EXHIBIT 10.7
EXECUTION COPY
REVOLVING CREDIT ASSIGNMENT OF LEASES
1. Pursuant to the Revolving Credit Agreement (the "Credit Agreement") and
the Security Agreement (the "Security Agreement") both dated as of the date
hereof, by and among LEASECOMM CORPORATION, a Massachusetts corporation and
TIMEPAYMENT CORP. LLC, a Delaware limited liability company, both having an
office at 00-X Xxxxxxxx Xxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (together, the
"Borrower"), the Lenders under (and as defined in) the Credit Agreement and THE
CIT GROUP/COMMERCIAL SERVICES, INC., having its head office at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as agent for the Lenders (in such
capacity, the "Agent"), and to secure the due payment and performance of all
Obligations, including, without limitation, the strict performance and
observance by the Borrower of all representations, warranties, covenants and
conditions of this Agreement, the Revolving Credit Notes and the other Loan
Documents, and any and all amendments thereto and replacements thereof, the
Borrower hereby assigns, pledges, hypothecates, transfers and sets over to the
Agent for the benefit of the Lenders and grants to the Agent and its successors
and assigns for the benefit of the Lenders, for the Agent's and the Lenders' and
their respective successors' and assigns' own proper use and benefit, a duly
perfected first priority Encumbrance upon all the right, title and interest of
the Borrower under, in and to all presently existing and hereafter acquired
lease rental schedules, master leases relating to such lease rental schedules,
leases, rental contracts, service contracts, agreements for use, sales contracts
and chattel paper (including, without limitation, all Leases, Eligible
Installment Sales Contracts, Eligible Interest Rate Contracts and Eligible
Installment Finance Contracts), and any and all renewals, extensions,
modifications and substitutions thereof (collectively, the "Contracts").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement and the Security Agreement.
2. As further security for the Obligations, the Borrower hereby assigns,
pledges, hypothecates, transfers and sets over to the Agent for the benefit of
the Lenders all Contract Payments, all Encumbrances granted by any lessee, buyer
or owner of any Equipment covered by any Contract, and any additional collateral
received from any lessee, buyer or owner under any Contract (collectively,
together with the Contracts and the Contract Payments, the "Contract
Collateral").
3. The Borrower shall remain liable under each of the Contracts to perform
all the obligations to be performed by it thereunder, all in accordance with and
pursuant to the terms and provisions of such Contracts, and the Agent and the
Lenders shall have no obligation or liability under any of the Contracts by
reason of or arising out of this Assignment nor shall the Agent or the Lenders
be required or obligated in any manner to perform or fulfill any of the
obligations of the Borrower under or pursuant to any of the Contracts, or to
make any payment, or to make any inquiry as to the nature or the amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
4. The obligations of the Borrower under the Contracts may be performed by
the Agent or its nominee, but only at the option of the Agent, without releasing
the Borrower therefrom and without providing for or resulting in any assumption
of liability thereunder. The Agent will provide the Borrower with written notice
if the Agent decides to perform any obligations of the Borrower under any of the
Contracts.
5. The Borrower does hereby constitute and appoint the Agent, its successors
and assigns, as the Borrower's true and lawful attorney-in-fact, with full power
of substitution, in the name of the Borrower or otherwise, to ask, require,
demand, receive, compound and give acquittance for any and all moneys and claims
for moneys due and to become due under or arising out of any of the Contracts
and the Contract Collateral, including, without limitation, the Contract
Payments, or any guarantee thereof or sublease permitted thereunder, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings which the Agent may
deem to be necessary or advisable. This power of attorney, being coupled with an
interest, shall be irrevocable until the payment in full of the Obligations and
expiration of the Commitments.
6. The Borrower agrees that at any time and from time to time, upon the
written request of the Agent and at the expense of the Borrower, the Borrower
will promptly deliver to the Agent all executed original counterparts of each
Lease and duly execute and deliver any and all such further instruments and
documents and take such further action as the Agent may reasonably deem
desirable in obtaining the full benefits of this Assignment and of the rights
and powers herein granted. In the event the Iron Mountain Agreement (or such
other replacement agreement acceptable to the Agent) is no longer in effect, or
after an Event of Default, thereafter at the Agent's option exercisable from
time to time all Leases shall require each Lease to bear a legend approved by
Agent indicating such Lease is assigned to Agent.
7. At the request of Agent, the Borrower shall deposit any and all security
deposits and any other cash reserves it receives with respect to the Contracts
in an account maintained with the Agent.
8. In any suit, proceeding or action brought by the Agent under any of the
Contracts or Contract Collateral, any, guarantee thereof or sublease permitted
thereunder, for any installment of, or interest on, any rental or other sum
owing thereunder, including, without limitation, any Payment, or to enforce any
provisions of such Lease, any guarantee thereof or sublease permitted
thereunder, the Borrower will save, indemnify and keep the Agent and the Lenders
harmless from and against all expense, loss or damage suffered by reason of any
defense, set off, counterclaim, recoupment or reduction of liability whatsoever
of the lessee under such Lease or with respect to such Contract Collateral, or
any guarantor or sublessee thereunder or its successors, arising out of a breach
by the Borrower of any obligation under such Lease or Contract Collateral or any
sublease permitted thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such lessee or any
such guarantor or sublessee or its successors from the Borrower, and all such
obligations of the Borrower shall be and remain enforceable against and only
against the Borrower.
9. The Borrower hereby represents and warrants that (a) it is the sole owner
of the Contract Collateral, (b) there are no Encumbrances against any of the
Contract Collateral, (c) the Contracts satisfy the requirements with respect
thereto set forth in the definition of "Eligible Leases", "Eligible Installment
Sales Contract", "Eligible Installment Finance Contract" or "Eligible Interest
Rate Contract", as applicable, contained in Section 1.1 to the Credit Agreement,
(d) any Equipment which is the subject of any Lease included in the Contracts
has been delivered to and accepted by the appropriate lessee, (e) there have
been no prepayments or
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any sums under any of the Contracts, and (f) to its knowledge, no default exists
under any of the Contracts.
10. Except as provided in the following paragraph, this Assignment shall
create a continuing collateral assignment of and security interest in the
Contract Collateral and shall remain in full force and effect until payment in
full of the Obligations and the expiration of the Commitments of the Lenders
under the Credit Agreement. Upon full payment of the Loans and the Revolving
Credit Notes and satisfaction in full of the Obligations and termination of the
Lenders' Commitments, this Agreement shall terminate and be of no further force
or effect. The Agent shall promptly execute and deliver to the Borrower, at the
Borrower's expense, such assignments and reassignments, as the Borrower shall
reasonably require in order to terminate the collateral assignments of the
Contract Collateral granted to the Agent, in each case with the Agent's sole
representation and warranty that the Contract Collateral is being reconveyed
free and clear of any Encumbrance created by or as a result of any act of the
Agent.
11. This Assignment shall be binding upon the Borrower and its successors, and
shall inure to the benefit of the Agent and the Lenders, including their
respective successors and assigns.
12. Each reference to the "Assignment" or words of like import in any
Assignment of Leases delivered under or pursuant to the Credit Agreement, this
Assignment or the Security Agreement shall mean and be a reference to this
Assignment as the same may be amended, amended and restated, supplemented or
modified from time to time.
This Assignment shall be governed by and construed and enforced in
accordance with the laws of the State of New York without reference to its
principles of conflict of laws.
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FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the Borrower has caused this Assignment to be executed
as of this 29th day of September, 2004.
LEASECOMM CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President
TIMEPAYMENT CORP. LLC
By:/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, President
AGREED:
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as Agent
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
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