FIRST AMENDMENT TO EQUIPMENT FINANCING AGREEMENT
THIS FIRST AMENDMENT dated as of April 18, 1990 (this
"Amendment"), to Equipment Financing Agreement dated as of August 1,
1988, (the "Agreement") is by and between ▇▇▇▇▇▇▇, INC., a
Pennsylvania corporation (the "Company"), CONTINENTAL BANK N.A.
(formerly known as Continental Illinois National Bank and Trust
Company of Chicago), a national banking association ("Continental"),
individually and as Collateral Agent, and FIDELITY BANK, N.A.
("Fidelity" and, together with Continental and its individual
capacity, the "Banks"). Unless otherwise defined herein,
capitalized terms used herein have the respective meanings assigned
thereto in the Agreement.
W I T N E S S E T H
WHEREAS, the Company and the Banks desire to amend the Agreement
in certain respects:
NOW, THEREFORE, the Company and the Bank agree as follows:
SECTION 1 AMENDMENTS. The Agreement is hereby amended as
follows:
1.1 Amendment of Section 1.1. Section 1.1 of the Agreement
is hereby amended (a) by adding thereto in proper alphabetical order
the following definitions:
"'Account Debtor' means the party who is obligated on or
under any Account Receivable."
"'Account Receivable' means any right of the Company to
payment for goods sold or leases or for services rendered."
"'Accounts Receivable Collateral' means all Accounts
Receivable (whether or not Eligible Accounts Receivable),
Contract Rights and documents of title of the Company; all
chattel paper and instruments evidencing any obligation to the
Company for payment for goods sold or leased or for services
rendered; all guaranties and other property securing the payment
of or performance under, any Accounts Receivable, Contract
Rights or any such chattel paper or instruments; to the extent
related to the property herein described, all books,
correspondence, credit files, records, invoices and other papers
and documents, including, without limitation, to the extent so
related, all tapes, cards, computer runs, computer programs and
other papers and documents in the possession or control of the
Company or any computer bureau from time to time acting for the
Company; and, to the extent so related, all rights in, to and
under all policies of insurance, including claims of rights to
payments thereunder and proceeds therefrom, including any credit
insurance; and all proceeds and products of any of the
foregoing."
"'Application' means an application by the Company, in a
form and containing terms and provisions acceptable to
Continental, for the issuance by Continental of a Letter of
Credit."
"'Contract Right' means any right of the Company to payment
under a contract for the sale or lease of goods or the rendering
of services, which right is at the time not yet earned by
performance."
"'Eligible Account Receivable' means an Account Receivable
which meets each of the following requirements: (i) if it arises
from the sale or lease of goods, such goods have been shipped or
delivered, and not returned or subject to return (other than
warranty returns and rights of distributors to exchange
inventory for other inventory in the ordinary course of
business), to the Account Debtor under such Account Receivable;
(ii) it is a valid, legally enforceable obligation of the
Account Debtor thereunder (subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other
similar laws from time to time in effect affecting creditors'
rights, and to the application of equitable principles
generally), and is not subject to any offset, rebate, refund,
allowance, counterclaim, debt memorandum, or other defense on
the part of such Account Debtor or to any claim on the part of
such Account Debtor denying liability thereunder in whole or in
part (as used herein, the foregoing defense to payment shall not
mean any discount for timely payment in the ordinary course of
business); (iii) it is not subject to any Lien or security
interest whatsoever, other than Liens permitted hereunder and
the security interest of the Bank; (iv) it is evidenced by an
invoice (dated not later than the date of shipment or
performance or lease contract applicable thereto and having
standard trade payment terms) rendered to such Account Debtor,
and is not evidenced by any instrument or chattel paper; (v) it
is not owing by any Account Debtor whose obligations the Bank,
acting in its reasonable discretion, shall have notified the
Borrower in writing are not deemed to constitute Eligible
Accounts Receivable; (vi) the invoice evidencing such Account
Receivable is not more than 90 days overdue; (vii) it is owing
either by (a) an Account Debtor whose principal place of
business is located in the United States, or (b) an Account
Debtor whose principal place of business may be located outside
the United States, but which maintains a place of business
located in the Untied States and where the goods or services
giving rise to such Account Receivable are delivered or
performed in the United States; and (viii) the Account Debtor is
neither the federal or any state or local government, nor any
unit, branch, agency or subdivision thereof. An Account
Receivable which is at any time an Eligible Account Receivable,
but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Account
Receivable.
"'Letter of Credit' means a letter of credit issued by
Continental, in its discretion, on the Application of the
Company pursuant to this Agreement."
"'Letter of Credit Obligations' means an amount equal to the
aggregate of the original face amounts of all Letters of Credit
minus the sum of (i) the amount of any reduction(s) in the
original face amount of any Letter of Credit which did not
result from a draw made under such Letter of Credit, (ii) the
amount of any payments made by the Banks or either of them with
respect to a Letter of Credit (A) which, from and after the date
of such payment, constitutes an Advance pursuant to Section
2.4(d), or (B) for which the Company has reimbursed the
Collateral Agent, and (iii) the undrawn portion of any issued,
but expired, Letter of Credit."
"'Security Agreement - Accounts Receivable' means a security
agreement of the Company in the form set forth as Exhibit N with
appropriate insertions."
and (b) by deleting therefrom the definition of the term "Borrowing
Base" and substituting therefor the following definition:
"'Borrowing Base' means, at any time, an amount equal to (i)
the Security Value of the Vehicles at such time, [minus (ii)
certain Indebtedness of the Company as more particularly
described on a Borrowing Base Certificate,] plus (iii) up to 80%
of the net amount of the Company's Eligible Accounts Receivable,
as calculated pursuant to a Borrowing Base Certificate."
1.2 Amendment of Section 2.1. Section 2.1 of the Agreement
is hereby amended by (i) adding the phrase ", minus the Letter of
Credit Obligations" at the end of the first sentence thereof, and
(ii) adding the phrase "and the Letter of Credit Obligations" after
the phrase "including the Advances" in the second sentence thereof.
1.3 Amendment of Section 2. Section 2 of the Agreement is
hereby amended by adding the following Section 2.4 thereto:
"2.4 Letters of Credit.
(a) In addition to Advances made pursuant to Section
2.1, Continental shall, subject to the terms and conditions of
this Agreement, upon receipt of duly executed Applications and
such other documents, instruments and/or agreements as
Continental may require, open Letters of Credit for the account
of the Company on such terms as are satisfactory to Continental,
provided that (i) the aggregate face amount of Letters of Credit
issued hereunder may not exceed $10,000,000 at any one time
outstanding; (ii) no Letter of Credit will be issued if, before
or after taking such Letter of Credit into account, the
aggregate Letter of Credit Obligations exceed or would exceed
the lesser of (A) $30,000,000 minus the outstanding principal
balance of the Advances minus the Letter of Credit Obligations
or (B) the Borrowing Base minus the outstanding principal
balance of the Advances minus the Letter of Credit Obligations
and (iii) no Letter of Credit shall have an expiration date
later than the earlier to occur or (y) the first anniversary of
the date such Letter of Credit was issued, or (z) the
Termination Date.
(b) The Company may request Continental to issue a
Letter of Credit by delivering to Continental, at its address
set forth on the signature pages hereof, an Application
completed to the satisfaction of and acceptable to Continental
in its reasonable discretion.
(c) Effective in the case of each Letter of Credit as
of the date of the opening thereof, Continental agrees to allot
and does allot, to itself and each other Bank, and each Bank
severally and irrevocably agrees to take and does take an
undivided participating interest in such Letter of Credit in a
percentage equal to the percentage such Bank's commitment set
forth opposite its signature hereto bears to the aggregate of
all the Banks' commitments.
(d) In the event that Continental makes a payment under
any Letter of Credit, the Company shall be deemed to have given
notice pursuant to Section 2.2 requesting the Banks to make
Advances on the date on which such payment by Continental takes
place in an amount equal to the amount of such payment and the
Banks shall, notwithstanding the failure of any of the
conditions set forth in Section 10, make Advances on such date
in such amount, the proceeds of which shall be applied directly
to reimburse Continental for the amount of such payment. The
obligation of each Bank to provide Continental with such Bank's
pro rata share of the amount of any payment made by Continental
to settle its obligations under any Letter of Credit shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment
which such Bank may have or has had against Continental,
including without limitation, any defense based on the failure
of the demand for payment under such Letter of Credit to conform
to the terms of such Letter of Credit or the legality, validity,
regularity or enforceability of such Letter of Credit or any
defense based on the identity of the transferee of such Letter
of Credit or the sufficiency of the transfer if such Letter of
Credit is transferable, absent Continental's gross negligence or
willful misconduct.
(e) The Company agrees to pay Continental, on demand,
Continental's standard administrative operating fees and charges
in effect from time to time for issuing and administering any
Letters of Credit. The Company further agrees to pay
Continental pro rata for the account of the Banks a commission
on the undrawn amounts of the Letters of Credit issued by
Continental at a rate per annum equal to (i) three-eights of one
percent (3/8%) on the first $845,200 of the aggregate undrawn
face amount of Letters of Credit, and (ii) three-quarters of one
percent (3/4%) on the aggregate undrawn face amount of Letters
of Credit in excess of $845,200. Such commission shall be paid
quarterly in arrears.
(f) Notwithstanding anything to the contrary herein or
in any Application of the Company, upon the occurrence of an
Event of Default or an Unmatured Event of Default or other
termination of this credit facility, an amount equal to the
aggregate amount of the outstanding Letter of Credit Obligations
shall, without demand upon or (in the case of an Event of
Default) further notice to the Company, be deemed (as between
the Banks and the Company) to have been paid or disbursed by
Continental under the Letters of Credit issued by Continental,
(notwithstanding that such amounts may not in fact have been so
paid or disbursed), and an Advance to the Company in the amount
of such Letter of Credit Obligations to have been made and
accepted, which Advance may, at the discretion of either of the
Banks, be immediately due and payable."
1.4 Amendment of Section 5.2. The first sentence of
Section 5.2 of the Agreement is hereby amended by inserting at the
end thereof the clause "; and provided, further, that no reduction
may reduce the amount of the Credit below the Letter of Credit
Obligations as of the date of such reduction.
1.4 Amendment of Section 5.6. Section 5.6 of the Agreement
is hereby deleted in its entirety and the following is
hereby substituted therefor:
"5.6 Borrowing Base. If at any time the
outstanding unsecured Indebtedness of the Company, including the
Advances and the Letter of Credit Obligations (whether or not
said Advances and/or Letter of Credit Obligations are secured)
exceeds the Borrowing Base, the Company shall prepay the
Advances to the extent of such excess and, if, after giving
effect to such prepayment, such outstanding unsecured
Indebtedness continues to exceed the Borrowing Base, then the
Company shall deliver to Continental cash, or other collateral
of a type satisfactory to Continental, having a value, as
determined by Continental, equal to such excess. Any such
collateral received by Continental shall be held by Continental
in a separate account appropriately designated as a cash
collateral account in relation to this Agreement and the Letters
of Credit and retained by Continental as collateral security for
the Company's liabilities in respect of this Agreement and each
of the Letters of Credit; it being understood that, in the
absence of an Event of Default or Unmatured Event of Default,
the amount of collateral maintained in such cash collateral
account at any time and from time to time need not be greater
than the amount by which the outstanding unsecured Indebtedness
of the Company, including the Advances and the Letter of Credit
Obligations (whether or not said Advances and/or Letter of
Credit Obligations are secured) exceeds the Borrowing Base. Any
amounts remaining in any cash collateral account established
pursuant hereto following payment in full of all such
liabilities, which are not (as determined by Continental) (to be
applied to reimburse the Banks for amounts actually paid by
Continental in respect of a Letter of Credit shall be returned
to the Company (after deduction of Continental's expenses).
Notwithstanding anything to the contrary contained in the
foregoing, in the case of a voluntary termination of the credit
facility by the Company in accordance with the provisions
hereof, the Company may provide to Continental, in lieu of cash
collateral, an additional letter or letters of credit in form
and substance, and issued by a financial institution,
satisfactory to Continental and naming Continental as
beneficiary thereunder which shall support any liabilities of
the Company hereunder with respect to any then outstanding
Letter of Credit Obligations."
1.6 Amendment of Section 8. Section 8 of the Agreement is
hereby amended by adding thereto the following Section 8.23:
"8.23 Liens on Accounts Receivable. Not, and not
permit any Subsidiary to, create or permit to exist any Lien
with respect to Accounts Receivable Collateral whether now
existing or hereafter arising except Liens in favor of the Banks
to secure the Company's liabilities hereunder and under the
Notes."
1.7 Amendment of Section 9. Section 9 of the Agreement is
hereby amended by adding thereto the following Section 9.3:
"9.3 Accounts Receivable. (a) The Company agrees
that at any time after the occurrence of an event which but for
the passage of time or the giving of notice or both would
constitute an Event of Default either Bank may require that all
the Company's liabilities and obligations hereunder and under
the Notes be secured by a security interest in and a lien upon
all Accounts Receivable Collateral, whether now existing or
hereafter arising. Within thirty days after such notice, the
Company will execute and deliver to the Collateral Agent the
Security Agreement - Accounts Receivable, together with such
financing statements or other documents as either Bank may
reasonably request and such other financing statements or other
documents as may be advised by counsel for the Collateral Agent
as being necessary or desirable to perfect the Banks' security
interest in the Accounts Receivable Collateral.
(b) The Company will, upon twenty-four hours' notice
from either of the Banks, permit such Bank by or through any of
its respective officers, attorneys, accountants or other
authorized agents to inspect and make extracts from the
Company's books and records relating to the Accounts Receivable
Collateral, regardless of whether such books and records are in
the possession of the Company or otherwise. Notwithstanding the
provisions of the foregoing sentence, the Company will not,
without the prior written consent of the Banks, relinquish
possession of its books and records relating to the Accounts
Receivable Collateral."
1.8 Amendment of Section 12. Section 12 of the Agreement
is hereby deleted in its entirety and the following is hereby
substituted therefor:
12. CONDITION SUBSEQUENT. Upon the request of any of the
Banks under Section 9 of this Agreement, the Company will
deliver to the Banks:
12.1 Security Agreement. Its Security Agreement or
its Security Agreement - Accounts Receivable, as the case may
be, together with such financing statements, Mortgages and other
documents as the Banks or their counsel may request.
12.2 Resolutions. A copy, duly certified as of the
date of the Security Agreement or Security Agreement - Accounts
Receivable, as the case may be, by the Company's secretary or
assistant secretary of (a) the resolutions of the Company's
Board of Directors authorizing the execution, delivery and
performance of such Security Agreement, (b) all documents
evidencing other necessary corporate action; and (c) all
approvals or consents, if any, with respect to such Security
Agreement.
12.3 Incumbency. A certificate of the Company's
secretary or assistant secretary dated the date of the Security
Agreement or Security Agreement - Accounts Receivable, as the
case may be, certifying the names of the Company's officers
authorized to sign such Security Agreement an all other
documents or certificates to be delivered with respect thereto,
together with the true signatures of such officers.
12.4 Opinion. An opinion of ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.,
counsel to the Company, addressed to the Collateral Agent and
the Banks and dated the date of the Security Agreement or
Security Agreement - Accounts Receivable, as the case may be, in
substantially the form of (i) in the case of the Security
Agreement, Exhibit L hereto, and (ii) in the case if the
Security Agreement - Accounts Receivable, Exhibit O hereto.
1.9 Amendment of Signature Page. The signature page of the
Agreement is hereby amended by deleting therefrom the figure
"$15,000,000" adjacent to the signature of Continental thereon and
substituting therefor the figure "$18,000,000"; and (ii) by deleting
therefrom the figure "$10,000,000" adjacent to the signature of
Fidelity thereon and substituting therefor the figure "$12,000,000".
1.10 Amendment of Exhibit A. Exhibit A to the Agreement
is hereby deleted in its entirety and Exhibit A attached hereto is
hereby substituted therefor.
1.11 Amendment of Exhibit C. Exhibit C to the Agreement
is hereby deleted in its entirety and Exhibit C attached hereto is
hereby substituted therefor. From and after the date of this
Amendment, all references in the Agreement to Exhibit C and to the
"Notes" shall be deemed to be a reference to Exhibit C hereto and to
the Company's Notes in the form of Exhibit C hereto (hereinafter
referred to as the "First Amended and Restated Notes").
1.12 Addition of Exhibits N and O. Exhibit N and
Exhibit O attached hereto are hereby added to the Agreement,
respectively, as Exhibit N and Exhibit O thereto.
SECTION 2 REPRESENTATIONS AND WARRANTIES. In order to induce
the Bank to enter into this Amendment, the Company hereby
represents and warrants to the Bank as of the date hereof as
follows:
2.1 The representations and warranties contained in Section
7 of the Agreement are true and correct on, and as though made as of
the date hereof. No Event of Default or Unmatured Event of Default
has occurred and is continuing as of the date of hereof.
2.2 The execution and delivery by the Company of this
Amendment does not violate any provisions of the Certificate of
Incorporation or ByLaws of the Company, or any indenture, contract
or agreement to which the Company or any of its subsidiaries is a
party.
2.3 The execution and delivery by the Company of this
Amendment have been duly authorized by all necessary corporate
action.
2.4 This Amendment constitutes, and the First Amended and
Restated Notes when executed and delivered in connection herewith
will constitute, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, except to the extent such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors' rights generally and general equitable
principles; and this Amendment does not constitute, to the best of
the Company's knowledge, a violation of the provisions of any
statute, regulation or judgment or decree of any court or
governmental instrumentality.
SECTION 3 CONDITIONS PRECEDENT. The amendments set forth in
Section 1 of this Amendment shall be effective upon the Bank's
receipt of all of the following, each duly executed on behalf of the
Company, in form and substance satisfactory to the Banks:
3.1 Notes. The First Amended and Restated Notes of the
Company;
3.2 Resolutions. A copy, certified by the Secretary or
Assistant Secretary of the Company, of resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Amendment and borrowings under the Agreement as amended hereby;
3.3 Incumbency and Signatures. A certificate of the
Secretary or Assistant Secretary of the Company, certifying the
names of the officer or officers of the Company authorized to
execute and deliver this Amendment and the First Amended and
Restated Notes on behalf of the Company, together with a sample of
the true signature of each such officer;
3.4 Opinion of Counsel. The opinion of counsel to the
Company, in the form of Exhibit B hereto; and
3.5 Other. Such other documents as the Banks may
reasonably request.
SECTION 4 GENERAL.
4.1 Ratification. The Agreement as amended by this
Amendment shall remain in full force and effect and in hereby
ratified, approved and confirmed in all respects. From and after
the date hereof, references in the Agreement and the documents and
instruments relating thereto shall refer to the Agreement as hereby
amended.
4.2 Counterparts. This Amendment may be executed in any
number of counterparts and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute
but one and the same Amendment.
4.3 Governing Law. This Amendment shall be construed in
accordance with, and governed by, the internal laws of the State of
Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective duly authorized
officers as of the day and year first above written.
▇▇▇▇▇▇▇, INC.
/s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
CONTINENTAL BANK N.A.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIDELITY BANK, NATIONAL ASSOCIATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
