NINTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.8(h)
NINTH
AMENDMENT TO CREDIT AGREEMENT
This NINTH AMENDMENT TO CREDIT
AGREEMENT (the “Ninth Amendment”) dated November 30, 2009, is by and among LEAF
FINANCIAL CORPORATION, a Delaware corporation (“LEAF Financial”), and LEAF
FUNDING, INC., a Delaware corporation (“LEAF Funding” and together with LEAF
Financial, each individually a “Borrower” and individually and collectively,
jointly and severally, the “Borrowers”), the various financial institutions and
other Persons parties hereto (the “Lenders”), and PNC BANK, NATIONAL
ASSOCIATION, a national banking association, as successor by merger to National
City Bank, as administrative agent and collateral agent for the Lenders (in such
capacity, the “Agent”).
BACKGROUND
A. Pursuant
to that certain Credit Agreement dated July 31, 2006, by and among the
Borrowers, the Lenders, and the Agent, as amended by a First Amendment dated
August 14, 2006, a Second Amendment dated December 22, 2006, a Third Amendment
dated March 14, 2007, a Fourth Amendment dated September 10, 2007, a Fifth
Amendment dated September 28, 2007, a Sixth Amendment dated October 18, 2007, a
Seventh Amendment dated July 31, 2009 and an Eighth Amendment dated September
30, 2009 (as the same may be modified and amended from time to time, including
by this Ninth Amendment, the “Credit Agreement”), the Lenders agreed, inter alia, to extend to the
Borrowers a revolving credit facility in the current maximum aggregate principal
amount of $135,000,000.
B. The
Borrowers have requested an amendment to the Credit Agreement, to which the
Lenders are willing to agree, on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the
foregoing premises and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Definitions.
(a) General
Rule. Except as expressly set forth herein, all capitalized
terms used and not defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement.
(b) Additional
Definition. The following additional definition shall be added
to Article 1 of the Credit Agreement to read in its entirety as
follows:
“Ninth Amendment”
means the Ninth Amendment to this Agreement dated November 30,
2009.
(c) Amended
Definitions. The following definitions in Article 1 of the
Credit Agreement are hereby amended and restated to read in their entirety as
follows:
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“Applicable Margin”
means, (a) as to any Base Rate Loan, 4.00%, and (b) as to any LIBOR Loan or
LIBOR Flex Rate Loan, 5.00%.
“Borrowing Base” means
at any time the lesser of (a) eighty-seven and one half of one percent (87.5%)
of the then Aggregate Net Present Value, and (b) one hundred percent (100%) of
the Aggregate Original Net Equipment Cost; provided that, in performing such
calculation, the Aggregate Net Present Value and Aggregate Original Net
Equipment Cost shall be reduced by such amount as may be necessary in order
that: (i) no more than an amount equal to five percent (5%) of the Aggregate
Commitment is attributable to any single Lessee; (ii) no more than an amount
equal to ten percent (10%) of the Aggregate Commitment is attributable to
progress payments; (iii) none of either such amount is attributable to any
Contract or Equipment the value of which has been used in six months or more of
previous calculations of the Borrowing Base, except with respect to any Contract
(and any related Equipment) with a payment period of not greater than 12 months
from the date of the first scheduled payment thereunder, as to which, no more
than an amount equal to twenty percent (20%) of the Aggregate Commitment is
attributable to such Contracts (and any related Equipment); (iv) no more than an
amount equal to five percent (5%) of the Aggregate Commitment is attributable to
Contracts whereby the related lessee is an Affiliate of any Borrower; and (v) no
more than an amount equal to twenty percent (20%) of the Aggregate Commitment is
attributable to Contracts with initial stated terms of greater than 120
months.
“Net Present Value”
means, as of any date of determination for any Eligible Contract, an amount
equal to the aggregate amount of remaining Contract Payments thereunder,
discounted to present value by a percentage per annum equal to one-month LIBOR
(as of such date) plus 3.75%. All present value calculations shall be
made using a 30-day month and a 360-day year and actual days
elapsed.
“Termination Date”
means the earliest of (a) January 29, 2010, and (b) the date on which the
Commitments are terminated in full or permanently reduced to zero pursuant to
the terms of this Agreement.
2. Amendment to Section 2.2 of
the Credit Agreement. Paragraph (b) of Section 2.2 of the
Credit Agreement is hereby amended and restated in its entirety, to read as
follows:
(b) Mandatory Reductions.
To the extent not previously reduced pursuant to paragraph (a) above, to or
below the following amount, the Aggregate Commitment shall be automatically and
permanently reduced to (i) $125,000,000, on December 30, 2009, and (ii)
$115,000,000, on January 19, 2010.
3. Amendment to Section 9.1 of
the Credit Agreement. Section 9.1 of the Credit Agreement is
hereby amended and restated in its entirety, to read as follows:
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Section
9.1 Maximum Senior Leverage
Ratio. The Borrowers will not permit the Senior Leverage Ratio
as of the last day of any Rolling Period to be greater than 3.00 to
1.00.
4. Amendment to Section 9.2 of
the Credit Agreement. Section 9.2 of the Credit Agreement is
hereby amended and restated in its entirety, to read as follows:
Section
9.2 Minimum Interest Coverage
Ratio. The Borrowers will not permit the Interest Coverage
Ratio as of the last day of any Rolling Period to be less than
1.25:1.00.
5. Amendment to Section 9.3 of
the Credit Agreement. Section 9.3 of the Credit Agreement is
hereby amended and restated in its entirety, to read as follows:
Section
9.3 Minimum Adjusted Tangible
Net Worth. The Borrowers will not permit Adjusted Tangible Net
Worth as of the last day of any Rolling Period to be less than $48,000,000
, plus 90% of the aggregate amount of Net
Income (without reduction for any loss in any Fiscal Quarter) for each Fiscal
Quarter ending after September 30, 2009.
6. Representations and
Warranties. Each Borrower hereby represents and warrants to
the Agent and each Lender that, as to such Borrower:
(a) Representations. each
of the representations and warranties of such Borrower contained in the Credit
Agreement and/or the other Credit Documents are true, accurate and correct in
all material respects on and as of the date hereof as if made on and as of the
date hereof, except to the extent such representation or warranty was made as of
a specific date;
(b) Power and
Authority. (i) such Borrower has the power and authority under
the laws of its jurisdiction of organization and under its organizational
documents to enter into and perform this Ninth Amendment and any other documents
which the Lenders require such Borrower to deliver hereunder (this Ninth
Amendment and any such additional documents delivered in connection with the
Ninth Amendment are herein referred to as the “Amendment Documents”); and (ii)
all actions, corporate or otherwise, necessary or appropriate for the due
execution and full performance by the Borrower of this Ninth Amendment have been
adopted and taken and, upon their execution, the Credit Agreement, as amended by
this Ninth Amendment will constitute the valid and binding obligations of the
Borrower enforceable in accordance with their respective terms (except as may be
limited by applicable insolvency, bankruptcy, moratorium, reorganization, or
other similar laws affecting enforceability of creditors’ rights generally and
the availability of equitable remedies);
(c) No Violations of Law or
Agreements. the making and performance of this Ninth Amendment
will not violate any provisions of any law or regulation, federal, state, local,
or foreign, or the organizational documents of such Borrower, or result in any
breach or
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violation
of, or constitute a default or require the obtaining of any consent under, any
agreement or instrument by which such Borrower or its property may be
bound;
(d) No
Default. no Default or Event of Default has occurred and is
continuing; and
(e) No Material Adverse
Effect. no Material Adverse Effect has occurred since
September 30, 2008.
7. Conditions to Effectiveness
of Amendment. This Ninth Amendment shall be effective upon the
Agent’s receipt of the following, each in form and substance reasonably
satisfactory to the Lenders:
(a) Ninth
Amendment. this Ninth Amendment, duly executed by the
Borrowers and the Lenders;
(b) Consent and
Waivers. copies of any consents or waivers necessary in order
for the Borrowers to comply with or perform any of its covenants, agreements or
obligations contained in any agreement, which are required as a result of the
Borrowers’ execution of this Ninth Amendment, if any;
(c) Extension
Fees. each Lender shall have been paid an extension fee by the
Borrowers equal to thirty-three basis points (0.33%) of such Lender’s Revolving
Loan Commitment as of the date of this Ninth Amendment;
(d) Costs and
Expenses. all reasonable costs and expenses of the Agent in
connection with the preparation and review of this Ninth Amendment, including,
but not limited to, the reasonable fees, expenses and disbursements of counsel
to the Agent; and
(e) Other Documents and
Actions. such additional agreements, instruments, documents,
writings and actions as the Lenders may reasonably request.
8. No Waiver;
Ratification. The execution, delivery and performance of
this Ninth Amendment shall not operate as a waiver of any right, power or remedy
of the Agent or the Lenders under the Credit Agreement or any Credit Document,
or constitute a waiver of any provision thereof. Except as expressly
modified hereby, all terms, conditions and provisions of the Credit Agreement
and the other Credit Documents shall remain in full force and effect and are
hereby ratified and confirmed by any Borrower. Nothing contained
herein constitutes an agreement or obligation by the Agent or any Lender to
grant any further amendments to any of the Credit Documents.
9. Acknowledgments. To
induce the Lenders to enter into this Ninth Amendment, each Borrower
acknowledges, agrees, warrants, and represents that:
(a) Acknowledgment of
Obligations; Collateral; Waiver of Claims. (i) the Credit Documents are
valid and enforceable against, and all of the terms and conditions of
the
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Credit
Documents are binding on, the Borrowers; (ii) the liens and security interests
granted to the Agent by the Borrowers pursuant to the Credit Documents are
valid, legal and binding, properly recorded or filed and first priority
perfected liens and security interests; and (iii) the Borrowers hereby waive any
and all defenses, set-offs and counterclaims which they, whether jointly or
severally, may have or claim to have against the Agent or any Lender as of the
date hereof; and
(b) No Waiver of Existing
Defaults. no Default or Event of Default exists immediately
before or immediately after giving effect to this Ninth
Amendment. Nothing in this Ninth Amendment nor any communication
between the Agent, any Lender, any Borrower or any of their respective officers,
agents, employees or representatives shall be deemed to constitute a waiver of
(i) any Default or Event of Default arising as a result of the foregoing
representation proving to be false or incorrect in any material respect; or (ii)
any rights or remedies which the Agent or any Lender has against any Borrower
under the Credit Agreement or any other Credit Document and/or applicable law,
with respect to any such Default or Event of Default arising as a result of the
foregoing representation proving to be false or incorrect in any material
respect.
10. Binding
Effect. This Ninth Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
11. Governing
Law. This Ninth Amendment and all rights and obligations of
the parties hereunder shall be governed by and be construed and enforced in
accordance with the laws of the internal laws of the Commonwealth of
Pennsylvania.
12. Headings. The
headings of the sections of this Ninth Amendment are inserted for convenience
only and shall not be deemed to constitute a part of this Ninth
Amendment.
13. Counterparts. This
Ninth Amendment may be executed in any number of counterparts with the same
affect as if all of the signatures on such counterparts appeared on one document
and each counterpart shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto
have caused this Ninth Amendment to Credit Agreement to be executed under seal
by their duly authorized officers, all as of the day and year first written
above.
LEAF FINANCIAL
CORPORATION
By:
________________________________
Name:
Title:
LEAF FUNDING, INC.
By:
________________________________
Name:
Title:
Borrowers
Signature Page
Ninth
Amendment to Credit Agreement
PNC BANK, NATIONAL ASSOCIATION,
assuccessor by merger to National
City Bank,
as Agent, Swingline Lender and as a
Lender
By:
________________________________
Name:
Title:
Agent
Signature Page
Ninth
Amendment to Credit Agreement
HSH NORDBANK AG, NEW YORK
BRANCH
By:
________________________________
Name:
Title:
By:
________________________________
Name:
Title:
Lender
Signature Page
Ninth
Amendment to Credit Agreement
SOVEREIGN BANK
By:
________________________________
Name:
Title:
Lender
Signature Page
Ninth
Amendment to Credit Agreement
BANK OF AMERICA, N.A.
By:
________________________________
Name:
Title:
Lender
Signature Page
Ninth
Amendment to Credit Agreement
TD BANK, N.A.
By:
________________________________
Name:
Title:
Lender
Signature Page
Ninth
Amendment to Credit Agreement
WACHOVIA BANK, NATIONAL
ASSOCIATION
By:
________________________________
Name:
Title:
Lender
Signature Page
Ninth
Amendment to Credit Agreement
