exceed $15,000,000 during the Initial Term or any Renewal Term.
(f) [Reserved].
--------
(g) Sell, discount or otherwise dispose of Loans or any Collateral; sell,
discount or otherwise dispose of other Receivables or obligations owing to a
Borrower or any of its Subsidiaries, with or without recourse, otherwise than
(i) in connection with the grant of any participation in accordance with and to
the extent permitted by Section 2.14 hereof, (ii) for collection in the ordinary
course of business or (iii) to the Agent for the benefit of the Banks.
(h) Make, or commit to make, or acquire or commit to acquire, any Loan to
or from any Person unless the applicable Borrower reasonably believes that such
Loan constitutes, or upon funding or acquisition will constitute, an Eligible
Loan; provided, that, it shall not be a breach of this covenant if the Loan
-------- ----
causing the breach is not in a material amount and in any event is not included
in the MBC Borrowing Base or the MFC Borrowing Base.
(i) Fail to file upon making or acquiring a Loan, all required Borrower
Financing Statements and Mortgage Assignments in order to assure that the Agent
receives a first priority perfected security interest or mortgage interest
therein; provided, that, it shall not be a breach of this covenant if the Loan
-------- ----
causing the breach is not in a material amount and in any event is not included
in the MBC Borrowing Base or the MFC Borrowing Base.
Section 8.4 [Reserved].
----------- --------
Section 8.5 Restricted Payments.
----------- -------------------
Make, or obligate itself to make, any Restricted Payment.
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Section 8.6 Merger, Consolidation, Sale or Transfers Assets.
----------- -----------------------------------------------
(a) Sell, discount or otherwise dispose of Loans or any Collateral if a
Default or Event of Default has occurred and is continuing or if the effect of
such sale, discount or disposal would be to put the applicable Borrower in
violation of any of the covenants and agreements contained in this Agreement;
(b) Sell or otherwise dispose of an amount of Loans which, in aggregate
principal amount, exceeds 10% of the aggregate principal amount of all Loans of
the applicable Borrower then outstanding unless, immediately upon such sale or
disposition, the Borrowers make, in accordance with the provisions of Section
2.5(a) hereof, a voluntary prepayment on all then outstanding Revolving Credit
Loans and Term Loans owing by them equal to the aggregate principal amount, plus
accrued interest, of the Loans so sold or disposed of.;
(c) Enter into any transaction of merger or consolidation, or transfer,
sell, assign, lease, or otherwise dispose of all or substantially all of its
properties or assets to any Person, except that either Borrower may merge or
consolidate with any other Person, provided that (A) a Borrower shall be the
surviving and continuing corporation, (B) no Default or Event of Default shall
have occurred and be continuing and (C) after giving effect to such
consolidation or merger, each Borrower would be Solvent and, except for good
will adjustments, would have Tangible Net Worth at least equal to the Tangible
Net Worth such Borrower had immediately before such consolidation or merger; or
(d) Sell, discount or otherwise dispose of, to any Subsidiary or Affiliate
of either Borrower, any Medallion Loan originated by such Borrower, except that
MFC may make such transfers to MBC, provided that no such transfer shall cause
-------- ----
the principal amount of the Revolving Credit Loans outstanding to MFC to exceed
the MFC Borrowing Base.
Section 8.7 Transfer of Proceeds.
----------- --------------------
Except in accordance with the provisions of Section 8.3(e), transfer, or
commit itself to transfer, any portion of the proceeds of the Revolving Credit
Loans, Swing Line Loans and Term Loans to be made to the Borrowers from time to
time hereunder to any Affiliate.
Section 8.8 Compliance with ERISA.
----------- ---------------------
Take any of the following actions or permit any of the following events to
exist if, as a result thereof, a Borrower would, or would be likely to, incur a
liability in excess of $50,000: terminate, or permit or suffer any of its ERISA
Affiliates to terminate (other than a standard termination, as defined in
Section 4041(b) of Title IV of ERISA, of a Single Employer Plan), any Plans
maintained by a Borrower or any of its ERISA Affiliates so as to incur any
liability to the PBGC; permit or suffer to exist any Prohibited Transaction
involving any of such Plans or any trust created thereunder which would subject
a Borrower to a tax, liability or penalty on Prohibited Transactions imposed
under Code Section 4975 or ERISA; fail to pay, or permit or suffer any of its
ERISA Affiliates to fail to pay, to any such Plan (including any Multiemployer
Plan) any contribution which
-67-
it or such ERISA Affiliate is obligated to pay under the terms of such Plan;
permit any Accumulated Funding Deficiency, whether or not waived, with respect
to any Plan; or permit or suffer to exist any occurrence of a Reportable Event,
or any other event or condition, which presents a material risk of termination
by the PBGC of any such Plan.
Section 8.9 Change in Business.
----------- ------------------
Materially change or alter the nature of its business as conducted as of
the Original Effective Date.
Section 8.10 Amendments of Agreements.
------------ ------------------------
Consent to any amendment, supplement, or other modification of any of the
terms (including acceleration, covenant, default, subordination, sinking fund,
repayment, interest rate or redemption provisions) contained in, or applicable
to, or any security for, any Permitted Debt or other instrument evidencing or
applicable to Permitted Debt if such amendment, supplement, or other
modification materially adversely affects the interests of the Agent, the Swing
Line Lender or any Bank provided that, the SBA Guaranty shall not be amended,
modified or supplemented without the consent of the Agent and the Required
Lenders.
Section 8.11 Transactions with Affiliates.
------------ ----------------------------
Enter into, or cause, suffer, or permit to exist, any material
transactions, including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service, with any Affiliate on
terms that are less favorable to such Borrower than those that would be
obtainable at the time from any Person who is not an Affiliate.
Section 8.12 Negative Pledges.
------------ ----------------
Enter into any agreement (excluding this Agreement and the other Loan
Documents) prohibiting the creation or assumption of any Lien upon its
properties, revenues, or assets, whether now owned or hereafter acquired.
Section 8.13 Inconsistent Agreements.
------------ -----------------------
Enter into any agreement containing any provisions which would be violated
or breached by any borrowing hereunder or by the performance by either Borrower
of its obligations under any of the Loan Documents where the potential
consequences of such violation or breach would have a Material Adverse Effect.
Section 8.14 Capital Expenditures.
------------ --------------------
Expend or commit to expend for itself more than an aggregate of $1,000,000
in any fiscal year for capital expenditures, for the acquisition of Equipment or
for leasehold improvements.
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Section 8.15 [Reserved].
------------ --------
Section 8.16. Portfolio Purchases.
------------ -------------------
Make, or obligate itself to make, any Portfolio Purchase unless:
(i) no Default or Event of Default exists or would exist after
giving effect to the applicable Portfolio Purchase;
(ii) the applicable Borrower has provided the Agent and each of
the Banks with a pro forma certificate of the chief financial officer of such
Borrower evidencing each Borrower's computation of compliance with each of the
financial ratios, tests or covenants specified in Article VII and Sections 8.2,
8.3 and 8.14 hereof after giving effect to the applicable Portfolio Purchase;
(iii) the applicable Portfolio Purchase has the approval of the
seller;
(iv) (1) the seller of the loans constituting such Portfolio Purchase
is in the business of making loans secured by New York City taxicab medallions
and the loans to be acquired in connection therewith are secured by New York
City taxicab medallions, or (2) the Portfolio Purchase is being made from a
Person in any other line of business; provided, that, to the extent the
--------------
Portfolio Purchase does not entirely involve loans secured by New York City
taxicab medallions, in addition to the foregoing, each such Portfolio Purchase
shall be subject to the following additional limitations:
(A) if the consideration for such Portfolio Purchase shall
be Capital Stock of MFC, the fair market value of such Capital Stock, less
the aggregate outstanding principal balances of all loans included in such
Portfolio Purchase that are secured by New York City taxicab medallions, if
any, shall not exceed $50,000,000 with respect to any one such Portfolio
Purchase or $100,000,000 in any fiscal year with respect to all such
Portfolio Purchases in the aggregate in such fiscal year; and
(B) if the consideration for such Portfolio Purchase shall
be other than Capital Stock of MFC, the consideration therefor, less the
aggregate outstanding principal balances of all loans included in such
Portfolio Purchase that are secured by New York City taxicab medallions, if
any, shall not exceed $25,000,000 with respect to any one such Portfolio
Purchase or $50,000,000 in any fiscal year with respect to all such
Portfolio Purchases in the aggregate in such fiscal year.
ARTICLE 9 DEFAULTS AND REMEDIES
Section 9.1 Events of Default.
----------- -----------------
If any one or more of the following events (herein called "Events of
---------
Default") shall occur for any reason whatsoever (and whether such occurrence
-------
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or in compliance with any judgment, decree
-69-
or order of any court or any order, rule or regulation of any administrative or
governmental body), that is to say:
(a) if default shall be made by either Borrower in the due and punctual
payment of the principal of or interest on any of its Revolving Credit Loans,
Swing Line Loans or Term Loans or any other amounts due and owing by such
Borrower to the Agent, the Swing Line Lender or the Banks, when and as the same
shall become due and payable and, with respect to defaults in payment other than
payment of principal, such default shall continue for more than five days;
(b) if default shall be made in the performance or observance of, or shall
occur under, any covenant, agreement or provision contained in Article VII or
Sections 6.9(d), 6.13, 6.14, 8.1, 8.2, 8.5, 8.6, 8.9, 8.10 or 8.12 hereof;
(c) if default shall be made by either Borrower in the performance or
observance of, or shall occur under, any other covenant, agreement or provision
of this Agreement (other than Section 6.7 hereof) and such default shall not
have been remedied within 30 days after such failure shall first have become
known to any officer of either Borrower;
(d) if default shall be made by either Borrower in the performance or
observance of, or shall occur under, any covenant, agreement or provision of any
other Loan Document or in any other agreement, instrument or document delivered
to the Agent, the Swing Line Lender or the Banks and such default shall not have
been remedied within such grace or cure period, if any, as may be provided
therefor;
(e) if a Default or an Event of Default shall occur and continue under and
as defined in that certain Amended and Restated Loan Agreement dated as of
December 24, 1997 by and among MFC's Subsidiary, Medallion Funding, the Lenders
party thereto, Fleet Bank, National Association, as Swing Line Lender,
Administrative Agent, Arranger and Collateral Agent and the Bank of New York as
Documentation Agent, as the same has been or may hereafter be amended, modified,
or supplemented from time to time;
(f) if either Borrower shall (i) default in the payment of any principal,
interest or premium with respect to any Indebtedness for borrowed money or any
obligation which is the substantive equivalent thereof in excess of $250,000,
other than Indebtedness under the Revolving Credit Loans, the Swing Line Loans,
or the Term Loans, and such default shall continue for more than the period of
grace, if any, therein specified or (ii) default in the performance or
observance of any other term, condition or agreement contained in any such
obligation or in any agreement relating thereto if the effect thereof is to
cause, or permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become due prior
to its stated maturity;
(g) if any representation or warranty or any other statement of fact
herein or in the other Loan Documents, or in connection with the transactions
contemplated hereby or thereby, or in any writing, certificate, report or
statement at any time furnished by either Borrower to the
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Agent, the Swing Line Lender or any Bank pursuant to or in connection with this
Agreement or the other Loan Documents shall prove to have been false or
misleading in any material respect when made;
(h) if either Borrower shall file a petition or seek relief under or take
advantage of any insolvency law; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver, trustee,
liquidator, custodian or conservator of itself or of the whole or substantially
all of its property; file a petition or an answer to a petition under any
chapter of the United States Bankruptcy Code, as amended (11 U.S.C. (S)101 et
seq.), or file a petition or seek relief under or take advantage of any other
similar law or statute of the United States of America, any state thereof or any
foreign country;
(i) if a court of competent jurisdiction shall enter an order, judgment or
decree appointing or authorizing a receiver, trustee, liquidator, custodian or
conservator of either Borrower or of the whole or substantially all of its
property, or enter an order for relief against either Borrower in any case
commenced under any chapter of the United States Bankruptcy Code, as amended, or
grant relief under any other similar law or statute of the United States of
America, any state thereof or any foreign country; or if, under the provisions
of any law for the relief or aid of debtors, a court of competent jurisdiction
or a receiver, trustee, liquidator, custodian or conservator shall assume
custody or control or take possession of either Borrower or of the whole or
substantially all of its property; or if there is commenced against either
Borrower any proceeding for any of the foregoing relief or if a petition is
filed against either Borrower under any chapter of the United States Bankruptcy
Code, as amended, or under any other similar law or statute of the United States
of America or any state thereof or any foreign country and such proceeding or
petition remains undismissed for a period of 60 days; or if either Borrower by
any act indicates its consent to, approval of or acquiescence in any such
proceeding or petition;
(j) if any judgment or judgments against either Borrower or any attachment
or execution against any of its property for any amount or amounts in excess of
$250,000 in the aggregate remains unpaid, unstayed, undismissed or unbonded for
a period of more than 30 days;
(k) (i) any Person shall engage in any Prohibited Transaction involving
any Plan, (ii) any Accumulated Funding Deficiency, whether or not waived, shall
exist with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Banks likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA (other than a
standard termination as defined in Section 4041(b) thereof), (v) either Borrower
or any of its ERISA Affiliates shall, or is, in the reasonable opinion of the
Agent or the Required Banks, likely to, incur any liability in connection with a
withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in case in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could subject either Borrower
to any tax,
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penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition of either
Borrower;
(1) if there shall occur any change in the Collateral or in the business
of either Borrower, or the operation, conduct or prospects thereof, that
individually or in the aggregate, could have or result in a Material Adverse
Effect and the Agent has been directed to declare such Event of Default by the
Super-majority Banks as set forth below in this Section 9.1; or
(m) if MFC is required to make, or otherwise makes, any payment pursuant
to the SBA Guaranty or in respect of the Guaranteed Obligations;
then, (A) in the case of an Event of Default described in clause (h) or (i)
above, the Aggregate Revolving Credit Commitment, the Swing Line Commitment, and
each Term Loan Commitment shall automatically terminate and (i) the unpaid
balance of the Revolving Credit Notes, the Swing Line Note, the Term Notes and
all interest accrued thereon, and (ii) any accrued and unpaid fees and expenses
due and payable hereunder or under any other Loan Document shall automatically
(without any action on the part of the Agent or the Banks and without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived) forthwith become due and payable, and, (B) in the case of an
Event of Default described in clause (l) above, at any time thereafter, if such
Event of Default shall then be continuing the following action may be taken: the
Agent, upon the direction of the Super-majority Banks, shall, declare (i) the
Aggregate Revolving Credit Commitment, the Swing Line Commitment and all Term
Loan Commitments to be terminated, whereupon the obligation of the Agent, the
Banks and the Swing Line Lender to make further Revolving Credit Loans or Term
Loans or Swing Line Loans, as the case may be, hereunder shall terminate
immediately and (ii) the Revolving Credit Notes, Swing Line Note and Term Notes
to be due and payable, whereupon the maturity of the then unpaid balance of the
Revolving Credit Notes, Swing Line Note and Term Notes shall be accelerated and
the same, and all interest accrued thereon and any accrued and unpaid fees and
expenses due and payable hereunder, shall forthwith become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, anything contained herein or in Revolving Credit Notes,
Swing Line Note or Term Notes to the contrary notwithstanding, and, (C) in the
case of any other Event of Default, then and in any such event, and at any time
thereafter, if such or any other Event of Default shall then be continuing the
following action may be taken: the Agent may (but shall not be obligated to),
and upon the direction of the Required Banks shall, declare (i) the Aggregate
Revolving Credit Commitment, the Swing Line Commitment and all Term Loan
Commitments to be terminated, whereupon the obligation of the Agent, the Banks
and the Swing Line Lender to make further Revolving Credit Loans or Term Loans
or Swing Line Loans, as the case may be, hereunder shall terminate immediately
and (ii) the Revolving Credit Notes, Swing Line Note and Term Notes to be due
and payable, whereupon the maturity of the then unpaid balance of the Revolving
Credit Notes, Swing Line Note and Term Notes shall be accelerated and the same,
and all interest accrued thereon and any accrued and unpaid fees and expenses
due and payable hereunder, shall forthwith become due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, anything contained herein or in Revolving Credit Notes, Swing
Line Note or Term Notes to the contrary notwithstanding.
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Section 9.2 Suits for Enforcement.
----------- ---------------------
In case any one or more Events of Default shall occur and be continuing,
the Agent may (but shall not be obligated to), and at the request of the
Required Banks shall, proceed to protect and enforce the rights or remedies of
the Agent, the Swing Line Lender and the Banks either by suit in equity or by
action at law, or both, whether for the specific performance of any covenant,
agreement or other provision contained herein, in the other Loan Documents, or
in any document or instrument delivered in connection with or pursuant to this
Agreement or the other Loan Documents or to enforce the payment of the Notes or
any other legal or equitable right or remedy.
Section 9.3 Rights and Remedies Cumulative.
----------- ------------------------------
No right or remedy herein conferred upon the Banks, the Swing Line Lender
or the Agent is intended to be exclusive of any other right or remedy contained
herein or in the other Loan Documents or in any instrument or document delivered
in connection with or pursuant to this Agreement or the other Loan Documents,
and every such right or remedy shall be cumulative and shall be in addition to
every other such right or remedy contained herein and therein or now or
hereafter existing at law or in equity or by statute, or otherwise.
Section 9.4 Rights and Remedies Not Waived.
----------- ------------------------------
No course of dealing between either Borrower and any of the Banks, the
Swing Line Lender or the Agent or any failure or delay on the part of any Bank,
the Swing Line Lender or the Agent in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of such or any
other Bank, the Swing Line Lender or the Agent and no single or partial exercise
of any rights or remedies hereunder shall operate as a waiver or preclude the
exercise of any other rights or remedies hereunder.
Section 9.5 Further Payments.
----------- ----------------
In the event that the Revolving Credit Commitments, the Swing Line
Commitment and the Term Loan Commitments shall have been terminated or the
Revolving Credit Loans, Swing Line Loans and the Term Loans and all other
amounts owing under the Loan Documents shall have been declared due and payable
pursuant to the provisions of this Section, any funds received by the Agent, the
Swing Line Lender and the Banks from or on behalf of the Borrowers shall be
remitted to, and applied by, the Agent in the following manner and order: (a)
first, to the payment of interest on, and then the principal portion of, any
Revolving Credit Loans or Term Loans which the Agent may have advanced on behalf
of any Bank for which the Agent has not then been reimbursed by such Bank or the
Borrowers; (b) second, to reimburse the Agent and the Swing Line Lender for any
expenses due from the Borrowers pursuant to the provisions of Section 10.6, (c)
third, to the payment of the outstanding principal amount of the Swing Line
Loans (together with all interest thereon), (d) fourth, to the payment of the
Fees, (e) fifth, to the payment of any other fees, expenses or amounts (other
than the principal of and interest on the Revolving Credit Loans, Swing Line
Loans or Term Loans) payable by the Borrowers to the Agent, the Swing Line
Lender or any of the
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Banks under the Loan Documents, (f) sixth, to the payment, pro rata according to
the Exposure Percentage of each Bank, of interest due on the Revolving Credit
Loans and Term Loans, (g) seventh, to the payment, pro rata according to
Exposure Percentage of each Bank, of principal on the Revolving Credit Loans and
Term Loans, of such principal, (h) eighth, any remaining funds shall be paid to
whomsoever shall be entitled thereto or as a court of competent jurisdiction
shall direct.
ARTICLE 10 MISCELLANEOUS
Section 10.1 Collection Costs.
------------ ----------------
In the event that the Banks, the Swing Line Lender or the Agent or any of
them shall retain or engage an attorney or attorneys to collect or enforce or
protect its interests with respect to this Agreement, any of the other Loan
Documents, or any instrument or document delivered pursuant to this Agreement or
the other Loan Documents, including, without limitation, each of the documents
referred to in Section 5.1 hereof, or to protect the rights of any holder or
holders with respect thereto, the Borrowers shall pay, within 10 days after
demand therefor, all of the costs and expenses of such collection, enforcement
or protection, including reasonable attorneys' fees actually incurred
(including, without limitation, the reasonable allocated costs of in-house
counsel) and disbursements, and the Agent on behalf of such Banks, the Agent on
behalf of the Swing Line Lender, the Swing Line Lender, the Agent or the holders
of such Notes, as the case may be, may take judgment for all such amounts, in
addition to the unpaid principal balance of the Notes and accrued interest
thereon and any accrued and unpaid fees and expenses due and payable hereunder.
Section 10.2 Modification and Waiver.
------------ -----------------------
With the written consent of the Required Lenders, the Agent and the
Borrowers may, from time to time, enter into written amendments, supplements or
modifications of the Loan Documents and, with the consent of the Required
Lenders, the Agent on behalf of the Banks and the Swing Line Lender may execute
and deliver to the Borrowers a written instrument waiving or a consent to a
departure from, on such terms and conditions as the Agent may specify in such
instrument, any of the requirements of the Loan Documents or any Default and its
consequences; provided, however, that:
-------- -------
(a) no such amendment, supplement, modification, waiver or consent shall,
without the consent of all of the Banks, (i) increase the Revolving Credit
Commitment or Term Loan Commitment of any Bank or the Aggregate Revolving Credit
Commitment, (ii) decrease the rate or extend the time of payment of interest on,
or change or forgive the principal amount or extend the time of payment of, any
Revolving Credit Loan or Term Loan, or decrease the rate, or extend the time of
payment, of the Facility Fee, (iii) change the provisions of Sections 3.3, 9.1,
this 10.2, or 10.9, change the definition of "Eligible Loan," "Required Banks,"
"Event of Default," "Prime Rate," "Adjusted LIBO Rate" "Revolving Credit
Commitment Periods," "Revolving Credit Loans," "Term Loans," "Term Loan
Commitment" or any defined terms included in such definitions, (iv) change any
of the provisions of Article II (other than Section 2.14 thereof) or Article III
hereof, or (v) change the MFC Security Agreement or the MBC Security Agreement
or release all or
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substantially all of the Collateral, or (vi) change any provision hereof which
expressly requires the consent, approval or waiver by all Banks;
(b) without the written consent of the Agent, no such amendment,
supplement, modification or waiver shall amend, modify or waive any provision of
Article 11 or otherwise change any of the rights or obligations of the Agent
hereunder or under the Loan Documents;
(c) without the written consent of the Swing Line Lender, no such
amendment, supplement, modification or waiver shall change the Swing Line
Commitment or change any other term or provision that relates to the Swing Line
Commitment or the Swing Line Loans; and
(d) none of the following shall require the consent, authorization or
approval of the Borrowers: (i) amendment or modification of any agreement to
which neither Borrower is a party, and (ii) with respect to the agency
relationship between the Agent and the Banks, Article XI (other than Section
11.4) hereof.
Any such amendment, supplement, modification or waiver shall apply equally
to the Agent, the Swing Line Lender, and each of the Banks and shall be binding
upon the parties to the applicable Loan Document, the Banks, the Swing Line
Lender and all future holders of the Revolving Credit Loans, Term Loans and/or
Swing Line Loans. In the case of any waiver, the parties to the applicable Loan
Document, the Banks, the Swing Line Lender and the Agent shall be restored to
their former position and rights hereunder and under the Loan Documents to the
extent provided for in such waiver, and any Default waived shall not extend to
any subsequent or other Default, or impair any right consequent thereon. The
Loan Documents may not be amended orally or by any course of conduct. No notice
to or demand on either Borrower in any case shall entitle either Borrower to any
other or further notice or demand in similar or other circumstances.
Section 10.3 GOVERNING LAW.
------------ -------------
THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE SWING LINE NOTE AND THE
TERM NOTES AND THE RIGHTS AND DUTIES OF THE PARTIES THEREUNDER AND WITH RESPECT
TO INTEREST, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE TO
THE EXERCISE OF REMEDIES OR THE PERFECTION OF SECURITY INTERESTS UNDER THE UCC.
Section 10.4 Notices.
------------ -------
All notices, requests, consents, demands or other communications provided
for herein shall be in writing and shall be deemed to have been given (i) five
Business Days after the date mailed if sent by registered or certified mail,
postage prepaid, return receipt requested, or (ii) on the day of delivery if
personally delivered or sent by overnight courier service, or (iii) on the day
of transmission if sent by telecopier and confirmed, on the same day as such
notice is sent, by
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telephonic notice or by one of the other two methods listed above, and shall be
addressed, as the case may be, as follows: to the Agent at its address set forth
on Exhibit A, with a copy to ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
---------
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.), Telecopier No. (212)
238-3100, and to any Bank at its address specified for such Bank on Exhibit A;
---------
and to the Borrowers c/o Medallion Financial Corp., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive
Officer and ▇▇▇▇▇▇ ▇▇▇▇▇, Treasurer and Chief Financial Officer), Telecopier No.
(▇▇▇) ▇▇▇-▇▇▇▇, or to such other person or address as either party shall
designate to the other from time to time in writing forwarded in like manner.
Section 10.5 Accounting Terms.
------------ ----------------
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP, consistently applied. Where any accounting determination
or calculation is required to be made under this Agreement, such determination
or calculation (unless otherwise provided) will be made in accordance with GAAP,
consistently applied except that if because of a change in GAAP, the Borrowers
would have to alter a previously utilized accounting method or policy in order
to remain in compliance with GAAP, such determination or calculation will
continue to be made in accordance with the Borrowers' previous accounting
methods or policy. Unless otherwise specified herein all financial statements
required to be delivered hereunder, shall be prepared and all financial records
shall be maintained in accordance with GAAP.
Section 10.6 Costs and Expenses; Indemnity.
------------ -----------------------------
(a) The Borrowers agree to pay on demand all reasonable out-of-pocket
costs and expenses incurred by the Banks, the Swing Line Lender and the Agent in
connection with the preparation, administration, filing and recording of any
amendments, waivers or consents which may be requested by the Borrowers, all
out-of-pocket costs and expenses, if any, in connection with the preparation,
administration and enforcement (whether in the context of a civil action,
adversary proceeding, workout or otherwise) of this Agreement, the other Loan
Documents, and such other instruments and documents, including, without
limitation, reasonable attorneys' fees actually incurred, audit charges
(provided, that audit charges will be subject to a cap agreed to between the
--------- ----
Agent and the Borrowers prior to the audit being conducted), appraisal fees,
search fees and filing fees and all out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys' fees) of the Agent in connection with
its duties as Agent under this Agreement, the MFC Security Agreement, the MBC
Security Agreement and the other Loan Documents. The Borrowers also agree to
pay on demand all reasonable attorneys' fees actually incurred, and any
expenses, costs and charges relating thereto of the Agent if at any time or
times hereafter the Agent employs counsel for advice with respect to this
Agreement or the other Loan Documents, or to intervene, file a petition, answer,
motion or other pleading in any suit or proceeding relating to this Agreement or
any other Loan Document (including, without limitation, the interpretation or
administration, or the amendment, waiver or consent with respect to any term, of
this Agreement or the other Loan Documents) or to represent the Agent in any
pending or threatened litigation with respect to the affairs of the Borrowers in
any way relating to any of the Borrowers' obligations hereunder or to
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enforce any rights of the Agent or any Bank or the Swing Line Lender or
liabilities of the Borrowers, any Person to whom either Borrower has made a
Loan, or any Person which may be obligated to the Agent or the Banks or the
Swing Line Lender by virtue of this Agreement or any other Loan Document,
instrument or document now or hereafter delivered to the Agent or any Bank or
the Swing Line Lender by or for the benefit of the Borrowers. The Borrowers
agree to be responsible for payment of the amounts referred to in this Section
10.6(a) whether or not any Revolving Credit Loans, Swing Line Loans or Term
Loans are made hereunder.
(b) The Borrowers further agree to indemnify and save harmless each Bank,
the Swing Line Lender and the Agent and each of their respective officers,
directors, employees, agents and Affiliates (each an "Indemnified Party" and
-----------------
collectively the "Indemnified Parties") from and against any and all actions,
-------------------
causes of action, suits, losses, liabilities and damages and expenses
(including, without limitation, reasonable attorneys' fees actually incurred) in
connection therewith (herein called the "Indemnified Liabilities") incurred by
-----------------------
any Indemnified Party as a result of, or arising out of or relating to any of
the transactions contemplated hereby or by the other Loan Documents, except for
any Indemnified Liabilities arising on account of the gross negligence or
willful misconduct of the Indemnified Party seeking indemnity under this Section
10.6(b); provided, however, that, if and to the extent such agreement to
-------- -------
indemnify may be unenforceable for any reason, the Borrowers shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which shall be permissible under applicable law. The agreements in
this Section 10.6(b) shall survive the payment of the Revolving Credit Notes,
the Swing Line Note and the Term Notes and related obligations and the
termination of the Revolving Credit Commitment, Swing Line Commitment and Term
Loan Commitment.
Section 10.7 WAIVER OF JURY TRIAL AND SETOFF.
------------ -------------------------------
EACH OF MFC, MBC, THE AGENT, THE SWING LINE LENDER AND EACH BANK 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 LOAN DOCUMENTS OR
ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE, HOWSOEVER ARISING, BETWEEN
EITHER OR BOTH BORROWERS AND ANY OF THE BANKS, THE SWING LINE LENDER OR THE
AGENT, BETWEEN ANY BANKS, AND BETWEEN THE AGENT AND/OR ANY BANKS; AND EACH
BORROWER HEREBY WAIVES THE RIGHT TO INTERPOSE ANY SETOFF, COUNTERCLAIM OR CROSS-
CLAIM IN CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH
SETOFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SETOFF, COUNTERCLAIM OR CROSS-
CLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS,
BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION).
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Section 10.8 Captions.
------------ --------
The captions of the various sections and paragraphs of this Agreement have
been inserted only for the purpose of convenience; such captions are not a part
of this Agreement and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Agreement.
Section 10.9 Lien; Setoff by Banks.
------------ ---------------------
(a) Each Borrower hereby grants to the Agent, the Swing Line Lender and
the Banks a continuing lien for its Indebtedness to each of the Agent, the Swing
Line Lender and the Banks upon any and all monies, securities and other property
of such Borrower and the proceeds thereof, now or hereafter held or received by
or in transit to, the Agent, the Swing Line Lender or any of the Banks from or
for such Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general or special)
and credits of such Borrower with, and any and all claims of such Borrower
against the Swing Line Lender or the Banks, at any time existing. Upon the
occurrence of any Event of Default, the Agent, the Swing Line Lender and the
Banks are hereby authorized at any time and from time to time, without notice to
the Borrowers, to setoff, appropriate and apply any or all items hereinabove
referred to with respect to each Borrower against all Indebtedness of such
Borrower to the Agent, the Swing Line Lender and the Banks, whether under this
Agreement, the Revolving Credit Notes, the Term Notes, the Swing Line Note or
otherwise, and whether now existing or hereafter arising. The Agent, the Swing
Line Lender and each Bank agree promptly to notify the Borrowers after any such
set-off and application is made by such Bank or Swing Line Lender, as the case
may be, provided, that, the failure to give such notice shall not affect the
-------- ----
validity of such setoff and application.
(b) Each holder of a Note agrees that if it shall, through the exercise of
a right of banker's lien, setoff, counterclaim or otherwise, obtain payment with
respect to any Note which results in its receiving more than its pro rata share
--------
of the aggregate payments or reductions of all Notes (based on such holder's
Exposure Percentage), it shall forthwith purchase from such other holders a
participation in all of the Notes held by such other holders so that the amount
of all unpaid Notes and participations therein held by all holders shall be pro
---
rata (based on each holder's Exposure Percentage).
----
(c) Each Borrower expressly consents to the foregoing arrangements in
Section l0.9(b) and agree that any holder of a participation in a Note so
acquired may exercise any and all rights of banker's lien, setoff, counterclaim
or otherwise with respect to any and all monies owing by such holder to such
Borrower as fully as if such holder were a holder of a Note in the amount of
such participation. If all or any portion of any such excess payment is
thereafter recovered from the holder which received the same, the purchase
provided for in Section l0.9(b) shall be rescinded to the extent of such
recovery, without interest.
(d) Each Bank and the Swing Line Lender agrees that if and to the extent
that any amount received by the Agent, the Swing Line Lender or any Bank from a
Borrower or any other
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obligor or from the Collateral is subsequently invalidated, declared to be
fraudulent or preferential, set aside or judicially required to be repaid to a
trustee, receiver or any other Person under any applicable creditors' remedy
proceeding, including without limitation any bankruptcy proceeding, the other
Banks hereto shall purchase from the Bank or Swing Line Lender from which said
amount is recovered an additional participation in such amount equal to such
Bank's Exposure Percentage of that amount. The amount invalidated, declared to
be fraudulent or preferential, set aside or judicially required to be repaid to
a trustee, receiver or any other person under any applicable creditors' remedy
proceeding shall be deemed to be an amount immediately due and owing from such
Borrower.
Section 10.10 Security; Continued Effectiveness.
------------- ---------------------------------
(a) As security for the payment of any and all sums owing under the Notes
and all other obligations of MBC hereunder and the other Loan Documents, MBC
shall execute and deliver to the Agent, the Banks and the Swing Line Lender, on
the Restatement Effective Date the MBC Security Agreement, and grant to the
Agent, on behalf of the Banks and the Swing Line Lender, a security interest in
all of its interests in the Collateral and Underlying Collateral described
therein and cause to be properly filed in all pertinent jurisdictions the
additional Borrower Financing Statements contemplated by Section 5.1(a)(iv).
(b) The MFC Security Agreement continues to be effective to create in
favor of the Agent, for the ratable benefit of the Banks and the Swing Line
Lender, a valid and perfected first priority (except as otherwise permitted
hereunder) security interest in and to the Collateral described therein securing
the payment of the Revolving Credit Loans of MFC, Swing Line Loans of MFC and
Term Loans of MFC and all other sums payable by MFC under or in connection with
the Loan Documents, whether incurred prior to or after the Restatement Effective
Date, and MFC hereby reconfirms its obligations thereunder. No transfers of the
proceeds of the Revolving Credit Loans, Swing Line Loans or Term Loans were made
by MFC to BL prior to the Restatement Effective Date and the Intercompany Demand
Loan Documents have been terminated.
Section 10.11 Jurisdiction; Service of Process.
------------- --------------------------------
Each Borrower hereby irrevocably consents to the non-exclusive jurisdiction
of the courts of the State of New York, County of New York and of any Federal
Court located in the Southern District of New York, and agrees that venue in
each of such Courts is proper, in connection with any action or proceeding
arising out of or relating to this Agreement, the other Loan Documents, or any
document or instrument delivered pursuant to this Agreement or the other Loan
Documents. In any such action or proceeding, each Borrower waives personal
service of any summons, complaint or other process and agrees that the service
thereof may be made by certified or registered mail directed to the Borrowers at
the address set forth in Section 10.4 hereof. Nothing herein shall affect the
right of the Agent, the Swing Line Lender or any Bank to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against a Borrower in any other jurisdiction.
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Section 10.12 Benefit of Agreement.
------------- --------------------
This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Agent, the Swing Line Lender and the Banks and their respective
successors and assigns, and all subsequent holders of the Notes except that the
obligation of the Banks to make Revolving Credit Loans or Term Loans hereunder
and the obligation of the Swing Line Lender to make any Swing Line Loan
hereunder shall not inure to the benefit of any successors or assigns of either
Borrower.
Section 10.13 Counterparts.
------------- ------------
This Agreement may be executed by the parties hereto individually or in any
combination, in one or more counterparts, each of which shall be an original and
all of which shall together constitute one and the same agreement.
Section 10.14 Interest.
------------- --------
(a) Usury Limitation. It is the intention of the parties hereto to
----------------
conform strictly to the usury laws now in force in the appropriate controlling
jurisdiction. Accordingly, if the transactions contemplated hereby would be
usurious, under any controlling law, then, in that event, notwithstanding
anything to the contrary in this Agreement, the Notes or any other instrument or
agreement entered into in connection therewith, it is agreed as follows: (i) the
aggregate of all charges which constitute interest under the laws of the
controlling jurisdiction that are contracted for, chargeable or receivable under
this Agreement or under any of the other aforesaid instruments or agreements or
otherwise in connection with the Notes ("Interest") shall under no circumstances
--------
exceed the maximum amount of interest permitted by law (the "Maximum Amount"),
--------------
and any Interest in excess of the Maximum Amount shall be cancelled
automatically and shall not be payable under this Agreement, the Notes or the
aforesaid instruments or agreements and, if theretofore paid, shall be either
refunded to the Borrowers or credited ratably on the principal of the Notes; and
(ii) in the event that the maturity of the Notes is accelerated by reason of an
election of the Required Banks resulting from any Event of Default under this
Agreement or otherwise, or in the event of any voluntary or mandatory prepayment
by the Borrowers permitted or required by this Agreement, the Notes or any of
the other aforesaid instruments or agreements, then Interest may never include
more than the Maximum Amount, and excess Interest, if any, shall be cancelled
automatically as of the date of such acceleration or prepayment, and if
theretofore paid, shall be either refunded to the Borrowers or credited ratably
on the principal of the Notes; provided, that, nothing contained in this Section
10.14 shall be deemed to imply that the laws of any State other than the State
of New York shall govern this Agreement or the Notes.
(b) Recapture. If, at any time, Interest would exceed the Maximum Amount
---------
but for the foregoing limitation, Interest shall remain at the Maximum Amount,
notwithstanding any subsequent reduction of Interest, until the total amount of
Interest equals the amount of Interest which would have accrued if Interest had
not been limited to the Maximum Amount, but nothing in this paragraph shall
affect or extend the maturity of any of the Notes. If, at maturity or final
payment of any of the Notes, the total amount of Interest paid is less than the
total amount of
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Interest which would have accrued had Interest not been limited to the Maximum
Amount, the Borrowers agree, to the full extent permitted by law, to pay to the
Agent for the ratable benefit of the Banks and the Swing Line Lender, as the
case may be, an amount equal to the positive difference, if any, derived by
subtracting (x) the amount of Interest which accrued on the Notes pursuant to
the provisions of the foregoing two paragraphs from (y) the lesser of (i) the
amount of Interest which would have accrued on such Notes if the Maximum Amount
had at all times been in effect, and (ii) the amount of Interest which would
have accrued if Interest on such Notes, not limited to the Maximum Amount, had
at all times been in effect.
Section 10.15 Attorneys' Fees.
------------- ---------------
As used in this Agreement, "attorneys' fees" shall include, without
limitation, all reasonable fees of counsel (including, without limitation, those
incurred on appeals) actually incurred arising from such services and all
reasonably incurred expenses, costs, charges and other fees of such counsel, and
all such fees shall constitute Indebtedness of the Borrowers to the Agent, the
Swing Line Lender and the Banks under this Agreement. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
paralegal fees, costs and expenses; accountants' fees, costs and expenses; court
costs and expenses; photocopying and duplicating expenses; long distance
telephone charges; air express and courier charges; telegram charges;
secretarial overtime charges; and, expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal services.
Section 10.16 Severability.
------------- ------------
Any provision of this Agreement prohibited by the laws of any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, or modified to conform with such laws, without invalidating the
remaining provisions of this Agreement, and any such prohibition in any
jurisdiction shall not invalidate such provisions in any other jurisdiction.
Section 10.17 Confidentiality.
------------- ---------------
The Agent, the Swing Line Lender and each Bank are hereby authorized to
deliver a copy of any financial statement or any other information relating to
the business, operations or financial condition of either or both of the
Borrowers which may be furnished to it hereunder or otherwise, to any regulatory
body or agency having jurisdiction over the Agent, the Swing Line Lender or such
Bank or to any Person which shall, or shall have any right or obligation to,
succeed to all or any part of the interest of the Agent, the Swing Line Lender
or such Bank in, this Agreement, the other Loan Documents and any security
herein or therein provided for or otherwise securing the Notes. Except as
provided above, the Agent, the Swing Line Lender and the Banks agree that from
the date hereof, they will not, without the prior written consent of the
Borrowers, submit or disclose to or file with any Person other than the Agent,
the Swing Line Lender or a Bank or any of its or such Bank's Affiliates or a
Person that may become a Bank, or such Person's Affiliates, any confidential or
non-public information relating to either Borrower, except where disclosure may
be required by
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law or pursuant to valid legal process, or where such disclosure is to such
Person's professionals or regulators.
Section 10.18 Loss, Theft, Etc. of Notes.
------------- --------------------------
Upon receipt by the Borrowers of (i) an affidavit of an authorized officer
of any Bank or the Swing Line Lender setting forth the fact of loss, theft or
destruction of any Note and of its ownership of the Note at the time of such
loss, theft or destruction or (ii) a mutilated Note, such affidavit or mutilated
Note shall be accepted as satisfactory evidence thereof and no further indemnity
shall be required as a condition to the execution and delivery of a new Note of
like tenor in lieu of such lost, stolen, destroyed or mutilated Note without
expense to the holder thereof, provided that such Bank, or the Swing Line
Lender, as the case may be, agrees in writing to indemnify the Borrowers from
all expenses, claims and liabilities (including without limitation, reasonable
attorneys' fees actually incurred) in the defense of any such claims resulting
from the loss, theft, destruction or mutilation of the old Note and the
execution and delivery of the new Note.
ARTICLE 11 AGENCY
Each Borrower, the Banks and the Swing Line Lender agree with the Agent as
follows:
Section 11.1 Appointment and Actions.
------------ -----------------------
(a) Each of each Bank and the Swing Line Lender hereby irrevocably
designates and appoints Fleet Bank, National Association as the Agent of such
Bank and the Swing Line Lender under the Loan Documents (including any
additional documents referred to therein as "Loan Documents"), and each of such
--------------
Bank and the Swing Line Lender hereby irrevocably authorizes the Agent to take
such action on its behalf under the provisions hereof and thereof and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms hereof and thereof together with such other powers as are
reasonably incidental thereto. The Agent shall hold the security pledged under
the MFC Security Agreement and the MBC Security Agreement in accordance with the
terms thereof. Notwithstanding any provision to the contrary in this Agreement
or any of the other Loan Documents, the Agent shall not have any duties or
responsibilities except those expressly set forth herein or therein, nor any
fiduciary relationship with any Bank or the Swing Line Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the Agent.
(b) The Agent may execute any of its duties by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
(c) Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such person under or in
connection with any of the Loan Documents (except for its or such person's own
gross negligence or willful misconduct), or (ii) responsible in any manner to
any Bank
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or the Swing Line Lender or any Participant for any recitals, statements,
representations or warranties made by either Borrower contained herein or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with any of the Loan Documents,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of either Borrower
to perform its obligations under any of the Loan Documents. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of any of the Loan Documents, or to inspect the properties, books or records of
either Borrower.
(d) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to a Borrower), independent accountants and other experts selected by the Agent.
The Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent.
(e) The Agent shall be fully justified in failing or refusing to take any
action under any of the Loan Documents unless it shall first receive such advice
or concurrence of the Banks as it deems appropriate or as required by the
specific terms of this Agreement or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under any of the Loan Documents in accordance with a request of the
Required Banks (or all Banks if specifically required by the terms of this
Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks, the Swing Line Lender and all
future holders of the Notes and all Participants.
(f) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default or any default under any document,
agreement or instrument delivered in connection therewith, unless the Agent
shall have actual knowledge thereof or shall have received notice from any Bank
or either Borrower, describing such event, act or condition, Default or Event of
Default and stating that such notice is a "notice of default." In the event
that the Agent has such actual knowledge or receives such a notice, the Agent
shall give notice thereof to the Swing Line Lender and the Banks. The Agent
shall take such action with respect to such event, act or condition or Default
or Event of Default as shall be reasonably directed by the Required Banks (or
all Banks if specifically required by the terms of this Agreement) in writing;
provided, that, unless and until the Agent shall have received such directions,
-------- ----
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such event, act or condition, Default or
Event of Default as it shall deem advisable in the best interests of the Banks
and the Swing Line Lender.
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(g) Until such time as the Agent shall have been notified in writing duly
executed on behalf of any Bank by an officer thereof duly authorized to take
such action, that such Bank has sold all or a portion of the Revolving Credit
Loans or the Term Loans made by, or Revolving Credit Commitment or Term Loan
Commitment of, such Bank, the Agent may treat such Bank as the owner or holder
of such Bank's share of the Revolving Credit Loans or Aggregate Revolving Credit
Commitment, or of such Bank's Term Loan or Term Loan Commitment, as applicable,
in accordance with the percentages thereof advanced by such Bank. The foregoing
shall also apply to the Swing Line Lender with respect to the Swing Line Loans
and the Swing Line Commitment.
(h) At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other Persons, either to act as co-agent or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Banks with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of this Article XI).
(i) Each Bank party to the Original Agreement expressly consented to the
Agent's, on behalf of such Bank, entering into the MFC Security Agreement and
each other Bank expressly agrees that the Agent shall act as agent for such Bank
in connection therewith. Each Bank expressly (i) consents to the Agent's, on
behalf of such Bank, entering into the MBC Security Agreement, provided the MBC
Security Agreement is substantially similar to the form of such document
attached as an Exhibit hereto and (ii) agrees that to the extent either the MFC
Security Agreement or the MBC Security Agreement expressly imposes any
obligation on any Bank it shall comply with each such obligation.
Section 11.2 Independent Credit Decisions.
------------ ----------------------------
Each Bank and the Swing Line Lender expressly acknowledges that neither the
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of either Borrower shall be deemed to constitute any representation or
warranty by the Agent to any Bank or the Swing Line Lender. Each of each Bank
and the Swing Line Lender represents to the Agent that it has, independently and
without reliance upon the Agent, or the Swing Line Lender, or the other Banks,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of each Borrower and made its
own decision to enter into this Agreement. Each of each Bank and the Swing Line
Lender also represents that it will, independently and without reliance upon the
Agent, the Swing Line Lender, or the other Banks, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
hereunder, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of each Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks
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and/or the Swing Line Lender by the Agent hereunder, the Agent shall have no
duty or responsibility to provide any Bank or the Swing Line Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of either Borrower which may
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates, provided that the Agent
shall supply the Banks and the Swing Line Lender with a copy of any financial
audit of the Borrowers actually received by the Agent.
Section 11.3 Indemnification of Agent.
------------ ------------------------
Each Bank jointly and severally agrees to indemnify Fleet in its capacity
as Agent (to the extent not reimbursed by the Borrower), ratably according to
its percentage of the sum of (i) the Aggregate Revolving Credit Commitment and
(ii) the principal amount of the outstanding Term Loans from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following the payment of any of
the Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided that no
Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's bad faith, willful
misconduct or gross negligence. The agreements in this subsection shall survive
the payment of the Notes and the related obligations and the termination of the
Revolving Credit Commitment, the Swing Line Commitment and the Term Loan
Commitment.
Section 11.4 Resignation and Succession.
------------ --------------------------
The Agent may resign as Agent upon ten days' written notice to the Banks,
the Swing Line Lender and the Borrowers, provided, however, that such
-------- -------
resignation shall not become effective until a successor agent shall have
accepted its appointment hereunder; and provided, further, that if no successor
shall have so accepted within 30 days from the date of such notice, the Agent
may apply to a court of competent jurisdiction for the appointment of a
successor agent. If the Agent shall resign as Agent, then the Borrowers (or the
Required Banks, if the Borrowers fail to do so) shall appoint a successor agent,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such successor agent effective upon
-----
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of the
Notes. Any such successor agent selected by the Borrowers shall require the
prior written consent of the Required Banks, which consent shall not be
unreasonably withheld. Any successor agent must be a bank or trust company
incorporated and doing business within the United States of America having a
combined capital and surplus of at least $250,000,000. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. In the event that the Agent becomes subject
to the receivership of the
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Federal Deposit Insurance Corporation or any successor entity, such receiver
commences the liquidation of the Agent, and Banks holding at least 10% of the
sum of the Aggregate Revolving Credit Commitment plus the amount of all Term
Loans then outstanding request the Agent to resign because of such receivership,
the Agent's agency under this Agreement shall terminate.
ARTICLE 12 SALES AND TRANSFERS
Section 12.1 Sales and Transfers.
------------ -------------------
(a) Subject to the provisions of this Section 12.1, any Bank may execute
an assignment and acceptance, which assignment and acceptance shall be
substantially in the form of Exhibit I hereto (herein individually called an
---------
"Assignment" and collectively called the "Assignments"), whereby such Bank
---------- -----------
(herein individually called an "Assignor" and collectively called the
--------
"Assignors") shall assign, without recourse and without representation or
---------
warranty except as specifically set forth in said Assignment, to one or more
banks or other entities (herein individually called an "Assignee" and
--------
collectively called the "Assignees") all or any part of the Assignor's rights
---------
and benefits, and delegate all or any part of the Assignor's obligations, under
this Agreement, such Assignor's Revolving Credit and/or Term Loan Commitment,
the Revolving Credit Loans and Term Loans and the Notes.
(b) Any Assignment pursuant to this Section 12.1 shall (i) be in an
aggregate principal amount of not less than $5,000,000; (ii) be of a constant,
and not a varying percentage of the Assignor's rights and obligations under the
Loan Documents; (iii) require the prior written consent of the Borrowers, which
consent shall not be unreasonably withheld (it being the understanding of the
parties hereto that a refusal to consent to an Assignment to an entity which is
a significant competitor of either Borrower shall not be considered
unreasonable); provided, that, such consent shall not be required if a Default
shall have occurred and then be continuing, or such Assignee is a subsidiary or
affiliate of such Assignor, or such Assignee is a subsidiary or affiliate of
another Bank, or such Assignee is another Bank; (iv) require the prior written
consent of the Agent and the Swing Line Lender, which consent shall not be
unreasonably withheld; provided, that, such consent shall not be required if
such Assignee is another Bank; (v) be subject to the requirement that after
giving effect to such Assignment, the Revolving Credit Commitment and Term Loan
Commitment of such Assignor remaining is not less than $5,000,000 and (vi) be
subject to the delivery to the Agent of an Assignment signed by the Assignor and
the Assignee, along with an assignment fee in the sum of $3,500 for the account
of the Agent.
(c) Upon execution, delivery and acceptance of each Assignment and the
satisfaction of the conditions set forth in subclauses (a) and (b) above, from
and after the effective date specified therein, which effective date shall be at
least five Business Days after the execution thereof, the Borrowers, the Agent,
and the Banks agree that, to the extent of any such Assignment,
(i) the Assignee shall, in addition to any rights, benefits and
obligations hereunder held by it immediately prior to such effective date, have
the rights, benefits and obligations of a Bank under this Agreement, the
Assignor's Revolving Credit and/or Term Loan
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Commitment, the Revolving Credit Loans, the Term Loans and the Notes as it would
have if it were a Bank hereunder to the extent that the same have been assigned
and delegated to it pursuant to such Assignment, and
(ii) the Assignor shall, to the extent that rights, benefits and
obligations hereunder have been assigned and delegated by it pursuant to such
Assignment, relinquish its rights and benefits and be released from its
obligations under this Agreement (and, in the case of an Assignment covering all
or the remaining portion of the Assignor's rights, benefits and obligations
under this Agreement, the Assignor shall cease to be a Bank hereunder), except
that in all cases the Assignor shall remain entitled to the rights and benefits
arising under Section 10.6, and shall remain liable with respect to any of its
obligations arising under Article XI, with respect to any matters arising prior
to the effective date of any such Assignment;
provided, that the Agent, the Borrowers and each Bank shall be entitled to
continue to deal solely and directly with the assigning Bank in connection with
the interests so assigned and delegated to the Assignee until written notice of
such Assignment, together with addresses and related information with respect to
the Assignee, shall have been given to the Agent, the Borrowers and each Bank by
the assigning Bank and the Assignee.
(c) Upon its receipt of an Assignment executed by the Assignor and an
Assignee, together with the Note(s) subject to such Assignment, the Agent shall,
if such Assignment has been completed and conforms to the requirements of this
Section 12.1, forward a photostatic copy thereof to the Borrowers. Within 5
Business Days after its receipt of a photostatic copy of such Assignment, the
Borrowers shall execute and deliver to the Agent, to be exchanged for the
applicable Note(s) delivered to the Agent by the Assignor, a new Note or new
Notes payable to the order of the Assignee in an amount equal to and of the same
type as the Note or Notes assumed by it pursuant to such Assignment and, if the
Assignor has retained a Revolving Credit Commitment or a portion of the Term
Loan hereunder, a new Revolving Credit Note or Term Note, as the case may be,
payable to the order of the Assignor in an amount equal to the Revolving Credit
Commitment or the amount of the Term Loan retained by it hereunder. Such new
Note or Notes shall be of the same type as, and in aggregate principal amount
equal to the aggregate principal amount of, such Note or Notes, shall be dated
the effective date of such Assignment, shall be payable to the order of the
Assignee and, if applicable, the Assignor, shall otherwise be in substantially
the form of such surrendered Note(s), and shall constitute Revolving Credit
Note(s) or a Term Note under this Agreement, as the case may be. Such new
Revolving Credit Note(s) or Term Note shall be in replacement and substitution
for, and not in payment of, the Revolving Credit Note(s) or Term Note delivered
to the Agent by the Assignor. The Agent shall deliver such new Revolving Credit
Note(s) or Term Note to the payee or payees thereof and shall ▇▇▇▇ the Revolving
Credit Note(s) or Term Note previously held by the Assignor as "replaced" and
shall deliver the same to the Borrower.
(d) Within five Business Days after each Assignment has been accepted by
the Agent in accordance with the terms hereof, the Borrowers and the Agent shall
revise Exhibit A hereto to set forth (i) the Percentage or amount of the Term
---------
Loan of each Assignee and such Assignee's name
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and address and (ii) the Percentage or amount of the Term Loan, if any, retained
by the Assignor, and the appropriate officer of each Borrower and the Agent
shall initial each such revision.
(e) The foregoing provisions shall be equally applicable to the Swing Line
Lender, Swing Line Note and Swing Line Commitment with such changes necessary to
conform the foregoing to the Swing Line Lender, Swing Line Note and Swing Line
Commitment.
(f) In addition to the participations provided for in this Agreement,
including those set forth in Section 2.1(c) and Section 10.9, each Bank may
grant participations in all or any part of its rights under the Loan Documents
to one or more parties that would be eligible to be an Assignee, provided that
(i) such Bank's obligations under this Agreement and the other Loan Documents
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties to this Agreement and the other Loan Documents for the performance
of such obligations, (iii) the Borrowers, the Agent, the Swing Line Bank and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement and the
other Loan Documents, (iv) no sub-participations shall be permitted without the
consent of the Borrowers and the Agent (which consent shall not be unreasonably
withheld), (v) neither the granting nor the offering of such participation would
require that any additional loss, cost or expense be borne by the Borrowers at
any time or would require any registration or qualification under any applicable
federal or state securities laws, and (vi) the voting rights of any holder of
any participation shall be limited to the those matters requiring the consent of
all Banks as set forth under Section 10.2.
(g) No Bank shall, as between and among the Borrowers, the Agent, the
Swing Line Lender and such Bank, as the case may be, be relieved of any of its
obligations under the Loan Documents as a result of any Assignment (except as
provided in Section 12.1(c)(ii)) hereof or the granting of any participation in
all or any part of its rights under the Loan Documents.
(h) Subject to Section 12.1(g) hereof, any Bank may at any time or from
time to time assign all or any portion of its rights under the Loan Documents to
a Federal Reserve Bank, provided that any such assignment shall not release such
assignor from its obligations thereunder.
Section 12.2 New Banks.
------------ ---------
Any financial institution approved by the Borrowers, the Agent and the
Required Banks may join this Agreement as an additional Bank (such Person being
herein referred to as the "New Bank") and be entitled to all the rights and
--------
interests and obligated to perform all of the obligations and duties of a Bank
with respect to a specified additional amount of Revolving Credit Commitment
hereunder, provided, that (a) the Borrowers shall, in its sole discretion, have
-------- ----
given their prior written consent to the addition of the New Bank as a party to
this Agreement, (b) the Agent, the Swing Line Lender and the Required Banks
shall have given their prior written consent (which consent shall not be
unreasonably withheld; provided, that, if the joinder of such New Bank would
-------- ----
result in an increase to the Aggregate Revolving Credit Commitment or the Term
Loan Commitment; such joinder shall require the consent of each Bank and such
consent shall be in the
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sole and absolute discretion of each Bank), (c) such New Bank and the Borrowers
shall have executed and delivered an instrument of adherence (the "Instrument of
-------------
Adherence") in form and substance satisfactory to the Borrowers and the Agent
---------
pursuant to which such New Bank shall agree to be bound as a Bank by the terms
and conditions hereof and the other Loan Documents, and to make Revolving Credit
Loans and a Term Loan to the Borrowers in accordance with this Agreement, and
which Instrument of Adherence shall specify the maximum amount of additional
Revolving Credit Loans that such New Bank agrees to provide hereunder (the
"Additional Commitment Amount") and the New Bank's address for notices, (d) the
----------------------------
Additional Commitment Amount provided by any New Bank must be at least
$5,000,000, (e) such New Bank shall have received such opinions of counsel to
the Borrowers, such evidence of proper corporate organization, existence,
authority and appropriate corporate proceedings with respect to the Borrowers,
and such other certificates, instruments, and documents, as it shall have
requested in connection with such Instrument of Adherence, (f) such New Bank
shall have paid to the Agent an administrative fee in the sum of $3,500 for the
account of the Agent, and (g) such New Bank shall have confirmed to and agreed
with the Agent, the Swing Line Lender and the Banks and the Borrowers as
follows:
(i) the Agent, the Swing Line Lender and the Banks have made no
representation or warranty and shall have no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency, collectibility or value of this
Agreement, the other Loan Documents, and Collateral, or any other Instrument or
document furnished pursuant hereto;
(ii) the Agent, the Swing Line Lender and the Banks have made no
representation or warranty and shall have no responsibility with respect to the
financial condition of either Borrower and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of their obligations under
this Agreement or any of the other Loan Documents, or the performance or
observance by either Borrower and its Subsidiaries or any other Person primarily
or secondarily liable in respect of their obligations under this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(iii) such New Bank confirms that it has received a copy of this
Agreement and the other Loan Documents, together with copies of the most recent
financial statements referred to in Sections 4.18 and 6.1 hereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Instrument of Adherence;
(iv) such New Bank will, independently and without reliance upon the
other Banks, the Swing Line Lender, or the Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement;
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(v) such New Bank appoints and authorizes the Agent to take such
action as Agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto;
(vi) such New Bank agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank; and
(vii) such New Bank represents and warrants that it is legally
authorized to enter into such Instrument of Adherence.
Upon any New Bank's execution of an Instrument of Adherence and the
Borrowers', the Agent's, the Swing Line Lender's and the Required Banks' consent
thereto, the Percentage of each Bank and the Aggregate Revolving Credit
Commitment shall be adjusted appropriately. Promptly thereafter, the Borrowers
shall notify each of the Banks and the Agent of the joinder hereunder of such
New Bank, the resulting increase in the Aggregate Revolving Credit Commitment
and each Bank's new Percentage and provide each of the Banks and the Agent with
a copy of the executed Instrument of Adherence and a copy of Exhibit A
---------
reflecting the necessary adjustments.
Upon the effective date of any Instrument of Adherence, the New Bank shall
make all (if any) such payments to the other Banks as may be necessary to result
in the Revolving Credit Loans made by such New Bank being equal to such New
Bank's Percentage (as then in effect) of the aggregate principal amount of all
Revolving Credit Loans outstanding to the Borrowers as of such date. The
Borrowers hereby agree that any New Bank so paying any such amount to the other
Banks pursuant to this Section 12.2 shall be entitled to all the rights of a
Bank hereunder and such payments to the other Banks shall constitute Revolving
Credit Loans held by such New Bank hereunder and that such New Bank may, to the
fullest extent permitted by law, exercise all of its right of payment (including
the right of set-off) with respect to such amounts as fully as if such New Bank
had initially advanced the Borrowers the amount of such payments.
Section 12.3 Joint and Several Liability.
------------ ---------------------------
Except to the extent otherwise expressly provided, the liability of the
Borrowers under this Agreement and each other Loan Document shall be joint and
several without regard to which party receives the proceeds of the loans. Each
Borrower hereby acknowledges that it expects to derive substantial economic
benefit from the loans.
ARTICLE 13 GUARANTEE
Section 13.1 Guarantee.
------------ ---------
(a) Subject to the limitations of Section 13.1(b) hereof, each Borrower
hereby absolutely, irrevocably and unconditionally guarantees the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of the Borrower Obligations of the
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other Borrower. This guaranty constitutes a guaranty of payment and neither the
Agent nor any Bank shall have any obligation to enforce any Loan Document or
exercise any right or remedy with respect to any collateral security thereunder
by any action, including making or perfecting any claim against any Person or
any collateral security for any of the Borrower Obligations, prior to being
entitled to the benefits of this Article 13. The Agent may, at its option,
proceed against any Borrower in the first instance, to enforce the Borrower
Obligations without first proceeding against the other Borrower or any other
Person, and without first resorting to any other rights or remedies, as the
Agent may deem advisable. In furtherance hereof, if the Agent or any Bank is
prevented by law from collecting or otherwise hindered from collecting or
otherwise enforcing any Borrower Obligation from any Borrower in accordance with
its terms, the Agent or such Bank, as the case may be, shall be entitled to
receive hereunder from the other Borrower after demand therefor, the sums which
would have been otherwise due had such collection or enforcement not been
prevented or hindered.
(b) Notwithstanding anything to the contrary contained herein, the maximum
aggregate amount of the obligations of each Borrower under this Section 13.1
shall not, as of any date of determination, exceed the lesser of (i) the
greatest amount that is valid and enforceable against such Borrower under
principles of New York State contract law and (ii) the greatest amount that
would not render such Borrower's liability hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any provisions of applicable state law (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
------------------------
liabilities of such Borrower, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however (provided that, as
to either Borrower, each such exclusion shall apply only to the extent such
exclusion would result in this Agreement's being enforceable against such
Borrower under Fraudulent Transfer Laws), any liability (A) in respect of
intercompany indebtedness to either Borrower, any Subsidiary or any other
Affiliate of either Borrower, to the extent that such intercompany indebtedness
would be discharged in an amount equal to the amount paid by such Borrower
hereunder, and (B) under any guarantee of (1) senior unsecured indebtedness or
(2) indebtedness subordinated in right of payment to any Borrower Obligation, in
either case which contains a limitation as to maximum liability similar to that
set forth in this Section 13.1(b) and pursuant to which the liability of such
Borrower hereunder is included in the liabilities taken into account in
determining such maximum liability) and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such Borrower pursuant to applicable law or any agreement
providing for an equitable allocation among such Borrower, the Subsidiaries and
the other Affiliates of the Borrowers of obligations arising under guarantees by
such parties. NOTWITHSTANDING THE LIMITATION OF LIABILITY PROVIDED IN THIS
SECTION 13.1(b), IT IS EXPRESSLY AGREED THAT SUCH LIMITATION SHALL ONLY APPLY TO
A BORROWER'S OBLIGATIONS AS GUARANTOR UNDER THIS ARTICLE 13 AND SHALL NOT IN ANY
CIRCUMSTANCE LIMIT OR IN ANY WAY AFFECT ANY BORROWER'S OTHER LIABILITIES OR
OBLIGATIONS UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT.
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(c) Each Borrower agrees that the Borrower Obligations may at any time and
from time to time exceed the maximum liability of such Borrower hereunder
without impairing this Article 13 or affecting the rights and remedies of the
Agent or any Bank hereunder.
Section 13.2 Absolute Obligation.
------------ -------------------
No Borrower shall be released from liability hereunder unless and until the
Termination Date shall have occurred and the outstanding principal balance of
all Revolving Credit Loans, Swing Line Loans and Term Loans shall have been paid
in full in cash, together with all accrued interest thereon and all other sums
then due and owing under the Loan Documents. Each Borrower acknowledges and
agrees that (i) neither the Agent nor any Bank has made any representation or
warranty to such Borrower with respect to the other Borrower, its Subsidiaries,
any Loan Document, or any agreement, instrument or document executed or
delivered in connection therewith, or any other matter whatsoever, and (ii) such
Borrower shall be liable hereunder, and such liability shall not be affected or
impaired, irrespective of (A) the validity or enforceability of any Loan
Document, or any agreement, instrument or document executed or delivered in
connection therewith, or the collectibility of any of the Borrower Obligations,
(B) the preference or priority ranking with respect to any of the Borrower
Obligations, (C) the existence, validity, enforceability or perfection of any
security interest or collateral security under any Loan Document, or the
release, exchange, substitution or loss or impairment of any such security
interest or collateral security, (D) any failure, delay, neglect or omission by
the Agent or any Bank to realize upon, enforce or protect any direct or indirect
collateral security, indebtedness, liability or obligation, any Loan Document,
or any agreement, instrument or document executed or delivered in connection
therewith, or any of the Borrower Obligations, (E) the existence or exercise of
any right of set-off by the Agent or any Bank, (F) the existence, validity or
enforceability of any other guaranty with respect to any of the Borrower
Obligations, the liability of any other Person in respect of any of the Borrower
Obligations, or the release of any such Person or any other guarantor of any of
the Borrower Obligations, (G) any act or omission of the Agent or any Bank in
connection with the administration of any Loan Document, or any of the Borrower
Obligations, (H) the bankruptcy, insolvency, reorganization or receivership of,
or any other proceeding for the relief of debtors commenced by or against, any
Person, (I) the disaffirmance or rejection, or the purported disaffirmance or
purported rejection, of any of the Borrower Obligations, any Loan Document, or
any agreement, instrument or document executed or delivered in connection
therewith, in any bankruptcy, insolvency, reorganization or receivership, or any
other proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith or any of
the Borrower Obligations, or which might cause or permit to be invoked any
alteration in the time, amount or manner of payment or performance of any of the
Borrower Obligations and liabilities, (K) the merger or consolidation of either
Borrower into or with any Person, (L) the sale by either Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to the Agent or any Bank,
(N) any amendment or modification of, or supplement to, any
-92-
Loan Document or (O) any other reason or circumstance which might otherwise
constitute a defense available to or a discharge of a Borrower in respect of
their respective obligations or liabilities (including the Borrower
Obligations), or any other fact or circumstance which would excuse the
obligation of a guarantor or surety, other than by the performance in full
thereof.. Each Borrower waives, in its capacity as a guarantor hereunder, (i)
presentment, demand, protest and notice of any kind (including, without
limitation, notice of dishonor); (ii) any defense based upon or arising out of
any defense which the other Borrower may have to the payment or performance of
any part of its Borrower Obligations; (iii) any defense based upon any
disbursements by the Agent or the Banks to either Borrower pursuant to any
agreements or instruments governing the Borrower Obligations whether same be
deemed an additional advance or be deemed to be paid out of any special interest
or other fund accounts, as constituting unauthorized payments hereunder or
amounts not guaranteed by this guaranty; (iv) until the indefeasible payment in
full of the Borrower Obligations, all rights of each Borrower in its capacity as
guarantor to proceed against the other Borrower, including but not limited to
all rights of subrogation and all rights to enforce any remedy that the Agent or
any Bank may have against such Borrower and (v) all rights to participate in any
security held by the Agent on behalf of the Banks or by any Bank for the
Borrower Obligations.
Section 13.3 Repayment in Bankruptcy.
------------ -----------------------
If, at any time or times subsequent to the payment of all or any part of
the Borrower Obligations, any Bank shall be required to repay any amounts
previously paid by or on behalf of a Borrower in reduction thereof by virtue of
an order of any court having jurisdiction in the premises, including as a result
of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the other Borrower unconditionally agrees to pay to the
Agent, within 10 days after demand, a sum in cash equal to the amount of such
repayment, together with interest on such amount from the date of such repayment
by Bank to the date of payment to the Agent at the applicable Default Rate.
Section 13.4 Miscellaneous.
------------ -------------
Each Borrower agrees that any statement of account with respect to the
Borrower Obligations from any Bank that binds either Borrower shall be binding
upon both Borrowers, and that copies of said statements of account maintained in
the regular course of such Bank's business may be used in evidence against each
Borrower in order to establish its obligations in respect of its guaranty
provided for in this Article 13.
Section 13.5 Subordination.
------------ -------------
Each Borrower agrees that any and all Indebtedness owed to it by, and
claims it may have against, the other Borrower, whether such Indebtedness or
claims are in connection with the guaranty contemplated by this Article 13 or
the Borrower Obligations, or are completely independent thereof, will be
subordinate to the claims of the Agent and the Banks under this Article 13 and
all Indebtedness guaranteed hereby, and that such Borrower will not
-93-
assert any such claim against, or collect any amounts in respect thereof from,
the other Borrower until all Borrower Obligations have been indefeasibly
satisfied in full in cash. Notwithstanding such subordination, and without
affecting or impairing in any manner the liability of either Borrower under the
other provisions of this Article 13, any Indebtedness of either Borrower to the
other Borrower, if the Agent so requests, shall be collected, enforced and
received by such Borrower as trustee for the Agent and the Banks and paid over
to the Agent on account of the Borrower Obligations.
ARTICLE 14 BORROWER AGENCY
Section 14.1 Appointment and Actions.
------------ -----------------------
Each Borrower hereby irrevocably designates and appoints the other Borrower
as the agent of such Borrower under the Loan Documents for the purpose of taking
any action, giving or receiving any notice, making any election, exercising any
other rights or powers and fulfilling any obligations of a Borrower under this
Agreement or any other Loan Document, all as effectively as such Borrower could
do, and agrees that any notice given to or received by one Borrower shall be
deemed to have been given to or received by (as the case may be) both Borrowers.
THIS AGREEMENT CONTAINS A WAIVER OF TRIAL BY JURY.
SEE SECTION 10.7 HEREOF.
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IN WITNESS WHEREOF, the Borrowers, the Agent, the Swing Line Lender and the
Banks have caused this Agreement to be duly executed by their respective
officers hereunto duly authorized as of the day and year first above written.
MEDALLION FINANCIAL CORP.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Operating Officer
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer and Chief Financial Officer
MEDALLION BUSINESS CREDIT, LLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
__________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
FLEET BANK, NATIONAL ASSOCIATION, as Agent,
as Swing Line Lender and as one of the Banks
By:__________________________________________
Title: Vice President
Payment Office:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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BANKBOSTON, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title:
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
Title:
EUROPEAN AMERICAN BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Title:
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Title:
By:__________________________________________
Title:
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BANK LEUMI USA
By: /s/ ▇▇▇▇ ▇▇▇▇
----------------------------
Title:
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇ ▇▇▇▇
----------------------------
Title:
HSBC BANK USA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Title:
CITIZENS BANK OF MASSACHUSETTS
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------
Title:
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Schedule I
Locations, Chief Executive ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-98-
Schedule II
Subsidiaries
Medallion Taxi Media, Inc., a New York corporation
Medallion Funding Corp., a New York corporation
Medallion Capital, Inc., a Minnesota corporation
Business Lenders, LLC, a Delaware limited liability company
Medallion Business Credit, LLC, a Delaware limited liability company
-99-
EXHIBIT A
Revolving Credit
Name and Address of Bank Facility Available Percentage
Fleet Bank, N.A.
1185 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $ 20,000,000 20/100
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $ 15,000,000 15/100
Bank Leumi USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 5,000,000 ▇/▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 10,000,000 ▇▇/▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 10,000,000 10/100
Citizens Bank of Massachusetts
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 10,000,000 10/100
European American Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $ 10,000,000 10/100
HSBC Bank USA
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 10,000,000 ▇▇/▇▇▇
▇▇▇▇▇▇ Discount Bank
of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $ 10,000,000 10/100
TOTAL FACILITIES $100,000,000
------------
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