EXHIBIT 10.1
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of August 1, 2000
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
and
▇▇▇▇▇▇▇▇ FINANCIAL, INC.
as the Borrower
TABLE OF CONTENTS
Section Page
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ARTICLE 1 INTERPRETATION OF THIS AGREEMENT...................................................... 1
1.1 Definitions.................................................................................... 1
1.2 Accounting Terms............................................................................... 22
1.3 Interpretive Provisions........................................................................ 23
ARTICLE 2 LOANS................................................................................. 24
2.1 Total Facility................................................................................. 24
2.2 Revolving Loans................................................................................ 24
2.3 Existing Indebtedness.......................................................................... 30
2.4 Bank Products.................................................................................. 30
ARTICLE 3 INTEREST AND FEES..................................................................... 30
3.1 Interest....................................................................................... 30
3.2 Continuation and Conversion Elections.......................................................... 31
3.3 Maximum Interest Rate.......................................................................... 32
3.4 Closing Fee.................................................................................... 33
3.5 Unused Line Fee................................................................................ 33
3.6 Documentation Fee.............................................................................. 33
3.7 Agency Fee..................................................................................... 33
3.8 Audit Fees..................................................................................... 33
ARTICLE 4 PAYMENTS AND PREPAYMENTS.............................................................. 33
4.1 Revolving Loans................................................................................ 33
4.2 Termination of Facility........................................................................ 34
4.3 Payments by the Borrower....................................................................... 34
4.4 Payments as Revolving Loans.................................................................... 35
4.5 Apportionment, Application and Reversal of Payments............................................ 35
4.6 Indemnity for Returned Payments................................................................ 35
4.7 Agent's and Lenders' Books and Records; Monthly Statements..................................... 36
ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY................................................ 36
5.1 Taxes.......................................................................................... 36
5.2 Illegality..................................................................................... 37
5.3 Increased Costs and Reduction of Return........................................................ 37
5.4 Funding Losses................................................................................. 38
5.5 Inability to Determine Rates................................................................... 38
5.6 Certificates of Lenders........................................................................ 39
5.7 Survival....................................................................................... 39
ARTICLE 6 COLLATERAL............................................................................ 39
6.1 Grant of Security Interest..................................................................... 39
6.2 Perfection and Protection of Security Interest................................................. 39
6.3 Location of Collateral......................................................................... 40
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6.4 Title to, Liens on, and Sale and Use of Collateral............................................. 41
6.5 Intentionally Deleted.......................................................................... 41
6.6 Access and Examination; Confidentiality; Consent to Advertising................................ 41
6.7 Collateral Reporting........................................................................... 42
6.8 Contracts...................................................................................... 42
6.9 Collection of Contracts; Payments.............................................................. 43
6.10 Intentionally Deleted.......................................................................... 43
6.11 Equipment...................................................................................... 43
6.12 Documents, Instruments, and Chattel Paper...................................................... 43
6.13 Right to Cure.................................................................................. 43
6.14 Intentionally Deleted.......................................................................... 44
6.15 The Agent's and Lenders' Rights, Duties and Liabilities........................................ 44
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..................................... 44
7.1 Books and Records.............................................................................. 44
7.2 Financial Information.......................................................................... 44
7.3 Notices to the Lenders......................................................................... 47
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS................................................ 49
8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents........... 49
8.2 Validity and Priority of Security Interest..................................................... 49
8.3 Organization and Qualification................................................................. 49
8.4 Corporate Name; Prior Transactions............................................................. 49
8.5 Subsidiaries and Affiliates.................................................................... 50
8.6 Financial Statements and Projections........................................................... 50
8.7 Capitalization................................................................................. 50
8.8 Solvency....................................................................................... 50
8.9 Debt........................................................................................... 50
8.10 Intentionally Deleted.......................................................................... 50
8.11 Title to Property.............................................................................. 50
8.12 Intentionally Deleted.......................................................................... 50
8.13 Intentionally Deleted.......................................................................... 51
8.14 Intentionally Deleted.......................................................................... 51
8.15 Litigation..................................................................................... 51
8.16 Restrictive Agreements......................................................................... 51
8.17 Labor Disputes................................................................................. 51
8.18 Environmental Laws............................................................................. 51
8.19 No Violation of Law............................................................................ 51
8.20 No Default..................................................................................... 51
8.21 ERISA Compliance............................................................................... 52
8.22 Taxes.......................................................................................... 52
8.23 Intentionally Deleted.......................................................................... 52
8.24 Use of Proceeds; Margin Regulations............................................................ 52
8.25 Intentionally Deleted.......................................................................... 52
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8.26 No Material Adverse Change..................................................................... 53
8.27 Full Disclosure................................................................................ 53
8.28 Intentionally Deleted.......................................................................... 53
8.29 Bank Accounts.................................................................................. 53
8.30 Governmental Authorization..................................................................... 53
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS.................................................... 53
9.1 Taxes and Other Obligations.................................................................... 53
9.2 Corporate Existence and Good Standing.......................................................... 54
9.3 Compliance with Law and Agreements; Maintenance of Licenses.................................... 54
9.4 Compliance with ERISA.......................................................................... 54
9.5 Mergers, Consolidations or Sales............................................................... 54
9.6 Distributions and Capital Change............................................................... 54
9.7 Transactions Affecting Collateral or Obligations............................................... 54
9.8 Guaranties..................................................................................... 54
9.9 Debt........................................................................................... 54
9.10 Prepayment..................................................................................... 54
9.11 Transactions with Affiliates................................................................... 54
9.12 Intentionally Deleted.......................................................................... 55
9.13 Business Conducted............................................................................. 55
9.14 Liens.......................................................................................... 55
9.15 Fiscal Year.................................................................................... 55
9.16 No Recognition of Income....................................................................... 55
9.17 Intentionally Deleted.......................................................................... 55
9.18 Minimum Interest Coverage...................................................................... 55
9.19 Intentionally Deleted.......................................................................... 55
9.20 Loss Reserve................................................................................... 55
9.21 Borrowing Base Ratio........................................................................... 55
9.22 Collateral Adjustment Percent.................................................................. 56
9.23 Limitation on Bulk Purchases................................................................... 56
9.24 Intentionally Deleted.......................................................................... 56
9.25 New Subsidiaries............................................................................... 56
9.26 Restricted Investment.......................................................................... 56
9.27 Reporting Methodology.......................................................................... 56
9.28 Contract Forms................................................................................. 56
9.29 Credit Guidelines.............................................................................. 56
9.30 Extended Warranty Plans........................................................................ 56
9.31 Charge-Off Policy.............................................................................. 57
9.32 Further Assurances............................................................................. 57
ARTICLE 10 CONDITIONS OF LENDING................................................................. 57
10.1 Conditions Precedent to Making of Loans on the Closing Date.................................... 57
10.2 Conditions Precedent to Each Loan.............................................................. 58
ARTICLE 11 DEFAULT AND REMEDIES.................................................................. 59
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Section Page
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11.1 Events of Default.............................................................................. 59
11.2 Remedies....................................................................................... 61
ARTICLE 12 TERM AND TERMINATION.................................................................. 63
12.1 Term and Termination........................................................................... 63
ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS.......................... 63
13.1 Amendments and Waivers......................................................................... 63
13.2 Assignments; Participations.................................................................... 64
ARTICLE 14 THE AGENT............................................................................. 66
14.1 Appointment and Authorization.................................................................. 66
14.2 Delegation of Duties........................................................................... 66
14.3 Liability of Agent............................................................................. 66
14.4 Reliance by Agent.............................................................................. 67
14.5 Notice of Default.............................................................................. 67
14.6 Credit Decision................................................................................ 67
14.7 Indemnification................................................................................ 68
14.8 Agent in Individual Capacity................................................................... 68
14.9 Successor Agent................................................................................ 68
14.10 Withholding Tax................................................................................ 69
14.11 Intentionally Deleted.......................................................................... 70
14.12 Collateral Matters............................................................................. 70
14.13 Restrictions on Actions by Lenders; Sharing of Payments........................................ 71
14.14 Agency for Perfection.......................................................................... 71
14.15 Payments by Agent to Lenders................................................................... 71
14.16 Concerning the Collateral and the Related Loan Documents....................................... 72
14.17 Field Audit and Examination Reports; Disclaimer by Lenders..................................... 72
14.18 Relation Among Lenders......................................................................... 73
ARTICLE 15 MISCELLANEOUS......................................................................... 73
15.1 No Waivers; Cumulative Remedies................................................................ 73
15.2 Severability................................................................................... 73
15.3 Governing Law; Choice of Forum; Service of Process............................................. 73
15.4 WAIVER OF JURY TRIAL........................................................................... 74
15.5 Survival of Representations and Warranties..................................................... 74
15.6 Other Security and Guaranties.................................................................. 74
15.7 Fees and Expenses.............................................................................. 75
15.8 Notices........................................................................................ 75
15.9 Waiver of Notices.............................................................................. 76
15.10 Binding Effect................................................................................. 76
15.11 Indemnity of the Agent and the Lenders by the Borrower......................................... 76
15.12 Limitation of Liability........................................................................ 77
15.13 Final Agreement................................................................................ 77
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Section Page
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15.14 Counterparts................................................................................... 77
15.15 Captions....................................................................................... 77
15.16 Right of Setoff................................................................................ 78
15.17 Intentionally Deleted.......................................................................... 78
15.18 Intentionally Deleted.......................................................................... 78
15.19 Agency of the Parent for each other Borrower................................................... 78
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EXHIBITS AND SCHEDULES
EXHIBIT A - INTENTIONALLY DELETED
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - INTENTIONALLY DELETED
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 6.3 - LOCATION OF COLLATERAL AND CHIEF EXECUTIVE OFFICE*
SCHEDULE 8.3 - ORGANIZATION AND QUALIFICATIONS*
SCHEDULE 8.5 - SUBSIDIARIES AND AFFILIATES*
SCHEDULE 8.15 - LITIGATION*
SCHEDULE 8.29 - BANK ACCOUNTS*
* These schedules have been omitted, as the registrant does not believe that
they contain information that is material to an investment decision. The
registrant agrees to furnish to the Commission upon request, a copy of any
omitted schedule.
i
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Amended and Restated Loan and Security Agreement, dated as of August 1,
2000, among the financial institutions listed on the signature pages hereof
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), Bank of America, N.A. with an office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders (in its
capacity as agent, the "Agent"), and ▇▇▇▇▇▇▇▇ Financial, Inc., a Florida
corporation, with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, #▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Borrower").
W I T N E S S E T H
WHEREAS, the Borrower and Bank of America, N.A. (the "Existing Lender")
are parties to that certain Loan and Security Agreement, dated as of March 31,
1993, as amended (as so amended, the "Existing Credit Agreement") pursuant to
which the Existing Lender has agreed to make loans and other financial
accommodations to the Borrower;
WHEREAS, the Borrower, the Agent, the Lenders and the Existing Lender
have agreed to enter into this Agreement in order to amend, restate and
consolidate the Existing Credit Agreement in its entirety to reflect, among
other things, Bank of America, N.A.'s role as agent;
WHEREAS, it is the intent of the parties hereto that this Agreement (i)
shall re-evidence, the Borrower's indebtedness to the Existing Lender under the
Existing Credit Agreement, (ii) is entered into in substitution for, and not in
payment of, the obligations of the Borrower under the Existing Credit Agreement,
and (iii) is in no way intended to constitute a novation of the Borrower's
indebtedness which was evidenced by the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Accounts" means all of the Borrower's now owned or hereafter
acquired or arising accounts as defined in the UCC, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
1
"ACH Transactions" means any cash management or related
services including the automatic clearing house transfer of funds by the Bank
for the account of the Borrower pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to
any fiscal period of the Borrower, the Borrower's net income after provision for
income taxes for such fiscal period, as determined in accordance with GAAP and
reported on the Financial Statements for such period, excluding any and all of
the following included in such net income: (a) gain or loss arising from the
sale of any capital assets; (b) gain arising from any write-up in the book value
of any asset; (c) earnings of any Person, substantially all the assets of which
have been acquired by the Borrower in any manner, to the extent realized by such
other Person prior to the date of acquisition; (d) earnings of any Person in
which the Borrower has an ownership interest unless (and only to the extent)
such earnings shall actually have been received by the Borrower in the form of
cash distributions; (e) earnings of any Person to which assets of the Borrower
shall have been sold, transferred or disposed of, or into which the Borrower
shall have been merged, or which has been a party with the Borrower to any
consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of debt or equity securities
of the Borrower or from cancellation or forgiveness of Debt; and (g) gain
arising from extraordinary items, as determined in accordance with GAAP, or from
any other non-recurring transaction.
"Adjusted Tangible Assets" means all assets of the Borrower
except: (a) trademarks, trade names, franchises, goodwill, and other similar
intangibles; (b) assets located and notes and receivables due from obligors
domiciled outside the United States of America, Puerto Rico, or Canada; (c)
accounts, notes and other receivables due from Affiliates or employees; and (d)
any other assets of Borrower which Agent, in its sole and absolute discretion,
determines to be of uncertain value or collectability.
"Adjusted Tangible Net Worth" means the remainder of (a) net
book value (after deducting related depreciation, obsolescence, amortization,
valuation, and other proper reserves) at which the Adjusted Tangible Assets
would be shown on a balance sheet at such date, but excluding any amounts
arising from write-ups of assets, minus (b) (i) the amount at which the
Borrower's liabilities (other than capital stock, surplus, and retained
earnings) would be shown on such balance sheet, and including as liabilities all
reserves for contingencies and other potential liabilities and (ii) the General
Adjustment Reserve.
"Advance Rate" means eighty-five percent (85%); provided,
however, that the Advance Rate shall be (a) eighty-four percent (84%) when the
Collateral Adjustment Percent ending on the date of determination is equal to or
greater than eighteen percent (18%), but less than nineteen percent (19%), (b)
eighty-three percent (83%) when the Collateral Adjustment Percent ending on the
date of determination is equal to or greater than nineteen percent (19%), but
less than twenty percent (20%); (c) eighty-two percent (82%) when the Collateral
Adjustment Percent is equal to or greater than twenty percent (20%), but less
than twenty-one percent (21%); and provided, further that the applicable Advance
Rate shall be reduced by the Repossessed Adjustment Percent.
2
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five percent
(5%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
"Agent" means the Bank, solely in its capacity as agent for
the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i).
"Agent's Liens" means the Liens in the Collateral granted to
the Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of
determination, the sum of (a) the unpaid balance of Revolving Loans, and (b) the
aggregate amount of Pending Revolving Loans.
"Agreement" means this Loan and Security Agreement.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means (i) with respect to Reference Rate
Revolving Loans, zero and (ii) with respect to LIBOR Rate Revolving Loans, one
and three-quarters of one percent (1-3/4%).
"Assignee" has the meaning specified in Section 13.2(a).
"Assignment and Acceptance" has the meaning specified in
Section 13.2(a).
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent, the
allocated costs of internal legal services of the Agent and the reasonable
expenses of internal counsel to the Agent.
"Availability" means, at any time, (a) the Borrowing Base
minus (b) the Aggregate Revolver Outstandings.
"Average Monthly Number of Vehicle Contracts" means, as of any
date of calculation, the average monthly number of Vehicle Contracts owned by
the Borrower as of the last day of each of the twelve months immediately
preceding the date of calculation.
"Bank" means Bank of America, N.A., a national banking
association, or any successor entity thereto.
3
"Bank Products" means any one or more of the following types
of services or facilities extended to the Borrower by the Bank or any affiliate
of the Bank in reliance on the Bank's agreement to indemnify such affiliate: (i)
credit cards; (ii) ACH Transactions; and (iii) Hedge Agreements.
"Bank Product Reserves" means all reserves which the Agent
from time to time establishes in its sole discretion for the Bank Products then
provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.ss.101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by the
Bank based upon various factors including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means the Base Rate Revolving Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the Base Rate.
"Blocked Account Agreement" means an agreement among the
Borrower, the Agent and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Accounts or of any other Collateral.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans made on the same day by the Lenders to the Borrower or by Bank
in the case of a Borrowing funded by Non-Ratable Loans or by the Agent in the
case of a Borrowing consisting of an Agent Advance.
"Borrowing Base" means, at any time, an amount equal to (a)
the lesser of (i) the Maximum Revolver Amount or (ii) the amount determined by
multiplying the Advance Rate by the Net Contract Payments payable under all of
the Borrower's Eligible Contracts then outstanding; less (b) the sum of (i) the
Bank Product Reserves and (ii) all other reserves which the Agent deems
necessary in the exercise of its reasonable credit judgment to maintain with
respect to the Borrower's account, including reserves for any amounts which the
Agent or any Lender may be obligated to pay in the future for the account of the
Borrower; provided, however, the Older Vehicle Contract Borrowing Base included
in calculating the Borrowing Base shall not, at any time, exceed thirty percent
(30%) and the Oldest Vehicle Contract Borrowing Base included in calculating the
Borrowing Base shall not, at any time, exceed three percent (3%); and provided,
further, however, that the Net Contract Payments payable under all Uninsured
Contracts shall not constitute more than three percent (3%) of the Net Contract
Payments payable under all Eligible Vehicle Contracts.
4
"Borrowing Base Amount" means the sum of the Adjusted Tangible
Net Worth of the Borrower, plus all Subordinated Debt of the Borrower.
"Borrowing Base Certificate" means a certificate by a
Responsible Officer of the Borrower, substantially in the form of Exhibit B (or
another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be satisfactory to the Agent. All calculations of the Borrowing
Base in connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrower and certified to the Agent; provided, that
the Agent shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation (1) to reflect its reasonable
estimate of declines in value of any of the Collateral described therein, and
(2) to the extent that such calculation is not in accordance with this
Agreement.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in New York, New York or Charlotte, North
Carolina are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Clearing Bank" means the Bank or any other banking
institution with whom a Payment Account has been established pursuant to a
Blocked Account Agreement.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute, and regulations promulgated
thereunder.
"Collateral" has the meaning specified in Section 6.1.
"Collateral Adjustment Percent" means, calculated as of the
first day of each month, the sum (rounded to the lowest whole percent) of the
Past Due Percent, the Repossession Percent and the Net Charge-Off Percent.
"Contracts" means all of the Borrower's now owned and
hereafter acquired loan agreements, accounts, installment sale contracts,
Instruments, notes, documents, chattel paper, and all other forms of obligations
owing to the Borrower, including Vehicle Contracts, Direct Loan Contracts, and
Sales Finance Contracts and any collateral for any of the foregoing, including
all rights under any and all Security Documents and merchandise returned to or
repossessed by the Borrower.
"Contract Debtor" means each Person who is obligated to the
Borrower to perform any duty under or to make any payment pursuant to the terms
of a Contract.
5
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
13.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which the
Loan is converted into or continued as a LIBOR Rate Loan.
"Credit Guidelines" means the Borrower's guidelines (which
have previously been reviewed and approved by the Agent) which state in detail
the credit criteria used by the Borrower in determining the creditworthiness of
Contract Debtors.
"Dealer" means a dealer that has sold goods and/or Vehicles to
Contract Debtors pursuant to Contracts.
"Dealer Agreement" means an agreement between the Borrower and
a Dealer that governs the sale or assignment of Contracts from such Dealer to
the Borrower, including any provisions for assignment (whether with or without
recourse, a repurchase obligation by the Dealer or a guaranty by such Dealer)
contained in such agreement.
"Dealer Payment Reserve" means a reserve, calculated as of the
last day of each month, equal to the product of (a) the Dealer Reserve
Percentage calculated on the last day of such month, multiplied by (b) the
aggregate amount paid by Borrower to third parties for the purchase of Contracts
then outstanding arising from the credit sale of Vehicles, acquired by Borrower
at any time prior to and including the date on which the calculation is made.
"Dealer Reserve Percentage" means the positive percent,
calculated as of the last day of each month, equal to the remainder of (a) the
positive quotient of (i) the aggregate amount paid by Borrower to third parties
for the purchase of Contracts then outstanding, arising from the credit sale of
Vehicles acquired by Borrower at any time prior to and including the date on
which the calculation is made, divided by (ii) the aggregate "wholesale clean
value" for all the Vehicles which are the subject of such Contracts, minus (b)
one hundred percent (100%). The "wholesale clean value" shall be such value as
specified in the National Auto Research Black Book (the "Black Book") in effect
at the time Borrower purchased the subject Contracts. In the event that the
Black Book shall, at any time, cease to be published, then the Agent shall
thereafter select a comparable publication, as determined by the Agent in its
sole discretion, for determining the foregoing calculation.
"Debt" means, without duplication, all liabilities,
obligations and indebtedness of the Borrower to any Person, of any kind or
nature, now or hereafter owing, arising, due or
6
payable, howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed or otherwise, and including,
without in any way limiting the generality of the foregoing: (a) the liabilities
and obligations to trade creditors; (b) all Obligations; (c) all obligations and
liabilities of any Person secured by any Lien on the Borrower's property, even
though the Borrower shall not have assumed or become liable for the payment
thereof; provided, however, that all such obligations and liabilities which are
limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance sheet
of the Borrower prepared in accordance with GAAP; (d) all obligations or
liabilities created or arising under any Capital Lease or conditional sale or
other title retention agreement with respect to property used or acquired by the
Borrower, even if the rights and remedies of the lessor, seller or lender
thereunder are limited to repossession of such property; provided, however, that
all such obligations and liabilities which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the Borrower prepared in
accordance with GAAP; and (e) all obligations and liabilities under Guaranties.
"Debt For Borrowed Money" means, as to any Person, (a) Debt
for borrowed money or as evidenced by notes, bonds, debentures or similar
evidences of any such Debt of such Person, (b) the deferred and unpaid purchase
price of any property or business (other than trade accounts payable incurred in
the ordinary course of business and constituting current liabilities) and (c)
all obligations under Capital Leases.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured, waived, or
otherwise remedied during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section
2.2(g)(ii).
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of the otherwise applicable Interest Rate plus two
percent (2%). Each Default Rate shall be adjusted simultaneously with any change
in the applicable Interest Rate.
"Direct Loan Contract" means a Contract arising from a
consumer loan made directly by the Borrower to the Contract Debtor.
"Direct Loan Eligible Contract" means a Direct Loan Contract
which is an Eligible Contract.
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for or other rights with respect to
such stock) of such corporation, other than distributions in capital stock (or
any options or warrants for or other rights with respect to such stock) of the
same class; or (b) the redemption or other acquisition by such corporation of
any capital stock (or any options or warrants for such stock) of such
corporation.
"DOL" means the United States Department of Labor or any
successor department or agency.
7
"Dollar" and "$" means dollars in the lawful currency of the
United States.
"Eligible Assignee" means (a) a commercial bank, commercial
finance company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default exists, any
Person reasonably acceptable to the Agent.
"Eligible Contracts" means only those Contracts which are
either Vehicle Contracts or Direct Loan Contracts or Sales Finance Contracts
which the Agent, in its sole discretion, deems eligible and which, without
limiting the Agent's discretionary rights, satisfy at all times all of the
following requirements as determined by the Agent in its sole and absolute
discretion:
(a) the Contract strictly complies with all of the
Borrower's warranties and representations;
(b) the Contract Debtor is a resident of the continental
United States;
(c) no payment due under the Contract is more than
fifty-nine (59) days contractually delinquent;
(d) except as permitted in subparagraph (c), above,
neither the Borrower nor the Contract Debtor is in default under the terms of
the Contract;
(e) the Contract is not subject to any defense,
counterclaim, setoff, discount, or allowance;
(f) the Borrower has not, within the immediately
preceding 12-month period granted to the Contract Debtor more than two
extensions of time (each not longer than one month) for the payment of any sum
due under the Contract;
(g) the terms of the Contract require that the unpaid
principal balance thereof be payable in equal monthly payments which will
amortize the full principal amount thereof over its scheduled term;
(h) the Contract is not a Modified Contract;
(i) the terms of the Contract, the Security Documents
therefor, and all other related documents have been executed by the Contract
Debtor, and comply in all respects with all applicable laws;
(j) the Contract Debtor is not an Affiliate or employee
of the Borrower;
(k) the creditworthiness of the Contract Debtor is
acceptable to the Agent;
(l) if the Contract is a Vehicle Contract, then:
8
(i) the Contract is secured by a first priority,
perfected security interest in a new or used Vehicle and the Borrower has filed
all documents with the department of motor vehicles and/or other appropriate
agency of the state wherein the Vehicle is registered and paid all appropriate
fees such that the Borrower is the registered first lien holder thereon;
(ii) no funds used to pay any payment due under
the Contract and no funds used to make the down payment for the Vehicle which is
the subject of the Contract, were borrowed by the Contract Debtor from the
Borrower;
(iii) the remaining term of the Contract, secured
by a Vehicle which was 8 or 9 model years old at the inception thereof, does not
exceed twenty-four (24) months;
(iv) to the extent that the Contract balance
includes sums representing the financing of so-called "extended warranty plans,"
such plans are (i) in substantial compliance with all applicable consumer credit
laws, including any and all special insurance laws relating thereto, and (ii)
underwritten by (x) a major automobile manufacturer, or an affiliate thereof, or
(y) an independent reputable and financially sound insurance company;
(v) the Vehicle securing repayment of the
Contract is insured against loss, with coverages and policy limits reasonably
satisfactory to the Lender, including collision coverage; and
(vi) if the amount paid by the Borrower to any
person for such Contract is equal to or more than $13,000, exclusive of amounts
attributable to items included in the Contract for items other than the Vehicle
which is the subject thereof (e.g., tax, license fees, extended warranty
insurance, credit life and disability insurance, and property and collision
insurance) then the Contract, the subject Vehicle, and the Contract Debtor meet
the Borrower's 'A' Guidelines.
(m) If the Contract is a Direct Loan Contract then:
(i) the original term of the Contract does not
exceed forty-eight (48) months;
(ii) the unpaid principal balance of the Contract
and the aggregate principal balance of all other Contracts owing by a Contract
Debtor does not exceed Ten Thousand Dollars ($10,000);
(iii) if the Contract Debtor was or is a Contract
Debtor under another Contract previously originated or acquired by the Borrower,
then (1) the Contract Debtor's payment history under such prior or current
Contract was satisfactory (which, in the case of a prior Contract means that the
Contract Debtor has paid such Contract in full), and (2) the Contract Debtor
shall have paid at least thirty percent (30%) of the original amount owing under
such current Contract with funds other than those resulting from a new Contract
or refinancing of another Contract.
(iv) if the Contract Debtor is not a Contract
Debtor under a Contract previously originated or acquired by the Borrower, then
the Contract Debtor's credit history is satisfactory to the Lender,
9
(v) repayment of the Contract is secured by a
perfected security interest on the Contract Debtor's personal property or real
property provided the real property is taken as collateral out of an abundance
of caution, and not as the primary collateral for the Contract;
(vi) no portion of the loan evidenced by the
Contract was made by the Borrower to the Contract Debtor for the purpose of
financing the Contract Debtor's payment of a down payment on a Vehicle which is
the subject of a motor vehicle retail installment contract; and
(vii) no portion of the loan evidenced by the
Contract was made by the Borrower for the purpose of providing funds to the
Contract Debtor to pay amounts owing by the Contract Debtor on another Contract
owing to the Borrower.
n. The Contract has a scheduled maturity date sixty (60)
months or less from the date of execution. "Environmental Claims" means all
claims, however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for a Release or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including motor vehicles
with respect to which a certificate of title has been issued, aircraft, dies,
tools, jigs, and office equipment, as well as all of such types of property
leased by the Borrower and all of the Borrower's rights and interests with
respect thereto under such leases (including, without limitation, options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
10
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multi-employer Plan or notification that a Multi-employer
Plan is in reorganization, (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan, or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Section 8.6 or any
other financial statements required to be given to the Lenders pursuant to this
Agreement.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on March
31, 2001.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and
11
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the Closing Date.
"General Adjustment Reserve" means a reserve, calculated as of
the last day of each month on a cumulative basis for the Borrower's current
Fiscal Year, in an amount equal to the excess, if any, of (a) the amount by
which all unearned finance charges, unearned discounts, and non-refundable
dealer reserve, computed on the basis of the actuarial method, over (b) the
amount of such items as reflected on the Borrower's books and records.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to the Borrower in connection with
the termination of any Plan or other employee benefit plan or any rights thereto
and any other amounts payable to the Borrower from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which the Borrower is
beneficiary, and any letter of credit, guarantee, claim, security interest or
other security held by or granted to the Borrower.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Gross Contract Payments" means, as of the date of
determination, (i) with respect to an interest bearing Contract the outstanding
balance thereof including all accrued but unpaid interest, fees, and other
charges owing by the Contract Debtor and (ii) with respect to a precomputed
Contract the outstanding balance thereof including all unearned interest, fees,
and charges owing by the Contract Debtor.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
12
"Hedge Agreement" means any and all transactions, agreements
or documents now existing or hereafter entered into, which provides for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging the Borrower's exposure to fluctuations
in interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
"Instruments" shall have the same meaning as given to that
term in the UCC, and shall include all negotiable instruments, notes secured by
mortgages or trust deeds, and any other writing which evidences a right to the
payment of money and is not itself a security agreement or lease, and is of a
type which is, in the ordinary course of business, transferred by delivery with
any necessary endorsement or assignment.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with
any Affiliate of the Borrower.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, or three months thereafter as selected by the
Borrower in its Notice of Borrowing, in the form attached hereto as Exhibit D,
or Notice of Continuation/Conversion, in the form attached hereto as Exhibit E
provided that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 3.1.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 7.2(f),
the projections of the Borrower's financial condition, results of operations,
and cash flows, for the period commencing on April 1,
13
2000 and ending on March 31, 2003 and delivered to the Agent prior to the
Closing Date; and (b) thereafter, the projections most recently received by the
Agent pursuant to Section 7.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans, the rate of interest per annum determined pursuant to the
following formula:
Offshore Base Rate
LIBOR Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such
rates. If for any reason none of the foregoing rates is
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum determined by Agent as the rate of
interest at which dollar deposits in the approximate amount of
the LIBOR Rate Loan comprising part of such Borrowing would be
offered by the Bank's London Branch to major banks in the
offshore dollar market at their request at or about 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency
14
funding (currently referred to as "Eurocurrency liabilities").
The Offshore Rate for each outstanding LIBOR Rate Loan shall
be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"LIBOR Rate Loans" means the LIBOR Revolving Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; (b) to the
extent not included under clause (a), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement and any other
agreements, instruments, and documents heretofore, now or hereafter evidencing,
securing, guaranteeing or otherwise relating to the Obligations, the Collateral,
or any other aspect of the transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Loss Reserve Percentage" means the greater of (a) four
percent (4%) or (b) the Net Charge-Off Percent as most recently calculated.
"Majority Lenders" means at any date of determination (a)
Lenders whose Pro Rata Shares aggregate more than 66% as such percentage is
determined under the definition of Pro Rata Share set forth herein; or (b) in
the event there are only two (2) Lenders under this Agreement, both Lenders.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Collateral; (b) a material impairment of the ability of the Borrower to perform
under any Loan Document to which it is a party and to avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower of any Loan Document to which it
is a party.
15
"Maximum Revolver Amount" means $60,000,000.
"Modified Contract" means a Contract which was, at any time,
in default for failure to pay for more than 59 days after its original
contractual due date and such Contract default was cured by adjusting or
amending the contract terms, or accepting a reduce payment or otherwise, or the
Contract was replaced with a new Contract with the Contract Debtor to accomplish
any of the foregoing.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.
"Net Balance" means, as of the date of determination, the
Gross Contract Payments of a Contract less all unearned interest, fees, charges,
and insurance premiums owing by the Contract Debtor.
"Net Charge-Offs" for any period means the aggregate amount of
all unpaid payments due under Contracts which have been charged off by the
Borrower during such period, as reduced by the amount of all cash recoveries
with respect to Contracts which had been charged off during previous periods or
during such period. In computing the amount of the charge-offs, all charges made
to the dealer reserve or to the dealer's discount shall be included.
"Net Charge-Off Percent" means the percent, calculated as of
the first day of each month, equal to (a) the aggregate amount of all Net
Charge-Offs during each of the twelve (12) months immediately preceding the date
of calculation, divided by (b) the amount of the Net Balance owing under all
Contracts outstanding as of the last day of each of the previous 12 months
divided by twelve. For example, if the Borrower charged off $10,000 each month
for 12 months and if the aggregate Net Balance outstanding at the end of the
previous 12 months was $1,000,000 for 6 months and $1,200,000 for 6 months, the
Net Charge-Off Percent would be 10.91% ($120,000/$1,100,000).
"Net Contract Payments" means the remainder of the aggregate
amount of all presently due and future, non-cancelable installment payments to
be made under a Contract, Less the sum of all unearned finance charges, unearned
fees, unearned dealer discounts, applicable reserves (including non-refundable
dealer reserves), unearned insurance premiums, and other similar charges
included therein and/or applicable thereto, as appropriate, and Less the Dealer
Payment Reserve. Unearned dealer discounts and non-refundable dealer reserves
shall be computed on an actuarial basis for purposes of computing the Net
Contract Payments; provided, however, only unearned finance charges shall be
deducted from the payments due for purposes of computing loss reserves under
Section 9.20.
"Net Number of Repossessions" means the number of Vehicles
repossessed by the Borrower from Contract Debtors during the twelve calendar
months immediately preceding the date of calculation, minus the number of such
Vehicles which have been redeemed by such Contract Debtors.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings
specified in Section 2.2(h).
16
"Notice of Borrowing" has the meaning specified in Section
2.2(b).
"Notice of Continuation/Conversion" has the meaning specified
in Section 3.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, acceptance,
loan, guaranty, indemnification or otherwise, whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, as principal
or guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to the Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, all debts, liabilities and obligations now or hereafter
arising from or in connection with Bank Products.
"Older Vehicle Contract Borrowing Base" means, as of any date
of calculation, the amount of the Net Contract Payments payable under Eligible
Vehicle Contracts which are secured by a lien on a Vehicle which is eight or
nine model years old at the time such Contract was originated (excluding the
model year in effect at the time the Contract was originated).
"Oldest Vehicle Contract Borrowing Base" means, as of any date
of calculation, the amount of the Net Contract Payments payable under Eligible
Vehicle Contracts which are secured by a lien on a Vehicle which is ten model
years old at the time such Contract was originated (excluding the model year in
effect at the time the Contract was originated).
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Participant" means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Past Due Percent" means the percent, calculated as of the
first day of each month, equal to (a) the Gross Contract Payments owing under
all Contracts (excluding Contracts charged-off) as to which any portion of an
installment due thereunder is 30 days or more past due as determined on a
contractual basis as of the last day of each of the six months immediately
preceding the date of calculation, divided by (b) the Gross Contract Payments
owing under all Contracts (excluding Contracts charged-off) as of the last day
of each of the six months immediately preceding the date of calculation. For
example, if, as of the last day of the previous six months the Gross Contract
Payments were $1,500,000 and on the same date the amount of Gross Contract
Payments that were more than 30 days past due was $100,000 for three months and
$150,000 for three months, the Past Due Percent would be 8 1/3%
($750,000/$9,000,000).
"Payment Account" means each bank account established pursuant
to Section 6.9, to which the proceeds of Accounts and other Collateral are
deposited or credited, and which is
17
maintained in the name of the Agent or the Borrower, as the Agent may determine,
on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or statutory
Liens for taxes in an amount not to exceed $100,000 provided that the payment of
such taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the
ordinary course of business in connection with, or to secure payment of,
obligations under worker's compensation, unemployment insurance, social security
and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than liens arising under ERISA or
Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons, provided that if any such Lien arises from the nonpayment of such
claims or demand when due, such claims or demands do not exceed $100,000 in the
aggregate;
(e) Liens constituting encumbrances in the
nature of reservations, exceptions, encroachments, easements, rights of way,
covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the Real Estate or materially
interfere with its use in the ordinary conduct of the Borrower's business; and
(f) Liens arising from judgments and attachments
in connection with court proceedings provided that the attachment or enforcement
of such Liens would not result in an Event of Default hereunder and such Liens
are being contested in good faith by appropriate
18
proceedings, adequate reserves have been set aside and no material Property is
subject to a material risk of loss or forfeiture and the claims in respect of
such Liens are fully covered by insurance (subject to ordinary and customary
deductibles) and a stay of execution pending appeal or proceeding for review is
in effect.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower sponsors or maintains or to which the Borrower
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"Property" means any interest in any kind of property or
asset, whether personal or real property, or mixed, or tangible, or intangible.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders, in each case giving effect to a
Lender's participation in Non-Ratable Loans and Agent Advances.
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service ▇▇▇▇ applications, and all licenses and rights related to any of the
foregoing, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to ▇▇▇ for past, present and future
infringement of any of the foregoing.
"Real Estate" means all of the Borrower's now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of the Borrower's now
or hereafter owned or leased interests in the improvements thereon, the fixtures
attached thereto and the easements appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
19
"Repossessed Adjustment Percent" means (a) one percentage
point when the Repossessed Percent is equal to or greater than twenty-five
percent (25%), but less than twenty-six percent (26%), and (b) two percentage
points when the Repossessed Percent is equal to or greater than twenty-six
percent (26%).
"Repossession Percent" means the percent, calculated as of the
first day of each month, equal to (a) the repossession value of all Vehicles
which the Borrower has repossessed and which, as of the last day of the
preceding month, was reflected as an asset on the Borrower's books divided by
(b) the Net Balance owing under all Vehicle Contracts (excluding Vehicle
Contracts charged-off) outstanding as of the last day of each of the previous
twelve (12) months divided by twelve. For example, if 10 Vehicles having a total
repossession value of $50,000 had at any time been repossessed by Borrower and
were reflected as assets on the books of Borrower at the end of a month and for
the preceding 12 months the Net Balance was $1,000,000 for four (4) months,
$1,500,000 for four (4) months and $2,000,000 for four (4) months, the
Repossession Percent would be 3 1/3% ($50,000/$1,500,000).
"Repossessed Percent" means, as of any date of calculation,
the percent resulting from dividing the Net Number of Repossessions by the
Average Monthly Number of Vehicle Contracts.
"Required Lenders" means at any time (a) Lenders whose Pro
Rata Shares aggregate more than fifty percent (50%) as such percentage is
determined under the definition of Pro Rata Share set forth herein, or (b) in
the event there are only two (2) Lenders under this Agreement, either Lender.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means, as to the Borrower, any
acquisition of property by the Borrower in exchange for cash or other property,
whether in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or a loan,
advance, capital contribution, or subscription, except the following: (a)
acquisitions of Equipment to be used in the business of the Borrower so long as
the acquisition costs thereof constitute Capital Expenditures permitted
hereunder; (b) acquisitions of Inventory in the ordinary course of business of
the Borrower; (c) acquisitions of current assets acquired in the ordinary course
of business of the Borrower; (d) direct obligations of the United States of
America, or any agency thereof, or obligations guaranteed by the United States
of America, provided that such obligations mature within one year from the date
of acquisition thereof; (e) acquisitions of certificates of deposit maturing
within one year from the date of acquisition, bankers' acceptances, Eurodollar
bank deposits, or overnight bank deposits, in each case issued by, created by,
or with a bank or trust company organized under the laws of the United States of
20
America or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or
better by Standard & Poor's Corporation or "P2" or better by ▇▇▇▇▇'▇ Investors
Service, Inc. and maturing not more than 90 days from the date of creation
thereof; and (g) Hedge Agreements.
"Revolving Loans" has the meaning specified in Section 2.2 and
includes each Agent Advance and Non-Ratable Loan.
"Sales Finance Contracts" mean Contracts which are purchased
from Dealers and which arise from a consumer purchasing consumer goods (other
than a Vehicle) from Dealers.
"Security Documents" means all security agreements, chattel
mortgages, deeds of trust, mortgages, or other security instruments, guaranties,
sureties, and agreements of every type and nature (including certificates of
title) securing the obligations of Contract Debtors under Contracts.
"Settlement" and "Settlement Date" have the meanings specified
in Section 2.2(j)(i).
"Solvent" means when used with respect to any Person that at
the time of determination:
(a) the assets of such Person, at a fair valuation, are
in excess of the total amount of its debts (including contingent
liabilities); and
(b) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as such debts
become absolute and matured; and
(c) it is then able and expects to be able to pay its
debts (including contingent debts and other commitments) as they
mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means November 30, 2002.
"Subordinated Debt" means all debt of the Borrower which is
subordinated to the Obligations pursuant to a written subordination agreement
the terms of which are satisfactory to the Agent in its sole and absolute
discretion.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is
21
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by the
Agent's or each Lender's net income in any jurisdiction (whether federal, state
or local and including any political subdivision thereof) under the laws of
which such Lender or the Agent, as the case may be, is organized or maintains a
lending office.
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrower pursuant to Section 4.2 or by the Majority Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever pursuant to the terms of this Agreement.
"UCC" means the Uniform Commercial Code (or any successor
statute), as in effect from time to time, of the State of New York or of any
other state the laws of which are required as a result thereof to be applied in
connection with the issue of perfection of security interests.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Uninsured Contracts" means Vehicle Contracts which would
constitute Eligible Vehicle Contracts except that the Vehicle securing repayment
of the Contract is not insured against loss.
"Unused Line Fee" has the meaning specified in Section 3.5.
"Vehicle" means any new or used, two-axeled, automobile or
light-duty truck, together with all equipment sold or financed in connection
therewith.
"Vehicle Contract" means a Contract (including Uninsured
Vehicle Contracts) which is a motor vehicle retail installment contract arising
from the purchase of a Vehicle.
22
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
as consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements.
1.3 Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in their preparation.
23
ARTICLE 2
LOANS
2.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders severally agree to make available a total credit facility
of up to the Maximum Revolver Amount for the Borrower's use from time to time
during the term of this Agreement. The Total Credit Facility shall be composed
of a revolving line of credit consisting of Revolving Loans up to the Borrowing
Base.
2.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 10, each Lender severally, but not
jointly, agrees, upon the Borrower's request from time to time on any Business
Day during the period from the Closing Date to the Termination Date, to make
revolving loans (the "Revolving Loans") to the Borrower in amounts not to exceed
(except for the Bank with respect to Non-Ratable Loans and except for the Agent
with respect to Agent Advances) such Lender's Pro Rata Share of the Borrowing
Base. The Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans in excess of the Availability on one or more occasions, but if
they do so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Borrowing Base or to be obligated to exceed such
limits on any other occasion. If the Aggregate Revolver Outstandings exceed the
Borrowing Base, the Lenders may refuse to make or otherwise restrict the making
of Revolving Loans as the Lenders determine until such excess has been
eliminated, subject to the Agent's authority, in its sole discretion, to make
Agent Advances pursuant to the terms of Section 2.2(i).
(b) Procedure for Borrowing. (1) Each Borrowing shall be
made upon the Borrower's irrevocable written notice delivered to the Agent in
the form of a notice of borrowing ("Notice of Borrowing") together with a
Borrowing Base Certificate reflecting sufficient Availability, which must be
received by the Agent prior to 11:00 a.m. (New York time) (i) three Business
Days prior to the requested Funding Date, in the case of LIBOR Rate Loans and
(ii) no later than 11:00 a.m. on the requested Funding Date, in the case of Base
Rate Loans, specifying:
(A) the amount of the Borrowing which
in the case of a LIBOR Rate Loan may not be less than $1,000,000;
(B) the requested Funding Date, which
shall be a Business Day;
(C) whether the Revolving Loans
requested are to be Base Rate Revolving Loans or LIBOR Revolving Loans (and if
not specified, it shall be deemed a request for a Base Rate Revolving Loan); and
(D) the duration of the Interest Period
if the requested Revolving Loans are to be LIBOR Revolving Loans. If the Notice
of Borrowing fails to specify the duration of the Interest Period for any
Borrowing comprised of LIBOR Rate Loans, such Interest Period shall be one
month;
24
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(2) With respect to any request for Base Rate
Revolving Loans, in lieu of delivering the above-described Notice of Borrowing
the Borrower may give the Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice but the Agent at all times shall be entitled
to rely on such telephonic notice in making such Revolving Loans, regardless of
whether any such confirmation is received by Agent.
(3) The Borrower shall have no right to request
a LIBOR Rate Loan while a Default or Event of Default has occurred and is
continuing.
(c) Reliance upon Authority. The Borrower shall deliver
to the Agent, prior to the Closing Date, a writing setting forth the account of
the Borrower to which the Agent is authorized to transfer the proceeds of the
Revolving Loans requested pursuant to this Section 2.2. which account shall be
reasonably satisfactory to the Agent. The Agent shall be entitled to rely
conclusively on any person's request for Revolving Loans on behalf of the
Borrower, the proceeds of which are to be transferred to the account specified
by the Borrower pursuant to the immediately preceding sentence, until the Agent
receives written notice from the Borrower that the proceeds of the Revolving
Loans are to be sent to a different account. The Agent shall have no duty to
verify the identity of any individual representing himself or herself as a
person authorized by the Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability
to the Borrower as a result of acting upon any notice referred to in Sections
2.2(b) and (c), which notice the Agent believes in good faith to have been given
by an officer or other person duly authorized by the Borrower to request
Revolving Loans on its behalf or for otherwise acting in good faith under this
Section 2.2, and the crediting of Revolving Loans to the Borrower's deposit
account, as the Borrower shall direct, shall conclusively establish the
obligation of the Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or
telephonic notice in lieu thereof) made pursuant to Section 2.2(b) shall be
irrevocable and the Borrower shall be bound to borrow the funds requested
therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice
of Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b),
the Agent shall elect, in its discretion, (i) to have the terms of Section
2.2(g) apply to such requested Borrowing, or (ii) to request the Bank to make a
Non-Ratable Loan pursuant to the terms of Section 2.2(h) in the amount of the
requested Borrowing; provided, however, that if the Bank declines in its sole
discretion to make a Non-Ratable Loan pursuant to Section 2.2(h), the Agent
shall elect to have the terms of Section 2.2(g) apply to such requested
Borrowing.
(g) Making of Revolving Loans. (i) In the event that the
Agent shall elect to have the terms of this Section 2.2(g) apply to a requested
Borrowing as described in Section 2.2(f), then promptly after receipt of a
Notice of Borrowing or telephonic notice pursuant to
25
Section 2.2(b), the Agent shall notify the Lenders by telecopy, telephone or
other similar form of transmission, of the requested Borrowing. Each Lender
shall make the amount of such Lender's Pro Rata Share of the requested Borrowing
available to the Agent in immediately available funds, to such account of the
Agent as the Agent may designate, not later than 11:00 a.m., (New York time) on
the Funding Date applicable thereto. After the Agent's receipt of the proceeds
of such Revolving Loans, the Agent shall make the proceeds of such Revolving
Loans available to the Borrower on the applicable Funding Date by transferring
same day funds equal to the proceeds of such Revolving Loans received by the
Agent to the account of the Borrower, designated in writing by the Borrower and
acceptable to the Agent; provided, however, that the amount of Revolving Loans
so made on any date shall in no event exceed the Availability on such date.
(ii) Unless the Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and the Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice by the Agent submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's
Revolving Loan for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and, upon demand by the Agent,
the Borrower shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising such Borrowing. The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to the cure
of such failure, being hereinafter referred to as a "Defaulting Lender") shall
not relieve any other Lender of any obligation hereunder to make a Revolving
Loan on such Funding Date, but no Lender shall be responsible for the failure of
any other Lender to make the Revolving Loan to be made by such other Lender on
any Funding Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead be
paid to or retained by the Agent. The Agent may hold and, in its discretion,
re-lend to Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. Any amounts so re-lent to the
Borrower shall bear interest at the rate applicable to Base Rate Revolving Loans
and for all other purposes of this Agreement shall be treated as if they were
Revolving Loans, provided, however, that for purposes of voting or consenting to
matters with respect to the Loan Documents and determining
26
Pro Rata Shares, such Defaulting Lender shall be deemed not to be a "Lender".
Until a Defaulting Lender cures its failure to fund its Pro Rata Share of any
Borrowing (A) such Defaulting Lender shall not be entitled to any portion of the
Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the Lenders
which have funded their respective Pro Rata Shares of such requested Borrowing
and shall be allocated among such performing Lenders ratably based upon their
relative Commitments. This Section shall remain effective with respect to such
Lender until such time as the Defaulting Lender shall no longer be in default of
any of its obligations under this Agreement. The terms of this Section shall not
be construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrower of its duties and obligations
hereunder.
(h) Making of Non-Ratable Loans. (i) In the event the
Agent shall elect, with the consent of the Bank, to have the terms of this
Section 2.2(h) apply to a requested Borrowing as described in Section 2.2(f),
the Bank shall make a Revolving Loan in the amount of such Borrowing (any such
Revolving Loan made solely by the Bank pursuant to this Section 2.2(h) being
referred to as a "Non-Ratable Loan" and such Revolving Loans being referred to
collectively as "Non-Ratable Loans") available to the Borrower on the Funding
Date applicable thereto by transferring same day funds to an account of the
Borrower, designated in writing by the Borrower and acceptable to the Agent.
Each Non-Ratable Loan shall be subject to all the terms and conditions
applicable to other Revolving Loans except that all payments thereon shall be
payable to the Bank solely for its own account (and for the account of the
holder of any participation interest with respect to such Revolving Loan). The
Agent shall not request the Bank to make any Non-Ratable Loan if (A) the Agent
shall have received written notice from any Lender that one or more of the
applicable conditions precedent set forth in Article 10 will not be satisfied on
the requested Funding Date for the applicable Borrowing, or (B) the requested
Borrowing would exceed the Availability on such Funding Date. The Agent shall
not otherwise be required to determine whether the applicable conditions
precedent set forth in Article 10 have been satisfied or the requested Borrowing
would exceed the Availability on the Funding Date applicable thereto prior to
making, in its sole discretion, any Non-Ratable Loan.
(ii) The Non-Ratable Loans shall be secured by the Agent's
Liens in and to the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Revolving Loans
from time to time.
(i) Agent Advances. (i) Subject to the limitations set
forth in the provisos contained in this Section 2.2(i), the Agent is hereby
authorized by the Borrower and the Lenders, from time to time in the Agent's
sole discretion, (A) after the occurrence of a Default or an Event of Default,
or (B) at any time that any of the other applicable conditions precedent set
forth in Article 10 have not been satisfied, to make Base Rate Revolving Loans
to the Borrower on behalf of the Lenders which the Agent, in its reasonable
business judgment, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to
pay any other amount chargeable to the Borrower pursuant to the terms of this
Agreement, including costs, fees and expenses as described in Section 15.7 (any
of the advances described in this Section 2.2(i) being hereinafter referred to
as "Agent Advances"); provided, that the Required Lenders may at any time revoke
the Agent's authorization contained in this Section
27
2.2(i) to make Agent Advances, any such revocation to be in writing and to
become effective prospectively upon the Agent's receipt thereof;
(ii) The Agent Advances shall be repayable on demand and
secured by the Agent's Liens in and to the Collateral, shall constitute
Revolving Loans and Obligations hereunder, and shall bear interest at the rate
applicable to Base Rate Revolving Loans from time to time. The Agent shall
notify each Lender in writing of each such Agent Advance.
(j) Settlement. It is agreed that each Lender's funded
portion of the Revolving Loans is intended by the Lenders to be equal at all
times to such Lender's Pro Rata Share of the outstanding Revolving Loans.
Notwithstanding such agreement, the Agent, the Bank, and the other Lenders agree
(which agreement shall not be for the benefit of or enforceable by the Borrower)
that in order to facilitate the administration of this Agreement and the other
Loan Documents, settlement among them as to the Revolving Loans, the Non-Ratable
Loans and the Agent Advances shall take place on a periodic basis in accordance
with the following provisions:
(i) The Agent shall request settlement ("Settlement")
with the Lenders on at least a weekly basis, or on a more frequent basis if so
determined by the Agent, (A) on behalf of the Bank, with respect to each
outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent
Advance, and (C) with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by telecopy, telephone or
other similar form of transmission, of such requested Settlement, no later than
12:00 noon (New York time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Bank, in the case of Non-Ratable
Loans and the Agent in the case of Agent Advances) shall make the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the Non-Ratable
Loans and Agent Advances with respect to which Settlement is requested available
to the Agent, to such account of the Agent as the Agent may designate, not later
than 3:00 p.m. (New York time), on the Settlement Date applicable thereto, which
may occur before or after the occurrence or during the continuation of a Default
or an Event of Default and whether or not the applicable conditions precedent
set forth in Article 10 have then been satisfied. Such amounts made available to
the Agent shall be applied against the amounts of the applicable Non-Ratable
Loan or Agent Advance and, together with the portion of such Non-Ratable Loan or
Agent Advance representing the Bank's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to the
Agent by any Lender on the Settlement Date applicable thereto, the Agent shall
(A) on behalf of the Bank, with respect to each outstanding Non-Ratable Loan,
and (B) for itself, with respect to each Agent Advance be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after the Settlement
Date and thereafter at the Interest Rate then applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and unconditionally purchase
and receive from the Bank or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such
28
Lender's Pro Rata Share of such Non-Ratable Loan or Agent Advance and (B) if
Settlement has not previously occurred with respect to such Non-Ratable Loans or
Agent Advances, upon demand by Bank or Agent, as applicable, shall pay to Bank
or Agent, as applicable, as the purchase price of such participation an amount
equal to one-hundred percent (100%) of such Lender's Pro Rata Share of such
Non-Ratable Loans or Agent Advances. If such amount is not in fact made
available to the Agent by any Lender, the Agent shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after such demand and
thereafter at the Interest Rate then applicable to Base Rate Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable Loan or
Agent Advance pursuant to clause (ii) preceding, the Agent shall promptly
distribute to such Lender, such Lender's Pro Rata Share of all payments of
principal and interest and all proceeds of Collateral received by the Agent in
respect of such Non-Ratable Loan or Agent Advance.
(iv) Between Settlement Dates, the Agent, to the extent no
Agent Advances are outstanding, may pay over to the Bank any payments received
by the Agent, which in accordance with the terms of this Agreement would be
applied to the reduction of the Revolving Loans, for application to the Bank's
Revolving Loans including Non-Ratable Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have
been applied to the Bank's Revolving Loans (other than to Non-Ratable Loans or
Agent Advances in which such Lender has not yet funded its purchase of a
participation pursuant to Section 2.2(j)(ii) above), as provided for in the
previous sentence, the Bank shall pay to the Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Revolving Loans. During the
period between Settlement Dates, the Bank with respect to Non-Ratable Loans, the
Agent with respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by the Bank, the
Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the
Non-Ratable Loans owing to the Bank, and the Agent Advances owing to the Agent,
from time to time. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of principal
of such Lender's Revolving Loans in its books and records, including computer
records, such books and records constituting presumptive evidence, absent
manifest error, of the accuracy of the information contained therein.
(l) Lenders' Failure to Perform. All Revolving Loans
(other than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder,
29
(ii) no failure by any Lender to perform its obligation to make any Revolving
Loans hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder
shall be several, not joint and several.
2.3 Existing Indebtedness. Borrower acknowledges and confirms that, as
of the Closing Date, it is indebted to the Existing Lender without defense,
set-off or counter-claim under the Existing Credit Agreement. This Agreement
amends and restates the Existing Credit Agreement and the Borrower's
indebtedness under the Existing Credit Agreement shall be deemed to constitute a
Loan hereunder. The execution and delivery of this Agreement and the other Loan
Documents, however, does not evidence or represent a refinancing, repayment,
accord and/or satisfaction or novation of the Borrower's indebtedness under the
Existing Credit Agreement. All of the Lenders' obligations to Borrowers with
respect to Loans to be made concurrently herewith or hereafter are set forth in
this Agreement. All liens and security interests previously granted to the
Existing Lender pursuant to the Existing Credit Agent are acknowledged and
reconfirmed and remain in full force and effect and are not intended to be
released, replaced or impaired. Bank Products.
2.4 Bank Products. The Borrower may request and the Bank may, in its
sole and absolute discretion, arrange for the Borrower to obtain from the Bank
or the Bank's Affiliates Bank Products although the Borrower is not required to
do so. To the extent Bank Products are provided by an Affiliate of the Bank, the
Borrower agrees to indemnify and hold the Bank and the Lenders harmless from any
and all costs and obligations now or hereafter incurred by the Bank or any of
the Lenders which arise from the indemnity given by the Bank to its Affiliates
related to such Bank Products; provided, however, nothing contained herein is
intended to limit the Borrower's rights, with respect to the Bank or its
Affiliates, if any, which arise as a result of the execution of documents by and
between the Borrower and the Bank which relate to Bank Products. The agreement
contained in this Section shall survive termination of this Agreement. The
Borrower acknowledges and agrees that the obtaining of Bank Products from the
Bank or the Bank's Affiliates (a) is in the sole and absolute discretion of the
Bank or the Bank's Affiliates, and (b) is subject to all rules and regulations
of the Bank or the Bank's Affiliates.
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall
bear interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Sections 3.1(a)(i), or (ii), as applicable, but not to exceed
the Maximum Rate described in Section 3.3. Subject to the provisions of Section
3.2, any of the Loans may be converted into, or continued as, Base Rate Loans or
LIBOR Rate Loans
30
in the manner provided in Section 3.2. If at any time Loans are outstanding with
respect to which notice has not been delivered to the Agent in accordance with
the terms of this Agreement specifying the basis for determining the interest
rate applicable thereto, then those Loans shall be Base Rate Loans and shall
bear interest at a rate determined by reference to the Base Rate until notice to
the contrary has been given to the Agent in accordance with this Agreement and
such notice has become effective. Except as otherwise provided herein, the
outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Revolving Loans and other
Obligations (other than LIBOR Revolving Rate Loans) at a fluctuating per annum
rate equal to the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate described
in clauses (i) and (ii) above as of the effective date of such change. All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest accrued on all Loans will be payable in
arrears on the fifteenth day of each month hereafter and on the Termination
Date.
(b) Default Rate. If any Default or Event of Default
occurs and is continuing and the Agent or the Majority Lenders in their
discretion so elect, then, while any such Default or Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
3.2 Continuation and Conversion Elections. (a) The Borrower may, upon
irrevocable written notice to the Agent in accordance with Section 3.2(b):
(i) elect, as of any Business Day, in the case
of Base Rate Loans to convert any such Loans (or any part thereof in an amount
not less than $5,000,000, or that is in an integral multiple of $1,000,000 in
excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate, and provided further that if
the notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.
(b) The Borrower shall deliver a notice of
conversion/continuation ("Notice of Continuation/Conversion") to be received by
the Agent not later than 11:00 a.m. (New York
31
time) at least three (3) Business Days in advance of the Continuation/Conversion
Date, if the Loans are to be converted into or continued as LIBOR Rate Loans and
specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be
converted or renewed;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period
applicable to LIBOR Rate Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to LIBOR Rate Loans or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to convert
such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) During the existence of a Default or Event of
Default, the Borrower may not elect to have a Loan converted into or continued
as a LIBOR Rate Loan.
(f) After giving effect to any conversion or continuation
of Loans, there may not be more than four different Interest Periods in effect
hereunder.
3.3 Maximum Interest Rate. In no event shall any interest rate provided
for hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Obligations, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would,
but for this Section 3.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. In the event that a court of competent jurisdiction
determines that the Agent and/or any Lender has received interest and other
charges hereunder in excess of the Maximum Rate, such excess shall be deemed
received on account of,
32
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrower such
excess.
3.4 Closing Fee. The Borrower agrees to pay the Agent the fees provided
for in the fee letter dated as of the Closing Date.
3.5 Unused Line Fee. Until the Loans have been paid in full and this
Agreement terminated, the Borrower agrees to pay, on the first day of each month
and on the Termination Date, to the Agent, for the account of the Lenders, in
accordance with their respective Pro Rata Shares, an unused line fee (the
"Unused Line Fee") equal to one quarter of one percent (1/4%) per annum times
the amount by which the Maximum Revolver Amount exceeded the sum of the average
daily outstanding amount of Revolving Loans during the immediately preceding
month or shorter period if calculated on the Termination Date. The Unused Line
Fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed. All payments received by the Agent shall be deemed to be credited
to the Borrower's Loan Account immediately upon receipt for purposes of
calculating the Unused Line Fee pursuant to this Section 3.5.
3.6 Documentation Fee. The Borrower agrees to pay the Agent, for its
sole account, a documentation fee in the amount of $15,000 on the Closing Date.
3.7 Agency Fee. The Borrower agrees to pay the Agent, for its sole
account, an agency fee in the amount of $25,000 on the Closing Date and on each
Anniversary Date thereafter.
3.8 Audit Fees. The Borrower shall pay the Agent an annual audit fee of
$10,000 as reimbursement for the costs incurred by the Agent in connection with
verifications, audits, and inspections of the Borrower and the Collateral. The
annual audit fee shall be payable in 12 equal monthly installments. Each
installment shall be payable to Agent on the fifteenth day of each month.
Notwithstanding the foregoing, upon the occurrence of any Event of Default,
Borrower shall pay all of the Agent's costs incurred in connection with the
verifications, audits, and inspections of the Borrower and the Collateral
without regard to the foregoing limitations.
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrower shall repay the outstanding principal
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
respect to any LIBOR Revolving Loans prepaid by the Borrower prior to the
expiration date of the Interest Period applicable thereto, the Borrower shall
pay to the Agent for account of the Lenders the amounts described in Section
5.4. In addition, and without limiting the generality of the foregoing, upon
demand the Borrower shall pay to the Agent, for account of the Lenders, the
amount, without duplication, by which the Aggregate Revolver Outstandings
exceeds the Borrowing Base.
33
4.2 Termination of Facility. The Borrower may terminate this Agreement
upon at least thirty (30) Business Days' notice to the Agent and the Lenders,
upon (a) the payment in full of all outstanding Revolving Loans, together with
accrued interest thereon, (b)the payment of the early termination fee set forth
in the next sentence, (c) the payment in full in cash of all other Obligations
together with accrued and unpaid interest thereon, and (d) with respect to any
LIBOR Rate Loans prepaid in connection with such termination prior to the
expiration date of the Interest Period applicable thereto, the payment of the
amounts described in Section 5.4. If this Agreement is terminated at any time
prior to the Stated Termination Date, whether pursuant to this Section or
pursuant to Section 11.2, the Borrower shall pay to the Agent, for the account
of the Lenders, an early termination fee determined in accordance with the
following table:
PERIOD DURING WHICH
EARLY TERMINATION EARLY TERMINATION
OCCURS FEE
--------------------------------- -----------------------------------------
On or prior to November 30, ▇▇▇▇ ▇▇▇ percent (1%) of the Maximum
Revolver Amount.
After November 30, 2000 but on or One half of one percent (1/2%) of the
prior to November 20, 2001 Maximum Revolver Amount.
After November 30, 2001 but prior One quarter of one percent (1/4%) of the
to November 30, 2002 Maximum Revolver Amount.
No early termination fee shall be payable if the Agreement is
terminated after November 30, 2002, and no termination fee shall be payable if
the Lenders decline the Borrower's request for an increase in the Maximum
Revolver Amount not to exceed $12,000,000 if at such time no Event of Default
then exists and if at such time less than 20% of the Borrowing Base remain
unused.
4.3 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders , at the account designated by the
Agent and shall be made in Dollars and in immediately available funds, no later
than 11:00 a.m. (New York time) on the date specified herein. Any payment
received by the Agent later than 11:00 a.m. (New York time) shall be deemed to
have been received on the following Business Day and any applicable interest or
fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition
of "Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be due on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that the Borrower
will not make such payment in full as and when required, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so
34
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower has not made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.
4.4 Payments as Revolving Loans. All payments of principal, interest,
fees, premiums and other sums payable hereunder, including all reimbursement for
expenses pursuant to Section 15.7, may, at the option of the Agent, in its sole
discretion, subject only to the terms of this Section 4.7, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
the Borrower pursuant to Section 2.2 or a deemed request as provided in this
Section 4.7. The Borrower hereby irrevocably authorizes the Agent to charge the
Loan Account for the purpose of paying principal, interest, fees, premiums and
other sums payable hereunder, including reimbursing expenses pursuant to Section
15.7, and agrees that all such amounts charged shall constitute Revolving Loans
(including Non-Ratable Loans and Agent Advances) and that all such Revolving
Loans so made shall be deemed to have been requested by Borrower pursuant to
Section 2.2.
4.5 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders. All payments shall be remitted to the Agent and all
such payments not relating to principal or interest of specific Loans, or not
constituting payment of specific fees, and all proceeds of Accounts or other
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, indemnities or expense
reimbursements then due to the Agent from the Borrower; second, to pay any fees
or expense reimbursements then due to the Lenders from the Borrower; third, to
pay interest due in respect of all Revolving Loans, including Non-Ratable Loans
and Agent Advances; fourth, to pay or prepay principal of the Non-Ratable Loans
and Agent Advances; fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans and Agent Advances) and sixth, to the payment of
any other Obligation including any amounts relating to Bank Products due to the
Agent or any Lender by the Borrower. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless an
Event of Default has occurred and is continuing, neither the Agent nor any
Lender shall apply any payments which it receives to any LIBOR Revolving Loan,
except (a) on the expiration date of the Interest Period applicable to any such
LIBOR Rate Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Revolving Loans. The Agent shall promptly distribute to
each Lender, pursuant to the applicable wire transfer instructions received from
each Lender in writing, such funds as it may be entitled to receive, subject to
a Settlement delay as provided for in Section 2.2(j). The Agent and the Lenders
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Obligations.
4.6 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the Agent
or any Lender is for any reason compelled to surrender such payment or proceeds
to any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or
35
voidable as a preference, impermissible setoff, or a diversion of trust funds,
or for any other reason, then the Obligations or part thereof intended to be
satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the Agent or
such Lender and the Borrower shall be liable to pay to the Agent and the
Lenders, and hereby does indemnify the Agent and the Lenders and hold the Agent
and the Lenders harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 4.9 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 4.9 shall survive the termination of this Agreement.
4.7 Agent's and Lenders' Books and Records; Monthly Statements. The
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrower a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrower and an account stated (except for
reversals and reapplications of payments made as provided in Section 4.8 and
corrections of errors discovered by the Agent), unless the Borrower notifies the
Agent in writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrower, only the items to which exception is expressly made will be considered
to be disputed by the Borrower.
ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. (a) Any and all payments by the Borrower to each Lender or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless
each Lender and the Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by any Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days after the date such Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
36
(i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender
or the Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts
to any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
5.2 Illegality. (a) If any Lender determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until that Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to
maintain any LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of
such fact and demand from such Lender (with a copy to the Agent), prepay in full
such LIBOR Rate Loans of that Lender then outstanding, together with interest
accrued thereon and amounts required under Section 5.4, either on the last day
of the Interest Period thereof, if that Lender may lawfully continue to maintain
such LIBOR Rate Loans to such day, or immediately, if that Lender may not
lawfully continue to maintain such LIBOR Rate Loans. If the Borrower is required
to so prepay any LIBOR Rate Loans, then concurrently with such prepayment, the
Borrower shall borrow from the affected Lender, in the amount of such repayment,
a Base Rate Loan.
5.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that due to either (i) the introduction of or any change in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other
37
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any LIBOR Rate Loans, then the Borrower shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent to
the Agent), pay to the Agent for the account of such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation or other entity controlling such Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender for such increase.
5.4 Funding Losses. The Borrower shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis
any payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or
convert a Loan after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after
acceleration thereof) of any LIBOR Rate Loans on a day that is not the last day
of the relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. Borrower shall also pay any customary administrative fees
charged by any Lender in connection with the foregoing.
5.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such Notice, the
38
Lenders shall make, convert or continue the Loans, as proposed by the Borrower,
in the amount specified in the applicable notice submitted by the Borrower, but
such Loans shall be made, converted or continued as Base Rate Loans instead of
LIBOR Rate Loans.
5.6 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article 5 shall deliver to the Borrower (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to such Lender hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
5.7 Survival. The agreements and obligations of the Borrower in this
Article 5 shall survive the payment of all other Obligations.
ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. As security for all Obligations, the
Borrower hereby grants to the Agent for the benefit of the Lenders and the Agent
a continuing security interest in, lien on, and assignment of and right of set
off against, all of the following Property of the Borrower, whether now owned or
existing or hereafter acquired or arising, regardless of where located: (a) all
Contracts; (b) all General Intangibles; (c) all Accounts; (d) all money,
securities and other property of any kind of the Borrower in the possession or
under the control of the Agent or any Lender; (e) all deposit accounts with any
financial institution in which the Borrower maintains deposits; (f) all credit
balances in favor of Borrower and claims against the Agent or any Lender or any
of their affiliates; (g) all books, records and other Property related to or
referring to any of the foregoing; (h) all of the Borrower's rights, but not its
obligations, under all Dealer Agreements, including all rights to require a
Dealer to repurchase a Contract acquired from such Dealer, and (i) all
accessions to, substitutions for and replacements, products and proceeds of any
of the foregoing, including proceeds of any insurance policies and claims
against third parties. All of the foregoing and all other Property of the
Borrower in which the Agent and the Lenders may at any time be granted a Lien is
herein collectively referred to as the "Collateral." All of the Obligations
shall be secured by all of the Collateral.
6.2 Perfection and Protection of Security Interest. (a) The Borrower
shall, at its expense, perform all steps requested by the Agent at any time to
perfect, maintain, protect, and enforce the Agent's Liens, including: (i)
executing, delivering and/or recording of filing financing or continuation
statements, and amendments thereof, in form and substance reasonably
satisfactory to the Agent; (ii) delivering to the Agent the originals of all
instruments, documents, and chattel paper, and all other Collateral of which the
Agent determines it should have physical possession in order to perfect and
protect the Agent's security interest therein, duly pledged, endorsed or
assigned to the Agent without restriction; (iii) placing notations on the
Borrower's books of account to disclose the Agent's security interest; and (iv)
taking such other steps as are deemed necessary or desirable by the Agent to
maintain and protect the Agent's Liens. To the extent permitted by applicable
law, the Agent may file, without the Borrower's signature, one or more financing
statements disclosing the Agent's Liens. The Borrower agrees that a carbon,
39
photographic, photostatic, or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any of the Borrower's agents or
processors, then the Borrower shall notify the Agent thereof and shall, at the
request of Agent, notify such Person of the Agent's security interest in such
Collateral and instruct such Person to hold all such Collateral for the Agent's
account subject to the Agent's instructions. If at any time any Collateral is
located in any operating facility of the Borrower not owned by the Borrower,
then the Borrower shall, at the request of the Agent, obtain written landlord
lien waivers or subordinations, in form and substance reasonably satisfactory to
the Agent, of all present and future Liens to which the owner or lessor of such
premises may be entitled to assert against the Collateral.
(c) From time to time, the Borrower shall, upon the
Agent's request, execute and deliver confirmatory written instruments pledging
to the Agent, for the ratable benefit of the Agent and the Lenders, the
Collateral with respect to the Borrower, but the Borrower's failure to do so
shall not affect or limit any security interest or any other rights of the Agent
or any Lender in and to the Collateral with respect to the Borrower. So long as
this Agreement is in effect and until all Obligations have been fully satisfied,
the Agent's Liens shall continue in full force and effect in all Collateral
(whether or not deemed eligible for the purpose of calculating the Availability
or as the basis for any advance, loan, extension of credit, or other financial
accommodation).
(d) Except with respect to Collateral delivered to the
Agent pursuant to this Section 6.2, the Borrower shall immediately following the
execution or receipt of a Contract, stamp on the Contract the following words:
"This document is subject to a security interest in favor of Bank of America,
N.A., as agent".
6.3 Location of Collateral. The Borrower represents and warrants to the
Agent and the Lenders that: (a) Schedule 6.3 is a correct and complete list of
the Borrower's chief executive office, the location of its books and records,
the locations of the Collateral, and the locations of all of its other places of
business; and (b) Schedule 6.3 correctly identifies any of such facilities and
locations that are not owned by the Borrower and sets forth the names of the
owners and lessors or sublessors of such facilities and locations. The Borrower
covenants and agrees that it will not (i) maintain any Collateral at any
location other than those locations listed for the Borrower on Schedule 6.3,
(ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
6.3, unless it gives the Agent at least thirty (30) days' prior written notice
thereof and executes any and all financing statements and other documents that
the Agent reasonably requests in connection therewith. Without limiting the
foregoing, the Borrower represents that all of its Inventory (other than
Inventory in transit) is, and covenants that all of its Inventory will be,
located either (a) on premises owned by the Borrower, (b) on premises leased by
the Borrower, provided that the Agent has, if requested by the Agent, received
an executed landlord waiver from the landlord of such premises in form and
substance satisfactory to the Agent, or (c) in a warehouse or with a bailee,
provided that the Agent has, if requested by the Agent, received an executed
bailee letter from the applicable Person in form and substance satisfactory to
the Agent.
40
6.4 Title to, Liens on, and Sale and Use of Collateral. The Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) all of the Collateral is and will continue to be owned
by the Borrower free and clear of all Liens whatsoever, except for Permitted
Liens; (b) the Agent's Liens in the Collateral will not be subject to any prior
Lien except for those Liens identified in clauses (c), (d) and (e) of the
definition of Permitted Liens; and (c) the Borrower will use, store, and
maintain the Collateral with all reasonable care and will use such Collateral
for lawful purposes only.
6.5 Intentionally Deleted.
6.6 Access and Examination; Confidentiality; Consent to Advertising.
(a) The Agent, accompanied by any Lender which so elects, may at all reasonable
times during regular business hours (and at any time when a Default or Event of
Default exists and is continuing) have access to, examine, audit, make extracts
from or copies of and inspect any or all of the Borrower's records, files, and
books of account and the Collateral, and discuss the Borrower's affairs with the
Borrower's officers and management. The Borrower will deliver to the Agent any
instrument necessary for the Agent to obtain records from any service bureau
maintaining records for the Borrower. The Agent may, and at the direction of the
Majority Lenders shall, at any time when a Default or Event of Default exists,
and at the Borrower's expense, make copies of all of the Borrower's books and
records, or require the Borrower to deliver such copies to the Agent. The Agent
may, without expense to the Agent, use such of the Borrower's respective
personnel, supplies, and Real Estate as may be reasonably necessary for
maintaining or enforcing the Agent's Liens. The Agent shall have the right, at
any time, in the Agent's name or in the name of a nominee of the Agent, to
verify the validity, amount or any other matter relating to the Accounts,
Inventory, or other Collateral, by mail, telephone, or otherwise.
(b) The Borrower hereby consents that the Agent and each
Lender may issue and disseminate to the public general information describing
the credit accommodation entered into pursuant to this Agreement, including the
name and address of the Borrower and a general description of the Borrowers
business and may use the Borrower's name in advertising and other promotional
material.
(c) Each Lender severally agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the Borrower and
provided to the Agent or such Lender by or on behalf of the Borrower, under this
Agreement or any other Loan Document, except to the extent that such information
(i) was or becomes generally available to the public other than as a result of
disclosure by the Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Agent or such Lender; provided, however, that the Agent and any Lender may
disclose such information (1) at the request or pursuant to any requirement of
any Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (2) pursuant to subpoena or other court process; (3)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
41
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (7) to any prospective Participant or Assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (8) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower is party or is deemed party with the Agent
or such Lender, and (9) to its Affiliates.
6.7 Collateral Reporting. The Borrower shall deliver to the Agent,
within 15 days after the end of each calendar month during the term of this
Agreement and at any other time specified by Agent, the following reports: (a) a
Collateral and Loan Status Report and Monthly Report of Delinquent Accounts in
forms provided by Agent, containing the information requested therein; (b) a
delinquency report listing all Contracts under which any scheduled payment
thereunder is 30, 60, and 90 days or more past due; (c) a month-end report
listing by Contract, the contract account number, Contract Debtor's name,
Contract Debtor's current address, and current Contract balance for all
Contracts then owned by Borrower; (d) a month-end report listing by Contract,
the Contract account number, Contract Debtor's name, Contract Debtor's current
address, and current Contract balance for all Contracts purchased by Borrower
during the immediately preceding calendar month; (e) a detailed work sheet
listing, with regard to each Contract entered into or purchased by Borrower
during the immediately preceding month (i) the Contract Debtor's name, (ii)
contract number, (iii) the make and model of the vehicle financed under the
Contract (iv) the cash advanced or due to be advanced to a dealer for the
Contract, and (v) the National Auto Research Black Book wholesale clean value
for the vehicle; (f) a monthly report of cash collections on a daily basis; (g)
a report of charge-offs and repossessions in total and by account; and (h) such
other reports as Agent may request. All of the foregoing reports shall be
delivered (i) twice monthly on the first and fifteenth of each month in the
event the Advance Rate is reduced as a result of the Collateral Adjustment
Percent and (ii) at such times as Agent requests upon the occurrence and
continuation of an Event of Default.
6.8 Contracts. (a) The Borrower hereby represents and warrants to the
Agents and the Lenders with respect to the Contracts, that: (i) each existing
Contract represents, and each future Contract will represent, a bona fide
obligation of the Contract Debtor, enforceable in accordance with its terms;
(ii) each existing Contract is, and each future Contract will be, for a
liquidated amount payable by the Contract Debtor thereon on the terms set forth
in the Contract therefor or in the schedule thereof delivered to the Agent,
without any offset, deduction, defense (including the defense of usury), or
counterclaim; (iii) there is only one original counterpart of the Contract
executed by the Contract Debtor; (iv) each Contract correctly sets forth the
terms thereof, including the interest rate applicable thereto and correctly
describes the collateral for such Contract; (vi) the signatures of all Contract
Debtors are genuine and, to the knowledge of the Borrower, each Contract Debtor
had the legal capacity to enter into and execute such documents on the date
thereof; (vii) each Contract complies with all Requirement of Law; and (viii)
the Borrower has not used illegal, improper, fraudulent or deceptive marketing
techniques or unfair business practices with respect to the Contracts.
42
(b) The Borrower shall not grant any discount, credit or
allowance to any such Contract Debtor without the Agent's prior written consent,
except for discounts, credits and allowances made or given in the ordinary
course of the Borrower's business.
6.9 Collection of Contracts; Payments. (a) While any portion of the
Revolving Loans are unpaid, the Borrower shall immediately, upon receipt
thereof, deposit all proceeds of the Collateral (including all payments received
in connection with the Contracts) into a Payment Account, which Payment Account
shall be subject to the terms of a Blocked Account Agreement, on terms
acceptable to Agent, between the Borrower, the Agent and the bank. If, at any
time, either (i) the Availability is equal to or less than five percent (5%) of
the Borrowing Base or (ii) an Event of Default occurs (both (i) and (ii) are
herein referred to as a "Triggering Event"), then at all times thereafter the
Borrower's right to withdraw any funds from the Payment Account shall
immediately terminate and only the Agent shall have a right to withdraw any
funds from the Payment Account. The Borrower authorizes the Agent to notify the
bank at which the Payment Account is located upon the happening of a Triggering
Event that all funds deposited into the Payment Account are subject solely to
the direction of the Agent. The Agent shall reinstate the Borrower's right to
withdraw funds from the Payment Account in the event (i) the Availability is, at
all times, greater than five percent (5%) of the Borrowing Base during any
ninety (90) consecutive-day period following the date of termination of the
Borrower's withdrawal rights and (ii) no Default or Event of Default occurs
during that period.
(b) During the period that the Borrower's withdrawal
rights with respect to the Payment Account have been terminated, all funds
deposited into the Payment Account will be the Agent's sole Property and will be
credited to the Borrower's Loan Account (conditional upon final collection upon
receipt by Agent).
6.10 Intentionally Deleted.
6.11 Equipment. The Borrower represents and warrants to the Agent and
the Lenders and agrees with the Agent and the Lenders that all of the Equipment
owned by the Borrower is and will be used or held for use in the Borrower's
business, and is and will be fit for such purposes. The Borrower shall keep and
maintain its Equipment in good operating condition and repair (ordinary wear and
tear excepted) and shall make all necessary replacements thereof.
6.12 Documents, Instruments, and Chattel Paper. The Borrower represents
and warrants to the Agent and the Lenders that (a) all documents, instruments,
and chattel paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all goods evidenced by such documents, instruments, and chattel
paper are and will be owned by the Borrower, free and clear of all Liens other
than Permitted Liens.
6.13 Right to Cure. The Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, pay any amount or do any act required of the
Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which the Borrower fails to pay or do, including payment of
any judgment against the Borrower, any insurance premium, any warehouse charge,
any finishing or processing charge, any landlord's or bailee's claim, and any
other Lien upon or
43
with respect to the Collateral. All payments that the Agent makes under this
Section 6.13 and all out-of-pocket costs and expenses that the Agent pays or
incurs in connection with any action taken by it hereunder shall be charged to
the Borrower's Loan Account as a Revolving Loan. Any payment made or other
action taken by the Agent under this Section 6.13 shall be without prejudice to
any right to assert an Event of Default hereunder and to proceed thereafter as
herein provided.
6.14 Intentionally Deleted.
6.15 The Agent's and Lenders' Rights, Duties and Liabilities. The
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. The Obligations shall not
be affected by any failure of the Agent or any Lender to take any steps to
perfect the Agent's Liens or to collect or realize upon the Collateral, nor
shall loss of or damage to the Collateral release the Borrower from any of the
Obligations. Following the occurrence and continuation of an Event of Default,
the Agent may (but shall not be required to), and at the direction of the
Majority Lenders shall, without notice to or consent from the Borrower, ▇▇▇ upon
or otherwise collect, extend the time for payment of, modify or amend the terms
of, compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take or
omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or
any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and the Borrower.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records. The Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 7.2(a). The Borrower shall, by means of appropriate entries,
reflect in such accounts and in all Financial Statements proper liabilities and
reserves for all taxes and proper provision for depreciation and amortization of
property and bad debts, all in accordance with GAAP. The Borrower shall maintain
at all times books and records pertaining to the Collateral in such detail, form
and scope as the Agent or any Lender shall reasonably require, including, but
not limited to, records of (a) all payments received and all credits and
extensions granted with respect to the Contracts; (b) the return, rejection,
repossession, stoppage in transit, loss, damage, or destruction of any
Inventory; and (c) all other dealings affecting the Collateral.
7.2 Financial Information. The Borrower shall promptly furnish to each
Lender, all such financial information as the Agent shall reasonably request.
Without limiting the foregoing, the Borrower will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:
44
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated audited and
consolidating audited balance sheets, and statements of income and expense, cash
flow and of stockholders' equity for the Borrower and its Subsidiaries for such
Fiscal Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable detail,
fairly presenting the financial position and the results of operations of the
Borrower and its consolidated Subsidiaries as at the date thereof and for the
Fiscal Year then ended, and prepared in accordance with GAAP. Such statements
shall be examined in accordance with generally accepted auditing standards by
and, in the case of such statements performed on a consolidated basis,
accompanied by a report thereon unqualified in any respect of independent
certified public accountants selected by the Borrower and reasonably
satisfactory to the Agent. The Borrower, simultaneously with retaining such
independent public accountants to conduct such annual audit, shall send a letter
to such accountants, with a copy to the Agent and the Lenders, notifying such
accountants that one of the primary purposes for retaining such accountants'
services and having audited financial statements prepared by them is for use by
the Agent and the Lenders. The Borrower hereby authorizes the Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Borrower.
(b) As soon as available, but in any event not later than
forty five (45) days after the end of each month, consolidated and consolidating
unaudited balance sheets of the Borrower and its consolidated Subsidiaries as at
the end of such month, and consolidated and consolidating unaudited statements
of income and expense and cash flow for the Borrower and its consolidated
Subsidiaries for such month and for the period from the beginning of the Fiscal
Year to the end of such month, all in reasonable detail, fairly presenting the
financial position and results of operations of the Borrower and its
consolidated Subsidiaries as at the date thereof and for such periods, and
prepared in accordance with GAAP applied consistently with the audited Financial
Statements required to be delivered pursuant to Section 7.2(a). The Borrower
shall certify by a certificate signed by its chief financial officer that all
such statements have been prepared in accordance with GAAP and present fairly,
subject to normal year-end adjustments, the Borrower's financial position as at
the dates thereof and its results of operations for the periods then ended.
(c) Intentionally Deleted
(d) With each of the audited Financial Statements
delivered pursuant to Section 7.2(a), a certificate of the independent certified
public accountants that examined such statement to the effect that they have
reviewed and are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or condition which
then constituted a Default or Event of Default with respect to a financial
covenant, except for those, if any, described in reasonable detail in such
certificate.
(e) With each of the annual audited Financial Statements
delivered pursuant to Section 7.2(a), and within forty-five (45) days after the
end of each fiscal quarter, a certificate of the chief financial officer of the
Borrower (i) setting forth in reasonable detail the calculations required to
establish that the Borrower was in compliance with the covenants set forth in
45
Sections 9.18 through 9.22 during the period covered in such Financial
Statements and as at the end thereof, and (ii) stating that, except as explained
in reasonable detail in such certificate, (A) all of the representations and
warranties of the Borrower contained in this Agreement and the other Loan
Documents are correct and complete in all material respects as at the date of
such certificate as if made at such time, except for those that speak as of a
particular date, (B) the Borrower is, at the date of such certificate, in
compliance in all material respects with all of its respective covenants and
agreements in this Agreement and the other Loan Documents, (C) no Default or
Event of Default then exists or existed during the period covered by such
Financial Statements, (D) describing and analyzing in reasonable detail all
material trends, changes, and developments in each and all Financial Statements;
and (E) explaining the variances of the figures in the corresponding budgets and
prior Fiscal Year financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant has
not been complied with, or that a Default or Event of Default existed or exists,
such certificate shall set forth what action the Borrower has taken or proposes
to take with respect thereto.
(f) No sooner than sixty (60) days and not less than
thirty (30) days prior to the beginning of each Fiscal Year, annual forecasts
(to include forecasted consolidated and consolidating balance sheets, statements
of income and expenses and statements of cash flow) for the Borrower and its
Subsidiaries as at the end of and for each month of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a
copy of each annual report or other filing filed with respect to each Plan of
the Borrower.
(h) Promptly upon the filing thereof, copies of all
reports, if any, to or other documents filed by the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission under the Exchange Act,
and all reports, notices, or statements sent or received by the Borrower or any
of its Subsidiaries to or from the holders of any equity interests of the
Borrower (other than routine non-material correspondence sent by shareholders of
the Borrower to the Borrower) or any such Subsidiary or of any Debt for Borrowed
Money of the Borrower or any of its Subsidiaries registered under the Securities
Act of 1933 or to or from the trustee under any indenture under which the same
is issued.
(i) As soon as available, but in any event not later than
15 days after the Borrower's receipt thereof, a copy of all management reports
and management letters prepared for the Borrower by any independent certified
public accountants of the Borrower.
(j) Promptly after their preparation, copies of any and
all proxy statements, financial statements, and reports which the Borrower makes
available to its shareholders.
(k) Promptly after filing with the IRS, a copy of each
tax return filed by the Borrower or by any of its Subsidiaries.
(l) Such additional information as the Agent and/or any
Lender may from time to time reasonably request regarding the financial and
business affairs of the Borrower or any Subsidiary.
46
7.3 Notices to the Lenders. The Borrower shall notify the Agent and the
Lenders in writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or
Event of Default;
(b) Immediately after becoming aware of the assertion by
the holder of any capital stock of the Borrower or of any Subsidiary or of any
Debt in a face amount in excess of $100,000 that a default exists with respect
thereto or that the Borrower or such Subsidiary is not in compliance with the
terms thereof, or the threat or commencement by such holder of any enforcement
action because of such asserted default or non-compliance;
(c) Immediately after becoming aware of any event or
circumstance which could have a Material Adverse Effect;
(d) Immediately after becoming aware of any pending or
threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which may have a Material
Adverse Effect;
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Borrower or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect;
(f) Immediately after becoming aware of any violation of
any law, statute, regulation, or ordinance of a Governmental Authority affecting
the Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect;
(g) Immediately after receipt of any notice of any
violation by the Borrower or any of its Subsidiaries of any Environmental Law
which could reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that the Borrower or any
Subsidiary is not in compliance with any Environmental Law or is investigating
the Borrower's or such Subsidiary's compliance therewith;
(h) Immediately after receipt of any written notice that
the Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the Release or threatened Release of any Contaminant or that the
Borrower or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the
Release or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $100,000;
(i) Immediately after receipt of any written notice of
the imposition of any Environmental Lien against any property of the Borrower or
any of its Subsidiaries;
(j) Any change in the Borrower's name, state of
organization, or form of organization, trade names under which the Borrower will
sell Inventory or create Contracts, or to which instruments in payment of
Contracts may be made payable, in each case at least thirty (30) days prior
thereto;
47
(k) Within ten (10) Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know, that an ERISA Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) has occurred, and, when known, any action taken or threatened by the IRS,
the DOL or the PBGC with respect thereto;
(l) Upon request, or, in the event that such filing
reflects a significant change with respect to the matters covered thereby,
within three (3) Business Days after the filing thereof with the PBGC, the DOL
or the IRS, as applicable, copies of the following: (i) each annual report (form
5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the
IRS with respect to each Plan, (ii) a copy of each funding waiver request filed
with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by the Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS with respect to such request, and (iii) a copy of each other
filing or notice filed with the PBGC, the DOL or the IRS, with respect to each
Plan by either the Borrower or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any
Plan or Multi-employer Plan and annual report for any Multi-employer Plan; and
within three (3) Business Days after receipt thereof by the Borrower or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Plan or to have a trustee appointed to administer such
Plan; (ii) any favorable or unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the Code; or (iii)
any notice from a Multi-employer Plan regarding the imposition of withdrawal
liability;
(n) Within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which increase the
Borrower's annual costs with respect thereto by an amount in excess of $100,000,
or the establishment of any new Plan or the commencement of contributions to any
Plan to which the Borrower or any ERISA Affiliate was not previously
contributing; or (ii) any failure by the Borrower or any ERISA Affiliate to make
a required installment or any other required payment under Section 412 of the
Code on or before the due date for such installment or payment; or
(o) Within three (3) Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know that any of the following events
has or will occur: (i) a Multi-employer Plan has been or will be terminated;
(ii) the administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a Multi-employer
Plan.
Each notice given under this Section shall describe the
subject matter thereof in reasonable detail, and shall set forth the action that
the Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken
or proposes to take with respect thereto.
48
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents to
which it is a party, to incur the Obligations, and to grant to the Agent Liens
upon and security interests in the Collateral. The Borrower has taken all
necessary corporate action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents to which it is a party have been duly executed and
delivered by the Borrower, and constitute the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with their
respective terms without defense, setoff or counterclaim. The Borrower's
execution, delivery, and performance of this Agreement and the other Loan
Documents to which it is a party do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result
in, or require the creation or imposition of any Lien upon the property of the
Borrower or any of its Subsidiaries by reason of the terms of (a) any contract,
mortgage, Lien, lease, agreement, indenture, or instrument to which the Borrower
is a party or which is binding upon it, (b) any Requirement of Law applicable to
the Borrower or any of its Subsidiaries, or (c) the certificate or articles of
incorporation or by-laws of the Borrower or any of its Subsidiaries.
8.2 Validity and Priority of Security Interest. The provisions of this
Agreement, [the Mortgage(s)], and the other Loan Documents create legal and
valid Liens on all the Collateral in favor of the Agent, for the ratable benefit
of the Agent and the Lenders, and such Liens constitute perfected and continuing
Liens on all the Collateral, having priority over all other Liens on the
Collateral, except for those Liens identified in clauses (c), (d) and (e) of the
definition of Permitted Liens securing all the Obligations, and enforceable
against the Borrower and all third parties.
8.3 Organization and Qualification. The Borrower (a) is duly
incorporated and organized and validly existing in good standing under the laws
of the state of its incorporation, (b) is qualified to do business as a foreign
corporation and is in good standing in the jurisdictions set forth on Schedule
8.3 which are the only jurisdictions in which qualification is necessary in
order for it to own or lease its property and conduct its business and (c) has
all requisite power and authority to conduct its business and to own its
property.
8.4 Corporate Name; Prior Transactions. The Borrower has not, during
the past five (5) years, been known by or used any other corporate or fictitious
name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its property
outside of the ordinary course of business.
49
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and complete
list of the name and relationship to the Borrower of each and all of the
Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated and organized and validly existing in good standing under the laws
of its state of incorporation set forth on Schedule 8.5, and (b) qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the failure to so qualify or be in good standing could reasonably be
expected to have a material adverse effect on any such Subsidiary's business,
operations, prospects, property, or condition (financial or otherwise) and (c)
has all requisite power and authority to conduct its business and own its
property.
8.6 Financial Statements and Projections. (a) The Borrower has
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, cash flows, and changes in stockholders
equity for the Borrower as of March 31, 2000, for the Fiscal Year then ended,
accompanied by the report thereon of the Borrower's independent certified public
accountants, Ernst & Young. The Borrower has also delivered to the Agent and the
Lenders the unaudited balance sheet and related statements of income and cash
flows for the Borrower as of March 31, 2000. All such financial statements have
been prepared in accordance with GAAP and present accurately and fairly the
financial position of the Borrower as of the dates thereof and its results of
operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders
as required herein represent the Borrower's best estimate of the future
financial performance of the Borrower and its consolidated Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lender.
8.7 Capitalization. The Borrower's authorized capital stock consists of
10,000 shares of common stock, par value $1.00 per share, of which 500 shares
are validly issued and outstanding, fully paid and non-assessable and are owned
beneficially and of record by ▇▇▇▇▇▇▇▇ Data Services, Ltd.
8.8 Solvency. The Borrower is Solvent prior to and after giving effect
to the making of the Revolving Loans to be made on the Closing Date, and shall
remain Solvent during the term of this Agreement.
8.9 Debt. After giving effect to the making of the Revolving Loans to
be made on the Closing Date, the Borrower and its Subsidiaries have no Debt,
except (a) the Obligations, (b) trade payables and other contractual obligations
arising in the ordinary course of business, and (c) other Debt existing on the
Closing Date and reflected in its Financial Statements.
8.10 Intentionally Deleted.
8.11 Title to Property. The Borrower has good, indefeasible, and
merchantable title to all of its property, free of all Liens except Permitted
Liens.
8.12 Intentionally Deleted.
50
8.13 Intentionally Deleted.
8.14 Intentionally Deleted.
8.15 Litigation. Except as set forth on Schedule 8.15, there is no
pending, or to the best of the Borrower's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or to the best of the Borrower's
knowledge investigation by any Governmental Authority, or any basis for any of
the foregoing, which could reasonably be expected to cause a Material Adverse
Effect.
8.16 Restrictive Agreements. The Borrower is not a party to any
contract or agreement, or subject to any charter or other corporate restriction,
which affects its ability to execute, deliver, and perform the Loan Documents
and repay the Obligations or which could reasonably be expected to cause a
Material Adverse Effect.
8.17 Labor Disputes. As of the Closing Date (a) there is no collective
bargaining agreement or other labor contract covering employees of the Borrower
or any of its Subsidiaries, (b) no such collective bargaining agreement or other
labor contract is scheduled to expire during the term of this Agreement, (c) no
union or other labor organization is seeking to organize, or to be recognized
as, a collective bargaining unit of employees of the Borrower or any of its
Subsidiaries or for any similar purpose, and (d) there is no pending or (to the
best of the Borrower's knowledge) threatened, strike, work stoppage, material
unfair labor practice claim, or other material labor dispute against or
affecting the Borrower or its Subsidiaries or their employees.
8.18 Environmental Laws.
(a) The Borrower and its Subsidiaries have complied in
all material respects with all Environmental Laws and neither the Borrower nor
any Subsidiary nor any of its presently owned real property or presently
conducted operations, nor its previously owned real property or prior
operations, is subject to any enforcement order from or liability agreement with
any Governmental Authority or private Person respecting (i) compliance with any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release of a Contaminant.
(b) The Borrower and its Subsidiaries have obtained all
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
compliance with all material terms and conditions of such permits.
8.19 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.
8.20 No Default. Neither the Borrower nor any of its Subsidiaries is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement to
51
which the Borrower or such Subsidiary is a party or by which it is bound, which
default could reasonably be expected to have a Material Adverse Effect.
8.21 ERISA Compliance.
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Borrower, nothing has occurred which would cause the loss of such
qualification. The Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multi-employer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.22 Taxes. The Borrower and its Subsidiaries have filed all federal
and other tax returns and reports required to be filed, and have paid all
federal and other taxes, assessments, fees and other governmental charges levied
or imposed upon them or their properties, income or assets otherwise due and
payable unless such unpaid taxes and assessments would constitute a Permitted
Lien.
8.23 Intentionally Deleted.
8.24 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for working capital purposes. Neither the Borrower nor any
Subsidiary is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
8.25 Intentionally Deleted.
52
8.26 No Material Adverse Change. No material adverse change has
occurred in the Borrower's property, business, operations, or conditions
(financial or otherwise) since the date of the Financial Statements delivered to
the Lenders.
8.27 Full Disclosure. None of the representations or warranties made by
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
8.28 Intentionally Deleted.
8.29 Bank Accounts. Schedule 8.29 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Borrower with
any bank or other financial institution.
8.30 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Borrower or any of its Subsidiaries of this Agreement or any other Loan
Document.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that so
long as any of the Obligations remain outstanding or this Agreement is in
effect:
9.1 Taxes and Other Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; and (c) pay when due all Debt owed by it
and all claims of materialmen, mechanics, carriers, warehousemen, landlords,
processors and other like Persons, and all other indebtedness owed by it and
perform and discharge in a timely manner all other obligations undertaken by it;
provided, however, so long as the Borrower has notified the Agent in writing,
neither the Borrower nor any of its Subsidiaries need pay any tax, fee,
assessment, or governmental charge, that (i) it is contesting in good faith by
appropriate proceedings diligently pursued, (ii) the Borrower or its Subsidiary,
as the case may be, has established proper reserves
53
for as provided in GAAP, and (iii) no Lien (other than a Permitted Lien) results
from such non-payment.
9.2 Corporate Existence and Good Standing. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain its corporate existence and
its qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
9.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Borrower shall comply with all Requirements of Law including the Federal Trade
Commission's used car rule and all usury and consumer credit disclosure laws and
regulation. The Borrower shall obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its Property and to
conduct its business as conducted on the Closing Date.
9.4 Compliance with ERISA. The Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; (c) make all required contributions to any
Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.
9.5 Mergers, Consolidations or Sales. The Borrower shall not (a) enter
into any transaction of merger, reorganization, or consolidation with any other
Person; (b) transfer, sell, assign, lease, or otherwise dispose of all or any
part of the Collateral or its assets; or (c) liquidate or dissolve.
9.6 Distributions and Capital Change. The Borrower shall not (i)
directly or indirectly declare or make or incur any liability to make any
Distribution or (ii) make any change in its capital structure.
9.7 Transactions Affecting Collateral or Obligations. The Borrower
shall not enter into any transaction which is likely to have a Material Adverse
Effect.
9.8 Guaranties. The Borrower shall not make, issue, be or become liable
on any Guaranty, except Guaranties in favor of the Agent and the Lenders.
9.9 Debt. The Borrower shall not incur or maintain any Debt, other
than: (a) the Obligations; (b) trade payables and contractual obligations to
suppliers and customers incurred in the ordinary course of business; and (c)
other Debt existing on the Closing Date.
9.10 Prepayment. The Borrower shall not voluntarily prepay any Debt,
except the Obligations and any Subordinated Debt in accordance with the terms of
this Agreement.
9.11 Transactions with Affiliates. Except as expressly provided in this
Section 9.11, Borrower shall not sell, transfer, distribute, or pay any money or
Property to any Affiliate or make any Distribution to any Affiliate, or lend any
money to and Affiliate, or invest in (by capital contribution or otherwise) or
purchase or repurchase any stock or indebtedness, or any
54
Property of any Affiliate, or become liable on any guaranty of the Affiliate.
(The foregoing transactions are hereinafter referred to as "Prohibited
Transactions"). A Prohibited Transaction shall not include a distribution of
cash by Borrower to ▇▇▇▇▇▇▇▇ Data Services, Inc. for the limited portion of
state and federal tax liabilities imposed on ▇▇▇▇▇▇▇▇ Data Services, Inc.
resulting from the inclusion of Borrower's taxable income in the income of
▇▇▇▇▇▇▇▇. Notwithstanding the foregoing, so long as no Default or Event of
Default then exists, Borrower may engage in a Prohibited Transaction provided
the aggregate amount of such transactions in any Fiscal Year of the Borrower do
not exceed the lesser of (a) $150,000 ("Permitted Amount") or (b) twenty-five
percent (25%() of Borrower's Adjusted Net Earnings from Operations for such
Fiscal Year.
9.12 Intentionally Deleted.
9.13 Business Conducted. The Borrower shall not engage directly or
indirectly, in any line of business other than the businesses in which the
Borrower is engaged on the Closing Date.
9.14 Liens. The Borrower shall not create, incur, assume, or permit to
exist any Lien on any Collateral, except for the Liens in favor of the Agent and
the Lenders.
9.15 Fiscal Year. The Borrower shall not change its Fiscal Year.
9.16 No Recognition of Income. Borrower shall not accrue or otherwise
recognize any fees, interest, or other income in connection with any Contract
under which any payment due thereunder is more than 89 days delinquent as
determined on a contractual basis.
9.17 Intentionally Deleted.
9.18 Minimum Interest Coverage. The Borrower shall not permit the
ratio, calculated as of the last day of each month on a cumulative Fiscal Year
basis, of (a) the sum of Adjusted Net Earnings from Operations for the
applicable period, plus interest expense and any provision for income taxes for
such period (numerator) to (b) aggregate interest expense for such period
(denominator), to be less than 1.25:1.
9.19 Intentionally Deleted.
9.20 Loss Reserve. The Borrower shall maintain loss and dealer reserves
at all times during the term of the Agreement in an amount, calculated as of the
last day of each month, which shall not be less than an amount equal to the Loss
Reserve Percentage (determined as of the last day of such month) multiplied by
the aggregate amount of all Net Contract Payments due as of the last day of such
month.
9.21 Borrowing Base Ratio
. The Borrower shall not permit the ratio of (a) the remainder of (i)
all liabilities, obligations, and indebtedness of the Borrower minus (ii) all
Subordinated Debt (numerator) to (b) Borrowing Base Amount (denominator) to be,
at any time, more than: 5 to 1.
55
9.22 Collateral Adjustment Percent. The Borrower shall not permit the
Collateral Adjustment Percent as of the last day of any month to be greater than
twenty-one percent (21%).
9.23 Limitation on Bulk Purchases. Borrower shall not, without Agent's
prior written consent (which Agent may withhold in its sole and absolute
discretion), acquire for a purchase price greater than $500,000 any Contracts as
part of a Bulk Purchase Transaction. The phrase `Bulk Purchase Transaction'
shall mean the purchase, on a group or aggregate basis, of Contracts originated
by third parties, in one or a series of related transactions, from a seller or
affiliated sellers, where Borrower's decision to purchase the Contracts is based
primarily on criteria other than the creditworthiness of the individual Contract
Debtors who are the Contract obligors. Borrower may, without the consent of
Agent, acquire for a purchase price of $500,000 or less Contracts as part of a
Bulk Purchase Transaction provided the Borrower has Availability sufficient to
consummate the Bulk Purchase Transaction prior to, and without giving effect to,
the Bulk Purchase Transaction.
9.24 Intentionally Deleted.
9.25 New Subsidiaries. The Borrower shall not, directly or indirectly,
organize or acquire any Subsidiary other than those listed on Schedule 8.5.
9.26 Restricted Investment. The Borrower shall not make any Restricted
Investment.
9.27 Reporting Methodology. The Borrower shall not amend or modify the
methodology employed by the Borrower in preparing its accounting and financial
reports relating to the presentation of (i) the delinquency of Vehicle
Contracts, (ii) the repossession of Vehicles, (iii) the charge-off of delinquent
Vehicle Contracts and (iv) the unearned insurance commissions and dealer
discounts from the methodology employed by the Borrower as of the Closing Date
so as to change the consistency of the information with respect to such items,
from time to time, provided to Lender.
9.28 Contract Forms. The Borrower shall not use or acquire in its
business Contracts which are not on the printed forms previously approved in
writing by the Lender and the Borrower shall not change or vary the printed
forms of such Contracts without the Lender's prior written consent, unless such
change or variation is required by any Requirement of Law. The Lender may
reasonably withhold its consent until the Lender receives a satisfactory opinion
of the Borrower's counsel regarding compliance of the revised form of Contract
with any Requirement of Law.
9.29 Credit Guidelines. The Borrower shall not make any changes in its
Credit Guidelines (a copy of which has been previously furnished by the Borrower
to the Lender) without the Agent's prior written consent which the Agent may
withhold in its sole and absolute discretion. The Borrower shall not purchase or
otherwise acquire Contracts which do not comply with the Credit Guidelines.
9.30 Extended Warranty Plans. To the extent that the Borrower allows a
Dealer to finance so-called "extended warranty plans," the Borrower shall ensure
that (i) the cost of such plans are disclosed to the Contract Debtors and such
plans are in compliance with all applicable consumer credit laws, including any
and all special insurance laws relating thereto and (ii) such
56
plans are underwritten by (x) a major automobile manufacturer or an Affiliate
thereof, or (y) an independent and financially sound insurance company.
9.31 Charge-Off Policy. Borrower shall establish and implement, all in
a manner satisfactory to Agent, a policy for charging off the unpaid balance of
any Contract upon the occurrence of any default under the terms thereof. Without
limiting the generality of the foregoing, Borrower shall, on the last business
day of each month, charge off (i) the unpaid balance of any Contract with
respect to which any payment due thereunder is 120 days or more past due as
determined on a contractual basis and (ii) the unpaid balance of any Contract
with respect to which the Contract Debtor is the subject of a bankruptcy or
insolvency proceeding. In addition, the policy shall provide that Borrower shall
immediately charge off all Contracts with a deficiency balance and shall charge
off all of the value of any Vehicles which have been repossessed for more than
120 days.
9.32 Further Assurances. The Borrower shall execute and deliver, or
cause to be executed and delivered, to the Agent such documents and agreements,
and shall take or cause to be taken such actions, as the Agent may, from time to
time, request to carry out the terms and conditions of this Agreement and the
other Loan Documents.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date are subject to the following conditions precedent having been satisfied in
a manner satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents shall
have been executed by each party thereto and the Borrower shall have performed
and complied with all covenants, agreements and conditions contained herein and
the other Loan Documents which are required to be performed or complied with by
the Borrower before or on such Closing Date.
(b) Upon making the Revolving Loans (including such
Revolving Loans made to finance the Closing Fee or otherwise as reimbursement
for fees, costs and expenses then payable under this Agreement) and with all its
obligations current, the Borrower would have Availability in an amount no less
than $2,000,000.
(c) All representations and warranties made hereunder and
in the other Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall exist on the
Closing Date, or would exist after giving effect to the Loans to be made
(e) The Agent shall have received:
57
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order to perfect
the Agent's Lien; and
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the Property of the
Borrower and its Subsidiaries except Permitted Liens.
(f) The Borrower shall have paid all fees and expenses of
the Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(g) The Agent shall have received evidence, in form,
scope, and substance, reasonably satisfactory to the Agent, of all insurance
coverage as required by this Agreement.
(h) The Agent and the Lenders shall have had an
opportunity, if they so choose, to examine the books of account and other
records and files of the Borrower and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to the Agent and the Lenders in all
respects.
(i) All proceedings taken in connection with the
execution of this Agreement, all other Loan Documents and all documents and
papers relating thereto shall be satisfactory in form, scope, and substance to
the Agent and the Lenders.
The acceptance by the Borrower of any Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to the
effect that all of the conditions precedent to the making of such Loans have
been satisfied, with the same effect as delivery to the Agent and the Lenders of
a certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 10.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.1, and
(iii) all documents sent to such Lender for approval consent, or satisfaction
were acceptable to such Lender.
10.2 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Revolving Loans on the Closing Date
shall be subject to the further conditions precedent that on and as of the date
of any such extension of credit:
(a) the following statements shall be true, and the
acceptance by the Borrower of any extension of credit shall be deemed to be a
statement to the effect set forth in clauses (i) and (ii), with the same effect
as the delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating that:
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(i) The representations and warranties contained
in this Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though made on and
as of such date, other than any such representation or warranty which relates to
a specified prior date and except to the extent the Agent and the Lenders have
been notified by the Borrower that any representation or warranty is not correct
and the Majority Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default or an
Event of Default; and
(b) The amount of the Borrowing Base shall be sufficient
to make such Revolving Loans without exceeding the Availability, provided,
however, that the foregoing conditions precedent are not conditions to each
Lender participating in or reimbursing the Bank or the Agent for such Lenders'
Pro Rata Share of any Non-Ratable Loan or Agent Advance made in accordance with
the provisions of Sections 2.2(h), (i) and (j).
ARTICLE 11
DEFAULT AND REMEDIES
11.1 Events of Default. It shall constitute an event of default ("Event
of Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrower to pay the principal of
or interest or premium on any of the Obligations or any fee or other amount
owing hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by
the Borrower in this Agreement or by the Borrower or any of its Subsidiaries in
any of the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of the date on
which made, deemed made, or furnished;
(c) any default shall occur in the observance or
performance of any of the covenants and agreements contained in this Agreement,
any other Loan Documents, or any other agreement entered into at any time to
which the Borrower or any Subsidiary and the Agent or any Lender are party
(including in respect of any Bank Products), or if any such agreement or
document shall terminate (other than in accordance with its terms or the terms
hereof or with the written consent of the Agent and the Majority Lenders) or
become void or unenforceable, without the written consent of the Agent and the
Majority Lenders;
(d) default shall occur with respect to any Debt For
Borrowed Money (other than the Obligations) of the Borrower or any of its
Subsidiaries in an outstanding principal amount which exceeds $100,000, or under
any agreement or instrument under or pursuant to which any such Debt For
Borrowed Money may have been issued, created, assumed, or guaranteed by the
Borrower or any of its Subsidiaries, and such default shall continue for more
59
than the period of grace, if any, therein specified, if the effect thereof (with
or without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the holders of any such Debt For Borrowed Money to
accelerate, the maturity of any such Debt For Borrowed Money; or any such Debt
For Borrowed Money shall be declared due and payable or be required to be
prepaid (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof;
(e) the Borrower or any of its Subsidiaries shall (i)
file a voluntary petition in bankruptcy or file a voluntary petition or an
answer or otherwise commence any action or proceeding seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the
federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
act or law, state or federal, now or hereafter existing, or consent to, approve
of, or acquiesce in, any such petition, action or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for it or for all or any part of
its property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition or proposal shall be filed or
an action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing;
(g) a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for the Borrower or any of its
Subsidiaries or for all or any part of its property shall be appointed or a
warrant of attachment, execution or similar process shall be issued against any
part of the property of the Borrower or any of its Subsidiaries;
(h) the Borrower or any of its Subsidiaries shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the
Borrower or any of its Subsidiaries shall be nationalized, expropriated or
condemned, seized or otherwise appropriated, or custody or control of such
property or of the Borrower or such Subsidiary shall be assumed by any
Governmental Authority or any court of competent jurisdiction at the instance of
any Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;
(j) any Guaranty of the Obligations shall be terminated,
revoked or declared void or invalid;
(k) one or more judgments, orders, decrees or arbitration
awards is entered against the Borrower involving in the aggregate liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or unrelated
series of transactions, incidents or conditions, of $100,000 or more,
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and the same shall remain unsatisfied, unvacated and unstayed pending appeal for
a period of 5 days after the entry thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Borrower or any Subsidiary occurs
which could reasonably be expected to cause a Material Adverse Effect and is not
adequately covered by insurance;
(m) there occurs a Material Adverse Effect;
(n) there is filed against the Borrower or any of its
Subsidiaries any action, suit or proceeding under any federal or state
racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (i) is not dismissed
within one hundred twenty (120) days, and (ii) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(o) for any reason other than the failure of the Agent to
take any action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full force and
effect or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected and
prior to all other Liens (other than Permitted Liens) or is terminated, revoked
or declared void;
(p) an ERISA Event shall occur with respect to a Pension
Plan or Multi-employer Plan which has resulted or could reasonably be expected
to result in liability of the Borrower under Title IV of ERISA to the Pension
Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess of
$100,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $100,000; or (iii) the Borrower or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multi-employer Plan in an aggregate amount
in excess of $100,000;
(q) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at any time fails to own at least
twenty-five percent (25%) of the voting stock of ▇▇▇▇▇▇▇▇ Financial, Inc.
("Parent") or that Parent at any time fails to own all of the issued and
outstanding stock of Borrower, or that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at any time fails to
control the Borrower; or
(r) the Borrower's Collateral Adjustment Percent is at
any time greater than twenty-one percent (21%).
11.2 Remedies. (a) If a Default or an Event of Default exists, the
Agent may, in its discretion, and shall, at the direction of the Majority
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower: (i) reduce the Maximum Revolver
Amount, or the advance rates against Eligible Contracts used in computing the
Borrowing Base, or reduce one or more of the other elements used in computing
the Borrowing Base; and (ii) restrict the amount of or refuse to make Revolving
Loans. If an Event of Default exists, the Agent shall, at the direction of the
Majority Lenders, do one or more of the following, in addition to the actions
described in the preceding sentence, at any time or times and in any order,
without notice to or demand on the Borrower: (A) terminate the Commitments and
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this Agreement; (B) declare any or all Obligations to be immediately due and
payable; provided, however, that upon the occurrence of any Event of Default
described in Sections 11.1(e), 11.1(f), 11.1(g), or 11.1(h), the Commitments
shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand of any
kind; and (C) pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) If an Event of Default has occurred and is
continuing: (i) the Agent shall have for the benefit of the Lenders, in addition
to all other rights of the Agent and the Lenders, the rights and remedies of a
secured party under the UCC; (ii) the Agent may, at any time, take possession of
the Collateral and keep it on the Borrower's premises, at no cost to the Agent
or any Lender, or remove any part of it to such other place or places as the
Agent may desire, or the Borrower shall, upon the Agent's demand, at the
Borrower's cost, assemble the Collateral and make it available to the Agent at a
place reasonably convenient to the Agent; and (iii) the Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit or
otherwise, at such prices and upon such terms as the Agent deems advisable, in
its sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new notice of sale.
Without in any way requiring notice to be given in the following manner, the
Borrower agrees that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to the Borrower if such notice
is mailed by registered or certified mail, return receipt requested, postage
prepaid, or is delivered personally against receipt, at least five (5) Business
Days prior to such action to the Borrower's address specified in or pursuant to
Section 15.8. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to the Borrower. In the
event the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, the Borrower irrevocably waives: (A) the posting of any
bond, surety or security with respect thereto which might otherwise be required;
(B) any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license or other right to use, without charge, the Borrower's
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit for
such purpose. The proceeds of sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations. The Agent will
return any excess to the Borrower and the Borrower shall remain liable for any
deficiency.
(c) If an Event of Default occurs, the Borrower hereby
waives all rights to notice and hearing prior to the exercise by the Agent of
the Agent's rights to repossess the Collateral without judicial process or to
reply, attach or levy upon the Collateral without notice or hearing.
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ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date. The Agent upon direction from the Majority Lenders may
terminate this Agreement without notice upon the occurrence of an Event of
Default. Upon the effective date of termination of this Agreement for any reason
whatsoever, all Obligations (including all unpaid principal, accrued and unpaid
interest and any early termination or prepayment fees or penalties) shall become
immediately due and payable. Notwithstanding the termination of this Agreement,
until all Obligations are indefeasibly paid and performed in full in cash, the
Borrower shall remain bound by the terms of this Agreement and shall not be
relieved of any of its Obligations hereunder, and the Agent and the Lenders
shall retain all their rights and remedies hereunder or under any other Loan
Document (including the Agent's Liens in and all rights and remedies with
respect to all then existing and after-arising Collateral).
ARTICLE 13
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrower
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of the Borrowing Base;
(f) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
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(g) release Collateral other than as permitted by Section
14.12 or release any Guaranty of the Obligations;
(h) change the definitions of "Majority Lenders" or "Required
Lenders"; or
(i) increase the Maximum Revolver Amount.
13.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent
(which consent shall not be unreasonably withheld), assign and delegate to one
or more Eligible Assignees (provided that no consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $5,000,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving effect
thereto, such assignor Lender retains a Commitment in a minimum amount of
$5,000,000); provided, however, that the Borrower and the Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender and
the Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in the form of Exhibit F
("Assignment and Acceptance") [together with any note or notes subject to such
assignment] and (iii) the assignor Lender or Assignee has paid to the Agent a
processing fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Borrower to the Agent or any Lender in the Collateral; (ii) such
assigning Lender makes no representation or warranty and assumes no
64
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers, including the
discretionary rights and incidental power, as are reasonably incidental thereto;
and (vi) such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of
Section 13.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of the
Borrower (a "Participant") participating interests in any Loans, the Commitment
of that Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
and subject to the same limitation as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
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ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates
and appoints Bank as its Agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. The Agent agrees to act as
such on the express conditions contained in this Article 14. The provisions of
this Article 14 are solely for the benefit of the Agent and the Lenders and the
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 2.2(i), and (c) the exercise of remedies pursuant to Section 11.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
14.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to
66
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
14.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders (or all Lenders if so required by
Section 13.1) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Majority
Lenders in accordance with Section 11; provided, however, that unless and until
the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other
67
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly herein required to be furnished to the Lenders by the
Agent, the Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower which may come into the possession of any of the Agent-Related Persons.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities as such term is
defined in Section 15.11; provided, however, that no Lender shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
14.8 Agent in Individual Capacity. The Bank and its Affiliates may
make loans to, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Subsidiaries and Affiliates as though the
Bank were not the Agent hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, the Bank or
its Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that the Agent and the
Bank shall be under no obligation to provide such information to them. With
respect to its Loans, the Bank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" include the Bank in its
individual capacity.
14.9 Successor Agent. The Agent may resign as Agent upon 30 days
notice to the Lenders and the Borrower, such resignation to be effective upon
the acceptance of a successor agent to its appointment as Agent. In the event
the Bank sells all of its Commitment and Revolving Loans as part of a sale,
transfer or other disposition by the Bank of substantially all of its loan
portfolio, the Bank shall resign as Agent and such purchaser or transferee shall
become the successor Agent hereunder. If the Agent resigns under this Agreement,
subject to the proviso in the preceding sentence, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Lenders and the
Borrower, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the
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retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 14 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
14.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States of America withholding tax
because it is effectively connected with a United States of America trade or
business of such Lender, two properly completed and executed copies of IRS Form
4224 before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form 1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States
of America withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax.
69
(e) If the IRS or any other Governmental Authority of the
United States of America or other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
14.11 Intentionally Deleted.
14.12 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent,
at its option and in its sole discretion, to release any Agent's Lien upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Loans and all other Obligations; (ii)
constituting property being sold or disposed of if the Borrower certifies to the
Agent that the sale or disposition is made in compliance with Section 9.9 (and
the Agent may rely conclusively on any such certificate, without further
inquiry); (iii) constituting property in which the Borrower owned no interest at
the time the Lien was granted or at any time thereafter; or (iv) constituting
property leased to the Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement. Except as provided
above, the Agent will not release any of the Agent's Liens without the prior
written authorization of the Lenders; provided that the Agent may, in its
discretion, release the Agent's Liens on Collateral valued in the aggregate not
in excess of $100,000 during any one year period without the prior written
authorization of the Lenders. Upon request by the Agent or the Borrower at any
time, the Lenders will confirm in writing the Agent's authority to release any
Agent's Liens upon particular types or items of Collateral pursuant to this
Section 14.12.
(b) Upon receipt by the Agent of any authorization
required pursuant to Section 14.12(a) from the Lenders of the Agent's authority
to release any Agent's Liens upon particular types or items of Collateral, and
upon at least five (5) Business Days prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Agent's Liens
upon such Collateral; provided, however, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens (other than those expressly being released) upon (or
obligations of the Borrower in respect of) all interests retained by the
Borrower, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by the Borrower
or is cared for, protected or insured
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or has been encumbered, or that the Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent pursuant to any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion given the Agent's own interest in the Collateral in its capacity as
one of the Lenders and that the Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing.
14.13 Restrictions on Actions by Lenders; Sharing of Payments. (a)
Each of the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of all Lenders, set off against the Obligations, any amounts owing
by such Lender to the Borrower or any accounts of the Borrower now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it shall
not, unless specifically requested to do so by the Agent, take or cause to be
taken any action to enforce its rights under this Agreement or against the
Borrower, including the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) If at any time or times any Lender shall receive (i)
by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
14.14 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
14.15 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds
71
to each Lender pursuant to wire transfer instructions delivered in writing to
the Agent on or prior to the Closing Date (or if such Lender is an Assignee, on
the applicable Assignment and Acceptance), or pursuant to such other wire
transfer instructions as each party may designate for itself by written notice
to the Agent. Concurrently with each such payment, the Agent shall identify
whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans, or otherwise.
14.16 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into this Agreement and the
other Loan Documents, for the ratable benefit and obligation of the Agent and
the Lenders. Each Lender agrees that any action taken by the Agent, Majority
Lenders or Required Lenders, as applicable, in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Agent, the
Majority Lenders, or the Required Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
14.17 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither the
Bank nor the Agent (i) makes any representation or warranty as to the accuracy
of any Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Agent or the Bank or
other party performing any audit or examination will inspect only specific
information regarding the Borrower and will rely significantly upon the
Borrower's books and records, as well as on representations of the Borrower's
personnel;
(d) agrees to keep all Reports confidential and strictly
for its internal use, and not to distribute except to its participants, or use
any Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including Attorney Costs) incurred by the Agent and any such
other Lender preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying
Lender.
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14.18 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
ARTICLE 15
MISCELLANEOUS
15.1 No Waivers; Cumulative Remedies. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Agent's and each
Lender's rights under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
15.2 Severability. The illegality or unenforceability of any
provision of this Agreement or any Loan Document or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
15.3 Governing Law; Choice of Forum; Service of Process. (a) THIS
AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO
ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF NEW YORK; PROVIDED THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE
AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED
73
HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE
THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY
OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS
FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
15.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
15.5 Survival of Representations and Warranties. All of the
Borrower's representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
15.6 Other Security and Guaranties. The Agent, may, without notice
or demand and without affecting the Borrower's obligations hereunder, from time
to time: (a) take from any
74
Person and hold collateral (other than the Collateral) for the payment of all or
any part of the Obligations and exchange, enforce or release such collateral or
any part thereof; and (b) accept and hold any endorsement or guaranty of payment
of all or any part of the Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Lien in any other
collateral as security for the payment of all or any part of the Obligations, or
any other Person in any way obligated to pay all or any part of the Obligations.
15.7 Fees and Expenses. The Borrower agrees to pay to the Agent,
for its benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes and fees for filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Agent's Liens (including costs and expenses paid or incurred by
the Agent in connection with the consummation of Agreement); (e) sums paid or
incurred to pay any amount or take any action required of the Borrower under the
Loan Documents that the Borrower fails to pay or take; (f) costs and expenses of
forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes; (g) costs and
expenses of preserving and protecting the Collateral; and (h) costs and expenses
(including Attorneys' Costs) paid or incurred to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). Notwithstanding the foregoing, Agent
agrees that no Attorney Costs will be charged to the Borrower in connection with
the closing of the Agreement, other than the Documentation Fee set forth in
Section 3.6. The foregoing shall not be construed to limit any other provisions
of the Loan Documents regarding costs and expenses to be paid by the Borrower.
All of the foregoing costs and expenses shall be charged to the Borrower's Loan
Account as Revolving Loans as described in Section 4.7.
15.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
75
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Borrower:
▇▇▇▇▇▇▇▇ Financial, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, #▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein,
the Borrower waives presentment, and notice of demand or dishonor and protest as
to any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrower which the
Agent or any Lender may elect to give shall entitle the Borrower to any or
further notice or demand in the same, similar or other circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower without prior written consent of
the Agent and each Lender. The rights and benefits of the Agent and the Lenders
hereunder shall, if such Persons so agree, inure to any party acquiring any
interest in the Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) The Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to
76
Indemnified Liabilities resulting solely from the willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
(b) The Borrower agrees to indemnify, defend and hold
harmless the Agent and the Lenders from any loss or liability directly or
indirectly arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal or presence of a hazardous
substance relating to the Borrower's operations, business or property. This
indemnity will apply whether the hazardous substance is on, under or about the
Borrower's property or operations or property leased to the Borrower. The
indemnity includes but is not limited to Attorneys Costs. The indemnity extends
to the Agent and the Lenders, their parents, affiliates, subsidiaries and all of
their directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including petroleum or natural gas. This
indemnity will survive repayment of all other Obligations.
15.12 Limitation of Liability. NO CLAIM MAY BE MADE BY THE BORROWER,
ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE AFFILIATES,
DIRECTORS, OFFICERS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR
BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER
AND EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO ▇▇▇ UPON ANY CLAIM FOR
SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR.
15.13 Final Agreement. This Agreement and the other Loan Documents
are intended by the Borrower, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower and a duly authorized officer of each
of the Agent and the requisite Lenders.
15.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
15.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
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15.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY
OF THE BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN
UNANIMOUS CONSENT OF THE LENDERS.
15.17 Intentionally Deleted .
15.18 Intentionally Deleted.
15.19 Agency of the Parent for each other Borrower. Each of the
other Borrowers appoints the Parent as its agent for all purposes relevant to
this Agreement, including the giving and receipt of notices and execution and
delivery of all documents, instruments and certificates contemplated herein and
all modifications hereto. Any acknowledgement, consent, direction, certification
or other action which might otherwise be valid or effective only if given or
taken by all of the Borrowers or acting singly, shall be valid and effective if
given or taken only by the Parent, whether or not either of the other Borrowers
joins therein.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER"
▇▇▇▇▇▇▇▇ Financial, Inc.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Title: CEO
"AGENT"
Bank of America, N.A., as the Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
____________________, Vice President
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"LENDERS"
Commitment: $45,000,000 Bank of America, N.A., as a Lender
Pro Rata Share: 75%
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
____________________, Vice President
Commitment: $15,000,000 Hibernia National Bank, as a Lender
Pro Rata Share: 25%
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Senior Vice President
79
EXHIBIT A
Intentionally Deleted
1
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
1
EXHIBIT C
INTENTIONALLY DELETED
1
EXHIBIT D
NOTICE OF BORROWING
Date: ______________, __
To: Bank of America, N.A., as Agent for the Lenders who are parties to the
Amended and Restated Loan and Security Agreement dated as of August
_______________, 2000 (as extended, renewed, amended or restated from
time to time, the "Loan and Security Agreement") among ▇▇▇▇▇▇▇▇
Financial, Inc., certain Lenders which are signatories thereto and Bank
of America, N.A., as Agent
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Financial, Inc. (the "Borrower"), refers to
the Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the Borrowing
specified below:
1. The Business Day of the proposed Borrowing is _________, ___.
2. The aggregate amount of the proposed Borrowing is
$_____________.
3. The Borrowing is to be comprised of $_______of Base Rate and
$_________of LIBOR Rate Loans.
The duration of the Interest Period for the LIBOR Rate Loans, if any,
included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained
in the Loan and Security Agreement are true and correct as though made on and as
of such date;
(b) No Default or Event of Default has occurred and is continuing,
or would result from such proposed Borrowing; and
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(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans to exceed the Borrowing Base or the
combined Commitments of the Lenders.
▇▇▇▇▇▇▇▇ FINANCIAL, INC.
By:_____________________________
Title:__________________________
2
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
Date: August , 2000
To: Bank of America, N.A., as Agent for the Lenders to the Amended and
Restated Loan and Security Agreement dated as of August _________, 2000
(as extended, renewed, amended or restated from time to time, the "Loan
and Security Agreement") among ▇▇▇▇▇▇▇▇ Financial, Inc., certain
Lenders which are signatories thereto and Bank of America, N.A., as
Agent
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇ Financial, Inc. (the "Borrower"), refers to
the Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Continuation/Conversion Date is _________, ___.
2. The aggregate amount of the Loans to be [converted]
[continued] is $_________.
3. The Loans are to be [converted into] [continued as] [LIBOR
Rate] [Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans
included in the [conversion] [continuation] shall be ____
months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed Continuation/Conversion
Date, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) The representations and warranties of the Borrower
contained in the Loan and Security Agreement are true and correct as though made
on and as of such date;
(b) No Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation]; and
The proposed conversion-continuation will not cause the aggregate principal
amount of all outstanding Revolving Loans to exceed the Borrowing Base or the
combined Commitments of the Lenders.
▇▇▇▇▇▇▇▇ FINANCIAL, INC.
1
By:_____________________________
Title:__________________________
2
EXHIBIT F
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, __ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Amended and Restated
Loan and Security Agreement dated as of August ________, 2000 (as amended,
amended and restated, modified, supplemented or renewed, the "Credit Agreement")
among ▇▇▇▇▇▇▇▇ Financial, Inc., a Florida corporation (the "Borrower"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Lenders"), and Bank of America, N. A., as agent for the Lenders
(the "Agent"). Any terms defined in the Credit Agreement and not defined in this
Assignment and Acceptance are used herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor
has committed to making Loans (the "Committed Loans") to the Borrower in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the
aggregate principal amount of $__________ to the Borrower;
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the Credit Agreement
in respect of its Commitment, together with a corresponding portion of each of
its outstanding Committed Loans, in an amount equal to $__________ (the
"Assigned Amount") on the terms and subject to the conditions set forth herein
and the Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this
Assignment and Acceptance, (i) the Assignor hereby sells, transfers and assigns
to the Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes
from the Assignor, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance) __% (the "Assignee's
Percentage Share") of (A) the Commitment and the Committed Loans and (B) all
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
(b) With effect on and after the Effective Date (as
defined in Section 5 hereof), the Assignee shall be a party to the Credit
Agreement and succeed to all of the rights and
1
be obligated to perform all of the obligations of a Lender under the Credit
Agreement, including the requirements concerning confidentiality and the payment
of indemnification, with a Commitment in an amount equal to the Assigned Amount.
The Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender. It is the intent of the parties hereto that the
Commitment of the Assignor shall, as of the Effective Date, be reduced by an
amount equal to the Assigned Amount and the Assignor shall relinquish its rights
and be released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee; provided, however, the
Assignor shall not relinquish its rights under Sections __ and __ of the Credit
Agreement to the extent such rights relate to the time prior to the Effective
Date.
(c) After giving effect to the assignment and assumption
set forth herein, on the Effective Date the Assignee's Commitment will be
$__________.
(d) After giving effect to the assignment and assumption
set forth herein, on the Effective Date the Assignor's Commitment will be
$__________.
2. Payments.
(a) As consideration for the sale, assignment and
transfer contemplated in Section 1 hereof, the Assignee shall pay to the
Assignor on the Effective Date in immediately available funds an amount equal to
$__________, representing the Assignee's Pro Rata Share of the principal amount
of all Committed Loans.
(b) The Assignee further agrees to pay to the Agent a
processing fee in the amount specified in Section (__) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment, and the Committed Loans shall be for the account
of the Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of the Borrower, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.
2
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the
effective date for this Assignment and Acceptance shall be __________, __ (the
"Effective Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be
executed and delivered by the Assignor and the Assignee;
[(ii) the consent of the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect as of the
Effective Date;]
(iii) the Assignee shall pay to the Assignor all
amounts due to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with
Section (_) of the Credit Agreement (if applicable);]
(v) the processing fee referred to in Section
2(b) hereof and in Section of the Credit Agreement shall have been paid to the
Agent; and
(b) Promptly following the execution of this Assignment
and Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.
6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the
Assignor to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Agent by the Lenders pursuant
to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations
held by the Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the Agent and
the Borrower that under applicable law and treaties no tax will be required to
be withheld by the Lender with respect to any payments to be made to the
Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the Borrower prior to the time that the Agent or Borrower is required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with applicable U.S. law and regulations and
amendments thereto, duly
3
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any Lien or other adverse claim;
(ii) it is duly organized and existing and it has the full power and authority
to take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance
and to fulfill its obligations hereunder; (iii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignor, enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Borrower, or the performance or observance by the Borrower,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is
duly organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; [and (iv) it is an
Eligible Assignee.]
9. Further Assurances.
4
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation, preparation,
execution and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be ____
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ______ [NOTE: CONFIRM
CHOICE OF LAW]. The Assignor and the Assignee each irrevocably submits to the
non-exclusive jurisdiction of any State or Federal court sitting in [_] over any
suit, action or proceeding arising out of or relating to this Assignment and
Acceptance and irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such [_] State or Federal court. Each
party to this Assignment and Acceptance hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
5
By:______________________________________
Title:___________________________________
By:______________________________________
Title:___________________________________
Address:_________________________________
[ASSIGNEE]
By:______________________________________
Title:___________________________________
By:______________________________________
Title:___________________________________
Address:_________________________________
6
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________,__
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ________________
Re: ▇▇▇▇▇▇▇▇ Financial, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, #▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We refer to the Amended and Restated Loan and Security Agreement dated
as of August ___, 2000 (as amended, amended and restated, modified, supplemented
or renewed from time to time the "Credit Agreement") among ▇▇▇▇▇▇▇▇ Financial,
Inc. (the "Borrower"), the Lenders referred to therein and Bank of America, N.
A., as agent for the Lenders (the "Agent"). Terms defined in the Credit
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including the right, title and interest of the Assignor in
and to the Commitments of the Assignor, all outstanding Loans made by the
Assignor pursuant to the Assignment and Acceptance Agreement attached hereto
(the "Assignment and Acceptance"). We understand and agree that the Assignor's
Commitment, as of , ____, is $ ___________, and the aggregate amount of its
outstanding Loans is $____________.
2. The Assignee agrees that, upon receiving the consent of the
Agent and, if applicable, the Borrower to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee were the Lender originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: ___________________________
Address: _________________________________
_________________________________
7
_______________________________
Attention: _______________________________
Telephone: (___) _________________________
Telecopier: (___) ________________________
Telex (Answerback): ______________________
(B) Payment Instructions:
Account No.: _____________________________
At: _____________________________
_____________________________
_____________________________
Reference: _____________________________
Attention: _____________________________
4. You are entitled to rely upon the representations, warranties
and covenants of each of the Assignor and Assignee contained in the Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:__________________________________
Title:_______________________________
[NAME OF ASSIGNEE]
By:__________________________________
Title:_______________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
8
Bank of America, N. A.
as Agent
By:__________________________________
Title:_______________________________
9