EXHIBIT 99.2
SECOND AMENDMENT TO FORBEARANCE AGREEMENT
This Second Amendment to Forbearance Agreement, dated as of March 2, 1998 (this
"Amendment"), is between Mercury Finance Company, a Delaware corporation (the
"Company"), and the person(s) listed on the signature pages of this Amendment
(collectively or individually, the "Lender"). Capitalized terms used in this
Amendment and not otherwise defined have the meanings assigned to such terms in
the Forbearance Agreement (referred to below).
PRELIMINARY STATEMENTS
1. The Company and the Lender are parties (or as to the Lender, is a successor
in interest to a party) to the Forbearance Agreement, dated as of July 11, 1997
(as amended by First Amendment to Forbearance Agreement dated as of November 6,
1997, the "Forbearance Agreement").
2. The Company has requested that the Forbearance Agreement be amended, inter
alia, to extend the automatic Termination Date of the Forbearance Period from
March 2, 1998 to June 3, 1998.
3. The Lender is willing to extend the automatic Termination Date of the
Forbearance Period from March 2, 1998 to June 3, 1998 but only on the terms and
conditions stated herein.
AGREEMENT
In consideration of the premises and mutual agreements contained in this
Amendment and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties to this Amendment agree as
follows:
1. AMENDMENTS TO FORBEARANCE AGREEMENT.
On the date this Amendment becomes effective, after satisfaction by the Company
of each of the conditions set forth in Section 3 hereof:
1.1 ESCROW. Section 1.1 of the Forbearance Agreement hereby is amended by
deleting the references to "January 9, 1998 and February 27, 1998" in the
definition of "Escrow" and replacing it with "June 1, 1998".
1.2 TERMINATION DATE. Section 1.1 of the Forbearance Agreement hereby is
amended by deleting the reference to "March 2, 1998" in the definition of
"Termination Date" and replacing it with "June 3, 1998".
1.3 EFFECT OF TERMINATION DATE. Section 2.2 of the Forbearance Agreement
hereby is amended by deleting the reference to "March 2, 1998" and replacing it
with "June 3, 1998".
1.4 PAYMENT OF INTEREST.
(A) Subsection (A) under 3.2 of the Forbearance Agreement is hereby amended by
deleting the reference to "Termination Date" and replacing it with "May 31,
1998".
(B) Subsection (B) under Section 3.2 of the Forbearance Agreement hereby is
amended by deleting the reference to "March 2, 1998" and replacing it with "June
1, 1998".
(C) Subsection (D) under Section 3.2 of the Forbearance Agreement hereby is
amended by adding a new sentence at the end of the first sentence as follows:
"On June 1, 1998, the Company will pay to the Lender all accrued and unpaid
interest calculated to and including May 31, 1998, excluding any accrued and
unpaid interest owing to the Lender as a result of the application of a Default
Rate in excess of 9.00% per annum."
1.5 ACKNOWLEDGMENT; OTHER AGREEMENTS. Section 3.3 of the Forbearance Agreement
hereby is amended by amending and restating the fourth sentence of such section
as follows:
"Prior to June 1, 1998, the Company will make no payment on account of
subordinated debt other than that agreed to by the holders of subordinated debt
in the Forbearance and Third Limited Waiver Agreement between the Company and
the holders of subordinated debt dated as of July 11, 1997 and in the
Forbearance and Fourth Limited Waiver Agreement between the Company and the
holders of subordinated debt dated as of November 6, 1997 (in either case,
without regard to any amendment, modification or supplement thereof)."
1.6 CASH SWEEP. Section 3.4 of the Forbearance Agreement hereby is amended by
adding two new sentences after the second sentence in such section as follows:
"So long as the Forbearance Period has not been terminated, on April 3, 1998 and
May 5, 1998, the Company will pay to the Lender its Funded Debt Pro Rata Share
of the aggregate amount of Excess Cash of the Company calculated as of the close
of business March 31, 1998 and April 30, 1998, respectively. On June 3, 1998,
the Company will pay to the Lender its Funded Debt Pro Rata Share of the
aggregate amount of Excess Cash calculated as of the close of business on May
29, 1998."
1.7 ESCROW. Section 3.10 of the Forbearance Agreement hereby is amended by
amending and restating such section in its entirety as follows:
"By no later than April 30, 1998, the Company agrees to establish the Escrow in
the amount of $7,500,000 that shall be used solely by the Company in accordance
with the terms of the Escrow Agreement to fund the payments required to be made
on June 1, 1998 to the Lender under this Agreement and other holders of Funded
Debt as contemplated by this Agreement."
1.8 TOLLING. Section 3.12 of the Forbearance Agreement hereby is amended by
deleting each reference to "April 1, 1998" and replacing them with "July 1,
1998".
1.9 TERMINATION EVENTS.
(A) Subsection (D) of Section 4.1 of the Forbearance Agreement hereby is
amended by amending and restating such section in its entirety as follows:
"(D) failure of the Company to deliver to the Steering Committee within 5
business days of the following delivery dates (i) audited financial statements
for fiscal year 1997 as soon as available but in no event later than April 15,
1998, (ii) unaudited financial statements for the first quarter of 1998 as soon
as available but in no event later than May 15, 1998 and (iii) unaudited monthly
financial statements as soon as available but in no event later than (a) April
15, 1998 for the February 1998 statements, (b) May 15, 1998 for the March, 1998
statements and (c) May 31, 1998 for the April, 1998 statements;"
(B) Subsection (E) of Section 4.1 of the Forbearance Agreement hereby is
amended by amending and restating such section in its entirety as follows:
"(E) the Company's consolidated net income before income taxes, professional
fees, restructuring costs and costs and fees associated with branch closures as
reported in the Company's unaudited income statements is less than (i)
($15,000,000) for the two months ended February 28, 1998, (ii) ($22,500,000) for
the three months ended Xxxxx 00, 0000, (xxx) ($30,000,000) for the four months
ended April 30, 1998, and (iv) ($37,500,000) for the five months ended May 31,
1998;"
2. REPRESENTATIONS AND WARRANTIES.
To induce the Lender to enter into this Amendment, the Company represents and
warrants to the Lender that:
2.1 CORPORATE AUTHORITY; NO CONFLICTS. The execution and delivery by the
Company of this Amendment and the performance of the Company's obligations under
this Amendment (i) are within its corporate powers, (ii) are duly authorized by
its board of directors and, if necessary, its stockholders, (iii) are not in
contravention of the terms of its articles or certificate of incorporation or
by-laws or of any indenture, agreement or undertaking to which it is a party or
by which it or any of its property is bound, (iv) does not, as of the date
hereof, require any consent, registration or approval of any governmental
authority, (v) does not contravene any material contractual or governmental
restriction binding upon it and (vi) will not result in the imposition of any
lien, claim or encumbrance upon any of its property under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other material
agreement or instrument to which it is a party or by which its property may be
bound or affected.
2.2 NO TERMINATION EVENT; REPRESENTATIONS AND WARRANTIES. As of the date
hereof, (a) no Termination Event under the Forbearance Agreement, as amended by
this Amendment, has occurred and is continuing or will result from the
amendments set forth in this Amendment other than as set forth in Schedule 2.2
hereof and (b) the representations and warranties of the Company contained in
the Forbearance Agreement, as amended by this Amendment, are true and correct.
3. CONDITIONS TO EFFECTIVENESS.
The obligation of the Lender to make the amendments contemplated by this
Amendment, and the effectiveness thereof, are subject to the following:
3.1 DOCUMENTS. The Lender has received all of the following, each duly
executed and dated as of the date of this Amendment (or such other date as shall
be satisfactory to the Lender) in form and substance satisfactory to the Lender:
(A) fully executed counterparts to this Amendment;
(B) executed amendments on the same terms as this Amendment from other holders
of Funded Debt satisfactory to the Lender; and
(C) certified resolutions of the board of directors of the Company authorizing
or ratifying the execution, delivery and performance of this Amendment.
3.2 EFFECTIVE TIME. Subject to the satisfaction of Section 3.1 hereof, the
effective time of this Amendment shall be deemed to be 12:01 a.m. March 2, 1998.
4. MISCELLANEOUS.
4.1 SECTION TITLES. The preliminary statements to this Amendment and the
section titles used in this Amendment are for convenience only and do not affect
the construction of this Amendment.
4.2 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which together constitute one instrument.
4.3 ENTIRE AGREEMENT. This Amendment constitutes the full and entire
understanding of the Company and the Lender with respect to the subject matter
of this Amendment. To the extent that any term of this Amendment is
inconsistent with or contrary to any term of the Forbearance Agreement, this
Amendment shall govern and control.
4.4 SUCCESSORS AND ASSIGNS. This Amendment inures to the benefit of, and is
binding upon the successors and assigns of, each of the Company and the Lender.
4.5 GOVERNING LAW. This Amendment will be interpreted, and the rights and
liabilities of the Company and the Lender determined, in accordance with the
internal laws of the State of Illinois.
4.6 SEVERABILITY. Wherever possible, each provision of this Amendment will be
interpreted in a manner as to be effective and valid under applicable law. If
any provision of this Amendment is held to be prohibited by or invalid under
applicable law, such provision is ineffective only to the extent of such
prohibition or invalidity and the remaining provisions of this Amendment remain
unaffected and in full force and effect.
4.7 SIGNATURE PAGE REPRESENTATIONS OF COMMERCIAL PAPER HOLDERS. As to holders
of commercial paper, each and every Schedule 1 attached to the signature pages
of this Amendment are true and correct.
4.8 AMENDED AND RESTATED SCHEDULE OF EXISTING AGREEMENTS. Schedule 1 to the
Forbearance Agreement is hereby amended and restated such that any reference in
the Forbearance Agreement to "Schedule 1" shall mean a reference to the Schedule
1 attached hereto.
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