LIMITED WAIVER AGREEMENT
This Limited Waiver Agreement (this "Agreement") dated as of March 10, 1997
is entered into between Mercury Finance Company, a Delaware corporation
("Mercury") and PaineWebber Inc., successor to Xxxxxx, Xxxxxxx & Co.,
Incorporated (the "Dealer") under that certain Commercial Paper Dealer Agreement
dated as of March 25, 1991 (the "Dealer Agreement").
W I T N E S S E T H :
WHEREAS, Dealer is party to the Dealer Agreement under which Mercury has
issued commercial paper to customers of the Dealer (the "Customers"), which
commercial paper is in default;
WHEREAS, Mercury is in default under various provisions of other lending
agreements with various institutions;
WHEREAS, in late January 1997, Mercury began experiencing a severe
liquidity crisis and required immediate emergency financing to continue its
operations;
WHEREAS, in February 1997, to meet such emergency financing needs, Mercury
and certain of its subsidiaries (collectively, the "Borrowers") entered into a
Loan and Security Agreement with BankAmerica Business Credit, Inc. ("BABC")
dated as of February 7, 1997 (the "Bridge Loan Agreement") providing the
Borrowers with a secured revolving loan facility in an aggregate principal
amount not to exceed $50 million and having a maturity of March 10, 1997, with
an option to extend (the "Bridge Loan");
WHEREAS, the Borrowers require financing beyond March 10, 1997 to continue
their operations and have therefore requested BABC to extend the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms set forth in
the Second Amendment attached hereto as Exhibit A;
WHEREAS, certain provisions of the Dealer Agreement unless waived prohibit
the Borrowers from granting liens on their assets to secure indebtedness for
borrowed money and/or require that Lender be granted an equal or ratable lien on
such assets in the event such a lien is granted to another lender;
WHEREAS, in connection with the extension of the maturity date of the
Bridge Loan to June 10, 1997, Mercury has requested the Dealer, on behalf of
itself but not its Customers, to waive such provisions of the Dealer Agreement
to permit Mercury to obtain the emergency financing it needs;
WHEREAS, the Dealer, on behalf of itself but not its Customers, is willing
to waive certain limited provisions of the Dealer Agreement to permit the
maturity of the Bridge Loan to be extended to June 10, 1997;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mercury and the Dealer agree as
follows:
1. Waiver. Solely in connection with the extension of the maturity date
of the Bridge Loan to June 10, 1997 in accordance with the terms and conditions
of the Second Amendment, on behalf of itself but not its Customers, the Dealer
waives compliance with any of the provisions of the Dealer Agreement that
(a) prohibit or restrict the granting of security interests, liens or mortgages
by any of the Borrowers to BABC (the "BABC Liens") to secure the Bridge Loan or
(b) result in or require the creation of a security interest, lien or mortgage
in favor of the Dealer or its customers on any assets of the Borrowers as a
result of the granting of the BABC Liens to secure the Bridge Loan; provided,
that the waivers set forth in this Section 1 shall be effective on the
conditions that the (i) aggregate principal amount of loans advanced to the
Borrowers under the Bridge Loan does not exceed $50 million and (ii) the BABC
Liens secure only the Bridge Loan and do not secure any other indebtedness for
borrowed money outstanding as of the date hereof or hereafter.
2. Entire Agreement. This Agreement constitutes the full and entire
understanding of the parties hereto with respect to the subject matter hereof.
3. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the laws of
the State of New York.
4. Successors and Assigns. This Agreement shall insure to the benefit
of, and be binding upon the successors and assigns of, each of the parties
hereto.
5. Counterparts. This Agreement may be executed in any number of
counterparts all of which together shall constitute one instrument.
* * * * *
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
MERCURY FINANCE COMPANY,
a Delaware corporation
By:
Name:
Title:
PAINEWEBBER INC.
By:
Name:
Title:
