EXHIBIT 10.44
FFCCB&DRAFT
6/27/97
SEC0ND AMENDMENT
TO
AMENDED AND RESTATED
MASTER SALE OF CHATTEL PAPER
AND SECURITY AGREEMENT
SECOND AMENDMENT (this "Second Amendment") dated as of June 30, 1997 to the
AMENDED AND RESTATED MASTER SALE OF CHATTEL PAPER AND SECURITY AGREEMENT (the
"Original Agreement") dated as of March 21, 1996, as amended prior to the date
hereof among EUROPEAN AMERICAN BANK ("Buyer"), BANKVEST CAPITAL CORP.
("BankVest"), and LEASEVEST CAPITAL CORP. ("LeaseVest"), jointly and severally,
("BankVest" and "LeaseVest", each a "Seller" and, collectively, the "Sellers")
each a Massachusetts corporation with its principal place of business at 000
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000.
RECITALS
The Buyer and the Seller desire to amend the Agreement on the terms set
forth herein.
Accordingly, the Seller and the Buyer hereby agree as follows:
1. Amendments. The Original Agreement is hereby amended as follows:
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A. The first sentence of Section 2(a) is hereby deleted in its
entirety and the following substituted in place thereof:
Subject to the terms and conditions set forth in this Agreement,
Seller hereby agrees to sell and Buyer hereby agrees to purchase
from time to time during the period commencing May 9, 1995 and
ending on November 30, 1997 or such later date as Buyer and
Seller may mutually agree in writing (such date, the "Commitment
Expiration Date") Paper, the sum of the unpaid rental payments in
respect of which when added to the sum of unpaid rental with
respect to all Paper purchased by Buyer from Seller shall not
exceed $15,000,000 (the "Commitment"). The Commitment
shall include the aggregate unpaid rental payments from time to
time of Paper purchased by Buyer from Seller prior to the date
hereof.
B. Section 5 is hereby amended to add new clauses (j) through (m) which
shall read in their entirety as follows:
(j) The Sellers shall maintain at all times an Adjusted Debt to
Tangible Net Worth ratio on a consolidated basis, measured quarterly as the
last day of each fiscal quarter, of not more than 6 to 1.
(k) The Sellers shall have and maintain at all times a
Delinquency Rate measured monthly as of the last day of each calendar
month, of no greater than seven (7%) percent of the Net Lease Receivables
comprising the Sellers' entire combined lease portfolio.
(l) The Sellers shall have and maintain net income on a
consolidated basis, calculated on a rolling four quarter basis and measured
quarterly at the end of each fiscal quarter of not less than one ($1.00)
dollar provided that the Sellers shall not permit a net loss to occur
during any one fiscal quarter in excess of one hundred thousand
($100,000.00) dollars.
(m) The Sellers have a consolidated Tangible Net Worth on the
date hereof of at least $6.0 million. As of the end of each fiscal
quarter, the Sellers will have a Tangible Net Worth equal to at least the
amount set forth below:
Year Fiscal Year Ending Minimum Tangible Net Worth
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Year 1 June 30, 1997 $6 million
Year 2 June 30, 1998 $6 million plus 50% of
Net Income for Year 1.
Year 3 June 30, 1999 Minimum Tangible Net
Worth required for Year 2
plus 50% of Net Income
for Year 2.
Year 4 June 30, 2000 Minimum Tangible Net
Worth required for Year 3
plus 50% of Net Income
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for year 3.
Year 5 June 30, 2001 Minimum Tangible Net
Worth required for Year 4
plus 50% of Net Income
for Year 4.
Year 6 June 30, 2002 Minimum Tangible Net
Worth required for Year 5
plus 50% of Net Income
for Year 5.
Year 7 June 30, 2003 Minimum Tangible Net
Worth required for Year 6
plus 50% of Net Income
for Year 6.
Year 8 June 30, 2004 Minimum Tangible Net
Worth required for Year 7
plus 50% of Net Income
for Year 7.
Satisfaction of such minimum Tangible Net Worth requirement will be tested at
the end of each fiscal quarter and, for such purpose, losses shall be
disregarded so that the required minimum Tangible Net Worth at the end of any
fiscal year shall not be less than the required minimum Tangible Net Worth for
the preceding fiscal year.
C. Article I is hereby amended to add the following defined terms in
appropriate alphabetical order:
"Adjusted Debt to Tangible Net Worth Ratio" shall mean at any time the
ratio of (i) total senior liabilities less Non-Recourse debt to (ii) Tangible
Net Worth.
"Delinquency Rate" shall mean the percentage of the Sellers' entire
combined lease portfolio expressed in dollars relating to leases which are more
than 30 days' contractually delinquent expressed as a percentage of the
aggregate Net Lease Receivables.
"Liabilities" shall mean all liabilities of every kind of the Sellers' as
would be shown on the Sellers' consolidated financial statements prepared in
accordance with GAAP.
"Net Lease Receivables" shall mean the aggregate of the scheduled future
lease payments comprising the Sellers' entire combined lease portfolio plus the
estimated residual value of the personal property leased pursuant thereto, plus
indirect initial cost, less unearned lease income and allows for doubtful
accounts.
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"Non-Recourse Debt" shall mean all liabilities of the Sellers' which are
non-recourse in nature and treated as non-recourse obligations on the Sellers'
financial statements.
"Senior Liabilities" shall mean all Liabilities of Sellers shown on the
consolidated financial statements of BankVest other than subordinated
Liabilities.
"Tangible Net Worth" shall mean as of the date of determination thereof,
the excess of (a) all assets of the Sellers determined on a consolidated basis
in accordance with GAAP over all liabilities of the Sellers determined on a
consolidated basis in accordance with GAAP, minus (c) the sum of (i) the book
value of all intangibles determined in accordance with GAAP, including goodwill
and intellectual property and (ii) any write-up of the book value of the assets
since the most recent audited financial statements in existence on the date
hereof.
D. Section 10 is hereby amended to add a new clause (c) which shall read
in its entirety as follows:
(c) In the event the Seller breaches any of the covenants contained in
Section 5(j) through Section 5(m) (the "Financial Covenants"), then Sellers
shall, immediately upon Buyer's demand, remit to Buyer an amount equal to the
difference between (x) the Ultimate Net Loss of Sellers incurred by the Sellers
immediately prior to such breach and (y) the maximum Ultimate Net Loss which may
be incurred by Sellers in each case as determined in accordance with Section 11
of the Agreement, in each case of (x) and (y) determined solely with respect to
Paper purchased on or after the date hereof (the "Escrow Amount"). The Buyer
shall deposit the Escrow Amount in an interest-bearing account at a branch of
the Buyer designated "BankVest Capital Corp./LeaseVest Capital Corp. special
escrow account", which shall be an account under the sole dominion and control
of Buyer. Proceeds of the account shall be used to fund Borrower's liabilities
under this Agreement, including without limitation, Section 9 and Section 11 of
the Agreement. On the first day of each month, the Buyer will remit to the
Seller an amount by which the funds in the account exceed the Escrow Amount
determined as of the last day of the preceding month or the Seller will remit to
Buyer for credit to the account an amount by which the Escrow Amount as so
determined exceeds the funds in the account. Buyer shall have a continuing lien
on all amounts in the account. Upon the earlier of (i) Sellers' compliance with
all of the Financial Covenants, and (ii) the date on which Sellers' obligations
under the Agreement have been paid in full and satisfied the Buyer shall release
the remaining funds held in the account to the Seller. Such release under
clause (i) shall not impair the Buyer's right
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to enforce this clause (c) with respect to any subsequent breach of any
Financial Covenant.
3. Miscellaneous. (a) Except as expressly modified hereby, the
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Original Agreement shall remain in full force and effect and the terms thereof
are ratified and confirmed.
(b) This Second Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
(c) This Second Amendment may be executed in two or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties have executed this Second Amendment as
of the date first above-written.
EUROPEAN AMERICAN BANK
By:________________________
Title:
BANKVEST CAPITAL CORP.
By:________________________
Title:
LEASEVEST CAPITAL CORP.
By:________________________
Title:
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