Exhibit 10.1(b)
AMENDMENT NO. 1
TO
THIRD AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDMENT, dated as of October __, 1997 ("Amendment No. 1"), is
by and among LINC CAPITAL, INC. (formerly known as Scientific Leasing Inc.), a
Delaware corporation ("LCI"), and LINC QUANTUM ANALYTICS, INC., a Delaware
corporation ("Quantum"; each of LCI and Quantum are sometimes individually
referred to herein as a "Borrower" and together as the "Borrowers"), FLEET BANK,
N.A. (formerly known as NatWest Bank, N.A. and successor to National Westminster
Bank USA), CORESTATES BANK, N.A., LASALLE NATIONAL BANK, THE FIRST NATIONAL BANK
OF CHICAGO, and EUROPEAN AMERICAN BANK (each a "Bank" and collectively the
"Banks") and FLEET BANK, N.A. as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
W I T N E S S E T H:
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WHEREAS, the Borrowers, the Banks and the Agent, are parties to a
Third Amended and Restated Loan Agreement dated as of July 22, 1997 (as amended
hereby and from time to time hereafter, the "Loan Agreement");
WHEREAS, the Borrowers, the Agent and the Banks desire to amend the
Loan Agreement (a) to increase the Banks' Commitments thereunder to an aggregate
of One Hundred Million ($100,000,000) Dollars and to increase the Temporary
Commitment, (b) to reduce the interest rates applicable to the Loans, and (c) to
permit the merger of The LINC Group Inc. with and into LCI, with LCI being the
surviving corporation, and to permit the consummation of certain other corporate
transactions and reorganizations contemplated to occur in connection with a
proposed public offering of the common stock of LCI in which net proceeds of at
least $24,500,000 shall be received by LCI (assuming receipt of such minimum
proceeds, the "Offering"); and
WHEREAS, capitalized terms used and not defined herein shall have the
meanings specified in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, the Borrowers, the
Banks and the Agent agree as follows:
Article I. Amendments to Loan Agreement.
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This Amendment No. 1 to Loan Agreement shall be deemed to be an
amendment to the Loan Agreement, and shall not be construed in any way as a
replacement therefor. All of the terms and provisions of this Amendment No. 1,
including, without limitation, the representations and warranties set forth
herein, are hereby incorporated by reference into the Loan Agreement as if such
terms and provisions were set forth in full therein. The Loan Agreement is
hereby amended, effective as of the Proceeds Receipt Date (as defined in Section
5.2 hereof) upon the satisfaction of the conditions precedent set forth in
Article V hereof, in the following respects:
1.1 The definition of "Adjusted Tangible Net Worth" is amended and
restated to read in its entirety, as follows:
"Adjusted Tangible Net Worth" - at any time, the difference
between (a) the sum of (i) the non-current portion of Subordinated
Debt (ii) the total of shareholders' equity calculated in accordance
with GAAP, and (iii) deferred income tax credits, minus (b) the sum of
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(i) deferred charges (after tax), and (ii) the total amount of any
intangible assets which shall include, without limitation, (A)
unamortized debt discount after taxes, (B) prepaid expenses after tax,
(C) goodwill, and (D) the net amount of all accounts receivable owing
to LCI or any subsidiary of LCI from LINC Group.
1.2 The definition of "Applicable Margin" is amended and restated to
read, in its entirety, as follows:
"Applicable Margin" - (a) From the date of execution and
delivery of the Loan Agreement until the first Applicable Margin
Determination Date following the Offering Closing Date, as at any date
of determination thereof, the applicable percentage to be added to the
Prime Rate or Eurodollar Rate set forth in the definition of
"Applicable Margin" as in effect prior to the effectiveness of the
amendments in Amendment No. 1, which corresponds to the Leverage Ratio
set forth in the table in subsection (a) of the definition of
"Applicable Margin" as in effect prior to the effectiveness of the
amendments in Amendment No. 1.
(b) For the periods from each Applicable Margin Determination
Date following the Offering Closing Date until the next Applicable
Margin Determination Date, or if earlier, the Commitment Termination
Date, that percentage to be added to the Prime Rate or Eurodollar
Rate, as appropriate, pursuant to Section 2.11 for purposes of
determining the per annum rate of interest applicable from time to
time to Prime Rate Loans or Eurodollar Loans, which in each case shall
be the percentage set forth in the table below in this subsection (b),
for the Prime Rate and the Eurodollar Rate, respectively, that as of
the Applicable Margin Determination Date, corresponds to the Leverage
Ratio set forth in such table:
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Applicable Margin Applicable Margin
for for
Leverage Ratio Prime Rate Loans Eurodollar Loans
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Less than 2.5:1 0% 1.25%
2.5:1 or more but less .10% 1.375%
than 3.0:1
3.0:1 or more but less .15% 1.50%
than 3.5:1
3.5:1 or greater .25% 1.75%
For purposes of the preceding subsections (a) and (b), the Leverage
Ratio shall be determined five business days after the date on which
the Agent receives a certificate pursuant to subsection 5.11(c) hereof
showing the calculation of the Leverage Ratio for the immediately
preceding full calendar month, provided that if the Borrowers shall
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not have submitted to the Agent such certificate as and when required
under subsection 5.11(c) hereof, the Applicable Margin shall be as
determined by the Agent for so long as such certificate has not been
received by the Agent. The Applicable Margin shall become effective
on each Applicable Margin Determination Date and shall remain in
effect until the next succeeding Applicable Margin Determination Date
(except that notwithstanding the foregoing, if an Event of Default
shall have occurred and be continuing at the time of delivery of such
certified calculations or at any time following the same, until the
next succeeding date of determination the Applicable Margin for any
such Loan shall not as a consequence of this provision be reduced for
the period from the occurrence of such Event of Default for and so
long as the same shall be continuing).
In confirmation of the foregoing (and subject to the terms of the
exception set forth in parentheticals above in respect of any
decreases in the Applicable Margin), if, at the last day of any
calendar month, the Leverage Ratio shall increase from that in effect
at the end of the preceding month, then the Applicable Margin shall
increase from the first day of the month following delivery of such
certificate until the next succeeding redetermination date. In the
event that quarterly or annual financial statements of the Borrowers
shall reflect that the Leverage Ratio for any particular period was
higher than as calculated for any month and theretofore delivered to
the Agent, then the Borrowers shall be obligated to pay to the Agent,
for the ratable benefit of the Banks, additional interest in the
amount that would have been payable in respect of any respective
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period if the calculation of the Leverage Ratio for the applicable
period had been correct.
(c) As at any date of determination thereof which determination
shall be made on each successive Applicable Margin Determination Date, the
applicable percentage set forth below shall apply if such date of
determination is on or after the Commitment Termination Date: the
Applicable Margin for Prime Rate Loans: 1.75% (175 basis points); and the
Applicable Margin for Eurodollar Loans: 3% (300 basis points).
1.3 The definition of "Cash Operating Expenses" is amended to delete
the parenthetical "(but excluding LFC and its Subsidiaries)".
1.4 The definition of "Cash Receipts" is amended to delete the
parenthetical "(but excluding LFC and its Subsidiaries)" wherever it appears.
1.5 The definition of "Commitment Termination Date" is amended to
replace the date "July 15, 1998", with the following:
"the earlier to occur of (a) 364 days following the date of receipt by
LCI of the Net Offering Proceeds, and (b) October 31, 1998, or such later date
to which the Commitment Termination Date shall have been extended in accordance
with subsection 2.1(b) hereof."
1.6 The definition of "Servicing Agreement" is amended to delete the
period at the conclusion thereof and to insert in lieu thereof the following:
, or from and after the date of execution and delivery of the
Distribution Agreement, the servicing agreement provisions set forth
in Section 2.8 of the Distribution Agreement.
1.7 The definition of "Subordination Agreements" is amended to delete
the words "the LFC Intercreditor Agreement".
1.8 The definition of "Temporary Commitment" is amended to change
"Five Million ($5,000,000) Dollars" to read "Ten Million ($10,000,000) Dollars".
1.9 The definition of "Transaction Documents" is amended to: (a)
delete the words "LFC Subordinated Debt Documents"; (b) to replace the words
"Servicing Agreement" with the words "Distribution Agreement"; and (c) delete
the period at the conclusion thereof and insert in lieu thereof the following:
", and the Merger Agreement."
1.10 New definitions are added in appropriate alphabetical order in
Section 1.1 to read as follows:
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"Amendment No. 1" - Amendment No. 1 dated October __, 1997 to this
Agreement.
"Offering" - the initial public offering of 2,000,000 shares of common
stock of LCI described in the Prospectus dated October 6, 1997,
subject to completion.
"Offering Closing Date" - the date on which LCI shall actually have
received the Net Offering Proceeds.
"Net Offering Proceeds" - the amount received by LCI as "Proceeds to
Company" as listed on the first page of the Prospectus of LCI relating
to the Offering, less the actual expenses payable by LCI (including
printing, legal fees and filing and registration fees) (which expenses
shall not have varied materially from the estimate thereof set forth
on such first page of the Prospectus), all as determined to the
satisfaction of the Agent.
"Merger Agreement" - as defined in Amendment No. 1.
"Distribution Agreement" - the Distribution Agreement dated in
October, 1997 ( and in substantially the form of the draft dated
October ___, 1997) by and among the Borrower, LINC Finance
Corporation, Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxx, as it may from
time to time be amended, modified or supplemented to the extent
permitted by this Agreement.
1.11 The following definitions are deleted from the Loan Agreement:
"LFC Subordinated Debt", "LFC Subordinated Debt Documents", and "LFC
Intercreditor Agreement".
1.12 Section 2.21, "Guaranties and Collateral", is amended (a) to
delete from the end of subsection (a)(i) the words ", other than the issued and
outstanding shares of the capital stock of LFC now or hereafter owned by LCI
except to the extent described below", (b) to delete the letter "(A)" from
subsection (a)(iii); (c) to delete the entire final clause "(B)" from
subsection (a)(iii); and (d) to delete the text of subsection (b) and insert in
lieu thereof the words "[intentionally deleted]."
1.13 Section 2.22, "Subordination", is amended to delete subsection
(b) thereof.
1.14 Section 5.6, "Copies of Documents", is amended to delete
subsection (e) thereof and to insert in lieu thereof the following:
(e)(i) proxy statements, in each case delivered by LCI or any of
its Subsidiaries to any holder of Indebtedness of the Borrowers other
than the Banks; (ii) registration statements and any amendments and
supplements thereto, and any regular and periodic reports, if any,
filed by LCI or any of its Subsidiaries with any securities exchange
or with the SEC (or any governmental authority
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succeeding to any or all of the functions of the SEC); and (iii)
letters of comment or correspondence sent to LCI or its Subsidiaries
by any such securities exchange or the SEC in relation to LCI or any
of its Subsidiaries and any of their affairs, except to the extent
sent in the ordinary course of business with respect to routine
filings.
1.15 Section 5.11, "Accounts Receivable Aging Report, Other
Information," is amended to change the period at the end of subsection (b) to ";
and" and to add a new subsection (c) to read in its entirety as follows:
(c) Monthly, deliver to the Agent a certificate demonstrating the
Leverage Ratio for the immediately preceding full calendar month,
certified as true and correct by the chief financial officer of the
Borrowers, and setting forth adequate detail as may be required by
the Agent.
1.16 Section 6.9, "Financial Covenants", is amended to delete (a)
from subsection (b) the words, "including LFC and its Subsidiaries", (b) from
subsections (c) and (d) the words "excluding LFC and its Subsidiaries", and (c)
to restate subsection 6.9(a) to read, in its entirety, as follows:
(a) With respect to LCI and its Subsidiaries, on a consolidated
basis, at the end of each calendar quarter commencing with the
quarter ending December 31, 1997, have minimum Adjusted Tangible Net
Worth in an amount not less than (i) Ten Million Five Hundred
Thousand ($10,500,000) Dollars, plus (ii) the Net Offering Proceeds
received by LCI minus Three Million ($3,000,000) Dollars, plus (iii)
seventy-five (75%) percent of consolidated net income (with no
deduction for losses) commencing from the calendar quarter ending
December 31, 1997 and subsequent quarters thereto;
1.17 The preamble to Article 7, "Negative Covenants", is amended to
replace the semicolon immediately preceding the words "provided, however" with a
colon and to delete the entire proviso thereof.
1.18 Section 7.5, "Redemptions, Distributions", is amended (a) to
restate subsection (a)(iii) to read, in its entirety, as follows:
(iii) the aggregate sum of all such payments while any of the
Obligations is outstanding shall not exceed Eight Hundred Fifty Thousand
($850,000) Dollars; or
(b) to delete the texts of subsections (b)(iv) and (v) thereof and insert in
lieu thereof the words "[intentionally deleted]", and (c) to amend and restate
subsection (b)(iii) thereof to read, in its entirety, as follows:
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(iii) subject to the terms of subsection 7.9(b) hereof, in the event
that the Adjusted Tangible Net Worth of LCI and its Subsidiaries, on a
consolidated basis, based upon audited financial statements, exceeds the
minimum Adjusted Tangible Net Worth required to be maintained hereunder as
in effect on any date of determination hereunder then LCI may declare or
pay a dividend in an amount not greater than the amount of such excess on
the date(s) of such payment or declaration, provided that in any event no
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Default or Event of Default exists or would exist after giving effect
thereto as confirmed in writing by the Borrowers to the Agent;
1.19 Subsection (b)(i) of Section 7.9, "Investments", is amended to
delete the words "or LFC".
1.20 Section 7.12, "Amendment of Documents", is amended to delete the
words "the Quantum Shareholders' Agreement" and to delete the text of clause (a)
of the proviso therein and to insert in lieu thereof the words "[intentionally
deleted]".
1.21 Section 7.19, "Business of LFC", is amended to delete the text
thereof and insert in lieu thereof the words ["intentionally deleted"].
1.22 Section 7.22, "Certain Inactive Subsidiaries", is amended to
delete the words "LFC and" from the first parenthetical therein.
1.23 The Preamble of Article 8, "Events of Default", is amended to
delete the final sentence.
1.24 Subsection 8.4(a), "Other Defaults", is amended to delete the
first parenthetical appearing therein.
1.25 Each of Section 8.6, "Bankruptcy", and Section 8.7, "Judgments",
is amended to delete the words "other than LFC and its Subsidiaries" each time
they appear.
1.26 Section 8.9, "Ownership of Stock of the Borrowers", is amended
and restated to read, in its entirety, as follows:
(a) If any of the following shall occur:
(i) the sale, lease, or transfer, in one or a series of related
transactions, of all or substantially all of the Borrower's assets to
any Person or group (as such term is defined in Section 13(d)(3) of
the Securities Act, as amended); or
(ii) Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxx in the aggregate cease to
beneficially own and control at least twenty percent (20%) of the
voting power of the voting stock (having ordinary voting rights for
the election of directors) of LCI, or Xxxxxx Xxxxxxxxx individually
ceases beneficially to own and control at least
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fifteen percent (15%) of the voting power of the voting stock (having
ordinary voting rights for the election of directors of LCI); except
that, upon at least ten (10) days' prior written notice to the Agent,
Xxxxxx X. Xxxxxxxxx or Xxxxx Xxxxxx may transfer shares of LCI that
are otherwise subject to the minimum ownership and control
restrictions set forth in this subsection (ii) to his children or
spouse or trusts for the benefit of any of them so long as (A) Xxxxxx
X. Xxxxxxxxx continues at all times to have voting control with
respect to such stock of LCI; (B) prior to any such transfer to
children, spouse, or trusts, any such aforementioned transferee of
Xxxxxx X. Xxxxxxxxx and Xxxxx Xxxxxx agrees in writing not to make any
further transfers and to be bound by the provisions and prohibitions
set forth in this Section 8.9(b)(ii) and to assume the obligations of
the transferor thereunder, and (C) a legend is placed on any stock
certificates transferred to any children, spouse or trusts to such
effect; or
(b) LCI shall at any time own, beneficially and of record, less
than 100% of all the issued and outstanding shares of capital stock of
Quantum, in each case having ordinary voting rights for the election
of directors, or permit any Lien thereon other than the Agent's Lien,
except as permitted by Section 7.2 hereof; or
1.27 Exhibits D, L and P shall be deemed amended and restated in order
to give effect to the provisions of this Amendment as of the Merger Effective
Date and as of the Proceeds Receipt Date.
Article II. Increases in Commitments.
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2.1 Commencing as of the Proceeds Receipt Date (as hereinafter
defined), the Commitment of each of the Banks shall be increased from the
amounts set forth, with respect to each Bank, on the signature pages of the Loan
Agreement to the respective amounts set forth opposite the name of each of the
Banks on Schedule A annexed hereto and the Temporary Commitment shall be
increased from Five Million ($5,000,000) Dollars to Ten Million ($10,000,000)
Dollars.
2.2 In order to evidence the Loans made by each of the Banks under
the Commitments as amended hereby, the Borrowers shall execute and deliver to
each of the Banks a new note substantially in the form attached to the Loan
Agreement as Exhibit B-1, reflecting the Commitment of each Bank respectively as
amended hereby, dated the Proceeds Receipt Date and otherwise duly completed
(collectively, all of the above-described promissory notes are defined as the
"New Bank Notes"). In order to evidence the Temporary Loans by the Temporary
Lender under the Temporary Commitment as amended hereby, the Borrowers shall
execute and deliver to the Temporary Lender a new note substantially in the form
attached to the Loan Agreement as Exhibit B-2 reflecting the Temporary
Commitment amount as amended hereby, dated the Proceeds Receipt Date and
otherwise duly completed (hereinafter, the "New Temporary Note" and together
with the New Bank Notes, collectively, the "New Notes"). Upon execution and
delivery by the Borrowers of the New Notes, the Agent shall cause each of the
Notes being replaced by a New Note to be marked "Replaced by New Note", and
returned to the Borrowers.
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2.3 All references in the Loan Agreement, Loan Documents and all
other instruments, documents and agreements executed and delivered pursuant to
any of the foregoing, to "the ratable benefit of the Banks", "pro rata", or
terms of similar effect shall be deemed to refer to the ratable interests of the
Banks, as their respective pro rata interests shall be adjusted to reflect the
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increase in the Commitments of each of the Banks as set forth on Schedule A
annexed hereto.
2.4 In order to reflect the foregoing, if necessary, the Banks shall,
as of the Proceeds Receipt Date, make appropriate adjustments among themselves
in order that the amount of Loans outstanding to the Borrowers from each Bank
under the Loan Agreement are in principal amounts, as of the Proceeds Receipt
Date, which are in the same proportion to the outstanding principal amount of
all Loans that each Bank's Commitment, respectively, bears to the aggregate
Commitments of all the Banks, after giving effect to the increased amount of the
Commitments; provided, however, that the foregoing adjustments shall not be made
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as of the Proceeds Receipt Date in respect of Loans bearing interest at a rate
subject to an Interest Period outstanding immediately prior to the Proceeds
Receipt Date but such adjustments shall be made on the first day on which the
foregoing adjustments can be made without incurring "breakage costs" in respect
of each respective Interest Period, so that the foregoing adjustment shall be
made as of the Proceeds Receipt Date only in respect of borrowings from and
after the Proceeds Receipt Date or borrowings that are not subject to an
Interest Period. The Borrowers agree and consent to the terms of this Article
II.
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Article III. Waivers and Consents; Release of Liens.
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3.1 (a) Consent to Merger.
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The Banks hereby consent to the merger of LINC Group with and into LCI,
with LCI being the surviving entity (the "Merger") and to the amendment and
restatement of the certificate of incorporation and by-laws of LCI in
substantially the form of Schedule B annexed hereto; subject, however, to the
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conditions that the Merger shall have been consummated in accordance with the
terms of the Merger Agreement (as defined in Section 4.7 hereof) and
satisfaction of the other conditions precedent set forth in Section 5.1 hereof
to the Merger Effective Date (as defined in Article V).
(b) Merger Effective Date Actions.
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On the Merger Effective Date the Agent shall receive a first priority
pledge of all of the shares of capital stock of LCI owned by Xxxxxx Xxxxxxxxx
and Xxxxx Xxxxxx upon terms and conditions, and by execution and delivery of
agreements in form and substance, satisfactory to the Agent.
3.2 (a) Consent to Distribution and Offering.
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The Banks hereby (i) consent to each of the transactions described in
Schedule C annexed hereto to be consummated concurrently with effectiveness of
the closing of (i.e. receipt of proceeds by LCI from) the Offering on the
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Proceeds Receipt Date (as defined in Section 5.2 hereof), notwithstanding the
prohibition on the taking of such actions under the Loan Agreement, and (ii)
agree to release their Liens on the assets described in subsection 3.2(b) hereof
and authorize the Agent to release such Liens on the Proceeds Receipt Date and
to take such other actions (at the cost and expense of the Borrowers) as may be
necessary to effectuate the transactions described on Schedule C hereto;
subject, however, to the conditions that (A) each of such transactions shall be
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consummated in substantially the manner set forth in the transaction description
annexed hereto as Schedule C (the "Transaction Schedule" and all of such
transactions described thereon and consummated on the terms and conditions set
forth therein, the "Distribution Transactions"; the Distribution Transactions,
together with the Merger and the Offering, are referred to collectively as the
"New Transactions") and on substantially the terms and conditions set forth in
the Distribution Agreement (as defined in Section 1.10 hereof) and the other
relevant New Transaction Documents (as defined in Section 4.8 hereof), and (B)
the other conditions precedent set forth in Section 5.2 shall have been
satisfied.
(b) Proceeds Receipt Date Actions. On the Proceeds Receipt
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Date, the Agent shall release, which release is hereby approved by each of the
Banks as evidenced by the signature of such Bank on the signature pages hereof,
all of its Liens on and security interests in the following collateral: the
Contributed Subsidiaries (as defined in Schedule C annexed hereto) and their
respective subsidiaries; the Transferred Assets (as defined in Schedule C
annexed hereto); all of the issued and outstanding preferred stock of Quantum
held by the Agent; all of the issued and
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outstanding capital stock of LFC, and all of the issued and outstanding capital
stock of LCI pledged to the Agent.
Article IV. Representation and Warranties.
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Each of the Borrowers represents and warrants as follows:
4.1 Each Borrower is duly organized and validly existing under the
laws of its state of organization and has the power to own its assets and to
transact the business in which it is presently engaged and in which it proposes
to be engaged.
4.2 Each Borrower is in good standing in its state of incorporation
and in each state in which it is qualified to do business. There are no
jurisdictions in which the character of the properties owned by any Borrower or
in which the transaction of the business of any Borrower as now conducted
requires or will require any Borrower to qualify to do business, except
jurisdictions in which the failure to so qualify would not have a material
adverse effect on the Collateral in the Borrowing Base or on the business,
operations, financial condition, or properties of any Borrower.
4.3 Each Borrower has the power to execute and deliver this Amendment
No. 1 and to perform the Loan Agreement, as amended hereby, and to make and
deliver the New Notes and to perform its obligations under the New Notes, and to
execute and deliver each of the New Transaction Documents to which it is a party
and to perform its obligations thereunder, and each Borrower has taken all
necessary action, corporate or otherwise, to authorize the execution and
delivery of this Amendment No. 1, the making and delivery of the New Notes, the
performance of the Loan Agreement, as amended hereby, the New Notes and the
consummation of the New Transactions. No consent or approval of any Person
(including, without limitation, any stockholder of any Borrower), no consent or
approval of any landlord or mortgagee, no waiver of any Lien or right of
distraint or other similar right and no consent, license, approval,
authorization or declaration of any governmental authority, bureau or agency, is
or will be required in connection with the execution or delivery by any Borrower
of this Amendment No. 1 or of any New Transaction Document to which such
Borrower is a party and the making and delivery of the New Notes or the
performance by any Borrower, or the validity, enforcement or priority, of the
Loan Agreement as amended hereby and the New Notes or the performance, validity
or enforcement of any New Transaction Documents by any Borrower party thereto.
4.4 The execution and delivery by each Borrower of this Amendment No.
1 and of each New Transaction Document to which any Borrower is a party and the
making and delivery of the New Notes and performance by it hereunder, thereunder
and under the Loan Agreement as amended hereby, each New Transaction Document to
which such Borrower is a party and under the New Notes, does not and will not
violate any provision of law (including, without limitation, the Xxxxxxxx Act,
Sections 13 and 14 of the Securities and Exchange Act of 1934, and the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, and Regulations U, G and X of
the Board of Governors of the Federal Reserve System and the rules and
regulations promulgated thereunder) and does not and will not conflict with or
result in a breach of any order, writ, injunction, ordinance, resolution,
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decree, or other similar document or instrument of any court or governmental
authority, bureau or agency, domestic or foreign, or any certificate of
incorporation or by-laws of any Borrower or create (with or without the giving
of notice or lapse of time, or both) a default under or breach of any agreement,
instrument, documents, bond, note or indenture to which any Borrower is a party,
or by which it is bound or any of its properties or assets is affected, or
result in the imposition of any Lien of any nature whatsoever upon any of the
properties or assets owned by or used in connection with the business of any
Borrower or any other Loan Party, except for the Liens created and granted
pursuant to the Security Documents or otherwise permitted under the Loan
Agreement.
4.5 This Amendment No. 1, the New Notes, the Loan Agreement as
amended hereby, and each of the New Transaction Documents to which any Borrower
is a party have been duly executed and delivered by the Borrower party thereto
and each constitutes the valid and legally binding obligation of such Borrower,
enforceable in accordance with its terms, except that the remedy of specific
performance and other equitable remedies are subject to judicial discretion and
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally.
4.6 The Liens granted pursuant to the Security Documents secure,
without limitation, the Obligations under the Loan Agreement as amended by this
Amendment No. 1 and under the New Notes, whether or not so stated in the
Security Documents. The terms "Obligations" as used in the Security Documents
(or any other term used therein to refer to the Indebtedness, liabilities and
obligations of the Borrowers to the Banks) include, without limitation,
Indebtedness, liabilities and obligations to the Banks under the Loan Agreement
as amended by this Amendment No. 1 and under the New Notes made and delivered in
connection with this Amendment No. 1.
4.7 (a) The copies of the Merger Certificate dated in October, 1997
between LCI and LINC Group (the "Merger Agreement") and all agreements,
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instruments, and documents executed and delivered in connection therewith, and
all exhibits, annexes and schedules annexed thereto, and all amendments and
modifications to any of the foregoing (collectively, all of the foregoing,
including the Merger Agreement, are referred to as the "Merger Documents")
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heretofore delivered by LCI to the Agent are true, complete and accurate copies
thereof. None of the parties to the Merger Documents waived compliance by any
of the other parties thereto with any term, covenant or condition thereof, and
no party thereto has breached any covenant set forth therein or failed to
perform any of its obligations thereunder.
(b) Effective on or before the Proceeds Receipt Date the merger
of LINC Group with and into LCI, with LCI being the surviving entity, (i.e., the
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Merger) shall have been consummated pursuant to the Merger Documents and
applicable law. Simultaneously with the consummation of the Merger, the
surviving entity in the Merger shall have adopted the amended and restated
Certificate of Incorporation and by-laws in the form delivered to the Agent,
certified as true and complete prior to the effectiveness thereof, and
substantially in the same form as annexed hereto. Upon such consummation all of
the assets and properties of LINC Group shall have been vested in LCI, subject
to the liabilities of LINC Group. Neither the execution and delivery of the
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Merger Documents, nor the performance by LINC Group or LCI of any obligations
thereunder, or of any obligations of LINC Group incurred by LCI by virtue of the
Merger, violate any provision of law or will conflict with or result in a breach
of or create (with or without the giving of notice or lapse of time, or both) a
default under any agreement to which LINC Group or LCI is a party or by which it
is bound or any of its properties is affected.
(c) Prior to the Merger, LINC Group had no assets or liabilities
and conducted no business except as set forth on Schedule D attached hereto.
4.8 (a) The copies of the Distribution Agreement and all agreements,
instruments, and documents executed and delivered in connection therewith, and
all exhibits, annexes and schedules annexed thereto, and all amendments and
modifications to any of the foregoing (collectively, all of the foregoing,
including the Distribution Agreement, are referred to as the "Distribution
------------
Documents" and together with the Merger Agreement and the Prospectus,
---------
collectively, the "New Transaction Documents") heretofore delivered by LCI to
-------------------------
the Agent are true, complete and accurate copies thereof. Schedule E sets forth
a true and complete list of all of the Distribution Documents. None of the
parties to the Distribution Documents waived compliance by any of the other
parties thereto with any term, covenant or condition thereof, and no party
thereto has breached any covenant set forth therein or failed to perform any of
its obligations thereunder.
4.9 Upon consummation thereof, the New Transactions shall have been
consummated in all material respects in accordance with the terms and conditions
of the Transaction Schedule, the Merger Agreement, the Distribution Agreement
and the Prospectus.
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Article V. Conditions Precedent.
--------------------
5.1 Merger Effective Date Conditions. The Banks' consent set forth
--------------------------------
in Section 3.1 hereof (i.e., relating to the Merger) shall be subject to the
----
fulfillment by the Borrowers, in a manner satisfactory to the Agent and the
Banks, of all of the conditions precedent set forth in this Section 5.1, and the
date on which all such conditions shall have been fulfilled to the satisfaction
of the Agent and the Banks shall be herein called the "Merger Effective Date"
(provided that the Banks' consent under Section 3.1 shall be deemed withdrawn if
the Merger Effective Date shall not have occurred on or before December 31,
1997):
(a) The Borrowers, the Banks and the Agent shall have executed and
delivered this Amendment.
(b) (i) The representations and warranties contained herein and in
each other agreement, instrument, certificate or other writing delivered to the
Agent or any Bank pursuant hereto or to the Loan Agreement shall be correct on
and as of the date hereof after giving effect to the consents in Section 3.1 of
this Amendment No. 1 as though made on and as of such date except to the extent
modified hereby and (ii) no Default or Event of Default shall have occurred and
be continuing on the Merger Effective Date or would result from the taking
effect of this Amendment No. 1.
(c) The Agent shall have received a copy of the Merger Documents as
of the Merger Effective Date, certified as true and complete by an officer of
LCI, and the Merger shall have been consummated in accordance with the terms
and conditions set forth in the Merger Agreement.
(d) LCI shall have delivered to the Agent a copy of its amended and
restated charter and by-laws, each certified as being true and complete as of
the Merger Effective Date;
(e) The Agent shall have received, on or before the Merger
Effective Date, the following, each in form and substance satisfactory to the
Agent:
(i) a long-form good standing certificate as of a date not
more than twenty days prior to the date hereof with regard to LCI and LINC Group
from the Secretary of State of each of Delaware and Illinois;
(ii) copies of the resolutions adopted by each of LCI's and
LINC Group's Board of Directors, certified by an authorized officer thereof,
authorizing the execution, delivery and performance by LCI and LINC Group of the
Merger Agreement and consummation of the Merger, the Distribution Transactions,
and the Offering in accordance with the terms thereof;
(iii) a favorable written opinion of Xxxxx X. Xxxxxx, Esq. and
Xxxxxxxx & Xxxxx, counsel to LCI and LINC Group, as to such matters relating to
the Merger or as the Banks may reasonably request.
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(f) All legal matters incident to the Merger shall be reasonably
satisfactory to the Agent and counsel to the Agent.
5.2 Proceeds Receipt Date Conditions. The effectiveness of the
--------------------------------
consents set forth in Section 3.2 of this Amendment No. 1 and the effectiveness
of the amendments set forth in Articles 1 and 2 hereof shall be subject to the
fulfillment by the Borrowers, in a manner satisfactory to the Agent and the
Banks, of all of the preceding conditions precedent set forth in this Article V
and all of the conditions precedent set forth in this Section 5.2, and the date
on which the last of all such conditions shall have been fulfilled to the
satisfaction of the Agent and the Banks, shall be herein called the "Proceeds
Receipt Date" (provided that the Banks' consent under Section 3.2 shall be
deemed withdrawn if the Proceeds Receipt Date shall not have occurred on or
before December 31, 1997):
(a)(i) The representations and warranties contained herein and in
each other agreement, instrument, certificate or other writing delivered to the
Agent or any Bank pursuant hereto or to the Loan Agreement, including the New
Transaction Documents, shall be correct on and as of the Proceeds Receipt Date
after giving effect to the New Transactions and this Amendment No. 1 as though
made on and as of such date except to the extent modified hereby and (ii) no
Default or Event of Default shall have occurred and be continuing on the
Proceeds Receipt Date or would result from the taking effect of this Amendment
No. 1.
(b) Each of the Borrowers shall have:
(i) executed and delivered to each of the Banks its
respective New Bank Note, and to the Temporary Lender its New Temporary Note;
(ii) paid to the Agent for the benefit of each of the
Banks, a fee equal to (A) 1/8% multiplied by (B) an amount equal to the
difference between such Bank's Commitment under the Loan Agreement (1) after the
Proceeds Receipt Date and (2) prior to the Proceeds Receipt Date;
(iii) paid all fees and expenses of counsel to the Agent and
to Fleet Bank N.A. incurred in connection herewith; and
(iv) otherwise complied in all respects with the terms
hereof and of any other agreement, document, instrument or other writing to be
delivered by the Borrowers in connection herewith.
(c) LCI shall have received not less than Twenty Four Million
Five Hundred Thousand ($24,500,000) Dollars in Net Offering Proceeds (as defined
in Section 1.10 hereof).
(d) The Agent shall have received, on or before the date hereof,
the following, each in form and substance satisfactory to the Agent:
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(i) copies of the resolutions adopted by each Borrower's
Board of Directors, certified by an authorized officer thereof, authorizing the
execution, delivery and performance by each such Borrower of this Amendment No.
1, the New Notes and each New Transaction Document to which such Borrower is a
party;
(ii) a certificate of an authorized officer of each
Borrower, certifying the names and true signatures of the officer authorized to
sign this Amendment No. 1 and the New Notes, together with evidence of the
incumbency of such authorized officer; and a Compliance Certificate dated the
Proceeds Receipt Date certifying that the conditions set forth in this Section
5.2 shall have been satisfied; and
(iii) opinions of counsel of Xxxxx Xxxxxx and of Xxxxxxxx &
Xxxxx relating to the Distribution Transactions and the Offering, in form and
substance as the Banks may reasonably request.
(d) The Agent shall have received copies of each of the documents
set forth on Schedule E annexed hereto together with all exhibits and schedules
related thereto and all amendments, modifications and supplements thereof in
effect as of the Proceeds Receipt Date, certified as true and correct by an
officer of each of the Borrowers, and the New Transactions and the Offering
shall be consummated substantially all in accordance with the terms and
conditions set forth in the New Transaction Documents as determined by the Banks
in their sole discretion.
(e) The obligations of LFC to Newcourt under the Note Purchase
Agreement dated September 28, 1994 between LFC and Newcourt shall have been
repaid in full and any and all liens held by Newcourt on the capital stock of
LCI shall have been released as evidenced by a writing in form and substance
satisfactory to the Agent.
(f) All legal matters incident to this Amendment and the Loan
Agreement shall be reasonably satisfactory to the Agent and counsel to the
Agent.
Article VI. Miscellaneous.
-------------
6.1 The Loan Agreement and the other agreements to which the
Borrowers are a party delivered in connection herewith or with the Loan
Agreement are, and shall continue to be, in full force and effect, and are
hereby ratified and confirmed in all respects, except that on and after the
Proceeds Receipts Effective Date (a) all references in the Loan Agreement to
"this Agreement", "hereto", "hereof", "hereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended hereby,
(b) all references in the Loan Agreement, the Security Documents or any other
agreement, instrument or document executed and delivered in connection therewith
to (i) the "Loan Agreement", "thereto", "thereof", "thereunder" or words of like
import referring to the Loan Agreement shall mean the Loan Agreement as amended
hereby, (ii) a "Note" payable to any Bank shall be deemed to refer to the New
Note payable to such Bank and (iii) the "Loans" (or any other term or terms used
in any of such documents to describe or refer to Loans
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made by the Banks to the Borrowers under the Loan Agreement) shall be deemed to
refer to Loans made by the Banks to the Borrowers pursuant to the Loan Agreement
as amended hereby.
6.2 The Loan Agreement, the Security Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Amendment No. 1. Except as so amended
hereby, the Loan Agreement and the other Loan Documents shall remain in full
force and effect in accordance with their respective terms. The execution and
delivery of this Amendment No. 1 by the Borrowers, the Banks and the Agent shall
not waive or be deemed to waive any default which has occurred or which may be
occurring in respect of the Loan Agreement. All of the terms and provisions of
this Amendment No. 1 are hereby incorporated by reference into the Loan
Agreement as if such terms and provisions were set forth in full therein.
6.3 The miscellaneous provisions under Article 10 of the Loan
Agreement, together with the definitions of all terms used therein, and all
other Sections of the Loan Agreement to which such Sections refer are hereby
incorporated by reference as if the provisions thereof were set forth in full
herein.
6.4 This Amendment No. 1 may be executed in counterparts by the
parties hereto, and each such counterpart shall be considered an original, and
all such counterparts shall constitute one and the same instrument.
6.5 THIS AMENDMENT NO. 1 SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to the Third Amended and Restated Loan Agreement to be duly
executed as of the date first above written.
LINC CAPITAL, INC. (formerly known
as SCIENTIFIC LEASING, INC.),
as Borrower
By
---------------------------------
Name:
Title:
LINC QUANTUM ANALYTICS, INC.,
as Borrower
By
---------------------------------
Name:
Title:
FLEET BANK, N.A. (formerly NatWest
Bank N.A.) as Agent and as a Bank
By
---------------------------------
Name:
Title:
CORESTATES BANK, N.A.
By
---------------------------------
Name:
Title:
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LASALLE NATIONAL BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO
By
---------------------------------
Name:
Title:
EUROPEAN AMERICAN BANK
By
---------------------------------
Name:
Title:
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