EXHIBIT 10.35
AMENDMENT NO. 2 TO
REVOLVING CREDIT AGREEMENT
AND SECURITY AGREEMENT
This AMENDMENT NO. 2 (this "Amendment"), dated as of December 5, 1997 by
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and among BANKVEST CAPITAL CORP. ("BankVest" or a "Borrower"), a Massachusetts
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corporation having its principal place of business at 000 Xxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, LEASEVEST CAPITAL CORP. ("LeaseVest" or a "Borrower" and,
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together with BankVest, the "Borrowers"), a Massachusetts corporation having its
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principal place of business at 000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, and
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston) (the "Bank"), a
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national banking association with its head office at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, amends (i) the Revolving Credit Agreement dated as of
September 12, 1996, as amended as of January 1, 1997 (as so amended and as may
be further amended and in effect from time to time, the "Credit Agreement")
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among the Borrowers and the Bank and (ii) the Security Agreement dated as of
September 12, 1996 (as amended and in effect from time to time, the "Security
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Agreement") among the Borrowers and the Bank.
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WHEREAS, the Borrowers and the Bank have agreed to modify and amend certain
terms and conditions of the Credit Agreement and the Security Agreement, as
specifically set forth in this Amendment;
NOW, THEREFORE, in consideration of the foregoing premise and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrowers and the Bank hereby agree as follows:
(S)1. DEFINITIONS. Capitalized terms used herein and not otherwise
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defined herein have the meanings given to such terms in the Credit Agreement as
amended hereby.
(S)2. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
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amended as follows:
(a) The definition of "Backup Servicer Agreement" set forth in (S)1 of
the Credit Agreement is deleted in its entirety.
(b) The definition of "Commitment" set forth in (S)1 of the Credit
Agreement is amended by deleting the dollar amount "$15,000,000" and
substituting in place thereof the dollar amount "$20,000,000".
(c) The definition of "Delinquent Account" set forth in (S)1 of the
Credit Agreement is amended by inserting before the period at the end thereof
the phrase "in an amount equal to the higher of (a) ten dollars or more or (b)
ten percent or more of any scheduled lease payment".
(d) The definition of "Eligible Lease Receivables" set forth in (S)1 of
the Credit Agreement is amended by:
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(i) deleting the word "or" at the end of clause (c)(iii) thereof and
substituting in place thereof the word "and";
(ii) replacing clause (f) thereof in its entirety with the following
new clause (f):
"(f) that related to a Lease which was originated in
accordance with such Borrower's Credit Policy or acquired by a
Borrower in the ordinary course of its business and complies with such
Borrower's Credit Policy;"
(iii) deleting the term "sixty (60) months" in clause (l) thereof and
inserting in place thereof the phrase:
"seventy-two (72) months, provided, however, that no more than ten
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percent (10%) of the total amount of Eligible Lease Receivables may be
the subject of Leases having an original term of greater than sixty
(60) months"
(iv) amending clause (p) thereof by deleting the dollar amount
"$1,000,000" and substituting in place thereof the dollar amount
"$2,000,000"; and
(v) deleting the word "and" before clause (r) thereof and inserting
a new clause (s) as follows:
"and (s) that is not the result of a sale-leaseback transaction,
provided, however, that not more than ten percent (10%) of the total
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amount of Eligible Lease Receivables may be the subject of sale-
leaseback transactions"
(e) The definition of "Equipment" set forth in (S)1 of the Credit
Agreement is amended by inserting before the period at the end thereof the
phrase "or from a lessor who sold the Lease and the underlying equipment to
either of the Borrowers."
(f) The definition of "Interest Period" is amended by restating clause (i)
(B) thereof to read as follows:
"(B) for any Eurodollar Rate Loan, 1, 2 or 3 weeks or 1, 2 or 3
months; and"
(g) The definition of "Lease Receivables" set forth in (S)1 of the Credit
Agreement is hereby amended by inserting after the word "Borrower" and before
the phrase "as determined in accordance with GAAP" the phrase "or lease
obligations of the Lessees assigned or sold by a lessor to such Borrower, all".
(h) The definition of "Lockbox Agreement" set forth in (S)1 of the Credit
Agreement is amended by inserting at the end thereof the phrase "and as amended
from time to time solely to add other parties."
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(i) The definition of "Maturity Date" set forth in (S)1 of the Credit
Agreement is amended by deleting the reference to the year "1997" and
substituting in place thereof the reference to the year "1998".
(j) The definition of "NorWest" set forth in (S)1 of the Credit Agreement
is deleted in its entirety.
(k) The definition of "Rewrites" set forth in (S)1 of the Credit Agreement
is amended by inserting before the period at the end of such definition the
phrase:
"more than once, excluding changes relating to administrative matters made
during the first six (6) months of the Lease term;"
(l) The following definition of "Second Amendment Date" is inserted in the
appropriate alphabetically sequence in (S)1 of the Credit Agreement:
"Second Amendment Date. December 5, 1997."
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(m) The definition of "Servicer" set forth in (S)1 of the Credit Agreement
is amended and restated in its entirety to read as follows:
"Servicer. Xxxxxxx or any successor thereto acceptable to the Bank and
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which acceptance shall not be unreasonably withheld and who has become a
party to the Receivable Collection Agreement and has entered into a service
agreement with the Borrowers in form and substance satisfactory to the
Bank."
(n) The definition of "Subordinated Debt" set forth in (S)1 of the Credit
Agreement is amended by deleting the phrase "in form and substance acceptable to
the Bank" and substituting in place thereof the phrase:
"on substantially the same terms as contained in the Securities Purchase
Agreement dated February 28, 1997 by and between BankVest and X.X. Xxxxxxx
Subordinated Debt Fund, L.P. in the form delivered to the Bank on or prior
to the Second Amendment Date."
(o) Section 2.2.2 of the Credit Agreement is amended by deleting the
dollar amount "$15,000,000" and substituting in place thereof the dollar amount
"$20,000,000".
(p) Section 4 of the Credit Agreement is amended by deleting the
percentage "one-half percent (0.50%)" in the second sentence thereof and
substituting in place thereof the percentage "one-quarter percent (0.25%)".
(q) Section 5 of the Credit Agreement is amended by inserting after the
phrase "in each case" in the eighth line thereof the phrase "insofar as the
foregoing relate to the Designated Lease Receivables and".
(r) Section 6(d) of the Credit Agreement is amended by deleting the
reference to the year "1996" in the first clause thereof.
(s) Section 6(j) of the Credit Agreement is amended by:
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(i) inserting after the word "LeaseVest" in the first line thereof
the words ", BV Funding Corp., BVFU Funding Corp."; and
(ii) deleting the final clause thereof from and after the semi-colon
in the second line thereof and substituting in place thereof the phrase:
"and such other Subsidiaries or joint ventures as the Borrowers may
from time to time form, acquire or enter into in accordance with
(S)8.2(c) hereof;"
(t) Section 8.1(a) of the Credit Agreement is amended by deleting the name
"Coopers & Xxxxxxx" in clause (i) thereof and substituting in place thereof the
name "Deloitte & Touche."
(u) Section 8.2(a) of the Credit Agreement is amended and restated in its
entirety to read as follows: "Intentionally Omitted".
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(v) Section 8.2(b)(vi) of the Credit Agreement is amended and restated in
its entirety to read as follows:
"(vi) Liens on assets of the Borrowers not constituting Collateral to
secure Indebtedness, provided that Liens on patents, trademarks, other
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intellectual property and general intangibles of the Borrowers shall be
permitted only to the extent such intellectual property and general
intangibles relate specifically to the Lease Receivables being pledged to
secure such Indebtedness;"
(w) Section 8.2(c) of the Credit Agreement is amended by:
(i) inserting after the word "Ltd.," in the second line thereof the
phrase:
"as well as special purpose Subsidiaries for use in securitizations
and other Subsidiaries formed or acquired by either Borrower in the
ordinary course of business or joint ventures entered into by either
Borrower in the ordinary course of business, provided that (A) such
Subsidiaries or joint ventures are engaged in the same line of
business as the Borrowers (i.e. the leased financing of equipment
having book values of less than $500,000) and (B) BankVest has a
consolidated tangible net worth plus subordinated debt of not less
than $40,000,000 at the time of such formation, acquisition or
entrance into such Subsidiary or joint venture)"; and
(ii) deleting the words "or (v)" and substituting in place thereof
the following "(v) investments by the Borrowers in Subsidiaries and joint
ventures to the extent the existence of such Subsidiaries and joint
ventures is otherwise permitted under this (S)8.2(c); or (vi)".
(x) Section 8.2(d) of the Credit Agreement is amended and restated in its
entirety as follows:
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"(d) make any dividends or distributions on or in respect of any
shares of any class of its capital stock of any nature whatsoever, if,
either before or immediately after giving effect to the proposed
distributions or dividends, a Default or Event of Default shall have
occurred and be continuing;"
(y) Section 8.2(e) of the Credit Agreement is hereby amended by:
(i) inserting after the word "BankVest" in the third line thereof
the phrase:
"or a merger or consolidation as a result of which the surviving
corporate entity is BankVest, provided that no Default or Event of
Default shall have occurred and be continuing or would result from
such merger or consolidation";
(ii) deleting the phrase "or any sale-leaseback transaction" in the
third line thereof; and
(iii) inserting after the phrase "in the ordinary course" in line five
thereof the phrase "(securitizations and other sales of Leases being
acknowledged as in the ordinary course of business)".
(z) Section 8.2(f) of the Credit Agreement is amended by inserting before
the semi-colon at the end thereof the phrase "and any securitizations".
(aa) Section 8.2(g) of the Credit Agreement is amended by deleting the
words "the Backup Servicer Agreement,".
(bb) Section 8.2(h) of the Credit Agreement is amended by inserting at the
end thereof the phrase "and which consent shall not be unreasonably withheld."
(cc) Section 8.3(b) of the Credit Agreement is amended by deleting the
phrase "fiscal month" in the third line thereof and substituting in place
thereof the phrase "fiscal quarter".
(dd) Section 8.3(c) of the Credit Agreement is amended by:
(i) deleting the word "two" in the first line thereof and
substituting in place thereof the word "four"; and
(ii) deleting the dollar amount "$100,000" in line four thereof and
substituting in place thereof the dollar amount "$200,000".
(ee) Section 9(f) of the Credit Agreement is amended by deleting the dollar
amount "$250,000" in the fourth line thereof and substituting in place thereof
the dollar amount "$500,000".
(ff) Section 9(j) of the Credit Agreement is amended by deleting the dollar
amount "$100,000" in the fifth line thereof and substituting in place thereof
the dollar amount "$500,000".
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(gg) Section 9(l) of the Credit Agreement is amended and restated in its
entirety to read as follows:
"(i) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) (other than
shareholders of BankVest as of the Second Amendment Date) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 20% or more of
the outstanding shares of common stock of BankVest; or, during any period
of twelve consecutive calendar months, individuals who were directors of
BankVest on the first day of such period shall cease to constitute a
majority of the board of directors of BankVest;"
(S)3. AMENDMENT TO THE SECURITY AGREEMENT. Section 2.1(e) of the Security
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Agreement is amended by inserting before the semi-colon at the end of such
paragraph the phrase ", to the extent the foregoing relate to any Designated
Lease Receivables".
(S)4. AFFIRMATION BY THE BORROWERS. Each of the Borrowers hereby ratifies
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and confirms all of the Obligations and each of the Borrowers hereby affirms its
absolute and unconditional joint and several promise to pay to the Bank the
Revolving Credit Loans and all other amounts due under the Credit Agreement as
amended hereby. Each of the Borrowers hereby confirms that the Obligations are
and remain secured pursuant to the Security Documents to which such Borrower is
a party.
(S)5. AMENDMENT FEE. The Borrowers shall pay to the Bank an amendment fee
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in an aggregate amount equal to $50,000 with a portion of such fee equal to
$25,000 due and payable on or prior to the Effective Date of this Amendment and
the remaining portion due and payable on July 1, 1998.
(S)6. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
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shall be conditioned upon the satisfaction of the following conditions
precedent.
(S)6.1. DELIVERY OF DOCUMENTS. The Borrowers shall have delivered to the
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Agent, contemporaneously with the execution hereof, or there shall have
otherwise been delivered to the Agent, the following, in form and substance
satisfactory to the Banks:
(a) this Amendment executed and delivered by each of the Borrowers and the
Bank;
(b) a restated Revolving Credit Note in favor of the Bank duly authorized,
executed and delivered by each of the Borrowers; and
(c) evidence of corporate resolutions of each Borrower authorizing the
additional borrowings contemplated under this Amendment.
(S)6.2. AMENDMENT FEE. The Borrowers shall have paid to the Bank a
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portion of amendment fee in an amount equal to $25,000.
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(S)6.3. LEGAL FEES. Each Borrower confirms and agrees that it shall pay
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or reimburse the Bank for all legal fees and disbursements of counsel for the
Bank in connection with this Agreement.
(S)7. CONDITION SUBSEQUENT. The Borrowers shall pay to the Bank on July
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1, 1998 the remaining portion of the amendment fee in an amount equal to
$25,000. Failure to make such payment on such date shall be an immediate Event
of Default.
(S)8. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
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represents and warrants to the Banks as follows:
(a) The representations and warranties of such Borrower contained in
the Credit Agreement, as amended hereby were true and correct in all material
respects when made and are and continue to be true and correct in all material
respects on the date hereof, except that the financial statements referred to
therein shall be the financial statements of such Borrower most recently
delivered to the Agent, and except as such representations and warranties are
affected by the transactions contemplated hereby.
(b) The execution, delivery and performance by such Borrower of this
Amendment and the consummation of the transactions contemplated hereby: (i) are
within the corporate powers of such Borrower and have been duly authorized by
all necessary corporate action on the part of such Borrower, (ii) to the best of
such Borrower's knowledge, do not require any approval, consent of, or filing on
the part of such Borrower with, any governmental agency or authority, or any
other person, association or entity, which bears on the validity of this
Amendment and which is required by law or the regulation or rule of any agency
or authority, or other person, association or entity, (iii) do not violate any
provisions of any order, writ, judgment, injunction, decree, determination or
award presently in effect in which such Borrower is named, or any provision of
the charter documents or by-laws of such Borrower, (iv) do not result in any
breach of or constitute a default under any agreement or instrument to which
such Borrower is a party or to which it or any of its properties are bound,
including without limitation any indenture, loan or loan agreement, lease, debt
instrument or mortgage, except for such breaches and defaults which would not
have a material adverse effect on such Borrower and its Subsidiaries taken as a
whole, and (v) except as specified in this Amendment, do not result in or
require the creation or imposition of any mortgage, deed of trust, pledge or
encumbrance of any nature upon any of the assets or properties of such Borrower.
(c) This Amendment, the Credit Agreement as amended hereby, and the
other Loan Documents constitute the legal, valid and binding obligations of such
Borrower, enforceable against such Borrower in accordance with their respective
terms, provided that (i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors, and (ii) enforcement may be
subject to general principles of equity, and the availability of the remedies of
specific performance and injunctive relief may be subject to the discretion of
the court before which any proceeding for such remedies may be brought.
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(S)9. MISCELLANEOUS. Except as expressly set forth in this Amendment, all
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of the terms and provisions of the Revolving Credit Agreement shall remain in
full force and effect. This Amendment may be executed in counterparts and shall
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. This Amendment shall become effective on the date on which all
the conditions set forth in (S)6 shall have been satisfied (the "Effective
Date").
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as an
instrument under seal to be effective as of the date first above written.
BANKVEST CAPITAL CORP.
By:________________________________________
Xxxx X. Xxxxxx
Executive Vice President
LEASEVEST CAPITAL CORP.
By:________________________________________
Xxxx X. Xxxxxx
Executive Vice President
BANKBOSTON, N.A. (f/k/a The First
National Bank of Boston)
By:________________________________________
Xxxxxxx X. Xxxxx, Vice President
