EXHIBIT 10.61
AMENDED AND RESTATED
SECURITY AGREEMENT,
DATED AS OF DECEMBER 24, 1997,
between
MEDALLION FUNDING CORP., as debtor
and
FLEET BANK, N.A., as Agent
and secured party,
for the benefit of
THE BANKS AND SWING LINE LENDER SIGNATORY TO
THE AMENDED AND RESTATED LOAN
AGREEMENT, DATED AS OF DECEMBER 24, 1997,
AMONG MEDALLION FUNDING CORP.,
THE BANKS SIGNATORY THERETO, THE SWING LINE LENDER,THE BANK OF NEW YORK AS
DOCUMENTATION AGENT
AND FLEET BANK, N.A. AS ARRANGER AND AGENT
and
THE HOLDERS OF COMMERCIAL PAPER
ISSUED BY
MEDALLION FUNDING CORP.
TABLE OF CONTENTS
This table of contents is not a part of the document
but is provided for ease of reference.
SECTION Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms 2
SECTION 1.2. Accounting Terms 6
SECTION 1.3. Rules of Construction 6
ARTICLE II
CREATION OF SECURITY INTEREST
SECTION 2.1. Grant of Security Interest to Agent 7
SECTION 2.2. Perfection 7
SECTION 2.3. Recording, Registering, Filing, Etc. 7
SECTION 2.4. Delivery of Documents 8
SECTION 2.5. Further Assurances 9
SECTION 2.6. Appointment of Agent as Attorney-in-Fact 9
SECTION 2.7. Indemnity 10
SECTION 2.8. Borrower Remains Liable 11
SECTION 2.9. Agent May Perform 11
SECTION 2.10. Agent's Duties 11
ARTICLE III
PRIORITY OF SECURITY INTERESTS
SECTION 3.1. Priority of Security Interests 11
ARTICLE IV
COLLATERAL
SECTION 4.1. Representations, Covenants and Warranties 12
SECTION 4.2. Collections 13
SECTION 4.3. Rights of Agent Regarding Collateral 14
ARTICLE V
DEFAULT
SECTION 5.1. Events of Default 14
SECTION 5.2. Remedies 14
SECTION 5.3. Application of Proceeds 17
SECTION 5.4. Waiver by Agent or Banks 18
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Continuing Lien 18
SECTION 6.2. Waivers by Borrower 18
SECTION 6.3. Parties 19
SECTION 6.4. GOVERNING LAW 19
SECTION 6.5. WAIVER OF JURY TRIAL AND SETOFF 19
SECTION 6.6. Jurisdiction; Service of Process 19
SECTION 6.7. Survival of Representations and Warranties 20
SECTION 6.8. Obligations Secured by Property Other Than Collateral 20
SECTION 6.9. Successor Agent 20
SECTION 6.10. Termination 20
SECTION 6.11. Notices 21
SECTION 6.12. Severability 21
SECTION 6.13. Counterparts 21
AMENDED AND RESTATED
SECURITY AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT, dated as of December 24,
1997, is between MEDALLION FUNDING CORP., a New York corporation ("Borrower"),
--------
and FLEET BANK, N.A., a national banking association, as agent (the "Agent") for
-----
the banks that from time to time are signatories to the Loan Agreement
(hereinafter defined) (collectively, the "Banks" and individually, a "Bank;"
----- ----
which term as used in this Amended and Restated Security Agreement shall be
deemed to include the Swing Line Lender set forth in such Loan Agreement, unless
the context clearly indicates otherwise).
RECITALS
WHEREAS, the Agent and the Banks have entered into an Amended and Restated
Loan Agreement, dated as of even date herewith, (as the same may be amended or
supplemented from time to time, the "Loan Agreement"), with Borrower providing
--------------
for revolving credit loans (including the Initial Revolving Credit Loan) (the
"Revolving Credit Loans;" which term as used in this Amended and Restated
-----------------------
Security Agreement shall be deemed to include the Swing Line Loans (as defined
in the Loan Agreement) unless the context clearly indicates otherwise) and term
loans (the "Term Loans") not to exceed the amounts provided in the Loan
----------
Agreement.
WHEREAS, a condition precedent to the obligation of the Banks to make the
Revolving Credit Loans or Term Loans under the Loan Agreement is that Borrower
grant to the Agent perfected, security interests in all of the Collateral to
secure the payment and performance of all of the obligations of Borrower owing
to the Agent and the Banks pursuant to the Loan Agreement and other documents.
WHEREAS, in partial satisfaction of Borrower's obligation under Sections
5.1 and 5.2 of the Loan Agreement and otherwise as an inducement necessary to
the Banks' making the Revolving Credit Loans or Term Loans to Borrower, Borrower
agrees to grant to the Agent a security interest in the Collateral pursuant to
the terms set forth herein.
WHEREAS, the Borrower expects to enter into a Commercial Paper Dealer
Agreement (as defined in the Loan Agreement) and a Paying Agency Agreement (as
defined in the Loan Agreement) pursuant to which the Borrower proposes to issue
Commercial Paper from time to time to provide financing for its operations; and
WHEREAS, the Borrower has asked the Banks to consent, and the Banks have
agreed, to the granting of a security interest in the Collateral to secure its
obligations to the holders (the
"CP Holders") of the Commercial Paper pari passu with the security interest held
by the Agent for the benefit of the Banks; and
WHEREAS, the Borrower has asked the Banks to consent to the granting of a
security interest in a pool of its Commercial Loans (and under certain
circumstances a subordinate lien in all of its assets) pursuant to a Security
Agreement among the Borrower, the Agent and the SBA (the "SBA Security
Agreement), providing for a lien on such Commercial Loans (the "SBA Collateral")
to secure a note originally made by Transportation Capital Corp., a New York
corporation ("TCC"), dated June 24, 1992, in the principal amount of $5,640,000,
and notes originally made by Xxxxxxx Capital Corp., a Delaware corporation
("Xxxxxxx"), in the aggregate original principal amount of $22,250,000, which
have become the obligations of the Borrower upon the merger of TCC and Xxxxxxx
into the Borrower; and
WHEREAS, the Banks are willing to consent to the grant of the security
interest in the Collateral to the Agent for the benefit of the CP Holders and to
the grant of the security interest in the SBA Collateral to the Agent for the
benefit of the SBA pursuant to the SBA Security Agreement, provided that the
Security Agreement is amended in accordance herewith and provided, further that
in the case of the CP Holders such security interest granted to the Agent for
their benefit shall not be effective unless and until (i) the Agent has been
appointed the Agent of the CP Holders for purposes of this Agreement with duties
consistent with those necessary for the Agent (in its opinion) to perform its
duties under this Agreement, (ii) the CP Holders shall have consented to the
terms of this Agreement and to the Agent's entering into the Intercreditor
Agreement on their behalf and (iii) the Agent shall have provided the CP Holders
written notification that it has been indemnified, in a manner satisfactory to
the Agent, by such CP Holders with respect to the Agent's responsibilities
hereunder on behalf of such CP Holders;
WHEREAS, in furtherance of the grant of the security interest in the SBA
Collateral, the Banks are also willing to consent to an Intercreditor Agreement
(the "Intercreditor Agreement"), effective upon the effectiveness of the SBA
Security Agreement, setting forth the relative rights of the Agent for the
benefit of the Banks and the CP Holders pursuant to this Agreement and the
rights of the Agent for the benefit of the SBA pursuant to the SBA Security
Agreement;
NOW, THEREFORE, in consideration of the willingness of the Agent and the
Banks to enter into the Loan Agreement and to agree, subject to the terms and
conditions thereof, to make the Revolving Credit Loans or Term Loans to Borrower
pursuant thereto, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and the Agent hereby
covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINED TERMS. Capitalized terms defined in the foregoing
caption and recitals shall have the respective meanings ascribed thereto.
Capitalized terms
2
defined in the Loan Agreement and not otherwise defined in this Agreement shall
have the meanings ascribed to those terms in the Loan Agreement. In addition, as
used herein, the following terms shall have the following meanings:
"Accounts" shall have the meaning assigned to it in Section 106 of the UCC.
--------
"Books and Records" shall mean books, records, computer files and other
-----------------
Information relating to any of the Collateral.
"Chattel Paper" shall have the meaning assigned to it in Section 9-
-------------
105(1)(b) of the UCC.
"Collateral" shall mean all the following property now owned or at any time
----------
hereafter acquired by Borrower or in which Borrower now has or at any time in
the future may acquire any right, title or interest:
(a) all Loans;
(b) all property and rights, including, but not limited to, Underlying
Collateral, which now or hereafter secure Loans;
(c) all Books and Records;
(d) all amounts deposited in any Collateral Account;
(e) all Contracts;
(f) all rights and remedies of Borrower with respect to, or in connection
with, any contract, security interest, guaranty or other document, instrument or
agreement relating to or affecting any Loans or any Underlying Collateral;
(g) all General Intangibles;
(h) all Instruments;
(i) all Chattel Paper;
(j) all Equipment;
(k) all Inventory;
(1) all Investments;
(m) all Investment Property;
3
(n) all Accounts
(o) all property and rights, including, but not limited to, items
described in clauses (b) through (n) hereof, repossessed, or otherwise acquired
in connection with any Loans or the exercise by Borrower of any rights of a
secured party under or with respect to any of the Loans or this Agreement or
arising out of the sale or disposition of any Loans, any other Collateral, or in
connection with the sale of any repossessed property;
(p) all parts, accessions, accessories, goods, appurtenant or related to
any of the foregoing, replacement parts, trade names, closes in action, now or
hereafter affixed thereto, arising therefrom, used in connection therewith, or
related to the use, possession or operation thereof;
(q) all cash and Short-Term Investments; and
(r) to the extent not otherwise included, all Proceeds, products,
substitutions and replacements of any and all of the foregoing.
"Collateral Account" shall mean that account of Borrower maintained with
------------------
the Agent and containing such reasonable terms as shall be agreed to by the
Agent.
"Contracts" shall mean all contracts and agreements, including, but not
---------
limited to, loan agreements, security agreements, guaranties, intercreditor
agreements, office leases, lease agreements for mobile goods (as defined in the
UCC) (whether or not covered by a certificate of title), indemnity agreements,
license agreements, rental agreements and all other contracts and agreements of
every kind and nature whatsoever.
"Depository Accounts" shall mean accounts of Borrower containing any
-------------------
deposits or other sums credited to Borrower, whether in regular or special
depository accounts or otherwise.
"Equipment" shall mean all machinery, equipment, fixtures, vehicles, office
---------
equipment, furniture, furnishings, inventories, supplies, computer equipment and
all other equipment whatsoever, wherever located, together with all attachments,
components, parts, equipment and accessories installed therein or affixed
thereto, including, but not limited to, all equipment as defined in Section 9-
109(2) of the UCC and all products, profits, rents and proceeds of any of the
foregoing; all whether now owned or hereafter created or acquired.
"General Intangibles" shall have the meaning assigned to it in Section 9-
-------------------
106 of the UCC and shall include, but not be limited to, all interests in and to
Permits and Licenses, Medallion Rights, patents, trademarks, tradenames,
copyrights, trade secrets, licenses and know- how.
"Information" shall mean books, records, delivery receipts, copies of
-----------
checks and stubs, security documents, division of interest files, bank
reconciliation statements, remittances,
4
revenue accounting records, invoices, leases, licenses, authorizations for
expenditures, contracts and such other documents, information and data as any
Bank may request pursuant to the Loan Agreement.
"Instruments" shall have the meaning assigned to it in Section 9-105(1)(i)
-----------
of the UCC.
"Inventory" shall mean all inventory, goods, raw materials, components and
---------
other personal property, wherever located, including, but not limited to, all
inventory as defined in Section 9-109(4) of the UCC.
"Investment" in any Person shall mean any loan, advance, or extension of
----------
credit to or for the account of; any guaranty, endorsement or other direct or
indirect contingent liability in connection with the obligations, Capital Stock
or dividends of; any ownership, purchase or acquisition of any assets, business,
Capital Stock, obligations or securities of; or any other interest in or capital
contribution to; such Person.
"Investment Property" shall have the meaning assigned to it in Section 9-
-------------------
115 of the UCC.
"Laws" shall have the meaning set forth in Section 2.2 hereof.
----
"Loan" shall mean any loan, advance or extension of credit made in the
----
ordinary course of business by Borrower to or for the account of any client or
customer of Borrower. Any loan, advance or extension of credit made at a
different point in time shall be deemed to be a separate and distinct Loan.
"Loan Documents" shall mean and collectively refer to the Loan Documents
--------------
(as defined in the Loan Agreement) and all other agreements, instruments and
documents, including, without limitation, notes, guaranties, mortgages, deeds to
secure debt, deeds of trust, chattel mortgages, pledges, powers of attorney,
consents, assignments, contracts, notices, security agreements, trust account
agreements and all other written matters whether heretofore, now or hereafter
executed by or on behalf of Borrower and/or delivered to the Agent or the Banks,
with respect to this Agreement, or the transactions contemplated by this
Agreement.
"Medallion" shall mean the metal plate which displays the license number of
---------
a licensed Taxicab on the outside of the vehicle and which is issued by the New
York City Taxi and Limousine Commission or by any other Governmental Authority
for a jurisdiction other than New York City with the authority to issue licenses
for the operation of Taxicabs.
"Medallion Riqhts" shall mean (a) all license, operating and/or
----------------
subscription rights to Taxicab Medallion(s), and all license, operating and/or
subscription rights evidenced by such Medallion(s) and (b) all renewals thereof.
5
"Obligations" shall mean any and all present and future indebtedness and
-----------
all performance obligations which may at any time be owing by Borrower to the
Agent or any Bank, however arising, under the Loan Agreement, this Agreement or
any other Loan Document between the Agent and/or any Bank and Borrower in
connection with any of the foregoing or in connection with any Loan Document,
whether now in existence or incurred hereafter, whether incurred directly or
incurred by others and assumed by Borrower, whether secured by mortgage, pledge,
or lien upon or security interest in any property of Borrower, or any other
Person, whether such indebtedness or other obligation is absolute or contingent,
joint or several, matured or unmatured, direct or indirect, and whether the
Borrower is liable for such indebtedness or other obligation as principal,
surety, endorser, guarantor, or otherwise. Without limiting the generality of
the foregoing, the Obligations shall include the liability of Borrower to any
Bank for all balances owing to any Bank in any account maintained on such Bank's
books under the Loan Agreement or under any other agreement or arrangement now
or hereafter entered into between Borrower and the Agent or any Bank in
connection therewith, and, in connection with this Agreement or the Loan
Agreement, (i) indebtedness owing by Borrower to the Agent or any Bank, (ii) the
liability of Borrower to the Agent or any Bank as maker or endorser of any
promissory note or other instrument for the payment of money, and (iii) the
liability of Borrower to the Agent or any Bank under any instrument of guaranty
or indemnity, or arising under any guarantee, endorsement, or undertaking which
the Agent or any Bank may make or issue to others for the account of Borrower,
including without limitation, any accommodation extended to Borrower with
respect to letters of credit, acceptance of drafts, or endorsement of notes or
other instruments by the Agent or such Bank for the account and benefit of
Borrower. The Obligations shall also include interest, premium (if any),
commissions, financing and service charges, and expenses and fees, including but
not limited to the costs and expenses of collection of the Obligations
(including the fees and disbursements of accountants), the costs and expenses of
the Agent and the costs and expenses of filing, perfecting, preserving,
retaking, holding, and preparing any of the Collateral for sale chargeable to
Borrower and due from Borrower under this Agreement, the Loan Agreement or under
any other agreement or arrangement which may be now or hereafter entered into
between Borrower and the Agent or the Banks.
"Other Agreements" shall mean collectively any of the Loan Documents other
----------------
than this Agreement.
"Percentage of the Obligations" shall mean with respect to the Agent or any
-----------------------------
Bank the percentage which is equal to the product of (x) 100 times (y) a
fraction, the numerator of which is the total amount of Obligations owing to the
Agent or such Bank, as the case may be, at the time of computation and the
denominator of which is the total amount of the Obligations as of such time.
"Permits and Licenses" shall mean (a) all applicable authorizations,
--------------------
consents, certificates, licenses, rights of way permits, approvals, waivers,
exemptions, encroachment
6
agreements, variances, franchises, permissions, and permits of any Governmental
Authority and all documents and applications filed in connection therewith, and
(b) all renewals thereof.
"Permitted Liens" shall mean the Liens permitted pursuant to Section 8.1 of
---------------
the Loan Agreement.
"Proceeds" shall have the meaning assigned to it in Section 9-306(1) of the
--------
UCC and shall include, but not be limited to, (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty existing from time to time with
respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority) and (c) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral.
"Real Property" shall mean real property of a Person or an ultimate
-------------
beneficial owner of such Person or machinery or Equipment of such Person or
beneficial owner forming a part of, or affixed to, such real property.
"SBA Collateral" shall have the meaning set forth in the recitals to this
--------------
Amended and Restated Security Agreement.
"Taxicab" shall mean a motor vehicle carrying passengers for hire, duly
-------
licensed as a taxicab by the Taxi and Limousine Commission, or any other
Governmental Authority for a jurisdiction other than New York City, and
permitted to accept hails from passengers in the street.
"UCC" shall mean, with respect to any jurisdiction, the Uniform Commercial
---
Code as then in effect in that jurisdiction.
"Underlying Collateral" shall mean all of Borrower's rights with respect
---------------------
to, or interest in, any and all present and future Medallion Rights, Equipment,
Real Property, machinery, future accounts, accounts receivable, receivables,
contracts, contract rights, general intangibles, books, desks, notes, bills,
drafts, acceptances, chases in action, chattel paper, instruments, documents and
other forms of obligations, and property, real, personal or mixed, tangible or
intangible, at any time owing to or owned by any Person to whom Borrower has
made a Loan, or any guarantor of such Person.
SECTION 1.2. ACCOUNTING TERMS. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP.
7
SECTION 1.3. RULES OF CONSTRUCTION. (a) Words of the masculine gender
shall mean and include correlative words of the female and neuter genders, and
words importing the singular number shall mean and include the plural number and
vice versa.
(b) The terms "hereby", "hereto", "hereof", "herein", and "hereunder" and
------ ------ ------ ------ ---------
any similar words refer to this Agreement as a whole and not to any particular
provisions of this Agreement. The term "hereafter" shall mean after, and the
---------
term "heretofore" shall mean before, the date of this Agreement, and "Article",
---------- -------
"Section", "Schedule", "Exhibit" and like references are to this Agreement
------- -------- -------
unless otherwise specified.
(c) Any defined term that relates to a document shall include within its
definition any amendments, modifications, renewals, restatements, extensions,
supplements, or substitutions which may have been heretofore or may be hereafter
executed in accordance with the terms thereof.
(d) References in this Agreement to particular sections of the UCC or to
any other legislation shall be deemed to refer also to any successor sections
thereto or other redesignations for codification purposes. Unless otherwise
indicated, references in this Agreement to the UCC shall mean the UCC as in
effect in the State of New York.
(e) All terms used in this Agreement that are not capitalized shall have
the meanings provided by the UCC as in effect in the State of New York to the
extent the same are used or defined therein.
ARTICLE II
CREATION OF SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY INTEREST TO AGENT. To induce the Banks to
make the Revolving Credit Loans or Term Loans to Borrower and, as security for
any and all Obligations of Borrower, and as security for Borrower's Permitted
Debt owing to the CP Holders, Borrower hereby grants to the Agent for the
ratable benefit of the Agent, the Banks and the CP Holders a continuing lien on
and security interest in the Collateral, which shall be a first priority lien
except as provided in the Intercreditor Agreement, and, in furtherance of such
grant, Borrower hereby assigns for security all the Collateral to the Agent for
the ratable benefit of the Agent, the Banks and the CP Holders.
SECTION 2.2. PERFECTION. At any time or times after (i) a Default or an
Event of Default has occurred or (ii) any change in any existing law,
regulation, guideline, treaty or directive or condition or interpretation
thereof, including without limitation, any request, guideline or policy, whether
or not having the force of law (collectively, "Laws"), or the proposal by any
----
Governmental Authority, of a new Law, which, in the Agent's opinion, adversely
affects the validity, security or perfection of the security interests and liens
granted herein, Borrower shall execute and deliver to the Agent, at the Agent's
request, all assignments,
8
certificates of title, conveyances, assignment statements, financing statements,
renewal financing statements, security agreements, affidavits, mortgages,
mortgage assignments, trust deeds, notices and all other agreements, instruments
and documents that the Agent reasonably may request, in form satisfactory to the
Agent, and shall take any and all other steps reasonably requested by the Agent,
in order to perfect and maintain the security interests and liens granted
herein, and to consummate fully all of the transactions contemplated under this
Agreement and any Other Agreements.
SECTION 2.3. RECORDING, REGISTERING, FILING, ETC. At any time or times
after (i) a Default or an Event of Default has occurred or (ii) any change in
any existing Law or the proposal by any Governmental Authority of a new Law
which, in the Agent's opinion, adversely affects the validity, security or
perfection of the security interests and liens granted herein, Borrower will
perform, or will cause to be performed, each of the following:
(a) Record, register and file such notices, certificates of title,
financing statements, mortgage assignments, trust deeds and other documents or
instruments as may, from time to time, be requested by the Agent to carry out
fully the intent of this Agreement, with such administrations or governmental
agencies as may be necessary or advisable in order to perfect, establish,
confirm, and maintain the security interests and liens created hereunder, as
legal, valid, and binding security interests and liens upon the Collateral;
(b) Furnish to the Agent evidence of every such recording, registering and
filing; and
(c) Execute and deliver or perform, or cause to be executed and delivered
or performed, such further and other instruments or acts as the Agent reasonably
determines are necessary or desirable to fully carry out the intent and purpose
of this Agreement or to subject the Collateral to the security interest and lien
created hereunder, including, without limitation, defending the title of
Borrower to the Collateral by means of negotiation with and, if necessary,
appropriate legal proceedings against, each party claiming an interest therein
contrary or adverse to Borrower's title to same.
SECTION 2.4. DELIVERY OF DOCUMENTS. (a) As promptly as practicable after
the date hereof (but in no event later than 10 Business Days after the date
hereof), Borrower shall deliver to the Agent all instruments evidencing all
Loans (collectively, the "Collateral Notes") of Borrower then outstanding. In
----------------
addition, each time Borrower shall make a new Loan, Borrower shall immediately
deliver to the Agent the Collateral Note evidencing such Loan. The Agent shall
keep all Collateral Notes at its principal office in New York City in a vault or
other place of similar security. Borrower and its authorized agents and
representatives, which shall include its Independent Public Accountants, shall
at all times, during normal business hours, have full access to examine, but not
to remove, without the prior consent of the Agent, the Collateral Notes;
provided, however, that (i) Borrower and/or its authorized agent shall have
given the Agent at least 24 hours prior notice, or such other notice as may be
required by applicable provisions of the Investment Company Act of 1940, as
amended, before seeking
9
access to the Collateral Notes and (ii) the Agent shall, in its sole discretion,
be entitled to have one of its employees, agents or representatives present at
all times or from time to-time during any such period of access.
(b) Upon the Agent's request, Borrower shall immediately deliver to the
Agent or its designee, at Borrower's expense, copies of all documents, chattel
paper, security agreements, guarantees and other writings evidencing any Loan or
its related Underlying Collateral.
(c) At any time on or after a Default or Event of Default, upon the Agent's
request, Borrower shall immediately deliver to the Agent or its designee all
documents, instruments, chattel paper, security agreements, guarantees and other
writings so requested by the Agent evidencing any Collateral of Borrower, such
documents, instruments, chattel paper, security agreements, guarantees and other
writings to be held as Collateral under the terms of this Agreement.
(d) The Agent shall have no obligation to inspect or examine any of the
Collateral Notes or other documents delivered to it by Borrower hereunder, and
shall be entitled to assume, and shall be fully protected in assuming, without
inspection or examination, that Borrower has complied in full with its delivery
obligations hereunder.
SECTION 2.5. FURTHER ASSURANCES. (a) At any time or times after (i) a
Default or an Event of Default has occurred or (ii) any change in any existing
Law or the proposal by any Governmental Authority of a new Law which, in the
Agent's opinion, adversely affects the validity, security or perfection of the
security interests and liens granted herein, then, in addition to the acts
specifically required to be performed by Borrower elsewhere under this
Agreement, Borrower shall do all other things and sign and deliver all other
documents and instruments reasonably requested by the Agent to perfect, protect,
maintain and enforce the security interests and liens of the Agent in the
Collateral, and the first priority of such security interests and liens, and
other rights granted hereunder or under any other present or future agreement
between Borrower and the Agent, including, without limitation, the Loan
Documents. Such acts shall include but not be limited to the marking of
Borrower's Books and Records, the chattel paper and instruments to show the
Agent's security interests and liens and the filing of financing, renewal and/or
continuation statements under the UCC or other documents evidencing the Agent's
liens under applicable law and the delivery of any Collateral the physical
possession of which is necessary or desirable in order for the Agent to perfect
its liens. Upon the occurrence of any of the events specified in subclauses (i)
and (ii) of this Section 2.5(a), Borrower authorizes the Agent to execute alone
any financing, renewal and/or continuation statement or any other document or
instrument which the Agent may require to perfect, protect, continue or enforce
in accordance herewith any security interest, lien or other right hereunder or
under any of the other Loan Documents and authorizes the Agent to sign
Borrower's name on the same. Upon payment in full by Borrower of all the
Obligations in
10
accordance with the terms thereof, the security interests and liens granted by
Borrower hereunder shall terminate, except that if, at any time, all or part of
the payment of the monetary Obligations theretofore made by Borrower or any
other Person is rescinded or otherwise must be returned by the Agent or any Bank
for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Borrower or such other Person), the security
interests and liens granted hereunder or under any other present or future
agreement between Borrower and the Agent, and all rights of the Agent and all
Obligations shall be reinstated as to monetary Obligations which were satisfied
by the payment to be rescinded or returned, all as though such payment had not
been made, and Borrower shall sign and deliver to the Agent all documents and
things necessary to perfect all terminated liens subject to the intervening
liens, if any, granted by Borrower to any Person.
(b) A carbon, photographic, or other reproduction of this Agreement shall
be sufficient as a UCC filing and may be filed in any appropriate office in lieu
thereof.
(c) Upon the occurrence of any of the events specified in subclauses (i)
and (ii) of Section 2.5(a), to the extent requested by the Agent, Borrower will
use its best efforts to cause each mortgagee of any and all real estate under
any lease included in any Underlying Collateral and each landlord under any
lease included in any Underlying Collateral to execute and deliver to the Agent
assignments, in form and substance satisfactory to the Agent, by which such
mortgagee or landlord waives its rights, if any, to the Collateral.
SECTION 2.6. APPOINTMENT OF AGENT AS ATTORNEY-IN-FACT. Upon the
occurrence of any of the events specified in subclause (i) of Section 2.5(a),
Borrower does hereby irrevocably make, constitute and appoint the Agent and any
of its officers, employees or agents as the true and lawful attorneys of
Borrower with power to:
(a) sign the name of Borrower on any financing statement, renewal financing
statement, notice or other similar document that in the Agent's opinion must be
filed in order to perfect or continue perfected the security interests granted
in this Agreement or any Other Agreements;
(b) receive, endorse, assign and deliver, in Borrower's name or in the name
of the Agent, all checks, notes, drafts and other instruments relating to any
Collateral, including receiving, opening and properly disposing of all mail
addressed to Borrower concerning the Collateral and, during the existence of an
Event of Default (as hereinafter defined), to notify postal authorities to
change the address for delivery of mail to such address as the Agent may
designate;
(c) sign Borrower's name on any notices to any of Borrowers clients or
customers; and
11
(d) upon the occurrence and during the continuance of an Event of Default,
take or bring at Borrower's cost, in Borrower's name or in the name of the
Agent, all steps, actions and suits deemed by the Agent necessary or desirable
to effect collections in connection with any Loans, to enforce payment in
connection with any Loans, to settle, compromise or release in whole or in part,
any amounts owing in connection with any Loans, to prosecute any action or
proceeding with respect to any Loans, to extend the time of payment in
connection with any Loans, to make allowances and adjustments with respect
thereto, to secure credit in the name of the Agent, and to do all other things
necessary or desirable to realize upon the Collateral, including but not limited
to the Underlying Collateral, and to carry out this Agreement and all Other
Agreements.
Neither the Agent nor its agents or attorneys will be liable for any act or
omission nor for any error of judgment or mistake of fact unless such act,
omission, error or mistake shall occur as a result of their gross negligence or
willful misconduct. This power, being coupled with an interest, is irrevocable
so long as the Obligations remain unpaid.
SECTION 2.7. INDEMNITY. In addition to all of the Agent's and Banks'
other rights and remedies under the Loan Documents, Borrower will hold the Banks
and the Agent from and indemnify the Banks and the Agent or other designee of
the Agent against all losses, damages, costs and expenses (including, without
limitation, attorneys' fees, costs and expenses) incurred by any of them,
whether prior to or from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or relating to any suit,
investigation, action or proceeding by any Person, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
Person under any statute or regulation, including without limitation, any
Federal or state antitrust laws, or under any common law or equitable cause or
otherwise, all to the extent arising from or in connection with this Agreement
or the other Loan Documents or the enforcement of the rights of the Agent
hereunder, other than losses, damages, costs and expenses resulting from, but
only to the extent resulting from, the willful misconduct or gross negligence of
the Person seeking indemnification.
SECTION 2.8. BORROWER REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (i) Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (ii) the exercise by the Agent or the Banks of
any rights under this Agreement or any of the other Loan Documents shall not
release Borrower from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (iii) neither the Agent nor the Banks
shall have any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement or any of the other Loan
Documents nor shall the Agent or any Bank be obligated to perform any of the
obligations or duties of Borrower thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
12
SECTION 2.9. AGENT MAY PERFORM. If Borrower fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by Borrower, together with interest thereon at the
rate specified in Section 2.6 of the Loan Agreement, and until so paid shall be
deemed part of the Obligations.
SECTION 2.10. AGENT'S DUTIES. The powers conferred on the Agent hereunder
are solely to protect its interest and the interests of the Banks and the CP
Holders in the Collateral and shall not impose any duty upon it to exercise any
such powers except as provided herein. Except for the safe custody of any
Collateral in its possession and the accounting for monies actually received by
it hereunder and performing its other express duties hereunder, the Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
ARTICLE III
PRIORITY OF SECURITY INTERESTS
SECTION 3.1. PRIORITY OF SECURITY INTERESTS. Borrower warrants and
represents to the Agent and the Banks that, as to those assets for which
perfection may be accomplished by filing or by possession under the UCC, the
security interests granted to the Agent hereunder constitute and will constitute
at all times a valid and perfected security interest vested in the Agent
in and upon the Collateral. Borrower further warrants and represents that the
Agent's security, interests in the Collateral are not and hereinafter shall not
become subordinate or junior to the security interests, liens or claims of any
other Person, firm or corporation, including the United States or any
department, agency or instrumentality thereof, or any state, county or local
governmental agency, except for the Permitted Liens. Borrower shall not grant
(without the prior written approval of the Agent) a security interest in or
permit a lien or encumbrance upon any of the Collateral to anyone except the
Agent as long as any of the Obligations remain unpaid, except for the Permitted
Liens. Notwithstanding the priority of any filed financing statement, the
Borrower, the Agent acting hereunder for the benefit of the Banks and the Agent
acting as agent for the SBA under the SBA Security Agreement acknowledge and
agree that the security interest in that part of the Collateral which
constitutes the SBA Collateral granted by the Borrower under the SBA Security
Agreement is senior and prior in right of distribution to the security interest
granted herein for the benefit of the Banks, the CP Holders and the Paying
Agent, to the extent and as provided in Section 5.3(a) hereof and in the
Intercreditor Agreement.
ARTICLE IV
COLLATERAL
SECTION 4.1. REPRESENTATIONS, COVENANTS AND WARRANTIES. Borrower hereby
makes the following representations, warranties and covenants to the Agent and
the Banks,
13
which shall survive the execution and delivery of the Loan Documents and (except
to the extent that any of such representations, and warranties and covenants
expressly relate to earlier dates) shall be deemed repeated and confirmed as of
each date on which any Revolving Credit Loans or Term Loans are requested by
Borrower or made by any Bank:
(a) Borrower is now and at all times hereafter shall be the absolute owner,
free and clear of all Liens (other than Permitted Liens) except security
interests and rights of the Agent and the Banks granted herein, of indefeasible
title to all of the Collateral, except for that portion of Borrower's rights
and/or obligations under any Loan in which Borrower has granted a participation
to any Person in accordance with Section 2.14 of the Loan Agreement;
(b) To the best of Borrower's knowledge, each outstanding Loan does, and
each future Loan will, represent a bona fide, valid and legally enforceable
indebtedness according to its terms, and each Loan, at the time of creation
thereof, except with the consent of the Agent and the Banks, will be subject to
no offsets, discounts, counterclaims, contra-accounts or any other defense of
any kind or character that materially adversely affects the value of the Loan;
(c) With respect to each outstanding and future Loan, the Agent and the
Banks may rely on all statements or representations made by Borrower on or with
respect to such Loans delivered hereunder or under the Loan Agreement, and,
unless otherwise indicated in writing by Borrower, each outstanding Loan is, and
each future Loan will be, genuine and in all respects what it purports to be,
and, to Borrower's knowledge, there are no, and, at the time of creation of each
Loan there will not be any, to Borrower's knowledge, facts, events or
occurrences that would in any way materially impair the validity or enforcement
thereof;
(d) All of the outstanding Loans have been, and all future Loans will be,
created, and are (or in the case of future Loans, will be), and the form and
content of each document related to all outstanding and future Loans, the
security related thereto, and the transactions from which it arose comply (or,
in the case of future Loans, will comply) in all material respects with any and
all applicable laws, ordinances, rules and regulations, Federal, state and/or
local, with respect to the extension of credit and charging of interest,
including, without limitation, as applicable, the Federal Consumer Credit
Protection Act, the Federal Fair Credit Reporting Act, the Federal Trade
Commission Act, the Federal Equal Credit Opportunity Act and all Federal, state
and local laws related to licensing, usury, truth in lending, real estate
settlement procedures, consumer protection, equal credit opportunity, fair debt
collection, unfair and deceptive trade practices, rescission rights and
disclosures, and with all rules and regulations thereunder, all as amended, and
any disclosures required with respect to any Loan the failure of which to make
would have a Material Adverse Effect on Borrower were and will continue to be
made properly and in a timely manner;
(e) The original amount and unpaid balance of each Loan shown on Borrower's
books and records and on any statement or schedule delivered to the Agent are
and will be true and correct, and the unpaid balance is and will be the amount
actually owing to Borrower;
14
(f) If requested by the Required Banks at any time or from time to time,
Borrower shall cause a Lien search against each Person to whom a Loan has been
made satisfactory to the Agent, to be performed and delivered directly to the
Agent, which Lien search shall indicate the absence of any Liens against such
Person or the property of the Person on which Borrower has a Lien, other than
Liens in favor of Borrower which have been assigned to the Agent or the Banks or
Liens in favor of the Agent or the Banks and other than Permitted Liens;
(g) Borrower has not extended and will not extend any credit of any kind or
in any manner to any Person in connection with the transactions from which the
Loans arose or will arise other than as Borrower has indicated on and has had
evidenced by, or will indicate or have evidenced by, in the case of future
Loans, Borrower's files related to the Loans;
(h) Each security agreement, UCC filing, title retention instrument, and
other document and instrument, if any, which is security for the Loans contains,
or will contain, in the case of future Loans, a correct and sufficient
description of the Underlying Collateral covered thereby and each lien or
security interest which secures any outstanding Loan is, or any future Loan will
be, valid;
(i) To the best knowledge of Borrower, except as disclosed to the Agent,
any and all policies of insurance related to the property securing any
obligation of a Person to whom Borrower has made a Loan, or any guarantor of
such Loan, in connection with any Loan and any credit life insurance, credit
disability insurance, or credit unemployment insurance are in full force and
effect in accordance with the terms of all agreements between Borrower and such
Person or guarantor;
(j) Borrower has no knowledge of any fact which would impair in any
material respect the value or validity of any Loan except as disclosed to the
Agent; and
(k) The transactions contemplated herein, including the granting of
security interests herein and the enforcement by the Agent of its rights
hereunder if a Default or Event of Default occurs, do not and will not affect
the validity of the pledges of the Underlying Collateral and the Loans secured
by the Underlying Collateral are and will still be valid against the Obligers of
such Loans.
SECTION 4.2. COLLECTIONS. (a) Subject to the provisions of this
Agreement, the Intercreditor Agreement, and the other Loan Documents, Borrower
shall service, manage, enforce, and make Collections in connection with the
Loans. "Collections", as used herein, means payment of principal and interest
-----------
on the Loans, other payments made with respect to Loans, the cash proceeds
realized from the enforcement of Loans and any security therefor, or the
collateral, proceeds of credit or group life insurance, and all proceeds of
insurance of any real or personal property which secure any of the Loans.
15
(b) With respect to each of the Collections: Borrower shall collect all
Collections, receive all payments thereon and immediately deposit the proceeds
thereof into a Depository Account. Borrower may withdraw funds from such
account to use in the ordinary course of its business.
SECTION 4.3. RIGHTS OF AGENT REGARDING COLLATERAL. Upon the occurrence
and during the continuance of an Event of Default, and subject to the provisions
of the Intercreditor Agreement, the Agent shall have the right, and upon the
direction of the Required Banks shall, at any time and from time to time
thereafter, without notice to Borrower, (a) to notify, and upon the direction of
the Agent to Borrower, the Borrower will notify, (i) all Persons to whom
Borrower has made Loans that the Agent has a security interest in such
Collateral and direct all such Persons to make payments to the Agent or its
designee, and to such banks and accounts (which may be the Collateral Account)
as designated by the Agent or such designee, of all sums owing by them to
Borrower, and (ii) all banks in which Borrower has any Depository Accounts of
the occurrence of an Event of Default and direct all such Banks to transfer into
the Collateral Account, or to such other account at such bank as shall be
designated by the Agent or its designee, all amounts on deposit from time to
time in the related Depository Accounts; (b) to settle, compromise, sell,
assign, extend or renew any debt owing by any Persons to whom Borrower has made
a Loan; (c) to sell or assign such Collateral upon such terms as the Agent may
deem advisable; and (d) to discharge and release in the name of Borrower and the
Agent any such debt. Any and all disbursements for costs and expenses incurred
or paid by the Agent with respect to the enforcement, collection or protection
of its interest in the Collateral, or against Borrower, whether by suit or
otherwise, notification of Persons to whom Borrower has made Loans, including
reasonable attorneys' fees actually incurred, court costs and similar expenses,
if any, shall become a part of the Obligations secured by the Collateral,
payable on demand.
ARTICLE V
DEFAULT
SECTION 5.1. EVENTS OF DEFAULT. Any one of the following events will
constitute an "Event of Default":
----------------
(a) failure of Borrower to observe, perform or comply with any of the
terms, provisions, conditions or covenants, or, in any material respect, any
warranties or representations, contained in this Agreement other than in Section
4.1 hereof;
(b) failure of Borrower to observe, perform or comply with any of the
terms, provisions, conditions, covenants, warranties or representations
contained in Section 4.1 of this Agreement, which failure shall not have been
remedied within 30 days after such failure shall first have become known to any
officer of Borrower;
(c) the occurrence of an Event of Default under the Loan Agreement; or
16
(d) any of the Loan Documents shall cease to be in full force and effect.
SECTION 5.2. REMEDIES. (a) Upon the occurrence of any Event of Default,
the Agent shall have, in addition to any other rights and remedies contained in
this Agreement or in any of the Other Agreements, all the rights and remedies of
a secured party under the UCC, and all other rights and remedies provided by
law, all of which shall be cumulative to the extent permitted by law. Upon the
occurrence of any Event of Default and at any time thereafter if such or any
other default shall then be continuing, the Agent shall have the right without
further notice to Borrower to, and upon the direction of the Required Banks
shall, appropriate, take possession and control of, set off and apply to the
payment of any or all of the Obligations and/or the CP Debt, any or all
Collateral, subject to and in the manner set forth in Section 5.3 and in the
Intercreditor Agreement, to enforce payment in connection with the Loans or any
other Collateral to settle, compromise or release, in whole or in part, any
amounts owing on the Collateral, to prosecute any action, suit or proceeding
with respect to the Collateral, to extend the time of payment of any and all
Collateral, to make allowances and adjustment with respect thereto, to issue
credits in the name of Borrower or the Agent, to sell, assign and deliver the
Collateral (or any part thereof), at public or private sale, at broker's board,
for cash, upon credit or otherwise, at the Agent's sole option and discretion
and the Agent and any Bank or other Person interested in the Obligations may bid
or become purchaser at any such sale, if public, free from any right of
redemption, which is hereby expressly waived. Borrower agrees that the giving
of ten days notice by the Agent, sent by certified mail, return receipt
requested postage prepaid, to the address set forth below, designating the place
and time of any public sale or of the time after which any private sale or other
intended disposition of the Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrower waives any other notice with respect
thereto. The net cash proceeds resulting from the exercise of any of the
foregoing rights or remedies shall be applied by the Agent in accordance with
Section 5.3 hereof, and the Borrower shall remain liable to the Agent, the Banks
and the CP Holders for any deficiency, together with interest thereon at the
rate provided in the Loan Agreement with respect to the Obligations and in the
Commercial Paper with respect to the CP Debt, and the cost and expenses of
collection of such deficiency, including (to the extent permitted by law),
without limitation, reasonable attorneys' fees actually incurred, expenses and
disbursements.
(b) If at any time or times hereafter the Agent employs counsel for advice
with respect to this Agreement or any Other Agreements, or to intervene, file a
petition, answer, motion or other pleading in any suit or proceeding relating to
this Agreement or any Other Agreements (including, without limitation, the
interpretation or administration, or the amendment, waiver or consent with
respect to any term, of this Agreement or any Other Agreements), or relating to
any Collateral, or to protect, take possession of, or liquidate any Collateral,
or to attempt to enforce any security interest or lien in any Collateral, or to
represent the Agent in any pending or threatened litigation with respect to the
affairs of Borrower in any way relating to any of the Collateral or to the
Obligations or to enforce any rights of the Agent,
17
any Bank or the CP Holders or liabilities of Borrower, any Person to whom
Borrower has made a Loan, or any Person which may be obligated to the Agent or
such Bank by virtue of this Agreement or any Other Agreement, instrument or
document now or hereafter delivered to the Agent, any Bank, any XX Xxxxxx or the
Paying Agent by or for the benefit of Borrower, then in any of such events, all
of the reasonable attorneys' fees actually incurred arising from such services,
and any expenses, costs and charges relating thereto, shall be Obligations
secured by the Collateral.
(c) Upon the occurrence of an Event of Default, the Agent shall have the
right to require Borrower to assemble all Collateral not already in the Agent's
possession and make it reasonably available to the Agent at one or more places
to be designated by the Agent which are reasonably convenient to both parties,
and to take possession of such Collateral and to enter and remain upon the
various premises of Borrower without cost or charge to the Agent, and to use the
same, together with materials, supplies, books and records of Borrower for the
purpose of collecting such Collateral or liquidating such Collateral (plus any
Collateral already in the Agent's possession), whether by foreclosure, auction
or otherwise. In addition, the Agent may remove from such premises such
Collateral, and any records with respect thereto, to the premises of the Agent
or any Custodian for such time as the Agent may desire, in order to effectively
collect or liquidate such Collateral.
(d) Upon the occurrence of an Event of Default, the Agent shall have the
right to, and upon the direction of the Required Banks shall, require Borrower
to establish and maintain a lockbox service (which may be the Collateral
Account) with such bank or banks as may be acceptable to the Agent. In the
event Borrower (or any of its Affiliates, subsidiaries, stockholders, directors,
officers, employees or agents) shall receive any monies, checks, notes, drafts
or any other items of payment relating to, or proceeds of, the Loan, Borrower
agrees with the Agent as follows:
(i) Borrower shall hold all such items of payment in trust for the Agent
and the Banks and as the property of Agent and the Banks, separate from the
funds of Borrower, and Borrower shall immediately forward, or cause to be
forwarded, the same to the lockbox service for application to the Revolving
Credit Loans or Term Loans;
(ii) Borrower shall forward to the Agent, on a daily basis, deposit slips
related to all such items of payment received by Borrower and, if requested
by the Agent, copies of such checks and other items, together with a
statement showing the application of that portion of such items of payment
relating to payment in connection with the Loans and a collection report
with regard thereto in form and substance satisfactory to the Agent;
(iii) All such items of payment shall be the sole and exclusive property
of the Agent for the benefit of the Banks immediately upon the earlier of
receipt of such items by the Agent or the receipt of such items by
Borrower;
18
(iv) The lockbox service shall be subject to the sole control of the Agent
and the Agent shall have the right at all times in its sole discretion to
apply all or part of such items of payment to the payment in accordance
with Section 5.3 hereof. The Agent may, and upon the direction of the
Required Banks shall, release to Borrower all or any part of such items of
payment; and
(v) The Agent assumes no responsibility for such lockbox arrangement,
including, without limitation, any claim of accord and satisfaction or
release with respect to deposits accepted by any bank thereunder.
(e) To the extent that the Agent, acting as Agent hereunder, exercises any
rights or omits to exercise any rights under this Agreement at any time for the
benefit of the Banks (whether requested by the Required Banks thereunder or
otherwise) with respect to any of the Collateral, such exercise or omission
shall likewise be deemed to be authorized by the CP Holders for performance (or
omission) by the Agent hereunder for the benefit of the CP Holders. In
furtherance of the foregoing, the Agent may exercise (or omit to exercise) all
rights requested by the Required Banks under this Agreement without first giving
notice to or consulting with any XX Xxxxxx or the Paying Agent acting with
respect to any Commercial Paper.
SECTION 5.3. APPLICATION OF PROCEEDS. (a) The proceeds of any lockbox
collection or sale of, or other realization upon, all or any part of the
Collateral shall be applied by the Agent in the following order of priority:
first, to payment of the expenses of such lockbox or sale or other
realization, including reasonable compensation to the Agent and its agents
and counsel and all expenses, liabilities, advances incurred or made by the
Agent in connection therewith, and any other unreimbursed expenses for
which the Agent is to be reimbursed under this Agreement;
second, (i) with respect to the realization upon SBA Collateral, first to
the payment of the SBA Secured Debt (including principal, interest, fees
and all other amounts due thereunder), and after payment in full of the SBA
Secured Debt, to the payment of the CP Debt (to the extent that it
constitutes Permitted Debt) and the Obligations, pro rata in accordance
with the respective outstanding balances thereof (including principal,
interest, fees and all other amounts due thereunder) and (ii) with respect
to all other Collateral, to the payment of the CP Debt (to the extent that
it constitutes Permitted Debt) and the Obligations, pro rata in accordance
with the respective outstanding balances thereof (including principal,
interest, fees and all other amounts due thereunder); and
19
third, after indefeasible payment in full of all Obligations and all CP
Debt, to payment to Borrower or its successors and assigns, or as a court
of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
The Agent may make distributions hereunder in cash or in kind, but such
distributions to the Banks shall in all events be made pro rata on the basis of
the respective Exposure Percentages of the Obligations. Distributions made
under clause "second" above may also be made in a combination of cash or
property, but distributions to the Banks shall be made pro rata on the basis of
the respective Exposure Percentages of the Obligations. Distributions made
under clauses "first" and "third" may also be made in a combination of cash or
property. Any deficiency remaining, after application of such cash or cash
proceeds to the Obligations, shall continue to be Obligations for which Borrower
remains liable.
(b) In making the determinations and allocations required by this Section
5.3, the Agent may rely upon information supplied by the Banks as to the amounts
of the Obligations held by them, upon information supplied by the Paying Agent
as to the amounts owed on the CP Debt, and upon information supplied by the SBA
as to the amounts owed on the SBA Secured Debt, and the Agent shall have no
liability to any of the Banks, the CP Holders or the Paying Agent for actions
taken in reliance upon such information. All distributions made by the Agent
pursuant to this Section 5.3 shall be final, and the Agent shall have no duty to
inquire as to the application by the Banks, the CP Holders, the Paying Agent or
the SBA of any amount distributed to them. However, if at any time the Agent
determines that an allocation was based upon a mistake of fact (including
without limitation, mistakes based on an assumption that principal or interest
or any other amount has been paid by payments that are subsequently recovered
from the recipient thereof through the operation of any bankruptcy,
reorganization, insolvency or other laws or otherwise), the Agent may in its
discretion, but shall not, subject to Section 5.3(c), be obligated to, adjust
subsequent allocations and distributions hereunder so that, on a cumulative
basis, the Banks, the CP Holders and the SBA receive the distributions to which
they would have been entitled if such mistake of fact had not been made.
(c) If, through the operation of any bankruptcy, reorganization, insolvency
or other laws or otherwise, the security interests created hereby are enforced
with respect to some, but not all, of the Obligations, the CP Debt and the SBA
Secured Debt, the Agent shall nonetheless apply the proceeds for the benefit of
the Banks, the CP Holders and the SBA, in the proportion and subject to the
priorities of Section 5.3(a). To the extent that the Agent distributes proceeds
collected with respect to one Obligation to or on behalf of the holder of
another Obligation or a Bank obtains the equivalent of proceeds through the
exercise of any right of setoff, the holder of the former Obligation shall be
deemed to have purchased a participation in the latter Obligation or shall be
subrogated to the rights of the holder thereof to receive any subsequent
payments and distributions made with respect to the portion thereof paid or to
be paid by the application of such proceeds.
20
SECTION 5.4. WAIVER BY AGENT OR BANKS. The Agent's or any Bank's failure
at any time or times hereafter to require strict performance by Borrower of any
of the provisions, warranties, terms and conditions contained in this Agreement
or any of the Other Agreements shall not waive, affect or diminish any right of
the Agent or any Bank at any time or times hereafter to demand strict
performance therewith and with respect to any other provisions, warranties,
terms and conditions contained in this Agreement or any of the Other Agreements,
and any waiver of any Event of Default shall not waive or affect any other Event
of Default, whether prior or subsequent thereto, and whether of the same or a
different type. None of the warranties, conditions, provisions and terms
contained in this Agreement or any Other Agreement shall be deemed to have been
waived by any act or knowledge of the Agent or any Bank, or their respective
agents, officers or employees except by an instrument in writing signed by an
officer of the Agent or such Bank and directed to Borrower specifying such
waiver.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. CONTINUING LIEN. This Agreement secures all present and
future Obligations of Borrower. There is included within the term "Collateral,"
----------
as used herein, all other property and all interests therein of any kind
hereafter acquired by Borrower, meeting or falling within the general
description of the Collateral set forth herein and also the proceeds and
products thereof.
SECTION 6.2. WAIVERS BY BORROWER. (a) Borrower irrevocably waives the
right to direct the application of any and all payments which may be received by
the Agent during the continuance of an Event of Default, and Borrower does
hereby irrevocably agree that, during the continuance of an Event of Default,
the Agent shall have the continuing exclusive right to apply and reapply any and
all such payments received in such manner as the Agent may deem advisable,
notwithstanding any entry upon any of its books and records.
(b) Borrower also waives any and all notices of demand, notice or protest
that Borrower might be entitled to receive with respect to this Agreement by
virtue of any applicable statute or law, and waives demand, protest, notice of
protest, notice of default, release, compromise, settlement, extension or
renewal of all commercial paper, accounts, contract rights, instruments,
guaranties, and otherwise, at any time held by the Agent or the Banks on which
Borrower may in any way be liable, notice of nonpayment at maturity of any and
all Loans, and notice of any action taken by the Agent or the Banks unless
expressly required by this Agreement.
SECTION 6.3. PARTIES. This Agreement and any of the Other Agreements,
instruments and documents executed and delivered pursuant hereto or to
consummate the transactions contemplated hereunder shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto.
21
SECTION 6.4. GOVERNING LAW. THIS AGREEMENT AND ANY OTHER AGREEMENTS SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE TO THE EXERCISE
OF REMEDIES OR THE PERFECTION OF SECURITY INTERESTS UNDER THE UCC.
SECTION 6.5. WAIVER OF JURY TRIAL AND SETOFF. EACH OF BORROWER AND THE
AGENT HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT
TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE OTHER AGREEMENTS
OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT OR THE OTHER
AGREEMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE, HOWSOEVER ARISING, BETWEEN
BORROWER AND ANY OF THE BANKS OR THE AGENT, BETWEEN ANY BANKS, BETWEEN THE AGENT
AND ANY BANKS, BETWEEN THE AGENT AND ANY XX XXXXXX OR THE PAYING AGENT, BETWEEN
ANY XX XXXXXX AND THE PAYING AGENT AND BETWEEN ANY CP HOLDERS AND BORROWER
HEREBY WAIVES THE RIGHT TO INTERPOSE ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN
CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM
COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE
INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION).
SECTION 6.6. JURISDICTION; SERVICE OF PROCESS. Borrower hereby
irrevocably consents to the Jurisdiction of the Courts of the State of New York,
County of New York and of any Federal Court located in the Southern District of
New York, and agrees that venue in each of such Courts is proper in connection
with any action or proceeding arising out of or relating to this Agreement, the
Other Agreements, or any document or instrument delivered pursuant to this
Agreement or the Other Agreements. Nothing herein shall affect the right of any
Bank to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Borrower in any other jurisdiction.
SECTION 6.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrower and all terms, provisions, conditions
and agreements to be performed by Borrower contained in this Agreement and in
the other Loan Documents shall be true and correct, and satisfied, where
applicable, at the time of the execution of this Agreement, and shall survive
the execution and delivery of this Agreement and all Other Agreements.
22
SECTION 6.8. OBLIGATIONS SECURED BY PROPERTY OTHER THAN COLLATERAL. To
the extent that the Obligations are now or hereafter secured by property other
than the Collateral, or by a guarantee, endorsement or property of any other
Person, then the Agent shall have the right to, and upon the direction of the
Required Banks shall, proceed against such other property, guarantee or
endorsement upon the occurrence and during the continuance of an Event of
Default, and the Agent shall have the right, with the consent of the Required
Banks, to determine which rights, security, liens, security interests or
remedies the Agent shall at any time pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way modifying or
affecting any of them or any of the Agent's rights or any of the Bank's rights
under the Obligations, this Agreement or any Other Agreements.
SECTION 6.9. SUCCESSOR AGENT. In the event a successor agent is appointed
pursuant to the provisions of Section 11.4 of the Loan Agreement, such successor
agent shall succeed to the rights, powers and duties of the Agent hereunder, and
the term "Agent" shall mean such successor agent effective upon its appointment,
-----
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to the Loan Agreement or any holders of the Revolving Credit
Notes or Term Notes. Such former Agent agrees to take such actions as are
reasonably necessary to effectuate the transfer of its rights, powers and duties
to such successor agent.
SECTION 6.10. TERMINATION. This Agreement and the security interest in
the Collateral created hereby will terminate when the Obligations and the CP
Debt have been irrevocably paid and finally discharged in full in accordance
with the terms of the Loan Agreement or the documents evidencing the CP Debt, as
the case may be, the Banks are no longer obligated to make Revolving Credit
Loans or Term Loans under the Loan Agreement, and the Dealer is no longer
required to sell Commercial Paper. No waiver by the Agent or any Bank or any
other holder of the Revolving Credit Notes or the Term Notes or any XX Xxxxxx or
the Paying Agent of any default will be effective unless in writing nor operate
as a waiver of any other default or of the same default on a future occasion.
In the event of a sale or assignment by any Bank (including the Agent in its
capacity as a Bank but not as Agent) of a Revolving Credit Note(s) or a Term
Note(s) or any portion thereof, such Bank may assign or transfer its rights and
interest under this Agreement in whole or in part to the purchaser or purchasers
of the Revolving Credit Note(s) or Term Note(s), whereupon such purchaser or
purchasers will become vested with all of the powers, rights and
responsibilities of such Bank hereunder, and such Bank will thereafter be
forever released and fully discharged from any liability or responsibility
hereunder with respect to the rights, interest and responsibilities so assigned,
other than liabilities arising out of actions taken prior to the date of
assignment. Borrower may not assign this Agreement without the express written
consent of the Agent and the Banks.
23
SECTION 6.11. NOTICES. All notices, requests, consents, demands or other
communications provided for herein shall be given in accordance with the terms
of Section 10.4 of the Loan Agreement.
SECTION 6.12. SEVERABILITY. To the extent any provision of this Agreement
is prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
SECTION 6.13. COUNTERPARTS. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be an original and both of which
shall together constitute one and the same agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written by the duly authorized officers of the parties hereto.
MEDALLION FUNDING CORP.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer and
Chief Financial Officer
FLEET BANK, N.A.,
as Agent
By: /s/ Xxxxxx X. Xxx
---------------------------------
Name: Xxxxxx X. Xxx
Title: Vice President
24
