August 6, 2007 FIRST ALBANY COMPANIES INC.
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EXHIBIT
10.34
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August
6,
2007
000
Xxxxxxxx
Albany,
New York 12207
Attn:
Xxxxx Xxxx, Chief Financial Officer
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Re:
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LIBOR
RATE, UNSECURED, loan in the original principal amount of $20,000,000.00
(the “Loan”) from KeyBank National Association (“KeyBank”) to FIRST ALBANY
COMPANIES INC. (“Borrower”) pursuant to a Loan Agreement RE:
$20,000,000.00 TERM LOAN by and between KeyBank and the Borrower
(the
“Loan Agreement”), and obligations of the Borrower under Master Lease
Agreements dated September 25, 1996 and all outstanding schedules
thereunder (the “Lease”) between Borrower and Key Equipment Finance Inc.
f/k/a KeyCorp Leasing Ltd (“KEF” and collectively with KeyBank, the
“Bank”)
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Dear
Xx.
Xxxx:
The
Bank
has been informed that Xxxxxxxx has entered into an agreement (the “MP
Agreement”) to receive an equity investment from an affiliate of MatlinPatterson
Global Opportunities Partners II (the substantive consummation of which is
referred to herein as the “MP Transaction”). The Bank has been further informed
that Xxxxxxxx has entered into an agreement (the “DEPFA Agreement”) for the sale
of the Municipal Capital Markets Group of its wholly owned subsidiary First
Albany Capital Inc. (the “Subsidiary”) to DEPFA BANK plc (“DEPFA”) and the
related purchase by DEPFA of First Albany’s municipal bond inventory (the
substantive consummation of which is referred to herein as the “DEPFA
Transaction” and together with the MP Transaction, collectively the
“Transactions” and individually a “Transaction”). At the request of the
Borrower, the Bank has engaged in telephonic discussion with you and
representatives of MatlinPatterson Global Opportunities Partners II (“MP”). This
letter shall serve to confirm the agreement reached between the Bank and the
Borrower with respect to the Borrower’s obligations under the Loan Agreement and
Lease with respect to the DEPFA Transaction and MP Transaction.. All terms
used
herein which are not defined herein but are defined in the Loan Agreement,
shall
have that meaning ascribed to such term in the Loan Agreement.
The
Bank
and the Borrower (collectively the “Parties”) do each hereby acknowledge that
the Parties do not agree on the interpretation and/or enforcement of each of
the
Parties respective rights under the Loan Agreement and/or the Lease, therefore,
the Parties acknowledge and agree that neither the Bank nor the Borrower has
waived or is waiving any of its rights under the Loan Agreement and/or the
Lease, except for those waivers and/or modifications as expressly set forth
in
sub provisions (i), (v), (vi) and/or (vii) herein.
The
Bank
and the Borrower have agreed as follows:
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(i)
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Commencing
on the date of this letter and continuing for so long as (a) the
Borrower
shall comply in all material respects with all of the terms of this
letter, (b) no Event of Default, as defined in the Loan Agreement
and/or
the Lease, as the same are expressly modified in sub provisions (i),
(v),
(vi) and/or (vii) hereof (each an “EOD”), shall occur and (c) the Borrower
shall use and take commercially reasonable efforts necessary and/or
desirable to effectuate the intent of the Borrower to consummate/close
the
MP Transaction on or before November 30, 2007 (any event specified
and/or
arising as contemplated by provisions (a), (b) and the failure to
satisfy
any requirement of provision (c) of this sub provisions (i) being
referred
to herein as a “Waiver Termination Event”), but without limiting and/or
affecting the termination of the Waiver upon the occurrence of a
Waiver
Termination Event, KeyBank and KEF waive all EODs (if any) arising
from,
in connection with or as a result of the MP Agreement, the MP Transaction,
the DEPFA Agreement or DEPFA Transaction. Upon the occurrence of
a Waiver
Termination Event the waiver set forth in this sub provision (i)
hereof
(the “Waiver”) shall automatically terminate and expire without any action
on the part of the Bank and such Waiver shall be of no force and
effect
following the occurrence of any Waiver Termination Event. Notwithstanding
the forgoing and in limitation thereof, the Bank does hereby acknowledge
that (i) upon consummation (or “closing” as defined in the DEPFA
Agreement) of the DEPFA Transaction (the “DEPFA Closing”) and (ii) the
provision to KeyBank and/or KEF of the remittances/payments
required/contemplated by sub provision (ii) hereof, KeyBank and KEF
shall
and shall be deemed to have irrevocably waived all EODs (if any)
arising
from, in connection with or as a result of the DEPFA Agreement or
DEPFA
Transaction. Furthermore, without waiving any of the obligations
of the
Borrower hereunder, the Bank acknowledges, that (i) the Borrower
is not
guaranteeing the occurrence of the MP Closing by November 30, 2007
and (b)
the obligations of the Borrower as set forth in sub provision (c)
of this
sub provision (i) to use and take necessary and/or desirable commercially
reasonable efforts, shall not impose upon the Borrower any duty and/or
obligation to materially change the MP Transaction from the form
of
transaction contemplated as of the date of this letter and/or materially
change the terms of the MP
Agreement.
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(ii)
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Upon
the DEPFA Closing and subject to the provisions hereof, the Borrower
will
(a) repay the outstanding Loan together with unpaid accrued interest
thereon and all other obligations of the Borrower then outstanding
under
the Loan Agreement (collectively the “Loan Agreement Obligations”) and (b)
pay in full and discharge all of the obligations and/or liabilities
of the
Borrower under the Lease, such obligations, including, but not limited
to,
those obligations of the Borrower and any Affiliate thereof to KEF
(the
“Lease Obligations”); provided however that if the DEPFA Closing should
occur prior to consummation of the MP Transaction then (x) the Borrower
shall only be obligated (prior to consummation of the MP Transaction)
to
prepay an aggregate amount of the Loan Agreement Obligations and
the Lease
Obligations equal to 75% of the net proceeds received by the Borrower
in
connection with the DEPFA Transaction (such net proceeds in any event
to
be net of amounts required to remain at the subsidiary level in connection
with (i) any agreement to which none of DEPFA, MP, an Affiliate or
person
or entity controlled by, controlling or under common control with
any of
them or the Borrower (each a “Borrower Related Entity”), is a party, or
(ii) the consent of any person or entity that is not a Borrower Related
Entity (including, without limitation, the NYSE) or the Borrower
and (y)
upon the later consummation of the MP Transaction the Borrower shall
repay
in full all remaining amounts of the Loan Agreement Obligations and
the
Lease Obligations and, without affecting any obligation contained
herein,
until the later of (i) the closing and/or consummation of one of
the
Transactions and (ii) the payment in full of the Lease Obligations
and the
Loan Agreement Obligations, the Borrower shall pay the Loan Agreement
Obligations and the Lease Obligations as contemplated by the Loan
Agreement and the Lease, subject to the modifications contained herein.
The Borrower has requested that prior to the DEPFA Closing KeyBank
and KEF
prepare payoff letters with respect thereto which KeyBank and KEF
undertake to do.
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(iii)
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Notwithstanding
the foregoing, in the event that the DEPFA Closing has not occurred
on or
before September 30, 2007 or a DEPFA Closing Termination Event, as
hereinafter defined, has occurred on or before such date, the Borrower
will (and hereby covenants to) use and take commercially reasonable
efforts necessary and/or desirable to obtain a commitment in a form
and
from a financial institution/third party lender, both reasonably
acceptable to the Bank (the “Acceptable Refinancing Commitment”) on or
before October 31, 2007, in order to remit to the Bank amounts necessary
to pay in full the Loan Agreement Obligations and the Lease Obligations
as
set forth in detail in the payoff letters to be delivered to the
Borrower
by KeyBank and KEF set forth in ¶”ii” above (the “Payoff Letters”). The
Borrower hereby covenants, upon the closing of an Acceptable Refinancing
Commitment, to remit to KeyBank and KEF amounts necessary to pay
in full
the Loan Agreement Obligations and the Lease Obligations as set forth
in
detail in the Payoff Letters. A “DEPFA Closing Termination Event” shall
occur if (1) DEPFA and/or the Borrower determines not to pursue and/or
abandons the consummation/closing of the DEPFA Transaction, or (2)
the
Borrower issues a statement expressly stating that the DEPFA Transaction
will not be closed/consummated or (3) an event set forth in subsection
(a)
– (f) of section 12.1 of the DEPFA Agreement
occurs.
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(iv)
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If
the Borrower or any Affiliate receives the Termination Fee as contemplated
by section 12.3 of the DEPFA Agreement or any payment and/or remittance
in
lieu or replacement thereof (collectively the “Termination Fee”), then by
the close of the first Business Day immediately following the day
the
Termination Fee is paid/remitted, the Borrower shall remit to the
Bank or
cause to be remitted to the Bank an amount equal to the Termination
Fee
(the “2007 PrePayment”) and the Bank shall apply the 2007 PrePayment to
reduce the principal balance of the Loan. The Borrower will (and
hereby
covenants to) use and take commercially reasonable efforts necessary
and/or desirable to enforce its rights under the DEPFA Agreement
and to
receive the Termination Fee.
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(v)
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In
the event that the Borrower is required to seek but unable to obtain
an
Acceptable Refinancing Commitment by October 31, 2007, then on the
last
day of each and every Interest Period, occurring after October 31,
2007
until the Maturity Date or the earlier payment in full of the Loan
Agreement Obligations (and in lieu of scheduled payments of principal
and
interest otherwise required by the terms of the Loan Agreement during
such
period), the Borrower shall (x) make a payment equal to interest
at the
Interest Rate on the unpaid principal balance of the Loan Agreement
Obligations on the last day of immediately preceding Interest Period
AND (y) make a payment of $500,000.00 in reduction
of the principal balance of the Loan Agreement Obligations. With
respect
to the Lease, the Borrower shall continue to perform thereunder in
accordance with its terms.
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(vi)
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The
Bank acknowledges and agrees that any and all payments made by the
Borrower hereafter with respect to the Loan Agreement Obligations
or the
Lease Obligations shall be made without any prepayment penalty or
breakage
costs (and the same are hereby waived by the Bank (on its behalf
and its
affiliates)).
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(vii)
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Commencing
on the date of this letter and continuing for so long as no Waiver
Termination Event shall occur, KeyBank and KEF shall waive any and
all
EODs arising from, in connection with or as a result of the failure
of the
Borrower to comply with the provisions of Section 5.04 of the Loan
Agreement.
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In
all
other respects the Loan Agreement and all other documents delivered by the
Borrower to the Bank memorializing the Loan and documents memorializing the
obligations of the Borrower to any Affiliates of the Bank remain in full force
and effect.
Please
confirm the Borrower’s (i) agreement with the foregoing and (ii) agreement that
the Bank has exercised reasonable discretion and acted in good faith and in
a
reasonable commercial manner during the course of the relationship between
the
Bank and the Borrower from the time of the commencement of the relationship
through, and including, the date hereof, by executing this letter as provided
below and faxing a signed copy to the undersigned at (000) 000-0000 within
forty
eight (48) hours following your receipt of this letter.
Very
truly yours,
KEYBANK
NATIONAL ASSOCIATION
BY:
/s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title:
Vice President
KEY
EQUIPMENT FINANCE INC. F/K/A KEYCORP LEASING LTD.
BY:
/s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title:
Authorized Signatory
ACCEPTED
AND AGREED THIS 6TH DAY OF AUGUST, 2007.
By:
/s/ X. Xxxxx Xxxx
Name:
X.
Xxxxx Xxxx
Title:
Chief Financial Officer
