Exhibit 10.5
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SECOND AMENDMENT TO WAREHOUSE LOAN AND SECURITY AGREEMENT
among
NHELP-I, INC.
as the Borrower
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as the Trustee
and
CONCORD MINUTEMEN CAPITAL COMPANY, LLC,
as the Lender
Dated as of September 29, 1999
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ARTICLE I
AMENDMENTS TO ORIGINAL AGREEMENT
Section 1.01. Definitions.................................................. 1
Section 1.02. Amendment to Section 2.02 of Original Agreement.............. 2
Section 1.03. Amendment to Article VI of Original Agreement................ 2
ARTICLE II
GENERAL PROVISIONS
Section 2.01. Date of Execution............................................ 5
Section 2.02. Laws Governing............................................... 6
Section 2.03. Severability................................................. 6
Section 2.04. Counterparts................................................. 6
ARTICLE III
APPLICABILITY OF ORIGINAL AGREEMENT
THIS SECOND AMENDMENT TO WAREHOUSE LOAN AND SECURITY AGREEMENT (this
"Amendment") is made as of September 29, 1999 among NHELP-I, INC., a corporation
duly organized under the laws of the State of Nevada (the "Borrower"), CONCORD
MINUTEMEN CAPITAL COMPANY, LLC, a Delaware limited liability company
("Concord"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national
banking association, as eligible lender and trustee (the "Trustee").
PRELIMINARY STATEMENTS
1. The Borrower, Concord and the Trustee have previously entered
into that certain Warehouse Loan and Security Agreement dated as of September
30, 1998 (as heretofore amended by that First Amendment to Warehouse Loan and
Security Agreement dated as of December 15, 1998, the "Original Agreement").
2. Pursuant to Section 9.01 of the Original Agreement, the
Borrower, the Required Lenders and, to the extent affected thereby, the Trustee
may amend the Original Agreement with the prior written consent of the Agent. As
of this date, Concord is the Required Lender and the Agent has given its written
consent to the execution of this Amendment.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO ORIGINAL AGREEMENT
ADDITIONS ARE INDICATED BY UNDERLINING AND DELETIONS ARE INDICATED BY
BRACKETS THROUGHOUT THIS AMENDMENT.
All words and phrases defined in Article I of the Original Agreement
shall have the same meaning in this Amendment, except as otherwise appears in
this Article.
SECTION 1.01 DEFINITIONS. The definitions set forth below are added to
the Original Agreement or amended to provide as follows:
"Facility Limit" means, at any time, [$500,000,000]
$440,000,000 as such amount may be adjusted from time to time pursuant
to Section 2.03; provided, however, at all times on or after the
termination of the Revolving Period, the "Facility Limit" shall mean
the Facility Amount.
"Liquidity Interest Rate" means the yield to be paid on
Liquidity Advances. The Liquidity Interest Rate shall be equal to
either (a) the sum of: (i) LIBOR and (ii) [0.625%] 0.95%, or (b) the
Alternate Borrowing Rate, as selected in accordance with Section 2.02.
"Rehab-Consolidation Loan" means a Consolidation Loan for
which (a) the borrower defaulted after the loan entered repayment (or
is a combination of a loan for which a default
occurred after repayment commenced), (b) the borrower is currently
making repayments, and (c) the applicable Guarantor has renewed the
borrower's eligibility under Title IV of the Higher Education Act.
"Required Lenders" means (a) prior to any drawing by Concord
under the Liquidity Facility, Concord, except as otherwise provided in
Section 4.1(d) of the Liquidity Agreement, (b) subsequent to any
drawing by Concord under the Liquidity Agreement and written notice to
the Borrower of such drawing by the Agent, so long as any amounts are
owed under this Agreement to Concord, Concord and the Agent, except as
otherwise provided in Section [4.9] 4.1(d) of the Liquidity Agreement,
and (c) at all other times, the Agent.
SECTION 1.02 AMENDMENT TO SECTION 2.02 OF ORIGINAL AGREEMENT. Section
2.02(d) of the Original Agreement is hereby amended to read as follows:
(d) If as a result of a draw under the Liquidity
Agreement the Agent shall become a Lender on any day other
than the first day of an Interest Period, the Liquidity
Interest Rate applicable to the Agent's Advances for the
remainder of such Interest Period shall be (i) the Alternate
Borrowing Rate plus 2.0% if such draw is the result of the
occurrence of an Event of Default hereunder or the Agent shall
not be given notice of such draw request not later than 12:00
noon, Pittsburgh time, at least three Business Days prior to
the date of such draw, or (ii) the sum of (A) LIBOR and (B)
[0.625%]0.95% if such draw is not the result of the occurrence
of an Event of Default hereunder and provided that the Agent
shall be given written notice of such draw request not later
than 12:00 noon, Pittsburgh time, at least three Business Days
prior to the date of such draw, unless otherwise agreed to by
the Agent.
SECTION 1.03 AMENDMENT TO ARTICLE VI OF THE ORIGINAL AGREEMENT. Article
VI of the Original Agreement is hereby amended to read as follows:
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower fails to pay any of its
Obligations under this Agreement or any of the other
Transaction Documents when such Obligations are due or are
declared due and such failure shall remain unremedied for one
Business Day; or
(b) any representation or warranty made or
deemed to be made by the Borrower (or any of its officers)
under or in connection with this Agreement or any other
Transaction Document, or other information or report delivered
pursuant hereto or thereto shall prove to have been false or
incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or
observe any other term, covenant or agreement contained in any
Transaction Document on its part to be performed or observed
(other than in Section 5.12 hereof) and any such failure shall
remain unremedied for three Business Days after written notice
thereof shall have been received; or
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(d) the Trustee, for the benefit of the Secured
Creditors, shall, for any reason, cease to have a valid and
perfected first priority security interest in any of the
Pledged Collateral; the Borrower shall, for any reason, cease
to have a valid and perfected first priority ownership
interest in each Financed Loan and Collections with respect
thereto; or
(e) an Event of Bankruptcy shall have occurred
with respect to the Borrower; or
(f) entry of a judgment or judgments in the
aggregate in excess of $100,000 against the Borrower which are
not (i) stayed, bonded, vacated, paid or discharged within 30
days after entry or (ii) fully covered by insurance as to
which the insurance carrier has acknowledged coverage to the
Borrower in writing within 30 days after entry; or
(g) (i) any litigation (including, without
limitation, derivative actions), arbitration proceedings or
governmental proceedings not disclosed in writing by the
Borrower to the Agent and Concord prior to the date of
execution and delivery of this Agreement is pending against
the Borrower or any of its Affiliates [Affiliate hereof], or
(ii) any material development not so disclosed has occurred in
any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings
so disclosed, which, in the case of clause (i) or (ii), in the
opinion of the Agent and the Required Lenders, has a Material
Adverse Effect; or
(h) the Internal Revenue Service shall file
notice of a lien pursuant to Section 6323 of the Internal
Revenue Code with regard to any of the assets of the Borrower
and such lien shall not have been released within 60 days, or
the Pension Benefit Guarantee Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to
Section 4068 of the Employee Retirement Income Security Act of
1974 with regard to any of the assets of the Borrower or any
of its Affiliates and such lien shall not have been released
within 60 days; or
(i) a Servicer Event of Default shall have
occurred or any Servicing Agreement shall not be in full force
and effect for any reason, and, in either case, such Servicer
or Servicing Agreement, as the case may be, shall not be
replaced by a Servicer or a Servicing Agreement, as the case
may be, acceptable to the Agent and the Required Lenders
within 60 days of such event; provided, however, the foregoing
event shall not be an "Event of Default" hereunder in such
Servicer Event of Default arises under a Servicing Agreement
with a Servicer that is not an Affiliate of the Seller and
within the 30 days of the occurrence of such event, all
Financed Loans then serviced by such Servicer are released
from the Pledged Collateral in accordance with the terms of
this Agreement; or
(j) at any time the sum of the aggregate
outstanding Principal Balance of all Financed Loans that are
Proprietary Loans exceeds 20% of the aggregate outstanding
Principal Balance of all Financed Loans; or
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(k) the Borrower shall fail to perform or
observe the covenant set forth in Section 5.12 hereof; or
(1) the occurrence of an event or circumstance
that has a Material Adverse Effect; or
(m) at any time the sum of the aggregate
outstanding Principal Balance of Financed Loans serviced by
Servicers for which the reporting of financial information to
the Agent is not permitted under their Servicing Agreements
shall exceed 10% of the aggregate outstanding Principal
Balance of all Financed Loans; or
(n) after [180] 90 days from any drawing by
Concord under the Liquidity Agreement, one or more Liquidity
Advances remain unpaid to the Liquidity Providers; or
(o) information in any of the reports described
in Exhibits C, D or E hereof or in the reports described in
the Valuation Agent Agreement[,] shall prove to have been
false or incorrect in any material respect and such false or
incorrect information shall remain uncorrected for three
Business Days after written notice thereof shall have been
received; or
(p) at any time the sum of the aggregate
outstanding Principal Balance of all Rehab-Consolidation Loans
exceeds 20% of the aggregate outstanding Principal Balance of
all Financed Loans;
then, and in any such event, the Agent or Required Lenders
may, by notice to the Borrower and the Trustee, declare the
Termination Date to have occurred, whereupon all of the
Obligations shall become immediately due and payable, except
that, in the case of any event described in subsection (e)
above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event and all of the
Obligations shall automatically become and be immediately due
and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived
by the Borrower. Upon any such declaration or automatic
occurrence, the Trustee and the Required Lenders shall have,
in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided
to a secured party under the UCC of the applicable
jurisdiction and other applicable laws, which rights shall be
cumulative. The rights and remedies of a secured party which
may be exercised by the Trustee and/or the Required Lenders
pursuant to this Article VI shall include, without limitation,
the right, without notice except as specified below, to
solicit and accept bids for and sell the Pledged Collateral or
any part thereof in one or more parcels at a public or private
sale, at any exchange, broker's board or at any of the
Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Trustee or
the Required Lenders may deem commercially reasonable. Any
sale or transfer by the Trustee and/or the Required Lenders of
Financed Loans shall only be made to an Eligible Lender. The
Borrower agrees that, to the extent notice of sale shall be
required by law, 10 Business Days' notice to the Borrower of
the time and
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place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification
and that it shall be commercially reasonable for the Trustee
to sell the Pledged Collateral to an Eligible Lender on an "as
is" basis, without representation or warranty of any kind. The
Trustee shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given and
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and
place to which it was so adjourned.
Notwithstanding the foregoing, upon (i) the
occurrence of an event described in subsection (n) above, and
(ii) declaration by the Agent or the Required Lenders, by
written notice to the Borrower and the Trustee, of the
occurrence of the Termination Date, and provided that no other
Event of Default shall then exist, the Trustee and the Lenders
shall forbear from exercising their rights and remedies as a
secured party to solicit and accept bids for and sell the
Financed Loans (A) for a period of fifteen (15) days after
such declaration, during which the Borrower may (but shall
have no obligation to) deliver written notice to the Agent and
Trustee of its intention to pay all of the Obligations (the
"Notice of Intention to Pay"), and (B) provided that the
Borrower has delivered the Notice of Intention to Pay within
such 15-day period, for a period of up to an additional thirty
(30) days, during which the Borrower may (but shall have no
obligation to) repay all of the Obligations, including,
without limitation, the aggregate amount of principal and
interest due on all Advances then outstanding, plus accrued
and unpaid interest which will be owing on such Advances upon
the date of the repayment of all of the Obligations, plus
interest which would accrue and be owing on any such Advances
owing to Concord through the end of all outstanding Interest
Periods. If (A) the Borrower shall fail to deliver the Notice
of Intention to Pay within such 15-day notice period, or (B)
after timely delivery of the Notice of Intention to Pay, the
Borrower shall fail to repay all of the Obligations within
such 30-day repayment period, then the Borrower's right and
option hereunder to repay the Obligations shall lapse and
expire and shall have no continuing force or effect, time
being of the essence. Except for such forbearance, the
Borrower's rights hereunder have no affect upon and shall not
alter or impair in any way the rights and remedies of the
Trustee and the Lenders pursuant to this Article VI. Neither
the granting to the Borrower of the rights hereunder to repay
all of the Obligations after declaration of the Termination
Date, nor the lapse or expiration of such rights, shall
constitute a waiver by the Borrower of any rights the Borrower
may have under the UCC of the applicable jurisdiction or other
applicable laws to repay the Obligations or to purchase the
Collateral in connection with a public sale.
ARTICLE II
GENERAL PROVISIONS
SECTION 2.01 DATE OF EXECUTION. Although this Amendment for convenience
and for the purpose of reference is dated and shall be effective as of September
29, 1999, the actual dates of execution by the Borrower, by Concord and by the
Trustee are as indicated by their respective acknowledgments hereto annexed.
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SECTION 2.02 LAWS GOVERNING. It is the intent of the parties hereto
that this Amendment shall in all respects be governed by the internal law, and
not the law of conflicts, of the State of Illinois.
SECTION 2.03 SEVERABILITY. If any covenant, agreement, waiver, or part
thereof contained in this Amendment shall be forbidden by any pertinent law or
under any pertinent law shall be effective to render this Amendment invalid or
unenforceable or to impair the lien hereof, then such covenant, agreement,
waiver, or part thereof shall itself be and is hereby declared to be wholly
ineffective, and this Amendment shall be construed as if the same were not
included herein.
SECTION 2.04 COUNTERPARTS. This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. One or more counterparts
of this Amendment may be delivered by telecopier, with the intention that they
shall have the same effect as an original counterpart thereof.
ARTICLE III
APPLICABILITY OF ORIGINAL AGREEMENT
The provisions of the Original Agreement are hereby ratified, approved
and confirmed, except as otherwise expressly modified by this Amendment. The
representations, warranties and covenants contained in the Original Agreement,
except as expressly modified herein, are hereby reaffirmed with same force and
effect as if fully set forth herein and made again as of the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
THE BORROWER:
NHELP-I, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and Treasurer
Date --------------------------------------------
c/o National Higher Education Loan Program
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇)▇▇▇-▇▇▇▇
THE LENDER:
CONCORD MINUTEMEN CAPITAL COMPANY, LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
Date --------------------------------------------
c/o The Liberty Hampshire Company, LLC
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Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Fax: (▇▇▇)▇▇▇-▇▇▇▇
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THE TRUSTEE:
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Corporate Trust Officer
Date 9/23/99
Norwest Bank Minnesota, National Association
▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Attn: Corporate Trust Services
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Fax: (▇▇▇)▇▇▇-▇▇▇▇
CONSENTED TO AND ACKNOWLEDGED:
THE AGENT:
MELLON BANK: N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Date 9/19/99
Mellon Bank, N.A.
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