TENTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.8(i)
This TENTH AMENDMENT TO CREDIT
AGREEMENT (the “Tenth Amendment”) dated January 29, 2010, 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, an Eighth Amendment dated September 30,
2009 and a Ninth Amendment dated November 30, 2009 (as the same may be modified
and amended from time to time, including by this Tenth 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 $115,000,000.
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:
“LAMI” means LEAF
Asset Management, LLC, a Delaware limited liability company, together with
its successors and permitted assigns.
“Non-Equipment Receivables
Contract” means a Contract which evidence receivable financings secured
by non-equipment collateral such as real estate.
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“Tenth Amendment”
means the Tenth Amendment to this Agreement dated January 29, 2010.
(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:
“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 the following amounts are attributable to Non-Equipment Receivables
Contracts: (A) $5,600,000, on any date prior to February 26, 2010; (B)
$2,800,000, on any date on or after February 26, 2010 and prior to March 24,
2010, or (C) $0 on any date on or after March 24, 2010.
“Contract” means (i) a
lease, loan or contract for use, hire or purchase of equipment, (ii) a practice
acquisition loan, (iii) an ultimate net loss loan, (iv) other commercial
contracts such as service and maintenance agreements, or (v) a Non-Equipment
Receivables Contract, together with any assignments thereof and any delivery and
acceptance certificate therefor, any guaranties and amendments, addendums and
other modifications thereto.
“Eligible Contract”
means a Contract owned by a Borrower that, as of any date of determination,
complies with the covenants set forth in this Agreement and each of the
following requirements:
(a) Such
Contract originated in the ordinary course of a Borrower’s business and is not a
Defaulted Contract;
(b) Such
Contract is a legal, valid and binding full recourse payment obligation of the
related Lessee enforceable in accordance with its terms (except as may be
limited by applicable insolvency, bankruptcy, moratorium,
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reorganization,
or other similar laws affecting enforceability of creditors’ rights generally
and the availability of equitable remedies) and is in full force and effect, is
not subject to any defense, counterclaim or right of setoff, and has not been
satisfied, subordinated or rescinded;
(c) The
initial stated term of such Contract is not greater than 63 months;
(d) With
the exception of any Contracts with a Governmental Authority required by law to
have provisions to the contrary, the Lessee’s obligations under such Contract
are “hell or high water” obligations that are, among other characteristics,
non-cancelable, unconditional and not subject to any right of set-off,
rescission, counterclaim, offset, reduction or recoupment except that, upon
making of a Casualty Payment under such Contract, the obligation of the related
Lessee to make Lease Payments thereunder may be reduced
accordingly;
(e) Such
Contract contains provisions requiring the Lessee to pay all sales, use, excise,
rental, property or similar taxes imposed on or with respect to any related
Equipment and to assume all risk of loss, damage, or destruction of such
Equipment, and such Contract requires the Lessee to maintain any related
Equipment in good and workable order and to obtain and maintain liability
insurance, physical damage insurance and liability insurance on such Equipment
subject thereto and to name the lessor (including any private label lessor) or
lender under the Contract as a loss payee and an additional insured with respect
thereto;
(f) The
pledge by a Borrower to the Agent of a security interest in such Contract and
the related Equipment will not violate the terms or provisions of such Contract
or any other agreement to which any Borrower is a party or by which it is
bound;
(g) Such
Contract has not been rewritten or amended, other than in accordance with the
written policies and procedures of Borrowers and consistent with their past
practice, such that the amount of any Contract Payment owing pursuant to the
terms of such Contract has been decreased, or any other obligations of the
Lessee under such Contract have been diminished, due to any payment default or
delinquency or the related Lessee’s financial inability to make such
payments;
(h) The
related Lessee is not subject to any action in bankruptcy, receivership,
reorganization, insolvency or other material adverse change in its condition
(since entering into the Contract);
(i) All
payments owing under such Contract are required to be made in
Dollars;
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(j) Such
Contract provides for the acceleration of all Lease Payments thereunder upon
default by the Lessee;
(k) Such
Contract requires that, if an Event of Loss occurs, the related Lessee must take
one of the following actions: (i) either (A) restore or repair the
affected Equipment to good repair, condition and working order or (B) replace
the Equipment with like equipment of the same or later model in good repair,
condition and working order, and, in either case, continue to make Contract
Payments on its regularly scheduled basis despite the occurrence of such Event
of Loss; or (ii) make a lump sum payment in an amount that is not less than the
then Net Present Value;
(l) Such
Contract and the Equipment subject to such Contract are not subject to any Liens
other than Permitted Liens;
(m) The
Agent has a first priority perfected security interest in such Contract (subject
only to Permitted Liens), and a complete Contract File for such Contract is
maintained either (i) with a custodian who holds such Contract Files for the
benefit of the Agent, or (ii) in the chief executive office of the Borrowers (or
such other location as is owned or, to the extent subject to a satisfactory
landlord waiver in favor of the Agent, leased by a Borrower), in a secure and
fireproof filing cabinet clearly identifying the contents thereof as Collateral
hereunder, pledged to the Agent.
(n) The
Agent (directly or through a Borrower) has a first priority perfected security
interest in any Equipment subject to a finance lease (to the extent such
Equipment has, in the aggregate, an Original Net Equipment Cost of $25,000 or
more);
(o) The
Lessee and each item of Equipment subject to such Contract are domiciled or
located within the United States and Puerto Rico, as applicable;
and
(p) Such
Contract is eligible for financing under a CP Facility;
provided
that, compliance with paragraph (m) above is hereby waived for the first three
(3) Business Days following acquisition of such Contract pursuant to a Financed
Acquisition.
“Guaranty” means the
Guaranty and Suretyship Agreement executed and delivered by LAMI pursuant to the
Tenth Amendment, as amended, supplemented, amended and restated or otherwise
modified from time to time.
“Termination Date”
means the earliest of (a) March 31, 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.
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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) $107,500,000, on February 26, 2010, and (ii)
$100,000,000, on March 24, 2010.
3. 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 $44,000,000, 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.
4. Amendment to Section 10.15
of the Credit Agreement. Section 10.15 of the Credit Agreement
is hereby amended and restated in its entirety, to read as follows:
Section
10.15 Subordinated Debt.
The Borrowers will not, and will not permit any of their consolidated
Subsidiaries to (a) prepay, redeem, repurchase or otherwise acquire for value
any Subordinated Debt, or (b) make any principal, interest or other payments on
any Subordinated Debt, whether or not, in any case, permitted (either expressly
or by implication) by a Subordination Agreement.
5. 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 Tenth Amendment and any other documents
which the Lenders require such Borrower to deliver hereunder (this Tenth
Amendment and any such additional documents delivered in connection with the
Tenth 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
Tenth Amendment have been adopted and taken and, upon their execution, the
Credit Agreement, as amended by this Tenth 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);
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(c) No Violations of Law or
Agreements. the making and performance of this Tenth 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 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.
6. Conditions to Effectiveness
of Amendment. This Tenth Amendment shall be effective upon the
Agent’s receipt of the following, each in form and substance reasonably
satisfactory to the Lenders:
(a) Tenth
Amendment. this Tenth Amendment, duly executed by the
Borrowers and the Lenders;
(b) Guaranty and Security
Agreement. A Guaranty and Suretyship Agreement and a Security
Agreement, each duly
executed by LEAF Asset Management, LLC, a Delaware limited liability company
(“LAMI”), together with a Secretary’s Certificate for LAMI and a good standing
certificate with respect thereto;
(c) 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 Tenth Amendment, if any;
(d) 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 Tenth Amendment;
(e) Costs and
Expenses. all reasonable costs and expenses of the Agent in
connection with the preparation and review of this Tenth Amendment, including,
but not limited to, the reasonable fees, expenses and disbursements of counsel
to the Agent; and
(f) Other Documents and
Actions. such additional agreements, instruments, documents,
writings and actions as the Lenders may reasonably request.
7. No Waiver;
Ratification. The execution, delivery and performance of
this Tenth 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
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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.
8. Acknowledgments. To
induce the Lenders to enter into this Tenth 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 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 Tenth
Amendment. Nothing in this Tenth 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.
9. Binding
Effect. This Tenth Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
10. Governing
Law. This Tenth 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.
11. Headings. The
headings of the sections of this Tenth Amendment are inserted for convenience
only and shall not be deemed to constitute a part of this Tenth
Amendment.
12. Counterparts. This
Tenth 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 Tenth 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
Tenth
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
Tenth
Amendment to Credit Agreement
HSH NORDBANK AG, NEW YORK
BRANCH
By:
________________________________
Name:
Title:
By:
________________________________
Name:
Title:
Lender
Signature Page
Tenth
Amendment to Credit Agreement
SOVEREIGN BANK
By:
________________________________
Name:
Title:
Lender
Signature Page
Tenth
Amendment to Credit Agreement
BANK OF AMERICA, N.A.
By:
________________________________
Name:
Title:
Lender
Signature Page
Tenth
Amendment to Credit Agreement
TD BANK, N.A.
By:
________________________________
Name:
Title:
Lender
Signature Page
Tenth
Amendment to Credit Agreement
WACHOVIA BANK, NATIONALASSOCIATION
By:
________________________________
Name:
Title:
Lender
Signature Page
Tenth
Amendment to Credit Agreement
Parent Consent and
Reaffirmation
Each of the undersigned (the “Parents”)
hereby consents to and joins in the terms of the foregoing Tenth Amendment to
Credit Agreement (the “Tenth Amendment”) and ratifies, affirms, reaffirms and
confirms all provisions of the Intercompany Subordination Agreement, dated July
31, 2006 (as amended and reaffirmed from time to time, collectively, the
“Subordination Agreement”), for the benefit of the Agent and the Lenders,
including, but not limited to, the jury trial waivers contained
therein. Each Parent hereby certifies that: (i) the Subordination
Agreement subordinates all Indebtedness of the Borrowers to the Agent (the
“Parent Debt”) and the Lenders under the Credit Agreement (as amended through
the date hereof); (ii) there exists no defenses, offsets or counterclaims to
such Parent’s obligations under the Subordination Agreement as of the date
hereof; and (iii) no defaults exist under the Subordination Agreement as of the
date hereof. Further, each Parent acknowledges and agrees
specifically to Section 4 of the Tenth Amendment, amending and restated Section
10.15 of the Credit Agreement so as to restrict any payment on the Parent Debt,
notwithstanding any allowance for such payment that might be set forth in the
Subordination Agreement, and will not cause any Borrower to make, or accept from
any Borrower, any payment with respect to the Parent
Debt. Capitalized terms not otherwise defined above shall have the
meaning given to such terms in the Tenth Amendment.
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RESOURCE
AMERICA, INC.
By:
__________________________________
Name:
Title:
|
RESOURCE
LEASING, INC.
By:
__________________________________
Name:
Title:
|
Dated: January
29, 2010
Tenth
Amendment to Credit Agreement
Parent
Consent
