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LOAN AND SECURITY AGREEMENT
Granite Financial, Inc.
with
CoreStates Bank, N.A., as
Agent and
Each of the Financial Institutions Now or
Hereafter Shown on the Signature Pages hereof
as Lenders
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION 1
1.1 Terms Defined 1
1.2 Accounting Principles 8
SECTION 2. THE LOANS 9
2.1 Credit Facility - Description 9
2.2 Advances, Conversions and Payments 10
2.3 Preconditions to Advances and Assignment
of Leases and Leased Property 12
2.4 Credit Facility Interest 13
2.5 Additional Interest Provisions. 14
2.6 Fees 14
2.7 Prepayments 15
2.8 Use of Proceeds 16
2.9 Capital Adequacy 16
SECTION 3. COLLATERAL 16
3.1 Description 16
3.2 Lien Documents 16
3.3 Other Actions 17
3.4 Searches 17
3.5 Filing Security Agreement 18
3.6 Power of Attorney 18
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES 18
4.1 Resolutions, Opinions, and Other Documents 18
4.2 Absence of Certain Events 19
4.3 Warranties and Representations at Closing 20
4.4 Compliance with this Agreement 20
4.5 Officers' Certificate 20
4.6 Closing 20
4.7 Non-Waiver of Rights 20
SECTION 5. REPRESENTATIONS AND WARRANTIES 20
5.1 Organization and Validity 20
5.2 Places of Business 21
5.3 Pending Litigation 21
5.4 Title to Collateral 22
5.5 Governmental Consent 22
5.6 Taxes 22
5.7 Financial Statements 22
5.8 Full Disclosure 22
5.9 Subsidiaries 23
5.10 Guarantees; Other Indebtedness 23
5.11 Government Regulations, etc. 23
5.12 Names 24
5.13 Other Associations 24
5.14 Environmental Matters 24
5.15 Capital Stock 25
5.16 Solvency 25
5.17 Leases and Leased Property 25
SECTION 6. BORROWER'S AFFIRMATIVE COVENANTS 29
6.1 Payment of Taxes and Claims 29
6.2 Maintenance of Properties and Corporate
Existence 29
6.3 Business Conducted 30
6.4 Litigation 30
6.5 Taxes 30
6.6 Bank Accounts 31
6.7 Warranties for Future Advances 31
6.8 Financial Covenants 31
6.9 Financial and Business Information 32
6.10 Officers' Certificates 34
6.11 Inspection 34
6.12 Tax Returns and Reports 35
6.13 Material Adverse Developments 35
6.14 Places of Business 35
6.15 Sale of Collateral 35
6.16 Receipt of Payments 35
SECTION 7. BORROWER'S NEGATIVE COVENANTS: 36
7.1 Merger, Consolidation, Dissolution or
Liquidation 36
7.2 Liens and Encumbrances 36
7.3 Negative Pledge 36
7.4 Transactions With Affiliates or Subsidiaries 37
7.5 Guarantees 37
7.6 Distributions, Redemptions and Other
Indebtedness 37
7.7 Use of Lenders' Name 37
7.8 Change of Management 37
SECTION 8. DEFAULT 38
8.1 Events of Default 38
8.2 Cure 40
8.3 Rights and Remedies on Default 40
8.4 Nature of Remedies 42
8.5 Set-Off 42
SECTION 9. AGENT 42
9.1 Appointment and Authorization 42
9.2 General Immunity 43
9.3 Consultation with Counsel 43
9.4 Documents 43
9.5 Rights as a Bank 43
9.6 Responsibility of Agent 43
9.7 Collections and Disbursements 44
9.8 Indemnification 45
9.9 Expenses 46
9.10 No Reliance 46
9.11 Reporting 46
9.12 Removal of Agent 46
9.13 Action on Instructions of Lenders 47
9.14 Several Obligations 47
9.15 Consent of Banks 47
9.16 Participations and Assignments 49
SECTION 10. MISCELLANEOUS 49
10.1 GOVERNING LAW 49
10.2 Integrated Agreement 49
10.3 Waiver 49
10.4 Time 50
10.5 Expenses of Agent 50
10.6 Brokerage 50
10.7 Notices 51
10.8 Headings 51
10.9 Survival 51
10.10 Successors and Assigns 52
10.11 Counterparts 52
10.12 Modification
52
10.13 Signatories
52
10.14 Third Parties
52
10.15 Discharge of Taxes, Borrower's Obligations,
Etc.
52
10.16 Most Favored Lenders
53
10.17 Consent to Jurisdiction
53
10.18 Waiver of Jury Trial
53
10.19 WARRANT OF ATTORNEY
53
10.20 Information to Participant
54
EXHIBIT LIST
Exhibit 2.1(b) -- Form of Revolving Credit Note
Exhibit 2.1(d) -- Form of Borrowing Base
Certificate
Exhibit 2.3(b)(ii) -- Form of Assignment Agreement
Exhibit 5.1 -- Borrower's States of
Qualifications
Exhibit 5.2 -- Places of Business
Exhibit 5.3 -- Judgments, Proceedings, Litigation
and Orders
Exhibit 5.9 -- Subsidiaries and Affiliates
Exhibit 5.10 -- Existing Guaranties, Investments
and Borrowings, Leases and Employment Agreements
Exhibit 5.12(a) -- Schedule of Names
Exhibit 5.12(b) -- Trademarks, Patents and
Copyrights
Exhibit 5.13 -- Other Associations
Exhibit 5.14 -- Environmental
Matters
Exhibit 5.15 -- Capital Stock
Exhibit 5.17 -- Form of Lease
Exhibit 6.9(ii) -- Form of
Receivables Aging Report
Exhibit 6.9(vi) -- Covenant Compliance
Certificate
Exhibit 6.10 -- Officers' Certificates
SCHEDULES
Schedule A -- Schedule and Addresses of Lenders
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement ("Agreement") is dated
this 4th day of February, 1997, by and among Granite Financial,
Inc., a Delaware corporation ("Borrower"), CoreStates Bank,
N.A., a national banking association in its capacity as agent
("Agent"), and CoreStates Bank, N.A. ("CoreStates") and the
financial institutions listed on Schedule A attached hereto and
made a part of this Agreement (as such Schedule may be amended,
modified or replaced from time to time), in their capacity as
lenders (singly, each is a "Lender" and collectively, all are
"Lenders").
BACKGROUND
A. Borrower wishes, from time to time, to obtain advances
from Lenders up to the Maximum Credit Limit. Lenders are
willing to make loans and grant extensions of credit to Borrower
under the terms and provisions hereinafter set forth.
B. The parties desire to define the terms and conditions
of their relationship to writing.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Terms Defined: As used in this Agreement, the
following terms have the following respective meanings and if a
Section reference follows any such term below, the meaning
ascribed thereto in such Section.
Account - Any right to payment for goods sold or
leased or for services rendered which is not evidenced by an
Instrument or Chattel Paper, whether or not it has been earned
by performance.
Additional Facility Fee - Section 2.6(d).
Adjusted Debt to Tangible Net Worth Ratio - At any
time means the ratio of Borrower's (i) total Liabilities less
Nonrecourse Debt to (ii) Tangible Net Worth.
Advance(s) - Any monies loaned or credit extended to
Borrower by any Lender under the Credit Facility.
Affiliate - As to any Person, each other Person that
directly, or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with,
the Person in question.
Agent Fee - Section 2.6(c).
Agreement - This Loan and Security Agreement, as it
may hereafter be amended, supplemented, extended or replaced
from time to time.
Assignment Agreement - Section 2.3(b)(ii).
Authorized Officer - Any officer of Borrower
authorized by specific resolution of Borrower to request
Advances as set forth in the incumbency certificate referred to
in Section 4.1(d) of this Agreement.
Available Credit Amount - As of any date of
determination, an amount equal to the lesser of:
(i) the Maximum Credit Limit, and
(ii) the Borrowing Base.
Base Rate - A per annum fluctuating rate of interest
which is five eighths (5/8) of one percentage point in excess of
the Prime Rate.
Books and Records - All of Borrower's original ledger
cards, payment schedules, credit applications, Contract Rights,
liens, security instruments, guarantees and other General
Intangibles relating in any way to the Leases or Leased
Property.
Borrowing Base - As of any date of determination, an
amount equal to the lesser of the following with respect to each
Eligible Lease, (x) 75% of the Lease Receivables corresponding
to each such Eligible Lease, and (y) 95% of the Present Value of
the Lease Receivables corresponding to each such Eligible Lease.
Business Day - Any day that is not a Saturday or
Sunday or day on which Agent or any Lender is required or
permitted to close.
Chattel Paper - The meaning ascribed thereto in the
Pennsylvania Uniform Commercial Code.
Closing - Section 4.6.
Closing Date - Section 4.6.
Closing Fee - Section 2.6(b).
Collateral - All now or hereafter existing Leases and
Leased Property, Books and Records and all cash and noncash
proceeds, thereof, including, without limitation, insurance
proceeds.
Contract Rights - All rights under contracts not yet
earned by performance.
Credit Facility - Section 2.1(a).
Current Term - The Initial Term during the period of
the Initial Term, and any renewal or extended term during the
term thereof, if Lenders elect, in their sole discretion, to
renew or extend the Credit Facility.
Defaulted Lease - Any Lease where the Lease or Leased
Property associated therewith fails, at any time, to comply with
all of the representations and warranties set forth in Section
5.17 below.
Defaulting Lender - Section 2.2(b)(iii)(C).
Distribution -
(1) The payment of dividends or other distributions
on capital stock of Borrower; and
(2) The redemption, repurchase or acquisition of
such capital stock or of warrants, rights or other options to
pur chase such capital stock.
Documents - The meaning ascribed thereto in the
Pennsylvania Uniform Commercial Code.
Eligible Lease(s) - Each Lease which meets all of the
following specifications: (1) is not subject to any Lien,
security interest or assignment other than Agent's security
interest for the benefit of Lenders and the rights of the
Lessees thereunder; (2) is a valid and enforceable Lease,
representing the undisputed obligation of the Lessee, with
rentals due thereunder not more than 61 days contractually past
due; (3) is not subject to any defense, set off, counterclaim,
deduction, or allowance or adjustment; (4) provides for the
lease of Leased Property which has not been returned, rejected,
lost or damaged; (5) arose in the ordinary course of Borrower's
business; (6) Borrower has not received notice of bankruptcy,
receivership, reorganization, insolvency or material adverse
change in the financial condition of the Lessee; (7) the Lessee
is not a Subsid iary or Affiliate of Borrower; (8) is not a
Defaulted Lease; (9)
the Lease does not have an initial stated term in excess of
sixtyfive (65) months; (10) the Lease has not been pledged to
Agent and/or Lenders for a period exceeding, in the aggregate,
six (6) months; and (11) is a Lease with a Lease Receivable,
which together with all other Lease Receivables owed by the same
Lessee, does not exceed $200,000 in the aggregate, unless
otherwise agreed to in writing by the SuperMajority Lenders.
Equipment - The meaning ascribed thereto in the
Pennsylvania Uniform Commercial Code.
ERISA - The Employee Retirement Income Security Act of
1974, as the same may be amended, from time to time.
Event of Default - Section 8.1.
Exchange Act - The Securities Exchange Act of 1934, as
amended, together with all rules and regulations in connection
therewith.
Expenses - Section 10.5.
Federal Funds Rate - means a fluctuating interest rate
per annum equal, for each day, to the weighted average of the
rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next succeeding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by the
Agent.
Financial Statements - The financial statements of
Borrower prepared in accordance with GAAP.
GAAP - Generally accepted accounting principles as in
effect on the Closing Date, as they may be amended from time to
time.
General Intangibles - The meaning ascribed thereto in
the Pennsylvania Uniform Commercial Code and shall include, but
not be limited to, all contract rights (including without
limitation, all rights under remarketing agreements), Chattel
Paper, documents, Instruments, books, records, ledgers,
journals, check books, print outs, blue prints, designs,
computer programs, computer tapes, punch cards, formulae,
drawings, customer lists,
choses in action, claims, goodwill, designs and plans,
licenses, license agreements, tax and all other types of
refunds, returned and unearned insurance premiums, rights and
claims under insurance policies, patents, patent application,
trademarks, trade names, trade styles, trademark applications
and copyrights.
Hazardous Substance - Section 5.14.
Initial Term - Section 2.1(c).
Instruments - The meaning ascribed thereto in the
Pennsylvania Uniform Commercial Code.
Intercreditor Agreement - The Granite Lock Box
Intercreditor Agreement dated January 24, 1997 by and among
Borrower, Agent, Colorado National Bank, FBS Business Finance
Corporation, Leasing Division, Norwest Equipment Finance, Inc.,
and the other parties joining therein, from time to time, in
accordance with the terms thereof, as the same may be amended,
modified, restated or supplemented from time to time.
Inventory - The meaning ascribed thereto in the
Pennsylvania Uniform Commercial Code and shall include, but not
be limited to, all additions, improvements, accessions,
attachments, upgrades, replacements and substitutions thereto
or therefor.
Lease(s) - All of Borrower's Accounts, Documents,
General Intangibles, Instruments and Chattel Paper arising in
connection with each and every equipment lease and/or schedule
to a master lease agreement assigned to Lenders and/or Agent
for the benefit of Lenders, or now or hereafter designated on
any schedule as being assigned to Lenders and/or Agent for the
benefit of Lenders. The term "Lease" includes (i) all payments
to be made thereunder, (ii) all rights of Borrower therein, and
(iii) any and all amendments, renewals, extensions or
guarantees thereof.
Lease Receivable(s) - With respect to each Lease, the
gross value of the contractual firm term remaining lease
payments plus the absolute and unconditional obligation, if
any, of the corresponding Lessee to make a payment(s) at the
end of the stated Lease term.
Leased Property - Any personal property leased or to
be leased or financed by Borrower pursuant to a Lease; the term
"Leased Property" includes all of Borrower's Inventory or
Equipment so leased and any and all additions, improvements,
accessions, attachments, upgrades, replacements and
substitutions thereto and therefor.
Lessee - The lessee(s) or obligor(s) responsible for
payment and/or performance under a Lease.
Liabilities - All liabilities of every kind of
Borrower and its Subsidiaries as would be shown on a
consolidated financial statement of Borrower prepared in
accordance with GAAP, and all contingent and unmatured
obligations of Borrower and its Subsidiaries pursuant to any
and all guarantee, surety or similar type agreements relating
to the debts of Persons outside of the consolidated group.
Lien - Any interest of any kind or nature in property
securing an obligation owed to, or a claim of any kind or
nature in property by, a Person other than the owner of the
Property, whether such interest is based on the common law,
statute,
regulation or contract, and including, but not limited to, a
security interest or lien arising from a mortgage, security
agreement, encumbrance, pledge, conditional sale or trust
receipt, a lease, consignment or bailment for security
purposes, a trust, or an assignment.
Loans - All Revolving Credit Loans.
Loan Documents - This Agreement, the Revolving Credit
Notes and all agreements, instruments and documents executed
and/or delivered from time to time in connection therewith, as
amended or replaced from time to time.
Maturity Date - The later of (i) the date which is
one (1) year from the date hereof or (ii) the last day of the
then Current Term.
Maximum Credit Limit - The sum of the Pro Rata Shares
which at the time of Closing equals Thirty-Six Million Dollars
($36,000,000).
Net Income - The net income after taxes of Borrower
as such would appear on Borrower's statement of income,
prepared in accordance with GAAP.
Net Worth - At any time means the amount of
shareholder equity in Borrower, as defined under GAAP.
Nonrecourse Debt - All Liabilities of Borrower which
are non-recourse in nature and treated as non-recourse
obligations on Borrower's Financial Statements. The term "Non
recourse Debt" shall not include the recourse portion of any
partially recourse Liabilities whether or not such Liabilities
are shown on a balance sheet of Borrower prepared in accordance
with GAAP.
Obligations - All existing and future liabilities and
obligations of every kind or nature at any time owing by
Borrower to Lenders (or any of them) and/or to Agent, whether
joint or several, related or unrelated, primary or secondary,
matured or contingent, due or to become due, and whether
principal, interest, fees or Expenses, including, without
limitation, obligations in respect of the Revolving Credit
Loans and any extensions, modifications, substitutions,
increases and renewals thereof, and Borrower's unconditional
obligation to reimburse Agent and/or Lenders for all fees paid
by Agent and/or Lenders pursuant to Section 8 of the
Intercreditor Agreement, and the payment of all reasonable
amounts advanced by Agent (or any Lender after the occurrence
of an Event of Default) to preserve, protect and enforce rights
hereunder and in the Collateral and all Expenses incurred by
Agent (or any Lender after the occurrence of an Event of
Default) in connection therewith.
Pennsylvania Uniform Commercial Code or UCC - The
Uniform Commercial Code as enacted in Pennsylvania, as the same
shall be amended from time to time.
Person - An individual, partnership, corporation,
limited liability company, trust, unincorporated association or
organization, joint venture or any other entity.
Present Value - The value, from time to time, as of
the date of determination, of the remaining Lease Receivables
due under a Lease, discounted using the Base Rate. Present
Value calculations shall fluctuate from time to time as the
Base Rate changes, with such fluctuations to be reflected in
calculating
the Borrowing Base hereunder.
Prime Rate - The per annum rate designated or
announced by Agent at its principal office from time to time as
its prime rate of interest, which may be greater or less than
other interest rates charged by Agent to other borrowers and is
not solely based or dependent upon the interest rate which
Agent may charge any particular borrower or class of borrowers.
Pro Rata Percentage - Section 2.1(a)(ii).
Pro Rata Share - Section 2.1(a)(ii).
Property - Any interest of Borrower in any kind of
property or asset, whether real, personal or mixed, or tangible
or intangible.
Revolving Credit Loans - Section 2.1(a).
Revolving Credit Notes - Section 2.1(b).
Securitization Transaction - Any transaction, for
which Agent has received 30 days prior written notice, using,
in part, leases or leased Property to secure promissory notes
issued by Borrower or a special purpose subsidiary of Borrower
and in connection with which, Borrower will be subject to
limited recourse arising out of a servicing agreement or no
recourse.
Subsidiary - As to any Person, any corporation more
than fifty percent (50%) of whose voting stock is legally and
beneficially owned by such Person or owned by a corporation
more than fifty percent (50%) of whose voting stock is legally
and beneficially owned by such Person.
SuperMajority Lenders - At any time, Lenders holding
Pro Rata Percentages aggregating at least sixty-six and two
thirds (66-2/3%) percent of the aggregate amount outstanding
under the Credit Facility at such time; provided, however, that
if there is no outstanding amount under the Credit Facility,
the SuperMajority Lenders shall be determined by those Lenders
holding sixty-six and two-thirds (66-2/3%) percent of the
Maximum Credit Limit.
Tangible Net Worth - At any time means the amount of
shareholder equity in Borrower (excluding trademarks, goodwill,
deferred closing costs, loans to shareholders or Affiliates and
all other intangible assets, as those terms are defined under
GAAP and further excluding an amount equal to twenty-five
percent (25%) of all restricted cash pledged as collateral in
connection with Securitization Transaction(s)).
Unmatured Event of Default - An event or condition
which, with the passage of time, the giving of notice, or both
would become an Event of Default.
Unused Line Fee - Section 2.6(a).
1.2 Accounting Principles: Where the character or amount
of any asset or liability or item of income or expense is
required to be determined or any consolidation or other
accounting computation is required to be made for the purposes
of this Agreement, this shall be done in accordance with GAAP,
to the extent applicable, except as otherwise expressly
provided in this Agreement.
SECTION 2. THE LOANS
2.1 Credit Facility - Description:
(a) (i) Subject to the terms and conditions of
this Agreement, each Lender, severally, hereby establishes for
the benefit of Borrower a credit facility (collectively
referred to as "Credit Facility") which shall include Advances
extended by Lenders to or for the benefit of Borrower from time
to time hereunder in the form of revolving credit loans
("Revolving Credit Loans"). The proceeds of all Revolving
Credit Loans shall be used solely to finance the acquisition of
Leased Property or Leases. The aggregate outstanding principal
amount of all Loans, at any time, shall not exceed the
Available Credit Amount. Subject to such limitation, the
outstanding balance of all Revolving Credit Loans may fluctuate
from time to time, to be reduced by repayments made by Borrower
and to be increased by future Revolving Credit Loans which may
be made by Lenders. The obligations of Borrower under the
Credit Facility and this Agreement shall at all times be
absolute and unconditional.
(ii) Subject to the terms and conditions of
this Agreement, each Lender, severally, agrees to lend to
Borrower an amount equal to such Lender's respective percentage
(as to each Lender, the percentage of the Credit Facility set
forth opposite its name on Schedule A attached hereto and made
a part hereof and referred to as its "Pro Rata Percentage") of
the Advance requested by Borrower. The aggregate outstanding
Loans by each Lender shall not exceed the respective amount
("Pro Rata Share") set forth opposite such Lender's name on
Schedule A.
(b) At Closing and contemporaneously with the
joinder of any Lender after the Closing Date, Borrower shall
execute and deliver its promissory note to each Lender for the
total principal amount of such Lender's Pro Rata Share
(collectively as may be amended, modified or replaced from time
to time, the "Revolving Credit Notes"). The Revolving Credit
Notes shall evidence Borrower's absolute and unconditional
obligation to repay such Lender(s) for all Revolving Credit
Loans made by such Lender(s) under the Credit Facility, with
interest as herein and therein provided. Each and every
Revolving Credit Loan under the Credit Facility shall be deemed
evidenced by the Revolving Credit Notes, which are deemed
incorporated herein by reference and made a part hereof. All
Revolving Credit Notes shall be substantially in the form set
forth in Exhibit 2.1(b) attached hereto and made a part hereof.
(c) The term ("Initial Term") of the Credit
Facility shall expire on the day which is one (1) year from the
date hereof. In Lenders' sole discretion, without any
obligation to do so, the Credit Facility may, nonetheless, be
renewed annually for additional one year periods. Borrower's
request for such renewal must be made at least 60 days prior to
the expiration of the then Current Term. After the Maturity
Date no further Advances shall be available from Lenders.
Borrower acknowledges that no Lender has any obligation to
renew its part of the Credit Facility.
(d) Borrower shall deliver, at least monthly on
the tenth (10th) day of each month, and with each borrowing
request, unless Agent requests more frequent delivery, a
Borrowing Base Certificate in the form of Exhibit 2.1(d)
attached hereto and made a part hereof, executed by an
Authorized Officer, evidencing availability under the Borrowing
Base for any such borrowing request.
2.2 Advances, Conversions and Payments:
(a) Except to the extent otherwise set forth in this
Agreement, all payments of principal and of interest on the
Credit Facility, the Unused Line Fee, the Closing Fee, the
Additional Facility Fee, the Agent Fee, the Expenses, and all
other charges and any other Obligations of Borrower hereunder,
shall be made to Agent at its main Philadelphia banking office,
CoreStates Bank, N.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ dollars, in immediately
available funds. Agent, on behalf of all Lenders, shall have
the unconditional right and discretion to make an Advance under
the Credit Facility in the form of a Revolving Credit Loan
(whether or not availability exists under the Borrowing Base)
to pay, and/or to charge Borrower's operating account with
Agent, for all of Borrower's Obligations as they become due
from time to time under this Agreement, including without
limitation, interest, principal, fees and reimbursement of
Expenses.
(b)(i) Advances which may be made by Lenders from
time to time under the Credit Facility shall be made available
by crediting such proceeds to Borrower's operating account with
Agent.
(ii) Each Advance requested by Borrower must be
requested by 11:00 A.M. Eastern time, one (1) Business Day
prior to the date of such requested Advance. All requests and
confirmations of requests for Advances are to be in writing and
may be sent by telecopy or facsimile transmission provided that
Agent shall have the right to require that receipt of such
request not be effective unless confirmed via telephone with
Agent.
(iii) A. Upon receiving a request for an Advance
in accordance with subparagraph (ii) above, as soon as
reasonably practical thereafter, Agent shall notify all Lenders
of the request. Each Lender shall advance its applicable Pro
Rata Percentage of the requested Advance to Agent by remitting
federal funds, immediately available, to Agent pursuant to
Agent's instructions prior to 11:00 A.M. Eastern Time on the
scheduled date of the Advance. Subject to satisfaction of the
terms and conditions hereof, Agent shall make the requested
Advance available to Borrower by crediting such amount to
Borrower's operating account with Agent as soon as is
reasonably practical thereafter on the day the requested
Advance is to be made. In lieu of the foregoing, Agent may, in
its discretion, fund the Pro Rata Percentage of such Advance on
behalf of any one or more Lenders (unconditionally and
absolutely obligating each affected Lender to reimburse Agent
in full without deduction or setoffs for its portion of such
Advance) with a settlement of the Pro Rata Percentage of such
Advance of each Lender on the following Business Day under such
procedures as Agent may establish.
B. Neither Agent nor any other Lender
shall be obligated for any reason whatsoever to advance the
share of any other Lender. If such corresponding amount is not
made available to Agent by such Lender on the date the Advance
is made and Agent elects (at its discretion, without any
obligation to do so) to make such Lender's Pro Rata Percentage
of the Advance, Agent shall be entitled to recover such amount
on demand from such Lender together with interest at the per
annum rate equal to the Federal Funds Rate in respect of the
first two days and at the Base Rate in respect of each day
thereafter during the period commencing 2:00 P.M. Eastern Time
on the date of such Advance and ending on (but excluding) the
date Agent recovers such amount. Agent shall also be entitled
to recover any and all losses and damages (including without
limitation, reasonable attorneys' fees
and costs) from any Lender failing to so advance upon demand of
Agent. Agent may set off the obligations of a Lender under
this subsection against any distributions or payments of the
Obligations which Agent would otherwise make available to such
Lender.
C. To the extent and during the time
period in which any Lender fails to provide or delays providing
its respective payment to Agent pursuant to subsections A or B
above (any such Lender being referred to, during such period,
as a "Defaulting Lender"), such Lender's percentage of all
payments of the Obligations (but not its Pro Rata Percentage of
future Advances required to be funded by such Lender) shall
decrease to reflect the actual percentage which its actual
outstanding Loans bears to the total outstanding Loans of all
Lenders. In addition, notwithstanding any definition or other
provision of this Agreement to the contrary except Section
9.15(b) herein, during any period in which a Lender is a
Defaulting Lender, all calculations for voting purposes among
the Lenders shall be made as if the Defaulting Lender were not
a Lender and not a party to this Agreement except when
calculating votes on the issues enumerated in Section 9.15(b)
herein, for which each Lender shall have a vote regardless of
whether it is a Defaulting Lender at the time of any vote on
such issues.
2.3 Preconditions to Advances and Assignment of
Leases and Leased Property
(a) Before Lenders will make any Advance:
(i) Borrower will deliver to Agent the following
(dated and signed) in form and substance satisfactory to Agent
and its counsel:
A. A borrowing request setting forth the
requested date of the Advance (but no sooner than three (3)
Business Days after Agent receives the request), the requested
Advance amount, a Borrowing Base Certificate in the form
attached hereto as Exhibit 2.1(d) setting forth the
availability under the Borrowing Base, any information required
by this Agreement and such other information as Agent shall
reasonably request. A borrowing request may be made orally,
provided that Borrower confirms the request in writing within
two (2) days thereafter, provided further, however, that
Lenders need not make any Advances until Agent receives actual
written confirmation and a Borrowing Base Certificate,
B. Such financial information concerning any
of the Leases, Borrower or any Lessee, as Agent may reasonably
request, and
C. Such other instruments, agreements and
documents as Agent reasonably requests to carry out the intent
of the parties to this Agreement.
(ii) No Event of Default or Unmatured Event of
Default shall have occurred hereunder.
(b) In order to increase the Borrowing Base,
Borrower shall deliver to Agent, for the benefit of Lenders,
the following items:
(i) A list of Leases being assigned and a
description of all such Leases, which shall include
identification of the Lessee, a description of the Leased
Property, the net cost of the Leased Property, the net
remaining principal balance under the Lease(s), and the terms
of and rentals owed under each Lease, and such other
information which Agent or Lenders shall reasonably request,
(ii) An Assignment Agreement signed by Borrower
assigning Borrower's right, title and interest in and to the
Leased Property and Leases to Agent for the benefit of Lenders,
in the form attached hereto as Exhibit 2.3(b)(ii) ("Assignment
Agreement"),
(iii) Invoices showing the true cost of the Leased
Property net of any servicing or maintenance charges, brokers'
fees or similar type of "soft costs",
(iv) If requested by Agent, additional Uniform
Commercial Code ("UCC") financing statements covering, inter
alia, the Leased Property and the Leases listing Agent, for the
benefit of Lenders, as secured party and Borrower as debtor, to
be filed in locations reasonably required by Agent,
(v) Copies of all UCC-1 financing statements filed
by Borrower against Lessee(s) and any acknowledgment copies or
recording information Borrower has received back from the
filing or recording offices,
(vi) The sole original of each Lease including all
relevant schedules, duly assigned to Agent for the benefit of
Lenders,
(vii) For each item of Leased Property with a fair
market value greater than $25,000.00, evidence that such item
of Leased Property is insured against such risks, in such
amounts, with such insurance, and on such terms and conditions
as shall be satisfactory to Agent, including but not limited
to, provisions naming Agent, for the benefit of Lenders, lender
loss payee and preventing cancellation or modification of the
insurance coverage without at least 30 days prior notice to
Agent ("Insurance Cover age"),
(viii) A certificate of acceptance or other
document evidencing that the Lessee has received and accepted
the Leased Property, and
(ix) An undated notice signed by the Borrower
directing each Lessee to pay all sums due or to become due
under each Lease directly to Agent for the benefit of Lenders
("Lessee Notice") to be used only following the occurrence of
an Event of Default or Unmatured Event of Default. Agent will
hold the Lessee Notices in safekeeping and will not release
them, unless and until an Event of Default or Unmatured Event
of Default shall have occurred.
2.4 Credit Facility Interest: The unpaid principal
balance of all Revolving Credit Loans shall bear interest,
subject to the terms hereof, at the per annum fluctuating rate
equal to the Base Rate. Changes in the applicable interest
rate shall become effective on the same day as Agent announces
a change in its Prime Rate. Interest on Revolving Credit Loans
shall be due and payable in arrears on the first day of each
calendar month commencing the first full month following the
Closing Date.
2.5 Additional Interest Provisions.
(a) Calculation of Interest: Interest on the
Loans, regardless of the applicable interest rate, shall be
based on a
three hundred sixty five (365) day year and charged for the
actual number of days elapsed.
(b) Default Rate: After the occurrence and during
the continuance of an Event of Default hereunder, the per annum
effective rate of interest on all Revolving Credit Loans
outstanding under the Credit Facility shall be increased to a
per annum rate equal to two (2%) percentage points in excess of
the otherwise applicable interest rate.
(c) Continuation of Interest Charges: All
contractual rates of interest chargeable on outstanding Loans,
regardless of the then applicable interest rate, shall continue
to accrue and be paid even after default, maturity,
acceleration, judgment, bankruptcy, insolvency proceedings of
any kind or the happening of any event or occurrence similar or
dissimilar.
(f) Applicable Interest Limitations: In no
contingency or event whatsoever shall the aggregate of all
amounts deemed interest hereunder and charged or collected
pursuant to the terms of this Agreement exceed the highest rate
permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such court determines Lenders have
charged or received interest hereunder in excess of the highest
applicable rate, Agent, on behalf of Lenders, shall in its sole
discretion, apply and set off such excess interest received by
Lenders against other Obligations due or to become due and such
rate shall automatically be reduced to the maximum rate
permitted by such law.
2.6 Fees:
(a) Unused Line Fee: So long as the Credit
Facility is outstanding and has not been terminated, Borrower
shall unconditionally pay to Agent, for the benefit of Lenders
in accordance with their respective Pro Rata Percentages, a non
refundable fee ("Unused Line Fee") equal to one-quarter of one
percent (1/4%) per annum of the average daily unused portion of
the Credit Facility (which shall be calculated as the Maximum
Credit Limit minus the average daily outstanding balance of all
Loans during the quarter for which such calculation is made).
The Unused Line Fee shall be computed and paid on a quarterly
basis, in arrears, on the first day of each January, April,
July and October for the previous quarter for which such
computation is made by Agent, beginning on the first day of
April, 1997.
(b) Closing Fee: As of the Closing, Lenders shall
have fully earned, and Borrower shall have paid to Agent, for
the benefit of Lenders, a non-refundable closing fee ("Closing
Fee") in an amount equal to Twenty Thousand Dollars
($20,000.00). CoreStates' share of the Closing Fee shall be
$5,000.00 and each other Lender's share of the Closing Fee
shall be $5,000.00.
(c) Agent Fee: So long as the Credit Facility is
outstanding and has not been terminated, Borrower shall
unconditionally pay to Agent, for Agent's account, a non
refundable fee ("Agent Fee") as set forth in that certain
letter agreement between Agent and Granite Financial, LLC dated
October 5, 1996, the obligations under which have been
expressly assumed by Borrower. The Agent Fee shall be computed
and paid on a quarterly basis, in arrears, on the first day of
each January, April, July and October for the previous quarter
for which such computation is made by Agent, beginning on the
first day of April, 1997 (provided, however, that Borrower
shall pay to Bank on the Closing Date the unpaid Agent Fee for
the quarter ending
December 31, 1996 and the portion of the Agent Fee attributable
to the quarter in which closing occurs pro rated through the
Closing Date).
(d) Additional Facility Fee: In the event that
Lenders and Agent, in their sole discretion, agree from time to
time to increase the Maximum Credit Limit, Borrower shall at
the time of any such increase (as a condition thereof), pay to
Agent, for the benefit of Lenders in accordance with their
respective Pro Rata Percentages, a non-refundable additional
facility fee ("Additional Facility Fee") in an amount equal to
one-quarter of one percent (1/4%) of the applicable increase.
Notwithstanding the foregoing, Lenders and Agent shall at no
time be obligated to increase the Maximum Credit Limit.
2.7 Prepayments:
(a) Revolving Credit Loans: Subject to Section
2.1(a), Revolving Credit Loans may be prepaid at any time and
from time to time in whole or in part without premium or
penalty upon at least two (2) days prior written notice to
Agent.
(b) Proceeds of Collateral: Prior to the
occurrence of an Event of Default, proceeds from Collateral
comprising a portion of the Borrowing Base, to the extent that
the aggregate outstanding amount of all Revolving Credit Loans
exceeds the Available Credit Amount, shall promptly be paid to
Agent for the benefit of Lenders and be first applied to
accrued but unpaid interest, fees, costs and Expenses related
to the Credit Facility, and then to the outstanding balance of
the Revolving Credit Loans and then to Borrower's other
Obligations. Following the occurrence of an Event of Default,
all proceeds from the Collateral shall be immediately delivered
to Agent and Agent may apply such proceeds to any of Borrower's
Obligations in such order as Agent may decide in its sole
discretion.
(c) Mandatory Prepayment: In the event the
aggregate outstanding amount of all Loans at any time exceeds
the Maximum Credit Limit, Borrower shall immediately repay such
excess in full and if the aggregate outstanding amount of all
Revolving Credit Loans exceeds the Borrowing Base, Borrower
shall immediately either (i) repay such excess in full or (ii)
pledge additional Eligible Leases in accordance with the terms
hereof. Any such payments shall first be applied to accrued but
unpaid interest, fees, costs and Expenses related to the Credit
Facility, and then to the outstanding balance of the Revolving
Credit Loans and then to Borrower's other Obligations.
2.8 Use of Proceeds: The extensions of credit under the
Credit Facility shall be used to enable Borrower to purchase
Leased Property and finance Leases associated with such Leased
Property.
2.9 Capital Adequacy: If any present or future law,
governmental rule, regulation, policy, guideline, directive or
similar requirement (whether or not having the force of law)
imposes, modifies, or deems applicable any capital adequacy,
capital maintenance or similar requirement which affects the
manner in which any Lender allocates capital resources to its
commitments (including any commitments hereunder), and as a
result thereof, in the reasonable opinion of such Lender, the
rate of return on such Lender's capital with regard to the
Loans is reduced to a level below that which such Lender could
have achieved but for such circumstances, then in such case and
upon notice from Agent and/or such Lender to Borrower, from
time to time, Borrower shall pay such Lender such additional
amount or
amounts as shall compensate such Lender for such reduction in
its rate of return. Such notice shall contain the statement of
such Lender with regard to any such amount or amounts which
shall, in the absence of manifest error, be binding upon
Borrower. In determining such amount, such Lender may use any
reasonable method of averaging and attribution that it deems
applicable.
SECTION 3. COLLATERAL
3.1 Description: As security for the payment of the
Obligations, and satisfaction by Borrower of all covenants and
undertakings contained in this Agreement and the other Loan
Documents, Borrower hereby grants to Agent, for the benefit of
Lenders, a continuing first lien on and security interest in,
upon and to the Collateral.
3.2 Lien Documents: At Closing and thereafter as Agent
deems necessary, Borrower shall execute and deliver to Agent,
or have executed and delivered (all in form and substance
reasonably satisfactory to Agent):
(a) Financing Statements - Financing statements
pursuant to the UCC, which Agent, on behalf of Lenders, may
file in any jurisdiction where any Collateral is or may be
located and in any other jurisdiction that Agent deems
appropriate; and
(b) Other Agreements - Any other agreements,
documents, instruments and writings, including, without
limitation, security agreements and Assignment Agreements,
reasonably required by Agent to evidence, perfect or protect
Agent's and/or Lenders' liens and security interests in the
Collateral or as Agent may request from time to time.
3.3 Other Actions: In addition to the foregoing,
Borrower shall do anything further that may be lawfully
required by Agent to secure Lenders and effectuate the
intentions and objects of this Agreement, including, but not
limited to, the execution and delivery of lockbox agreements,
continuation statements, amend ments to financing statements,
security agreements, contracts and any other documents required
hereunder. Borrower shall also immediately deliver (with
execution by Borrower of all necessary documents or forms to
reflect Agent's Lien for the benefit of Lenders thereon) to
Agent as bailee for Lenders, all items for which Agent and/or
Lenders must or may receive possession to obtain a perfected
security interest, including without limitation, all Leases,
notes, certificates and documents of title, Chattel Paper,
warehouse receipts, Instruments, and any other similar
instruments constituting Collateral.
3.4 Searches: Agent shall, prior to or at Closing, and
thereafter as Agent may determine from time to time, at
Borrower's sole expense, obtain the following searches (the
results of which are to be consistent with the warranties made
by Borrower in this Agreement):
(a) UCC Searches: UCC financing statement
searches with the Secretary of State and local filing office of
each state where Borrower maintains its executive office, a
place of business, or assets;
(b) Judgments, Etc.: Judgment, federal tax lien
and corporate tax lien searches, in all applicable filing
offices of each state searched under subparagraph (a) above.
Borrower shall, prior to or at Closing and at its
expense, obtain and deliver to Agent good standing certificates
showing Borrower to be in good standing in its state of
incorporation and in each other state or foreign country in
which it is doing and presently intends to do business for
which Borrower's failure to be so qualified might have a
material adverse effect on Borrower's business, financial
condition, Property or Agent's and/or Lenders' rights
hereunder.
3.5 Filing Security Agreement: A carbon, photographic or
other reproduction or other copy of this Agreement or of a
financing statement is sufficient as and may be filed in lieu
of a financing statement.
3.6 Power of Attorney: Each of the officers of Agent is
hereby irrevocably made, constituted and appointed (such
appointment being coupled with an interest) the true and lawful
attorney for Borrower (without requiring any of them to act as
such) with full power of substitution to do the following: (1)
endorse the name of Borrower upon any and all checks, drafts,
money orders and other instruments for the payment of monies
that are payable to Borrower and constitute collections on the
Collateral; (2) execute in the name of Borrower any financing
statements, schedules, assignments, instruments, documents and
statements that Borrower is obligated to give Agent hereunder
or is necessary to perfect Agent's and/or Lenders' security
interest or Lien in the Collateral; (3) to verify validity,
amount or any other matter relating to the Collateral by mail,
telephone, telecopy or otherwise; and (4) do such other and
further acts and deeds in the name of Borrower that Agent may
reasonably deem necessary or desirable to enforce any Account
or other Collateral.
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES
Closing under this Agreement is subject to the following
conditions precedent (all documents to be in form and substance
satisfactory to Agent and Agent's counsel):
4.1 Resolutions, Opinions, and Other Documents: Borrower
shall have delivered to Agent the following:
(a) this Agreement and the Revolving Credit Notes
all properly executed;
(b) each document and agreement required to be
executed under any provision of this Agreement or any related
agreement;
(c) certified copies of (i) resolutions of
Borrower's board of directors authorizing the execution of this
Agreement, the Revolving Credit Notes to be issued hereunder
and each document, instrument and agreement required to be
delivered by any Section hereof and (ii) Borrower's articles of
incorporation and bylaws;
(d) an incumbency certificate identifying all
Authorized Officers of Borrower, with specimen signatures;
(e) a written opinion of Borrower's counsel
addressed to Agent for the benefit of all Lenders;
(f) certification by Borrower's chief financial
officer or president that there has not occurred any material
adverse change in the operations and condition (financial or
otherwise) of Borrower since October 31, 1996;
(g) payment by Borrower of all Expenses associated
with the Credit Facility incurred to the Closing Date and the
Closing Fee;
(h) UCC financing statement, judgment, federal and
state tax lien searches against Borrower, at Borrower's
expense, showing that the Collateral is not subject to any
Liens, together with good standing certificates showing
Borrower to be in good standing in each jurisdiction where the
failure to so qualify might have a material adverse affect on
Borrower's business, financial condition, Property or Agent's
and/or Lenders' rights hereunder;
(i) an initial Borrowing Base Certificate dated
the Closing Date evidencing Borrower's minimum borrowing
availability under the Borrowing Base as of the Closing Date;
(j) UCC-1 financing statements naming Borrower as
debtor and Agent as secured party, to be filed in all locations
satisfactory to Agent;
(k) a copy of the Intercreditor Agreement; and
(l) a certified copy of Borrower's Form S-1
Registration Statement filed with the Securities and Exchange
Commission in connection with the initial public offering of
its capital stock consummated on October 25, 1996 together with
all amendments and exhibits and schedules thereto and all
documentation evidencing the acquisition by Borrower of all of
the membership units of Granite Financial, LLC and the
liquidation thereof and the assumption of all obligations and
liabilities thereof by Borrower.
4.2 Absence of Certain Events: At the Closing Date, no
Event of Default or Unmatured Event of Default hereunder shall
have occurred and be continuing.
4.3 Warranties and Representations at Closing: The
warranties and representations contained in Section 5 as well
as any other Section of this Agreement shall be true and
correct in all material respects on the Closing Date with the
same effect as though made on and as of that date. Borrower
shall not have taken any action or permitted any condition to
exist which would have been prohibited by any Section hereof.
4.4 Compliance with this Agreement: Borrower shall have
performed and complied with all agreements, covenants and
conditions contained herein including, without limitation, the
provisions of Sections 6 and 7 hereof, which are required to be
performed or complied with by Borrower before or at the Closing
Date.
4.5 Officers' Certificate: Agent shall have received a
certificate dated the Closing Date and signed by an Authorized
Officer of Borrower certifying that all of the conditions spec
ified in this Section have been fulfilled.
4.6 Closing: Subject to the conditions of this Section
4, the Credit Facility shall be made available on the date
("Closing Date") this Agreement is executed and all of the
conditions contained in Section 4 hereof are completed (the
"Closing").
4.7 Non-Waiver of Rights: By completing the Closing here
under, or by making Advances hereunder, neither Agent nor any
Lenders thereby waive a breach of any warranty, representation
or covenant made by Borrower hereunder or in any agreement,
document, or instrument delivered to Agent and/or any Lender or
otherwise referred to herein, and any claims and rights of
Agent and/or Lenders resulting from any breach or
misrepresentation by Borrower are specifically reserved by
Agent and Lenders.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce Lenders to complete the Closing and make the
initial Advance under the Credit Facility to Borrower, Borrower
warrants and represents to Agent and Lenders that:
5.1 Organization and Validity:
(a) Borrower is a corporation duly organized and
validly existing under the laws of the State of Delaware, is
duly qualified, is validly existing and in good standing and
has lawful power and authority to engage in the business it
conducts in each state and other jurisdiction where the nature
and extent of its business requires qualification, except where
the failure to so qualify would not have a material adverse
effect on Borrower's business, financial condition, Property or
prospects. A list of all states and other jurisdictions where
Borrower is qualified to do business is attached hereto as
Exhibit 5.1 and made a part hereof.
(b) The making and performance of this Agreement
and related agreements, and each document required by any
Section hereof will not violate any law, government rule or
regulation, or the articles of incorporation or bylaws of
Borrower or violate or result in a default (immediately or with
the passage of time) under any contract, agreement or
instrument to which Borrower is a party, or by which it is
bound. Borrower is not in violation of, nor has knowingly
caused any Person to violate, any term of any agreement or
instrument to which it or such Person is a party or by which it
may be bound or of its Articles of Incorporation or Bylaws,
which violation could have a material adverse effect on
Borrower's business, financial condition, Property or
prospects.
(c) Borrower has all requisite corporate power and
authority to enter into and perform this Agreement and to incur
the Obligations herein provided for, and has taken all proper
and necessary action to authorize the execution, delivery and
performance of this Agreement and the documents and related
agreements required hereby.
(d) This Agreement, the Revolving Credit Notes to
be issued hereunder, and all related agreements and documents
required to be executed and delivered by Borrower hereunder,
when delivered, will be valid and binding upon Borrower and
enforceable in accordance with their respective terms.
5.2 Places of Business: The only places of business of
Borrower, and the places where it keeps and intends to keep
copies of the Leases and its Books and Records concerning the
Collateral, are at the addresses listed in Exhibit 5.2 attached
hereto and made a part hereof. The name of the record owner of
each property is also set forth on Exhibit 5.2.
5.3 Pending Litigation: There are no judgments or
judicial or administrative orders, proceedings or
investigations (civil or criminal) pending, or to the knowledge
of Borrower, threatened, against Borrower in any court or
before any governmental author ity or arbitration board or
tribunal except as shown in Exhibit 5.3 attached hereto and
made a part hereof, none of which may materially and adversely
affect the business, financial
condition, Property or prospects of Borrower, or the ability of
Borrower to perform under this Agreement. Borrower is not in
default with respect to any order of any court, governmental
authority, regulatory agency or arbitration board or tribunal,
the effect of which would materially and adversely affect the
business, financial condition, Property or prospects of
Borrower. No executive officer or director of Borrower has been
indicted or convicted in connection with or is engaging in any
criminal conduct, or is currently subject to any lawsuit or
proceeding or under investigation in connection with any anti-
racketeering or other conduct or activity.
5.4 Title to Collateral: Borrower has good and
marketable
title in fee simple (or its equivalent under applicable law) to
all the Collateral it respectively purports to own, free from
Liens, except those of Agent, and free from the claims of any
other Person other than the leasehold interests of the Lessees.
5.5 Governmental Consent: Neither the nature of Borrower
or of its business or Property, nor any relationship between
Borrower and any other Person, nor any circumstance affecting
Borrower in connection with the issuance or delivery of the
Revolving Credit Notes, is such as to require a consent,
approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of
Borrower in connection with the execution and delivery of this
Agreement or the issuance or delivery of the Revolving Credit
Notes or other documents contemplated hereby.
5.6 Taxes: All tax returns required to be filed by
Borrower
in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon Borrower,
or upon any of its Property, income or franchises, which are
shown to be due and payable on such returns have been paid,
except for those taxes being contested in good faith with due
diligence by appropriate proceedings for which appropriate
reserves have been maintained under GAAP.
5.7 Financial Statements: Borrower's opening
consolidated
balance sheet as of October 31, 1996 has been prepared in accor
dance with GAAP (except for the omission of footnote disclosure
and year-end adjustments) and presents fairly, accurately and
completely the financial position of the Borrower as of such
date. The fiscal year for Borrower currently ends on June 30.
Borrower's federal tax identification number is ▇▇-▇▇▇▇▇▇▇.
5.8 Full Disclosure: Neither the financial statements
referred to in Section 5.7, nor this Agreement or related
agreements and documents or any written statement furnished by
Borrower to Agent in connection with the negotiation of the
Credit Facility and contained in any financial statements or
documents relating to Borrower contain any untrue statement of
a material fact or omit a material fact necessary to make the
statements contained therein or herein not misleading.
5.9 Subsidiaries: Borrower has no Subsidiaries or
Affiliates, except as listed on Exhibit 5.9 attached hereto and
made a part hereof.
5.10 Guarantees; Other Indebtedness:
Borrower does not (i) own or hold equity or long term
debt investments in, (ii) have any outstanding advances to,
(iii) serve as guarantor, surety or accommodation maker for the
obligations of, or (iv) have any outstanding borrowings from,
any Person except as described in Exhibit 5.10, attached hereto
and a
made part hereof.
5.11 Government Regulations, etc.:
(a) The use of the proceeds of and Borrower's
issuance of the Revolving Credit Notes will not directly or
indirectly violate or result in a violation of Section 7 of the
Exchange Act or Regulations U, T, G or X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
Borrower does not own or intend to carry or purchase any
"margin stock" within the meaning of said Regulation U.
(b) Borrower has obtained all licenses, permits,
franchises or other governmental authorizations necessary for
the ownership of its Property and for the conduct of its
business, where the failure to obtain would have a material
adverse effect on the business, financial condition, Property
or prospects of Borrower or Agent's and/or Lenders' rights with
respect to the Collateral.
(c) Borrower is not in violation of, has not
received written notice that it is in violation of, or has
knowingly caused any Person to violate, any applicable statute,
regulation or ordinance of the United States of America, or of
any state, city, town, municipality, county or of any other
jurisdiction, or of any agency or department thereof,
(including without limitation, environmental laws and
regulations) which may materially and adversely affect its
business, financial condition, Property or prospects or Agent's
and/or Lenders' rights with respect to the Collateral.
(d) Borrower is current with all reports and
documents required to be filed with any state or federal
securities commission or similar agency and is in full
compliance in all material respects with all applicable rules
and regulations of such commissions.
5.12 Names:
(a) Within five (5) years prior to the Closing
Date, Borrower has not conducted business under or used any
other name (whether corporate or assumed) except for the names
shown on Exhibit 5.12(a), attached hereto and made a part
hereof. Borrower is the sole owner of all names listed on such
Exhibit 5.12(a) and any and all business done and all invoices
issued in such trade names are Borrower's business and
invoices. Each trade name of Borrower represents a division or
trading style of Borrower and not a separate corporate
Subsidiary or Affiliate or independent entity.
(b) All trademarks, patents or copyrights which
Borrower uses, plans to use or has a right to use are listed on
Exhibit 5.12(b) attached hereto and made a part hereof.
Borrower is the sole owner of such Property except to the
extent any other Person has claims or rights in such Property,
as such claims and rights are described on such Exhibit
5.12(b). To the best of Borrower's knowledge, Borrower is not
in violation of any rights of any other Person with respect to
such Property.
5.13 Other Associations: Borrower is not engaged and has
no interest in any joint venture or partnership with any other
Person except as described on Exhibit 5.13 hereto and made a
part hereof.
5.14 Environmental Matters: Except as disclosed on
Exhibit 5.14 attached hereto and made a part hereof, Borrower
has no
knowledge:
(a) of the presence of any Hazardous Substances on
any of the real property where Borrower conducts operations or
has its personal property, or
(b) of any on-site spills, releases, discharges,
disposal or storage of Hazardous Substances that have occurred
or are presently occurring on any of such real property or
where any Collateral is located, or
(c) of any spills, releases, discharges or disposal
of Hazardous Substances that have occurred, are presently
occurring on any other real property as a result of the
conduct, action or activities of Borrower.
As used herein, the term "Hazardous Substances" means any
substances defined or designated as hazardous or toxic waste,
hazardous or toxic material, hazardous or toxic substance or
similar term, by any environmental statute, rule or regulation
of any governmental entity presently in effect and applicable
to such real property.
5.15 Capital Stock: The authorized and outstanding shares
of capital stock of Borrower are as set forth on Exhibit 5.15
attached hereto and made a part hereof. All of the capital
stock of Borrower has been duly and validly authorized and
issued and is fully paid and non-assessable and has been sold
and delivered to the holders thereof in compliance with, or
under valid exemption from, all Federal and state laws and the
rules and regulations of all regulatory bodies thereof
governing the sale and delivery of securities. Except for the
rights and obligations set forth in Exhibit 5.15, there are no
subscriptions, warrants, options, calls, commitments, rights or
agreements by which Borrower or any of the shareholders of
Borrower are bound relating to the issuance, transfer, voting
or redemption of shares of its capital stock or any pre-emptive
rights held by any Person with respect to the shares of capital
stock of Borrower. Except as set forth in Exhibit 5.15,
Borrower has not issued any securities convertible into or
exchangeable for shares of its capital stock, or any options,
warrants or other rights to acquire such shares or securities
convertible into or exchangeable for such shares.
5.16 Solvency: Borrower is solvent, able to pay its debts
as they become due, and has capital sufficient to carry on its
business and all business in which it is about to engage, and
now owns Property having a value both at fair valuation and at
present fair salable value greater than the amount required to
pay its debts. Borrower will not be rendered insolvent by the
execution and delivery of this Agreement or any of the other
documents executed in connection with this Agreement or by the
transactions contemplated hereunder or thereunder.
5.17 Leases and Leased Property: Each Lease reported to
Agent and Lenders as an Eligible Lease and the Leased Property
associated therewith shall, at all times when such Leases are
included in the Borrowing Base calculation, be in compliance
with all of the following representations:
(a) Each Lease is in substantially the same form
as that attached as Exhibit 5.17 hereto and is genuine, based
on contracts that are enforceable in accordance with its terms
against the Lessee and the Leased Property named and referenced
therein, constitutes the entire agreement for the leasing of
the Leased Property thereby covered, has not been altered or
amended,
except as set forth in the related schedules, and Borrower's
Books and Records relating thereto are accurate, complete and
genuine;
(b) The sole original of each Lease has been
delivered to Agent, and all other counterparts of each Lease
shall contain a legend stating that the Lease has been assigned
to CoreStates Bank, N.A., As Agent, pursuant to that certain
Loan and Security Agreement dated January __, 1997, or contain
similar language specifying that such counterpart is not an
original for "Chattel Paper" purposes under the UCC;
(c) Where the Lease consists of a Master Lease
Agreement and specific schedules which describe the terms of
any specific items to be leased pursuant to such schedule, the
sole original schedule shall constitute the sole original
Lease, provided that the terms of the Master Lease Agreement
and the schedule make it clear that the sole original schedule
is a separate lease for "Chattel Paper" purposes under the UCC
and that possession of such schedule constitutes possession of
"Chattel Paper" under the UCC;
(d) None of the Leased Property is Property for
which a certificate of title is required;
(e) The original amount and unpaid balance of each
Lease shown on Borrower's Books and Records and on any
statement or schedule delivered to Agent in connection
therewith is the true and correct amount actually owed to
Borrower, no portion of which, except as specifically provided
for in the Lease, has been prepaid;
(f) The amount due under each Lease is not subject
to, and the terms of the Lease provide that the Lessee may not
assert, any claim or reduction, counterclaim, setoff,
recoupment, or any other claim, allowance or adjustment and no
Lease has been re-negotiated, restructured or compromised
except as renewed in the ordinary course of business;
(g) All security agreements, title retention
instruments and other documents and instruments which are
security for any Lease, and/or each Lease, contain a correct
and sufficient description of the Leased Property covered
thereby and all security interests granted therein to Borrower
(either directly or as assignee), if applicable, have been
properly perfected and assigned to Agent for the benefit of
Lenders, except for security interests in items of Leased
Property which have a fair market value of less than $25,000;
(h) Borrower has not and will not enter into any
agreement with a Lessee of any Leased Property which provides,
directly or indirectly, for the crediting of any obligation or
liability of Borrower to such Lessee against future rentals
accruing under the Lease;
(i) Each item of Leased Property has been
delivered
to and, in all instances, accepted by the Lessee and is in good
condition, ordinary wear and tear accepted, has not been
returned, rejected, lost, stolen, destroyed or damaged and has
not been removed from service;
(j) Each Lease has been duly executed by Borrower
and each Lessee, is a valid, legal and binding obligation of
Borrower, and such Lessee, and is enforceable against Borrower
and such Lessee in accordance with its terms. Borrower is the
sole owner of each of the Leases and has the authority to
assign
all of its right, title and interest therein upon the terms
herein set forth;
(k) Each of the Leases and all Leased Property
which
is the subject matter thereof at the time of its assignment to
Agent for the benefit of Lenders and at all times thereafter,
will be free and clear of any and all assignments, options,
rights, or other Liens whatsoever except Lenders' and/or
Agent's;
(l) Borrower has made its usual credit
investigation
of each Lessee and has determined that the credit is
satisfactory;
(m) All costs, fees, and expenses incurred in
making
and closing each of the Leases has been paid and each Lease is
and, except as hereafter provided, will be current at the time
of the assignment thereof to Lenders. No default exists or
event exists which, with the giving of notice or the passage of
time or both, will result in the occurrence of a default of any
obligation, as expressed in any Lease, except for a default
arising from a Lessee's failure to pay rent within sixty-one
days of the date when due under the Lease;
(n) All rentals, fees, costs, expenses and charges
paid or payable by the Lessee under any Lease, including
without limitation, any brokerage and other fees paid to
Borrower do not violate any laws relating to the maximum fees,
costs, expenses or charges that can be charged in any state in
which any Leased Property is located or in which the
corresponding Lessee is located, or in which a transaction was
consummated, or in any other state which may have jurisdiction
with respect to any such Leased Property, Lease or Lessee;
(o) Agent, for the benefit of Lenders, has a first
perfected lien and security interest in the Collateral
(including without limitation each Lease and the Leased
Property except for Leased Property having a fair market value
of less than $25,000) subject to no other Lien. Borrower has
taken, and in the future shall take, all steps necessary to
maintain Agent's first perfected lien and security interest in
the Collateral, including, if required, perfecting Borrower's
security interest (in the event the Lease is not a "true
lease") through filing financing statements, amendments
thereto, or assignments and/or continuations thereof and
recording of the documentation necessary to perfect Borrower's
lien;
(p) For each Lease of Leased Property with a fair
market value of $25,000 or more, Borrower has filed, within ten
(10) days of receipt by the Lessee of possession of the Leased
Property, such UCC financing statements (listing Borrower as
secured party, Lessee as debtor, and such Leased Property as
collateral), in such locations as would be required by
applicable law (if Borrower were a secured party and Lessee
were a debtor) in order to perfect a security interest in such
Leased Property under the UCC or otherwise;
(q) For each Lease of Leased Property with a fair
market value of $25,000 or more, Borrower has either (i) listed
Agent for the benefit of Lenders, as assignee on the UCC-1
Financing Statement so filed, or (ii) after Borrower has
received acknowledgment copies of UCC-1s, delivered to Agent
executed UCC3 Financing Statements naming Agent for the benefit
of Lenders as assignee of Borrower's security interest. Agent
agrees not to file the UCC-3 Financing Statements until such
time as an Event of Default or Unmatured Event of Default
occurs under this Agreement, and Agent will return such UCC-3
Financing Statements
to Borrower if such Leases are ultimately sold or refinanced on
a permanent basis with another lender or in a Securitization
Transaction;
(r) Each Lease is valid and enforceable and
presents
the undisputed obligation of the Lessee named therein and is
not more than sixty-one (61) days contractually past due;
(s) Each item of Leased Property with a fair
market
value of $25,000 or more has been insured in the ordinary
course of Borrower's or the corresponding Lessee's business;
(t) Borrower has not received notice of a
bankruptcy, receivership, reorganization or insolvency of any
Lessee;
(u) No Lessee is a Subsidiary or Affiliate of
Borrower, or under common control with Borrower or is an
officer or employee of Borrower; and
(v) The Lessee is not otherwise in default under
the
corresponding Lease; and
(w) No item of Leased Property had an original
cost
in excess of $150,000.00.
SECTION 6. BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants that until all of Borrower's
Obligations to Lenders and Agent are paid and satisfied in full
and the Credit Facility has been terminated:
6.1 Payment of Taxes and Claims: Borrower shall pay,
before they become delinquent, all taxes, assessments and
governmental charges or levies imposed upon it or upon
Borrower's Property.
6.2 Maintenance of Properties and Corporate Existence:
(a) Property Insurance - Borrower shall maintain
or
cause to be maintained insurance on the Collateral (except for
items of Leased Property having a fair market value of less
than $25,000) against fire, flood, casualty and such other
hazards in such amounts, with such deductibles and with such
insurers as are satisfactory to Agent. At or prior to Closing,
Borrower shall furnish Agent with copies of original insurance
binders certified as true and correct and being in full force
and effect as of the Closing Date or such other evidence of
insurance as Agent may require. In the event Borrower fails to
procure or cause to be procured any such insurance or to timely
pay or cause to be paid the premium(s) on any such insurance,
Agent (on behalf of Lenders) may do so for Borrower, but
Borrower shall continue to be liable for the same. The
policies of all such casualty insurance shall contain standard
lender's loss payable clauses issued in favor of Agent (on
behalf of Lenders) under which all losses thereunder shall be
paid to Agent (on behalf of Lenders) as Agent's interest may
appear. Such policies shall expressly provide that the
requisite insurance cannot be altered or canceled without
thirty (30) days prior written notice to Agent and shall insure
Lenders notwithstanding the act or neglect of Borrower.
Borrower hereby appoints Agent as Borrower's attorney-in-fact,
exercisable at Agent's option, to endorse any check which may
be payable to Borrower in order to collect the proceeds of such
insurance and any amount or amounts collected by Agent pursuant
to the provisions of this paragraph may be applied
by Agent to Borrower's Obligations in such order as Agent shall
elect in its sole discretion. Borrower further covenants that
all insurance premiums owing under its current casualty policy
have been paid. Borrower also agrees to notify Agent,
promptly, upon Borrower's receipt of a notice of termination,
cancellation, or non-renewal from its insurance company of any
such policy.
(b) Public Liability Insurance - Borrower shall
maintain, and shall deliver to Agent upon Agent's request
evidence of, public liability insurance in such amounts, with
such deductibles and with such insurers as are satisfactory to
Agent.
(c) Financial Records - Borrower shall keep
current and accurate books of records and accounts in which
full and correct entries will be made of all of its business
transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in
accordance with GAAP. Borrower shall not change its respective
fiscal year end date without the prior written consent of
Agent.
(d) Legal Existence and Rights - Borrower shall do
(or cause to be done) all things necessary to preserve and keep
in full force and effect its legal existence, good standing,
rights and franchises.
(e) Compliance with Laws - Borrower shall be in
compliance with any and all laws, ordinances, governmental
rules and regulations, and court or administrative orders or
decrees to which it is subject, whether federal, state or
local, (including without limitation environmental or
environmental-related laws, statutes, ordinances, rules,
regulations and notices and all applicable consumer sale and/or
leasing laws and regulations), and shall obtain and maintain
any and all licenses, permits, ▇▇▇▇ chises or other
governmental authorizations necessary to the ownership of its
Property or to the conduct of its businesses, which violation
or failure to obtain may materially adversely affect the
business, Property, financial conditions or prospects of
Borrower.
6.3 Business Conducted: Borrower shall continue in the
business presently operated by it using its best efforts to
maintain its customers and goodwill. Borrower shall not
engage, directly or indirectly, in any material respect in any
line of business substantially different from the businesses
conducted by it immediately prior to the Closing Date, unless
such line of business is reasonably related to such business so
conducted prior to the Closing Date.
6.4 Litigation: Borrower shall give prompt notice to
Agent of any litigation claiming in excess of $250,000 from
Borrower, or which may otherwise have a material adverse effect
on the business, financial condition, Property or prospects of
Borrower.
6.5 Taxes: Borrower shall pay all taxes (other than
taxes based upon or measured by any Lender's income or
revenues), if any, in connection with the Loans and/or the
recording of any Lien documents. The obligations of Borrower
under this section shall survive the payment of Borrower's
Obligations under this Agreement and the termination of this
Agreement. Borrower shall cause to be paid all taxes incurred
in connection with any of the Leases or the acquisition, sale
or lease of any of the Leased Property.
6.6 Bank Accounts: Borrower shall maintain depository
and disbursement account(s) with Agent with a minimum balance
of
$10,000.
6.7 Warranties for Future Advances: Each request by
Borrower for an Advance under the Credit Facility in any form
following the Closing Date shall constitute an automatic
representation and warranty by Borrower to the effect that:
(a) There has been no material adverse change in
Borrower's operations or condition (financial or otherwise)
since the date of delivery of Borrower's most recent Financial
Statements;
(b) No Event of Default which has not been cured
or
waived, or Unmatured Event of Default, then exists;
(c) Each Advance is within and complies with the
terms and conditions of this Agreement, including without
limitation, the notice provisions contained in Section 2.3
hereof;
(d) No Lien, including, without limitation, any
federal tax Lien, has been imposed on Borrower which may, in
any way, take priority over Agent's and/or Lenders' security
interests in or Liens on any Collateral; and
(e) Each representation and warranty set forth in
Section 5 of this Agreement is then true and correct in all
material respects.
6.8 Financial Covenants: Borrower shall maintain and
comply with the following financial covenants as reflected on
and computed from their Financial Statements:
(a) Adjusted Debt to Tangible Net Worth Ratio:
Borrower shall have and maintain at all times an Adjusted Debt
to Tangible Net Worth Ratio on a consolidated basis, measured
quarterly as of the last day of each fiscal quarter during each
fiscal year, of not more than 5.0 to 1.
(b) Tangible Net Worth\Net Worth:
(i) Borrower shall have and maintain a
Tangible Net Worth on a consolidated basis, measured quarterly
as of the last day of each fiscal quarter, of not less than
$8,000,000 plus an amount equal to 50% of Borrower's Net
Income, without respect to losses, for the immediately
preceding fiscal quarter, with such step-up to commence with
the fiscal quarter ending December 31, 1996.
(ii) Borrower shall have and maintain a Net
Worth on a consolidated basis, measured quarterly as of the
last day of each fiscal quarter, of not less than $11,000,000
plus an amount equal to 50% of Borrower's Net Income, on a
consolidated basis without respect to losses, for the
immediately preceding fiscal quarter, with such step-up to
commence with the fiscal quarter ending December 31, 1996.
(c) Interest Coverage Ratio: Borrower shall
have
and maintain as of the end of each fiscal quarter, based on
financial information for the twelve (12) month period ending
as of the end of such fiscal quarter, on a consolidated basis,
a ratio of Net Income before interest to interest expense of
not less than 1.25 to 1.0.
(d) Delinquent Leases: Borrower shall maintain
its Accounts which are 31 days or more past due at a level less
than 3.75% of its gross lease receivables, measured as of the
last day of each month.
(e) Charge-Offs: Borrower shall maintain its
chargeoffs on a year-to-year date basis at a level less than 2%
of equipment cost (net of "soft costs"). Compliance with this
covenant is to be calculated on a monthly basis.
6.9 Financial and Business Information: Borrower shall
deliver to Agent (and Agent shall thereafter promptly furnish
copies to each of the Lenders) the following:
(a) Financial Statements and Collateral Reports:
such data, reports, statements and information, financial or
otherwise, as Agent may reasonably request, including, without
limitation:
(i) within one hundred twenty (120) days after
the end of each fiscal year of Borrower, deliver to Agent,
Financial Statements of Borrower for such year including the
balance sheet of Borrower as at the end of such fiscal year and
a statement of cash flows and income statement for such fiscal
year, all on a consolidated and consolidating basis, setting
forth in the consolidated statements in comparative form, the
corresponding figures as at the end of and for the previous
fiscal year, all in reasonable detail, including all supporting
schedules, and audited and certified by independent public
accountants of recognized standing, selected by Borrower and
satisfactory to the Agent, to have been prepared in accordance
with GAAP, and such independent public accountants shall also
provide an unqualified opinion that the Financial Statements
present fairly the Borrower's financial condition. Such
independent accountants shall also provide a statement
certifying that nothing has come to their attention to cause
them to believe that calculations contained in the compliance
certificate delivered pursuant to Section 6.9(vi) below are
inaccurate;
(ii) within twenty-five (25) days of the end of
each calendar month, deliver to Agent the following reports for
that month and on a year-to-date basis (i) Borrower's Lease
receivables aging report in the form of Exhibit 6.9 (ii)
attached hereto, (ii) a monthly delinquency report, (iii)
Borrower's monthly portfolio statistics and (iv) such other
reports as Agent reasonably deems necessary, certified by
Borrower's chief financial officer or president as true and
correct, all in form and substance satisfactory to Agent;
(iii) within forty-six (46) days after the end of
each fiscal quarter, deliver to Agent, Borrower's internally
prepared monthly consolidated and consolidating Financial
Statements, including balance sheet, income statement and
statements of cash flows; and
(iv) Within forty-five (45) days after the end
of each fiscal quarter, deliver to Agent a quarterly write-off
analysis for such quarter and on a year-to-date basis;
(v) Within twenty-five (25) days after the end
of each month, deliver to Agent, certified copies of all
servicing reports or similar covenant compliance reports
delivered to the applicable trustee for all existing and future
Securitization Transaction(s); and
(vi) Within forty-six (46) days after the end of
each fiscal quarter, deliver to Agent a covenant compliance
certificate in the form of Exhibit 6.9(vi) attached hereto.
(b) Notice of Event of Default - promptly upon
becoming aware of the existence of any condition or event which
constitutes a default or an Event of Default or Unmatured Event
of Default under this Agreement, a written notice specifying
the nature and period of existence thereof and what action
Borrower is taking (and proposes to take) with respect thereto;
(c) Notice of Claimed Default - promptly upon
receipt by Borrower, notice of default, oral or written, given
to Borrower by any creditor for borrowed money in excess of
$20,000;
(d) Securities and Other Reports - if Borrower
shall be required to file reports with the Securities and
Exchange Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act, promptly upon its becoming available, one copy of
each financial statement, report, notice or proxy statement
sent by Borrower to stockholders generally, and, a copy of each
regular or periodic report, and any registration statement, or
prospectus in respect thereof, filed by Borrower with any
securities exchange or with federal or state securities and
exchange com missions or any successor agency.
6.10 Officers' Certificates: Along with the set of
Financial Statements delivered to Agent at the end of each
fiscal quarter and fiscal year pursuant to Section 6.9(a)
hereof, deliver to Agent a certificate (in the form of Exhibit
6.10 attached hereto and made a part hereof) from the chief
financial officer or president of Borrower (and as to
certificates accompanying the annual statements of Borrower,
also certified by Borrower's independent certified public
accountant) setting forth:
(a) Covenant Compliance - the information
(including detailed calculations) required in order to
establish whether Borrower is in compliance with the
requirements of Section 6.8 as of the end of the period covered
by the financial statements then being furnished (and any
exhibits appended thereto) under Section 6.9; and
(b) Event of Default - that the signer, in his
capacity as an officer of Borrower, has reviewed the relevant
terms of this Agreement and has made (or caused to be made
under his supervision) a review of the transactions and
conditions of Borrower from the beginning of the accounting
period covered by the Financial Statements being delivered
therewith to the date of the certificate, and that such review
has not disclosed the existence during such period of any
condition or event which constitutes an Event of Default or
Unmatured Event of Default or if any such condition or event
existed or exists, specifying the nature and period of
existence thereof and what action Borrower has taken or
proposes to take with respect thereto.
6.11 Inspection: Borrower will permit (from time to time
at Agent's discretion) any of Agent's officers or other
represen tatives to visit and inspect any of Borrower's
locations and where any Collateral is kept during regular
business hours, to examine and audit all of Borrower's books of
account, records, reports and other papers, to make copies and
extracts therefrom and to discuss its affairs, finances and
accounts with its officers, employees and independent certified
public accountants. Agent will notify Lenders of each scheduled
field examination and to the extent reasonably practicable,
representatives of each Lender may accompany Agent during each
such field examination. Prior to the occurrence of an Event of
Default, Borrower shall be responsible for the cost of no more
than two (2) such
examinations per year, at a cost not to exceed $3,000 per audit
(plus out-of-pocket expenses). After the occurrence of an
Event of Default, Borrower shall be responsible for all costs
(and outof-pocket expenses) for all audits conducted by Agent
or any outside firm retained by Agent for such purpose.
6.12 Tax Returns and Reports: At Agent's request from
time to time, Borrower shall promptly furnish Agent with copies
of the annual federal and state income tax returns of Borrower.
6.13 Material Adverse Developments: Borrower agrees that
immediately upon becoming aware of any development or other
information which would reasonably be expected to materially
and adversely affect its businesses, financial condition,
Property, prospects or its ability to perform under this
Agreement, it shall give to Agent telephonic or facsimile
notice specifying the nature of such development or information
and such anticipated effect. In addition, any such verbal
communication shall be con firmed by written notice thereof to
Agent on the next Business Day after such verbal notice is
given.
6.14 Places of Business: Borrower shall give thirty (30)
days prior written notice to Agent of any changes in the
location of any of its respective places of business, or of the
places where Books and Records are kept, or the establishment
of any new place of business, or the discontinuance of any
existing place of business.
6.15 Sale of Collateral: Borrower shall ▇▇▇▇ its Books
and Records to indicate Agent's security interest in the
Collateral for the benefit of Lenders, including the Leases and
Leased Property and, unless Agent consents otherwise in
writing, Borrower shall retain title at all times to the Leased
Property; provided however, that so long as no Event of Default
or Unmatured Event of Default has occurred, Borrower may,
subject to the prepayment provisions set forth herein, sell (i)
Leases and Leased Property pursuant to Securitization
Transactions or (ii) Leased Property at the termination of
Leases in the ordinary course. So long as no Event of Default
or Unmatured Event of Default has occurred, upon receipt by
Agent of the proceeds (if required) from the sale of such
Leases and/or Leased Property, Agent shall execute such
documentation as is reasonably necessary to release its
security interest in such Leases and/or Leased Property.
6.16 Receipt of Payments: Prior to the occurrence of
an Event of Default and the Agent's notification to lessees to
redirect payment under Leases to a place designated by Agent,
Borrower shall direct all Lessees to make payments under Leases
to Borrower at a ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (provided, however, that Borrower agrees to redirect
payments under the Leases to a lock-box in the name of, and
under the dominion and control of, Agent, upon the request of
Agent anytime after the expiration of 120 days from the date
hereof, provided Agent has reasonably demonstrated its ability
to provide the requisite lock-box functions in connection with
its provision of lock-box services under that certain Lockbox
Agreement dated _________, 1997 among GF Funding Corp. II,
Agent, and Norwest Bank of Minnesota, as Trustee, as amended
from time to time) and Borrower shall not redirect payments or
change such post office box without the express written consent
of Agent.
SECTION 7. BORROWER'S NEGATIVE COVENANTS:
Borrower covenants that until all of Borrower's
Obligations to Lenders and Agent are paid and satisfied in full
and the
Credit Facility has been terminated, that:
7.1 Merger, Consolidation, Dissolution or Liquidation:
(a) Borrower shall not sell, lease, license,
transfer or otherwise dispose of more than 10% of Borrower's
aggregate assets during any 12 consecutive month period except
in the ordinary course or ordinary operation of Borrower's
business and in Securitization Transactions and other
nonrecourse financing of Leases.
(b) Borrower shall not enter into any merger,
consolidation, reorganization or recapitalization or acquire
all or substantially all of the assets of any other Person or
entity except for a merger, consolidation or acquisition in
which properties and assets of Borrower are transferred to or
combined with, as a single entity, any one Person, so long as
(A) no Event of Default or Unmatured Event of Default has
occurred hereunder and that after giving effect to such merger,
consolidation or acquisition, no Event of Default or Unmatured
Event of Default shall have occurred, and (B) Borrower shall be
the surviving entity.
7.2 Liens and Encumbrances: Borrower shall not: (i)
execute a negative pledge agreement with any Person covering
any of the Collateral, or (ii) cause or permit or agree or
consent to cause or permit in the future (upon the happening of
a contingency or otherwise) the Collateral, whether now owned
or hereafter acquired, to be subject to a Lien;
7.3 Negative Pledge: Borrower shall not pledge, grant or
permit any Lien to exist on the common stock of its
Subsidiaries and Affiliates (except GF Funding Corp. I or any
other special purpose corporation formed in connection with a
Securitization Transaction) nor on any Leases or Leased
Property (except those Liens and assignments granted to Agent
for the benefit of Lenders).
7.4 Transactions With Affiliates or Subsidiaries:
(a) Borrower shall not enter into any transaction
with any Subsidiary or other Affiliate including, without
limita tion, the purchase, sale, lease or exchange of Property,
or the loaning or giving of funds to any Affiliate or any
Subsidiary (other than a sale to a special purpose Subsidiary
in connection with a Securitization Transaction), unless (i)
such Subsidiary or Affiliate is engaged in a business
substantially related to the business conducted by Borrower and
the transaction is in the ordinary course of and pursuant to
the reasonable requirements of Borrower's business and upon
terms substantially the same and no less favorable to Borrower
as it would obtain in a comparable arm's-length transactions
with any Person not an Affiliate or a Subsidiary, and (ii) so
long as such transaction is not prohib ited hereunder.
(b) Subject in any event to the limitations of
Section 7.4(a) above, Borrower shall not create or acquire any
Subsidiary unless such Subsidiary engages in a business
substantially related to the business of Borrower as conducted
immediately prior to the Closing Date.
7.5 Guarantees: Excepting the endorsement in the
ordinary course of business of negotiable instruments for
deposit or collection, Borrower shall not become or be liable,
directly or indirectly, primarily or secondarily, in any
manner, whether as guarantor, surety, accommodation maker, or
otherwise, for the
existing or future indebtedness, matured or contingent, of any
kind of any Person.
7.6 Distributions, Redemptions and Other Indebtedness:
Borrower shall not make any Distribution to its shareholders,
their successors or assigns while an Event of Default is
outstanding or if an Event of Default would be caused by such
Distribution.
7.7 Use of Lenders' Name: Borrower shall not use any
Lender's name (or the name of any of any Lender's Affiliates)
or Agent's name in connection with any of its business
operations except to identify the existence of the Credit
Facility and the names of the Lenders and Agent in the ordinary
course of Borrower's business. Nothing herein contained is
intended to permit or authorize Borrower to make any contract
on behalf of any Lender or Agent.
7.8 Change of Management: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall at all
times remain as President of Borrower.
SECTION 8. DEFAULT
8.1 Events of Default: Each of the following events
shall constitute an event of default ("Event of Default") and
Agent shall thereupon have the option, and the SuperMajority
Lenders shall have the right to cause Agent, to declare the
Obligations immediately due and payable, all without demand,
notice, presentment or protest or further action of any kind
(it also being understood that the occurrence of any of the
events or conditions set forth in subparagraphs (j), (k) or (l)
shall automatically cause an acceleration of the Obligations):
(a) Payments - if Borrower fails to make any
payment of principal or interest under the Credit Facility
within five (5) days of the due date of such payment; or
(b) Other Charges - if Borrower fails to pay any
other charges, fees, Expenses or other monetary obligations
owing to any Lender or Agent arising out of or incurred in
connection with this Agreement within five (5) days of the date
such payment is due and payable; or
(c) Particular Covenant Defaults - if Borrower
fails to perform, comply with or observe any covenant or
undertaking contained in this Agreement and (other than with
respect to the covenants contained in Section 6.8 and in
Section 7 hereof, as to which no cure period shall be
applicable) such breach is not cured (to the satisfaction of
Lender) within five (5) days from the date Borrower becomes
aware or should have known of such breach; or
(d) Financial Information - if any statement,
report, financial statement, or certificate made or delivered
by Borrower or any of its officers, employees or agents, to
Agent or any Lender, is not true and correct, in all material
respects, when made; or
(e) Uninsured Loss - if there shall occur any
uninsured damage to or loss, theft, or destruction in excess of
$20,000 with respect to any portion of any Collateral; or
(f) Warranties or Representations - if any
warranty, representation or other statement by or on behalf of
Borrower contained in or pursuant to this Agreement, or in any
document, agreement or instrument furnished in compliance with,
relating to, or in reference to this Agreement, is false,
erroneous, or
misleading in any material respect when made; or
(g) Agreements with Others - if Borrower shall
default beyond any grace period under any agreement with any
creditor for borrowed money and (i) such default consists of
the failure to pay any principal, premium or interest with
respect to such indebtedness or (ii) such default consists of
the failure to perform any covenant or agreement with respect
to such indebtedness, if the effect of such default is to cause
Borrower's obligations which are the subject thereof to become
due prior to its maturity date or prior to its regularly
scheduled date of payment or would entitle such creditor to
accelerate such obligations; or
(h) Other Agreements with Lenders - if Borrower
breaches or violates the terms of, or if a default or an event
of default occurs under, any other existing or future agreement
(related or unrelated) between or among Borrower and Agent or
any Lender or all Lenders; or
(i) Judgments - if any final judgment for the
payment of money in excess of $20,000 which is not fully and
unconditionally covered by insurance shall be rendered against
Borrower; or
(j) Assignment for Benefit of Creditors, etc. - if
Borrower makes or proposes an assignment for the benefit of
creditors generally, offers a composition or extension to
creditors, or makes or sends notice of an intended bulk sale of
any business or assets now or hereafter owned or conducted by
Borrower which might materially and adversely affect Borrower;
or
(k) Bankruptcy, Dissolution, etc. - the
commencement
of any action for the dissolution or liquidation of Borrower,
or the commencement of any proceeding to avoid any transaction
entered into by Borrower, or the commencement of any case or
proceeding for reorganization or liquidation of Borrower's
debts under the Bankruptcy Code or any other state or federal
law, now or hereafter enacted for the relief of debtors,
whether in stituted by or against Borrower; provided, however,
that Borrower shall have sixty (60) days to obtain the
dismissal or discharge of involuntary proceedings filed against
it, it being understood that during such sixty (60) day period,
no Lender shall be obligated to make Advances hereunder and
Agent may seek adequate protection in any bankruptcy
proceeding; or
(l) Receiver - the appointment of a receiver,
liquidator, custodian, trustee or similar official or fiduciary
for Borrower or for any of Borrower's Property; or
(m) Execution Process, Seizure, etc. - the
issuance
of any execution or distraint process against Borrower, or any
Property of Borrower is seized by any governmental entity,
federal, state or local; or
(n) Termination of Business - if Borrower ceases
any
material portion of its business operations as presently
conduct ed; or
(o) Pension Benefits, etc. - if Borrower fails to
comply with ERISA, so that grounds exist to permit the
appointment of a trustee under ERISA to administer Borrower's
employee plans or to allow the Pension Benefit Guarantee
Corporation to institute a proceeding to appoint a trustee to
administer such plan(s), or to permit the entry of a Lien to
secure any deficiency or claim; or
(p) Investigations - if any indication or evidence
is received by Agent or any Lender that reasonably leads it to
believe Borrower may have directly or indirectly been engaged
in any type of activity which, would be reasonably likely to
result in the forfeiture of any Property of Borrower to any
governmental entity, federal, state or local; or
(q) Securitization Transaction Violations. If a
"Trigger Event" occurs or any other violation or default under
or in connection with any existing or future Securitization
Transaction occurs or any event occurs, the occurrence of which
entitles the trustee in connection with such Securitization
Transaction to cause an acceleration of the promissory notes or
other instruments issued in connection with such Securitization
Transaction.
8.2 Cure - Nothing contained in this Agreement or the
Loan Documents shall be deemed to compel Agent and/or Lenders
to accept a cure of any Event of Default hereunder.
8.3 Rights and Remedies on Default:
(a) In addition to all other rights, options and
remedies granted or available to Agent under this Agreement or
the Loan Documents, or otherwise available at law or in equity,
upon or at any time after the occurrence and during the
continuance of an Event of Default or Unmatured Event of
Default, Agent may, in its discretion, and the SuperMajority
Lenders shall have the right to cause Agent to, withhold or
cease making Advances under the Credit Facility.
(b) In addition to all other rights, options and
remedies granted or available to Agent under this Agreement or
the Loan Documents, Agent may, in its discretion, and the
SuperMajority Lenders shall have the right to cause Agent to,
upon or at any time after the occurrence and during the
continuance of an Event of Default, terminate the Credit
Facility.
(c) In addition to all other rights, options and
remedies granted or available to Agent under this Agreement or
the Loan Documents, Agent may, upon or at any time after the
occurrence of an Event of Default, exercise all rights under
the UCC and any other applicable law or in equity, and under
all Loan Documents permitted to be exercised after the
occurrence of an Event of Default, including the following
rights and remedies (which list is given by way of example and
is not intended to be an exhaustive list of all such rights and
remedies):
(i) The right to take possession of, and notify
all Lessees of the Agent's and Lenders' security interest in
the Collateral and require payment under the Leases to be made
directly to Agent for the benefit of Lenders and Agent may, in
its own name or in the name of Borrower, exercise all rights of
lessor under the Leases and collect, ▇▇▇ for and receive
payment on all Leases, and settle, compromise and adjust the
same on any terms as may be satisfactory to Agent, in its sole
and absolute discretion for any reason or without reason and
Agent may do all of the foregoing with or without judicial
process (including without limitation notifying the United
States postal authorities to redirect mail addressed to
Borrower to an address designated by Agent); or
(ii) By its own means or with judicial
assistance, subject to the rights of the Lessees, enter
Borrower's premises or location of Collateral and take
possession of the Collateral,
or render it unusable, or dispose of the Collateral on such
premises in compliance with subsection (d) below, without any
liability for rent, storage, utilities or other sums, and
Borrower shall not resist or interfere with such action; or
(iii) Require Borrower, at Borrower's sole
expense, subject to the rights of the Lessees, to assemble all
or any part of the Collateral and make it available to Agent at
any place designated by Agent; or
(iv) The right to reduce or modify the Maximum
Credit Limit, Borrowing Base or any portion thereof or the
advance rates or to modify the terms and conditions upon which
Agent, on behalf of and with the consent of Lenders, may be
willing to consider making Advances under the Credit Facility
(without any obligation to do so) or to take additional
reserves in the Borrowing Base for any reason; or
(v) The right to terminate the lock-box
arrangement established pursuant to the Lock-Box Agreement
described and defined in the Intercreditor Agreement as it
relates to this Agreement and to direct delivery of all
remittances thereto constituting Collateral in accordance with
Agent's instructions by notifying Colorado National Bank, in
its capacity as lock-box bank, to take such actions. Any such
notice to be deemed a Control Event Notice as defined in the
Intercreditor Agreement.
(d) Borrower hereby agrees that a notice received
by it at least five (5) days before the time of any intended
public sale or of the time after which any private sale or
other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other
disposition. If per mitted by applicable law, any Collateral
which threatens to speedily decline in value or which is sold
on a recognized market may be sold immediately by Agent without
prior notice to Borrower. Borrower covenants and agrees not to
interfere with or impose any obstacle to Agent's exercise of
its rights and remedies with respect to the Collateral, after
the occurrence of an Event of Default hereunder.
8.4 Nature of Remedies: All rights and remedies granted
Agent or Lenders hereunder and under the Loan Documents, or
otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and
Agent may proceed with any number of remedies at the same time
until all Obligations are satisfied in full. The exercise of
any one right or remedy shall not be deemed a waiver or release
of any other right or remedy, and Agent, upon or at any time
after the occurrence of an Event of Default, may proceed
against Borrower, at any time, under any agreement, with any
available remedy and in any order.
8.5 Set-Off: If any bank account of Borrower with Agent,
any Lender or any participant is attached or otherwise liened
or levied upon by any third party, Agent or such Lender or such
participant, as applicable, as agent for Lenders, shall have
and be deemed to have, without notice to Borrower, the
immediate right of set-off and may apply the funds or amount
thus set-off against any of Borrower's Obligations hereunder.
SECTION 9. AGENT
As between the Agent, on one hand, and the Lenders, on the
other hand, the Agent and each of the Lenders, who are now or
shall become parties to this Agreement, agree as follows (with
the consent and approval of Borrower):
9.1 Appointment and Authorization. Each Lender, and each
subsequent holder of any of the Revolving Credit Notes, by its
acceptance thereof, hereby irrevocably appoints and authorizes
the Agent to take such action 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 as are
reasonably incidental thereto. Except as may be otherwise
expressly provided herein, Borrower is hereby authorized by the
Lenders to deal solely with the Agent in all transactions which
affect the Lenders under this Agreement and the Loan Documents.
The rights, privileges and remedies accorded to the Agent
hereunder shall be exercised by the Agent on behalf of all of
the Lenders.
9.2 General Immunity. Subject to the provisions of this
Agreement, the Agent will handle all transactions relating to
the Loans and all other Obligations, including, without
limitation, all transactions with respect to this Agreement,
the Loan Documents and all related documents in accordance with
its usual banking practices. In performing its duties as Agent
hereunder, the Agent will take the same care as it takes in
connection with loans in which it alone is interested.
However, neither the Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or
omitted to be taken by it or them hereunder or in connection
herewith except for its or their own gross negligence or
willful misconduct.
9.3 Consultation with Counsel. The Agent may consult
with legal counsel and any other professional advisors or
consultants deemed necessary or appropriate and selected by
Agent and shall not be liable for any action taken or suffered
in good faith by it in accordance with the advice of such
counsel.
9.4 Documents. The Agent shall not be under a duty to
examine into or pass upon the effectiveness, genuineness or
validity of this Agreement or any of the Revolving Credit
Notes, or any other instrument or document furnished pursuant
hereto or in connection herewith, and the Agent shall be
entitled to assume that the same are valid, effective and
genuine and what they purport to be. In addition, the Agent
shall not be liable for failing to make any inquiry concerning
the accuracy, performance or observance of any of the terms,
provisions or conditions of such instrument or document.
9.5 Rights as a Bank. With respect to its applicable Pro
Rata Percentage of the Credit Facility, the Agent shall have
the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
Subject to the provisions of this Agreement, the Agent may
accept deposits from, lend money to and generally engage in any
kind of banking or trust business with Borrower and its
Affiliates as if it were not the Agent.
9.6 Responsibility of Agent. It is expressly understood
and agreed that the obligations of the Agent hereunder are only
those expressly set forth in this Agreement and that the Agent
shall be entitled to assume that no Event of Default and no
Unmatured Event of Default has occurred and is continuing,
unless the Agent has actual knowledge of such fact. Except to
the extent Agent is required by the Lenders pursuant to the
express terms hereof to take a specific action, the Agent shall
be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it
by, or with respect to taking or refraining from taking any
action or actions that it may be able to take under or in
respect of, this Agreement and the Loan Documents. The Agent
shall incur no liability under or in respect of this Agreement
and the Loan Documents by acting upon any notice, consent,
certificate, warranty or other paper or instrument believed by
it to be genuine or authentic or to be signed by the proper
party or parties, or with respect to anything that it may do or
refrain from doing in the reasonable exercise of its judgment,
or that may seem to it to be necessary or desirable under the
circumstances. It is agreed among the Agent and the Lenders
that the Agent shall have no responsibility to carry out field
examinations or otherwise examine the books and records or
properties of Borrower, except as the Agent in its sole
discretion deems appropriate. The relationship between the
Agent and each Lender is and shall be that of agent and
principal only and nothing herein shall be construed to
constitute the Agent a joint venturer with any Lender, a
trustee or fiduciary for any of the Lenders or for the holder
of a participation therein nor impose on the Agent duties and
obligations other than those set forth herein.
9.7 Collections and Disbursements.
(a) The Agent will have the right to collect and
receive all payments of the Obligations, together with all
fees, charges and other amounts due under this Agreement and
the Loan Documents, and the Agent will remit to each Lender
according to applicable Pro Rata Percentages all such payments
actually received by Agent (subject to any required clearance
procedures) on the same Business Day of receipt thereof (but if
such payments shall not have been received by the Agent prior
to 12:00 noon Eastern Time on such Business Day then, on the
next Business Day).
(b) On the Business Day for which notice is given
Lenders by Agent with respect to requested Advances (which
notice shall state the date and amount of such payment), each
Lender shall, provided all preconditions to Advances contained
in Section 2.3 herein have been satisfied, remit to the Agent
its Pro Rata Percentage of the payment in respect to such
Advance. The obligations of Lenders under this Section 9.7(b)
are unconditional, not subject to set-off, are irrevocable and
may not be terminated at any time.
(c) If any such payment received by the Agent is
rescinded, determined to be unenforceable or invalid or is
otherwise required to be returned for any reason at any time,
whether before or after termination of this Agreement and the
Loan Documents, each Lender will, upon written notice from the
Agent, promptly pay over to the Agent its Pro Rata Percentage
of the amount so rescinded, held unenforceable or invalid or
required to be returned, together with interest and other fees
thereon if also required to be rescinded or returned.
(d) All payments by the Agent and the Lenders to
each other hereunder shall be in immediately available funds.
The Agent will at all times maintain proper books of account
and records reflecting the interest of each Lender in the
Credit Facility, in a manner customary to the Agent's keeping
of such records, which books and records shall be available for
inspection by each Lender at reasonable times during normal
business hours, at such Lender's sole expense. In the event
that any Lender shall receive any payments in reduction of the
Obligations in an amount greater than its applicable Pro Rata
Percentage in respect of indebtedness to the Lenders evidenced
hereby (including, without limitation amounts obtained by
reason
of setoffs), such Lender shall hold such excess in trust for
Agent (on behalf of all other Lenders) and shall promptly remit
to the Agent such excess amount so that the amounts received by
each Lender hereunder shall at all times be in accordance with
its applicable Pro Rata Percentage. To the extent necessary
for each Lender's actual percentage of all outstanding Loans to
equal its applicable Pro Rata Percentage, the Lender having a
greater share of any payments than its applicable Pro Rata
Percentage shall acquire a participation in the applicable
outstanding balances of the Pro Rata Shares of the other
Lenders as determined by Agent.
9.8 Indemnification. The Lenders hereby each indemnify
the Agent ratably according to their respective Pro Rata
Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or
omitted by the Agent under or related to this Agreement or the
other Loan Documents or the Loans, provided that no Lender
shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from
the Agent's gross negligence or willful misconduct. Agent
shall have the right to deduct, from any amounts to be paid by
Agent to any Lender hereunder, any amounts owing to Agent by
such Lender by virtue of this paragraph. The indemnity
provision contained in this Section 9.8 shall survive the
termination of this Agreement, the Revolving Credit or payment
in full of the Obligations.
9.9 Expenses.
(a) All out-of-pocket costs and out-of-pocket
expenses incurred by Agent and not reimbursed on demand by
Borrower, in connection with the creation, amendment,
administration, termination and enforcement of the Loans
(including, without limitation, field examination expenses,
counsel fees and expenditures to protect, preserve and defend
Agent's and any Lender's rights and interest under the Loan
Documents) shall be shared and paid on demand by Lenders pro
rata, based on their applicable Pro Rata Percentage provided
that such out-of-pocket costs and expenses shall not be
recoverable from the Lenders by the Agent to the extent such
costs and expenses resulted solely from the Agent's gross
negligence or willful misconduct.
(b) Agent may deduct from payments or
distributions to be made to Lenders such funds as may be
necessary to pay or reimburse Agent for the costs and expenses
described in subsection 9.9(a) if not paid to Agent within
thirty (30) days of the date of demand for same by Agent
pursuant to such subsection.
9.10 No Reliance. By execution of or joining in this
Agreement, each Lender acknowledges that it has entered into
this Agreement and the Loan Documents solely upon its own
independent investigation and is not relying upon any
information supplied by or any representations made by Agent.
Each Lender shall continue to make its own analysis and
evaluation of Borrower. Agent makes no representation or
warranty and assumes no responsibility with respect to the
financial condition or Property of Borrower, any Lessee or any
Collateral; the accuracy, sufficiency or currency of any
information concerning the financial condition, prospects or
results of operations of Borrower; or for sufficiency,
authenticity, legal effect, validity or enforceability of the
Loan Documents. Agent assumes no responsibility or liability
with respect to the collectibility of the Obligations or the
performance by Borrower of any obligation under the Loan
Documents.
9.11 Reporting. During the term of this Agreement, Agent
will promptly furnish each Lender such financial statements and
reports as any Lender may reasonably request. Agent will
notify Lenders within a reasonable period of time after it
receives actual knowledge of any Event of Default under the
Loan Documents.
9.12 Removal of Agent. The Agent may resign at any time
upon giving thirty (30) days prior written notice thereof to
Lenders and Borrower. The Agent may be removed as Agent
hereunder upon the written direction of all Lenders exclusive
of the Agent upon the following: (i) wilful misconduct in the
performance of Agent's duties or responsibilities under this
Agreement; or (ii) if a receiver, trustee or conservator is
appointed for Agent or any state or federal regulatory
authority assumes management or control of Agent or if, under
applicable law, the administrative or discretionary duties and
responsibilities of Agent hereunder become controlled by or
subject to the approval of any state or federal regulatory
authority. Upon any resignation or permitted removal of Agent,
the Lenders shall have the right to appoint a successor Agent
by majority vote of the other Lenders (based upon the
percentages of the total Pro Rata Shares of the Lenders other
than the Lender which is the Agent). Upon the acceptance of
the appointment as a successor Agent hereunder by such
successor Agent, such successor Agent shall thereupon succeed
to and become vested with all rights, powers, obligations and
duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder.
9.13 Action on Instructions of Lenders. With respect to
any provision of this Agreement, or any issue arising
thereunder, concerning which the Agent is authorized to act or
withhold action by direction of one or more Lenders, the Agent
shall in all cases be fully protected in so acting, or in so
refraining from acting, hereunder in accordance with written
instructions signed by the requisite Lenders. Such
instructions and any action taken or failure to act pursuant
thereto shall be binding on all Lenders and on all holders of
the Revolving Credit Notes.
9.14 Several Obligations. The obligation of each Lender
is several, and neither the Agent nor any other Lender shall be
responsible for any obligation or commitment hereunder of any
other Lender.
9.15 Consent of Lenders.
(a) Subject to this Section 9.15, Agent shall have
the sole and exclusive right to service, administer and monitor
the Loans and the Loan Documents, including without limitation,
the right to exercise all rights, remedies, privileges and
options under the Loan Documents, including without limitation
the determination as to whether Advances should be made under
this Agreement and the determination as to the basis on which
and extent to which Advances may be made.
(b) Notwithstanding anything to the contrary
contained in subparagraph (a) above, Agent shall not, without
the prior written consent of all Lenders: (i) extend or renew
the Current Term or any payment date under the Credit Facility,
(ii) decrease any interest rate on the Credit Facility, (iii)
compromise or settle all or a portion of the Obligations, (iv)
release any obligor from the Obligations except in connection
with termination of the Credit Facility and full payment and
satisfaction of all Obligations, (v) increase the Borrowing
Base advance rate, (vi) modify Section 9.15(b) or (c), or (vii)
increase the Maximum Credit Limit; provided however that Agent
may increase the Maximum Credit Limit after first offering the
amount of any such increase to each of the Lenders in
accordance with their respective Pro Rata Percentage. To the
extent any Lender may choose not to increase its respective Pro
Rata Share by the amount attributable to its Pro Rata
Percentage of such increase, such amount will be offered to the
other Lenders on such sharing basis as Agent may reasonably
establish. After each Lender choosing to increase its Pro Rata
Share has agreed to do so, and in conjunction with the
modification of this Agreement to reflect such increase
executed by those Lenders sharing in the increase of the Credit
Facility, the Lenders' Pro Rata Percentages will be adjusted
accordingly and all Lenders (whether or not sharing in such
increase) shall be bound by such modification.
(c) Notwithstanding anything to the contrary
contained in subparagraph (a) above and subject to the terms of
subparagraph (b) above, Agent shall not, without the prior
written consent of the SuperMajority Lenders: (i) enter into
any written amendment to any of the Loan Documents; (ii) waive
Borrower's compliance with the terms and conditions of the Loan
Documents or any Event of Default hereunder or thereunder; or
(iii) consent to Borrower taking any action which, if taken,
would constitute an Event of Default under this Agreement or
under any of the Loan Documents.
(d) After an acceleration of the Obligations,
Agent shall have the sole and exclusive right, with
communication (to the extent reasonably practicable under the
circumstances) with all Lenders, to exercise or refrain from
exercising any and all rights, remedies, privileges and options
under the Loan Documents and available at law or in equity to
protect and enforce the rights of the Lenders and collect the
Obligations, including, without limitation, instituting and
pursuing all legal actions against Borrower or to collect the
Obligations, or defending any and all actions brought by
Borrower or other Person; or incurring Expenses or otherwise
making expenditures to protect the Loans, the Collateral or
Lenders' rights or remedies.
(e) To the extent Agent is required to obtain or
otherwise elects to seek the consent of Lenders to an action
Agent desires to take, if any Lender fails to notify Agent, in
writing, of its consent or dissent to any request of Agent
hereunder within seven (7) Business Days of such Lender's
receipt of such request, such Lender shall be deemed to have
given its consent thereto.
(f) No provision in Section 9 of this Agreement
may be amended without Agent's prior written consent.
9.16 Participations and Assignments: Borrower and Lenders
hereby acknowledge and agree that Lenders may not grant
participations in or assign all or any portion of their
respective Pro Rata Shares, or Pro Rata Percentages or of their
right, title and interest therein or in or to this Agreement
except:
(a) the granting of such participations or
assignments to any Affiliate of such Lender; and
(b) assignments which arise by operation of law;
and
(c) assignments or participations approved by
Agent in its discretion and on such terms and conditions as are
reasonably acceptable to Agent.
Agent agrees with each other Lender that it shall at all
times maintain a Pro Rata Share equal to at least $11,000,000
and a Pro Rata Percentage which is no less than the Pro Rata
Percentage of any other Lender unless the Agent obtains the
express written consent of the other Lenders. The agreement
contained in the immediately preceding sentence is only for the
benefit of the Lenders and shall confer no rights on the
Borrower or any other third parties.
SECTION 10. MISCELLANEOUS
10.1 GOVERNING LAW: THIS AGREEMENT, AND ALL RELATED
AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA. THE PROVISIONS OF THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO
HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR
THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND
EFFECT.
10.2 Integrated Agreement: The Revolving Credit Notes,
the other Loan Documents, all related agreements, and this
Agreement shall be construed as integrated and complementary of
each other, and as augmenting and not restricting Lenders' and
Agent's rights and remedies. If, after applying the foregoing,
an inconsistency still exists, the provisions of this Agreement
shall constitute an amendment thereto and shall control.
10.3 Waiver:
(a) No omission or delay by Agent or Lenders in ex
ercising any right or power under this Agreement or any related
agreements and documents will impair such right or power or be
construed to be a waiver of any default, or Event of Default or
an acquiescence therein, and any single or partial exercise of
any such right or power will not preclude other or further
exercise thereof or the exercise of any other right, and as to
Borrower no waiver will be valid unless in writing and signed
by Agent and then only to the extent specified.
(b) Borrower releases and shall indemnify, defend
and hold harmless Agent and Lenders, and their respective
officers, employees and agents, of and from any claims,
demands, liabilities, obligations, judgments, injuries, losses,
damages and costs and expenses (including, without limitation,
reasonable legal fees) resulting from (i) acts or conduct of
Borrower under, pursuant or related to this Agreement and the
other Loan Documents, (ii) Borrower's breach or violation of
any representation, warranty, covenant or undertaking contained
in this Agreement or the other Loan Documents, and (iii)
Borrower's failure to comply with any or all laws, statutes,
ordinances, governmental rules, regulations or standards,
whether federal, state or local, or court or administrative
orders or decrees, (including without limitation environmental
laws, etc.) and all costs, expenses, fines, penalties or other
damages resulting therefrom, unless resulting solely from acts
or conduct of Lenders constituting wilful misconduct or gross
negligence. The indemnity provisions contained in this Section
10.3(b) shall survive indefinitely, notwithstanding the
termination of this Agreement, the Credit Facility or payment
in full of the Obligations.
10.4 Time: Whenever Borrower shall be required to make
any payment, or perform any act, on a day which is not a
Business Day, such payment may be made, or such act may be
performed, on the next succeeding Business Day. Time is of the
essence in Borrower's performance under all provisions of this
Agreement and all related agreements and documents.
10.5 Expenses of Agent and Lenders: At Closing and from
time to time thereafter, Borrower will pay all expenses of
Agent (and after the occurrence of an Event of Default, all
expenses of Lenders, or any of them) on demand (including,
without limitation, search costs, audit fees, appraisal fees,
environmental fees and the fees and expenses of legal counsel
for Agent, and/or Lender(s), if applicable) relating to this
Agreement, and all related agreements and documents, including,
without limitation, expenses incurred in the analysis, nego
tiation, preparation, closing, administration and enforcement
of this Agreement and the other Loan Documents, the
enforcement, protection and defense of the rights of Agent and
Lenders in and to the Loans and Collateral or otherwise
hereunder, and any expenses relating to extensions, amendments,
waivers or consents related to this Agreement or any related
agreements and documents or relating to agreements with other
creditors, or termination of this Agreement (collectively, the
"Expenses").
10.6 Brokerage: This transaction was brought about and
entered into by Agent, Lenders and Borrower acting as
principals and without any brokers, agents or finders being the
effective procuring cause hereof. Borrower represents that it
has not committed Agent or any Lender to the payment of any
brokerage fee, commission or charge in connection with this
transaction.
10.7 Notices:
(a) Any notices or consents required or permitted
by this Agreement shall be in writing and shall be deemed given
if delivered in person or if sent by telecopy or by nationally
recognized overnight courier, or via first class, Certified or
Registered mail, postage prepaid, as follows, unless such
address is changed by written notice hereunder:
If to Agent to: CoreStates Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ D'▇▇▇▇▇▇▇, Vice
President Telecopy No.: 215/786-7704
With copies to: Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Four ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇,
Esquire Telecopy No.: 215/569-5555
If to Borrower to: Granite Financial, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President Telecopy No.: 303/650-
4061
With copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: 303/296-3152
If to Lenders: To the addresses
set forth on Schedule A attached
hereto
(b) Any notice sent by Agent, any Lender or
Borrower by any of the above methods shall be deemed to be
given when so received.
(c) Agent shall be fully entitled to rely upon any
facsimile transmission or other writing purported to be sent by
any Authorized Officer (whether requesting an Advance or
otherwise) as being genuine and authorized.
10.8 Headings: The headings of any paragraph or Section
of
this Agreement are for convenience only and shall not be used
to interpret any provision of this Agreement.
10.9 Survival: All warranties, representations, and
covenants made by Borrower herein, or in any agreement referred
to herein or on any certificate, document or other instrument
delivered by it or on its behalf under this Agreement, shall be
considered to have been relied upon by Agent and Lenders, and
shall survive the delivery to Lenders of the Revolving Credit
Notes, regardless of any investigation made by Lenders or on
their behalf. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of Agent
and any and all Lenders shall constitute warranties and
represen tations by Borrower hereunder. Except as otherwise
expressly provided herein, all covenants made by Borrower
hereunder or under any other agreement or instrument shall be
deemed continuing until all Obligations are satisfied in full.
10.10 Successors and Assigns: This Agreement shall inure
to the benefit of and be binding upon the successors and
assigns of each of the parties. Borrower may not transfer,
assign or delegate any of its duties or obligations hereunder.
10.11 Counterparts: Two or more duplicate originals of
this Agreement may be signed by the parties, each of which
shall constitute an original but all of which together shall
constitute one and the same instrument. This Agreement may be
executed in counterparts, all of which counterparts taken
together shall constitute one completed fully executed
document.
10.12 Modification: No modification hereof or any agree
ment referred to herein shall be binding or enforceable unless
in writing and signed by Borrower, Agent and the Lenders and
except as provided in Section 9 hereof. Any modification in
accordance with the terms hereof shall be binding on all
parties hereto, whether or not each is a signatory thereto.
10.13 Signatories: Each individual signatory hereto
repre
sents and warrants that such individual is duly authorized to
execute this Agreement on behalf of their principal and that
such individual executes the Agreement in such capacity and not
as a party.
10.14 Third Parties: No rights are intended to be
created
hereunder, or under any related agreements or documents for the
benefit of any third party donee, creditor or incidental benefi
ciary of Borrower. Nothing contained in this Agreement shall
be construed as a delegation to Agent or any Lender of
Borrower's duty of performance, including, without limitation,
Borrower's duties under any Lease, account or contract with any
other Person.
10.15 Discharge of Taxes, Borrower's Obligations, Etc.:
Agent, in its sole discretion, shall have the right at any
time, and from time to time, with prior notice to Borrower, if
Borrower fails to do so five (5) Business Days after requested
in writing to do so by Agent, to: (a) pay for the performance
of any of Borrower's obligations hereunder, (b) discharge taxes
or Liens, at any time levied or placed on any of Borrower's
Property in violation of this Agreement unless Borrower is in
good faith with due diligence by appropriate proceedings
contesting such taxes or Liens and maintaining proper reserves
therefor in accordance with GAAP and (c) pay the fee described
in Section 8 of the Intercreditor Agreement. Expenses and
advances, including without limitation, those advances
described in clauses (a), (b) and (c) above, shall be added to
the Revolving Credit Loans, bear interest at the same rate
applied to the Revolving Credit Loans, until reimbursed to
Agent. Such payments and advances made by Agent shall not be
construed as a waiver by Agent or Lenders of an Event of
Default under this Agreement.
10.16 Most Favored Lenders: Borrower agrees to promptly
notify Agent in writing if any agreement for borrowed money to
which Borrower is a party contains, or is amended to contain,
financial or performance covenants more restrictive than those
contained herein and upon Agent's request, Borrower agrees to
amend this Agreement accordingly so that covenants contained
herein are substantially the same as those contained in such
other agreements for borrowed money.
10.17 Consent to Jurisdiction: Borrower and each Lender
hereby irrevocably consents to the jurisdiction of the Courts
of Common Pleas of Philadelphia, Commonwealth of Pennsylvania
or the United States District Court for the Eastern District of
Pennsylvania in any and all actions and proceedings whether
arising hereunder or under any other agreement or undertaking
related hereto and irrevocably agree to service of process by
certified mail, return receipt requested to the address of the
appropriate party set forth herein.
10.18 Waiver of Jury Trial: EACH OF BORROWER, LENDERS
AND AGENT HEREBY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A
JURY TRIAL IN CONNECTION WITH ANY LITIGATION COMMENCED BY OR
AGAINST AGENT OR ANY LENDER OR LENDERS WITH RESPECT TO RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN
DOCUMENTS.
10.19 WARRANT OF ATTORNEY: THIS SECTION 10.19 SHALL ONLY
APPLY AND BE ENFORCEABLE AGAINST BORROWER IN THE EVENT THAT
BORROWER GRANTS SIMILAR RIGHTS TO ANY OTHER CREDITOR. BORROWER
AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS OR THE
PROTHONOTARY OR CLERK OF ANY COURT OF RECORD IN THE
COMMONWEALTH OF PENNSYLVANIA, UPON THE OCCURRENCE OF AN EVENT
OF DEFAULT HEREUNDER, TO APPEAR FOR BORROWER IN ANY SUCH COURT,
WITH OR WITHOUT DECLARATION FILED, AS OF ANY TERM OR TIME THERE
OR ELSEWHERE TO BE HELD AND THEREIN TO CONFESS OR ENTER
JUDGMENT AGAINST BORROWER IN FAVOR OF THE AGENT, ON BEHALF OF
LENDERS FOR ALL SUMS DUE OR TO BECOME DUE BY BORROWER TO
LENDERS UNDER THIS AGREEMENT, WITH COSTS OF SUIT AND RELEASE OF
ERRORS AND WITH THE GREATER OF FIVE PERCENT (5%) OF SUCH SUMS
OR $7,500.00 ADDED AS A REASONABLE ATTORNEY'S FEE; AND FOR
DOING SO THIS AGREEMENT OR A COPY VERIFIED BY AFFIDAVIT SHALL
BE SUFFICIENT WARRANT; SUCH AUTHORITY AND POWER SHALL NOT BE
EXHAUSTED BY ANY EXERCISE THEREOF, AND JUDGMENT MAY BE
CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS
OCCASION THEREFOR.
BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND
FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
CONFESSION OF JUDGMENT HAVE BEEN FULLY EXPLAINED TO IT BY SUCH
COUNSEL.
BORROWER, BEING FULLY AWARE OF THE RIGHT TO NOTICE AND A
HEARING CONCERNING THE VALIDITY OF ANY AND ALL CLAIMS THAT MAY
BE ASSERTED AGAINST BORROWER BY THE AGENT AND/OR LENDERS BEFORE
A JUDGMENT CAN BE ENTERED HEREUNDER OR BEFORE EXECUTION MAY BE
LEVIED ON SUCH JUDGMENT AGAINST ANY AND ALL PROPERTY OF
BORROWER, HEREBY WAIVES THESE RIGHTS AND AGREES AND CONSENTS TO
JUDGMENT BEING ENTERED BY CONFESSION IN ACCORDANCE WITH THE
TERMS HEREOF AND EXECUTION BEING LEVIED ON SUCH JUDGMENT
AGAINST ANY AND ALL PROPERTY OF BORROWER, IN EACH CASE WITHOUT
FIRST GIVING NOTICE AND THE OPPORTUNITY TO BE HEARD ON THE
VALIDITY OF THE CLAIM OR CLAIMS UPON WHICH SUCH JUDGMENT IS
ENTERED.
10.20 Information to Participant: Agent may divulge all
information pertaining to Borrower and the Credit Facility to
any participant, co-lender or assignee or prospective
participant, co-lender or assignee it may obtain in the Credit
Facility, or any portion thereof, and furnish to any such
Person copies of any reports, financial statements,
certificates, and documents obtained under any provision of
this Agreement, or related agreements and documents; provided,
however that any potential participant, co-lender or assignee
agrees to hold in confidence all confidential or proprietary
information provided to them by Borrower or Agent except (a) to
the extent that the production of such information is required
pursuant to any statute, ordinance, regulation, rule or order
or any subpoena or any governmental inquiry or by reason of any
bank regulation in connection with any bank examination, and
(b) such potential participant, colender or assignee shall not
be prohibited from disclosing any such information to any of
their agents, officers, employees, attorneys, accountants or
consultants who shall be informed of this provision.
IN WITNESS WHEREOF, the undersigned parties have executed
this Agreement the day and year first above written.
GRANITE FINANCIAL, INC.
By:________________________________
Title:
Attest:_____________________(Corporate
Seal) Title:
CORESTATES BANK, N.A., as Agent
By:________________________________
Title:
CORESTATES BANK, N.A., as a Lender
By:________________________________
Title:
COLORADO NATIONAL BANK, as a Lender
By:________________________________
Title:
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By:________________________________
Title:
BANK LEUMI TRUST COMPANY OF NEW YORK, as
a Lender
By:________________________________
Title:
SCHEDULE A
Pro Rata
Lenders Pro Rata Share Percentage
CoreStates Bank, N.A. $11,000,000 30.56%
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇., ▇▇ ▇▇▇▇▇
Attn: Mr. David D'Antonio,
Vice President
Telecopy No.: 215/786-7704
Colorado National Bank $10,000,000
27.78%
Commercial Banking Division
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Asst. Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
PNC Bank, National $7,500,000
20.83%
Association
PNC Bank Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇-▇▇▇▇-▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President
Telecopy No.: 215/585-8351
Bank Leumi Trust $7,500,000
20.83%
Company of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Asst. Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 2.1(d)
CoreStates Bank, N.A. ("CS"), as
Agent Borrowing Base
Availability
for Granite Financial, Inc. ("Granite")
As of ______________, 19__
---------------------------------------------------------------
--
This Certificate is submitted to CS, as Agent, in
connection with the Loan and Security Agreement dated as of
_______, 1997
(the "Agreement") between CS, as Agent, the Lenders now or
hereafter identified on the signature pages thereof and
Granite. Capitalized terms used herein without further
definition shall have the meanings ascribed thereto in the
Agreement.
The undersigned hereby certifies to CS, as Agent, that the
undersigned is familiar with the following financial
information which has been taken from Granite's books and
records which are complete and accurate and that the following
calculations of the Borrowing Base and remaining amount
available under the Borrowing Base and all of the
representations and warranties contained in the Agreement are
true and correct on the date hereof:
BORROWING BASE
1. Total Eligible Lease Receivables
Currently Pledged to CS
$___________________
2. Total Ineligible Lease Receivables:
Delinquent Leases (over 61 days past
due)
$___________________
Leases pledged to Lenders for
over six (6) months
$___________________
Other exclusions per definition
of Eligible Leases
$___________________
3. Borrowing Base:
$___________________
lesser of 75% Of Eligible Lease
Receivables or (ii) 95% of Present
Value of such Lease Receivables.
4. Aggregate Revolving Credit
$___________________
Note Balances
5. Excess of Borrowing Base
over Revolving Credit
Note Balances (Line 3,
minus line 4)
$___________________
6. Maximum Credit Limit $ 36,000,000
7. Availability Under Facility
(lesser of (i) line 6, minus
line 4 or (ii) line 5) $___________________
8. Amount Of Borrowing Request $___________________
9. Net Availability (Line 7, minus
line 8) $___________________
Date:____________________ GRANITE FINANCIAL, INC.
By: ___________________________
Name: Title:
EXHIBIT 2.3(b)(ii)
ASSIGNMENT AGREEMENT
Granite Financial, Inc. (hereinafter "Assignor"), does
hereby assign to CORESTATES BANK, N.A. as Agent, for the benefit
of the
Lenders (as defined below) (hereinafter "Assignee"), its
successors and assigns, all of the right, title and interest of
Assignor in and to (i) the Leases, as identified on the Schedule
A attached hereto and made a part hereof, the Leased Property
which is the subject matter of such Leases, and all proceeds
thereof; and (ii) all of the interest of Assignor as loss payee
or beneficiary under any insurance policies issued in connection
with any Lease or any Leased Property which is the subject matter
of any Lease.
This Assignment is entered into and delivered in accordance
with and is subject to that certain Loan and Security Agreement
dated _____________, 1997 among Assignor, Assignee and the
lenders now or hereafter shown on the signature pages thereof
(collectively "Lenders") (hereinafter "Agreement"). Assignee
shall have the right to ▇▇▇ for, collect, and receive all
payments due or to become due under the Leases, in accordance
with the Agreement, with power to enforce in its own name or in
Assignor's name any and all rights given to Assignor thereunder.
All capitalized terms not otherwise defined herein shall have the
meaning set forth in the Agreement.
This Assignment and the subject matter hereof, is hereby
given as security for all of Assignor's Obligations.
Delivered herewith are the sole originals of all Leases
referred to on Schedule A attached hereto and made a part hereof.
Assignor agrees that Assignee has not assumed and does not
assume by virtue of this assignment, any of Assignor's
obligations or liabilities to the lessee/renter under any Leases.
All of the representations and warranties contained in the
Agreement with respect to Assignor, the Leases and the Leased
Property are true, correct and complete as of the date of this
Assignment and no Event of Default has occurred under the
Agreement.
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed by its duly authorized officer this _____
day of _____________________, 199__.
Granite Financial, Inc.
Attest:_____________________ By:___________________________
Title: Title:
Exhibit 6.9(ii)
CoreStates Bank, N.A. ("CS"), as Agent
Lease Receivable Agings
for Granite Financial, Inc.
("Granite") As of
___________, 199__
_________________________________________________________________
__ This Certificate is submitted to CS, as Agent, in connection
with the Loan and Security Agreement dated as of _______, 1997
(the "Agreement") between CS, as Agent, the Lenders now or
hereafter identified on the signature pages thereof and Granite.
Capitalized terms used herein without further definition shall
have the meanings ascribed thereto in the Agreement.
Aging of Lease Receivables
Eligible Lease Receivables:
Current: $___________________ ( % of portfolio)
1-30 days past due: $___________________ ( % of portfolio)
31-61 days past due: $___________________ ( % of portfolio)
Ineligible Lease Receivables:
Current:
1-30 days past due: $___________________ ( % of portfolio)
31-61 days past due: $___________________ ( % of portfolio)
over 61 days past due: $___________________ ( % of portfolio)
Attach supporting documentation hereto.
Borrower certifies to CS, as Agent, that the undersigned is
familiar with the above financial information which has been
taken from Granite's books and records which are complete and
accurate and that all information contained herein and the
representations and warranties made in the Agreement are true and
correct as of the date hereof.
Granite Financial, Inc.
DATE:_______________ BY:__________________________________
Name Title
Exhibit 6.9(vi)
CoreStates Bank, N.A. ("CS"), as Agent
Financial Covenant Compliance
for Granite Financial, Inc.
("Granite")
As of ___________, 199__
_________________________________________________________________
__ This Certificate is submitted to CS, as Agent, in connection
with the Loan and Security Agreement dated as of _______, 1997
(the "Agreement") between CS, as Agent, the Lenders now or
hereafter identified on the signature pages thereof and Granite.
Capitalized terms used herein without further definition shall
have the meanings ascribed thereto in the Agreement.
Financial Covenant Compliance
Covenant Required Actual Compliance
Yes/No
Adjusted Debt to
Tangible Net Worth 5.0 to 1
Tangible Net Worth
Net Worth
Interest Coverage Ratio 1.25x
Delinquencies less than 3.75%
of gross receivables
Charge-Offs less than 2%
of equipment cost
Attach supporting documentation hereto.
Borrower certifies to CS, as Agent, that the undersigned is
familiar with the above financial information which has been
taken from Granite's books and records which are complete and
accurate
and that all information contained herein and the representations
and warranties made in the Agreement are true and correct as of
the date hereof.
Granite Financial, Inc.
DATE:_______________ BY:__________________________________
Name Title