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EXHIBIT 10.101
TERM LOAN AGREEMENT
$10,000,000
BayView Capital Corporation,
a Delaware Corporation,
as Lender
and
Onyx Acceptance Corporation,
a Delaware Corporation,
as Borrower
Dated as of February 24, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Accounting Terms; GAAP Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.03 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II THE TERM LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.01 The Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02 Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.03 Evidence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.01 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.02 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.04 Highest Lawful Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV REDUCTION OR TERMINATION;
REPAYMENT; PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.01 Reduction or Termination of the Commitments . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.02 Repayment of the Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.03 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.02 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.02 Insolvency, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.03 Senior Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.04 Senior Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.05 Turn-Over of Payments Received . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.06 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.08 Subordination Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.09 Right To Retain Payment Received . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.10 Remedy Standstill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.12 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.13 Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.14 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.15 Warranties, Representations, Covenants and Acknowledgments
of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE VII CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.01 Conditions Precedent to Initial Borrowing . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.02 Conditions Precedent to All Term Loans . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.01 Reporting Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.01 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 11.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 11.02 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.04 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.05 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12.06 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.07 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.08 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.09 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.12 Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.13 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.14 Jury Trial Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 12.15 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
EXHIBITS
FORM OF NOTE A
FORM OF WARRANT B
FORM OF NOTICE OF BORROWING C
FORM OF NOTICE OF PREPAYMENT D
FORM OF TRANSFERENCE ACKNOWLEDGMENT E
SCHEDULES
PERMITTED LIENS 1
LIST OF SUBSIDIARIES 2
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TERM LOAN AGREEMENT
This Term Loan Agreement (this "Agreement"), dated as of February 24,
1998, is made by and between Onyx Acceptance Corporation, a Delaware
corporation ("Borrower"), and BayView Capital Corporation, a Delaware
corporation ("Lender").
Borrower has requested that Lender make available to the Borrower
subordinated term loans upon the terms and conditions set forth in this
Agreement, to refinance certain existing indebtedness and to use for general
corporate purposes. Lender is willing to make available such subordinated term
loans to Borrower upon the terms and subject to the conditions set forth in
this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" means any Person which, directly or indirectly, controls,
is controlled by or is under common control with another Person. For purposes
of the foregoing, "control," "controlled by" and "under common control with"
with respect to any Person shall mean the possession, directly or indirectly,
of the power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person, or (ii) to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq., as the same may be amended, and any successor federal
statute, and all similar state bankruptcy, insolvency or reorganization laws.
"Borrower" has the meaning set forth in the recital of parties to this
Agreement.
"Borrowing" means a borrowing consisting of a Term Loan made at any
time pursuant to Article II.
"Business Day" means a day (i) other than Saturday or Sunday, and (ii)
on which commercial banks are open for business in San Francisco, California.
"Commitment" means $10,000,000 or, where the context so requires, the
obligation of Lender to make Term Loans up to such amount on the terms and
conditions set forth in this Agreement.
"Consolidated Net Income" means the consolidated net income of
Borrower as determined in accordance with GAAP, excluding extraordinary gains
or losses.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of Preferred Stock (other than Disqualified Stock) that
by its terms is not entitled to the payment of dividends unless such dividends
may be declared and paid only out of net earnings in respect of the year of
such declaration and payment, but only to the extent of any cash received by
such Person upon issuance of such Preferred Stock, less (x) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of the Agreement
in the book value of any asset owned by such Person or a consolidated
Subsidiary of such Person and (y) all investments as of such date in non
consolidated Subsidiaries and in Persons that are not Subsidiaries.
"Debt" shall mean, with respect to any Person, (a) obligations of such
Person for borrowed money or which has been incurred in connection with the
acquisition of property or assets, (b) obligations secured by any lien upon
property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations and (c)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding
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the fact that the rights and remedies of the seller, lender or lessor under
such agreement in the event of default are limited to repossession or sale of
property.
"Default" means an Event of Default or an event or condition which
with notice or lapse of time or both would constitute an Event of Default.
"Dollars" and the sign "$" each means lawful money of the United
States.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directives, requests, licenses, authorizations and
permits of, and agreements with (including consent decrees), any Governmental
Authorities, in each case relating to or imposing liability or standards of
conduct concerning public health, safety and environmental protection matters,
including the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Clean Air Act, the Federal Water Pollution Control Act of
1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act, the California Hazardous Waste Control Law, the
California Solid Waste Management, Resource Recovery and Recycling Act, the
California Water Code and the California Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, including (unless the context otherwise requires) any rules or
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control with Borrower within the meaning of
Section 4001(a)(14)(B) of ERISA and Sections 414(b) and (c) of the Internal
Revenue Code, or a member of an affiliated service group with Borrower within
the meaning of Section 414(m) of the Internal Revenue Code.
"Event of Default" has the meaning set forth in Section 11.01.
"Extended Maturity Date" has the meaning set forth in Section 4.02.
"Fifth Amendment to Amended and Restated Investors' Rights Agreement"
means that certain Fifth Amendment to Amended and Restated Investors Rights
Agreement, dated as of the date hereof, by and among Lender, Borrower and
certain other parties identified therein.
"Fiscal Year" means the fiscal year of Borrower and its consolidated
Subsidiaries.
"Funded Debt" means all of such Person having a final maturity of one
or more than one year from the date of determination thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of determination provided that outstandings
under the credit facilities which are retired for a period of thirty (30)
consecutive days during each fiscal year will be defined as short term debt)
but excluding Permitted Debt.
"GAAP" means generally accepted accounting principles in the U.S. as
in effect from time to time.
"Governmental Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank,
court, tribunal or other instrumentality or authority, domestic or foreign,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Substances" means any toxic or hazardous substances,
materials, wastes, contaminants or pollutants, including asbestos, PCBs,
petroleum products and byproducts, and any substances defined or listed as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances" (or similarly identified), regulated under or forming the basis for
liability under any applicable Environmental Law.
"Indebtedness" for any Person shall mean at any time, without
duplication: (i) all indebtedness or other obligations of such Person for
borrowed money or for the deferred purchase price of property or services; (ii)
all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (iii) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property); (iv) all
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reimbursement or other obligations of such Person under or in respect of
letters of credit and bankers acceptances, and all net obligations in respect
of derivative contracts; (v) all guaranty obligations; and (vi) all
indebtedness of another Person secured by any Lien upon or in property owned by
the Person for whom indebtedness is being determined, whether or not such
Person has assumed or become liable for the payment of such indebtedness of
such other Person.
"Interest Payment Date" means a date specified for the payment of
interest pursuant to Section 3.01(c).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, including (unless the context otherwise requires) any rules or
regulations promulgated thereunder.
"Lender" has the meaning set forth in the recital of parties to this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien (statutory or
other), or other preferential arrangement (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing or any agreement to give any
security interest).
"Loan Documents" means this Agreement, the Notes, the Warrant, and the
Fifth Amendment to the Amended and Restated Investors' Rights Agreement, and
all other certificates, documents, agreements and instruments delivered to
Lender under or in connection with this Agreement.
"Material Adverse Effect" means any event, matter, condition or
circumstance which (i) has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of Borrower; (ii) would materially impair the ability
of Borrower or any other Person to perform or observe its obligations under or
in respect of the Loan Documents, or (iii) affects the legality, validity,
binding effect or enforceability of any of the Loan Documents.
"Maturity Date" means the date two years after the date of this
Agreement.
"Minimum Amount" has the meaning set forth in Section 2.04.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA to which Borrower or an ERISA Affiliate
has an obligation to contribute.
"Notes" means any subordinated promissory note of Borrower payable to
Lender, in substantially the form of Exhibit "A".
"Notice" means a Notice of Borrowing or a Notice of Prepayment.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Prepayment" has the meaning set forth in Section 4.03(b).
"Obligations" means the indebtedness, liabilities and other
obligations of Borrower to Lender under or in connection with any of the Loan
Documents, including all Term Loans, all interest accrued thereon (including
interest that, but for the filing of a petition in bankruptcy with respect to
any Borrower, would have accrued on the Obligations), all fees due under this
Agreement or any of the Loan Documents and all other amounts payable by
Borrower to Lender thereunder or in connection therewith.
"Pension Plan" means any employee pension benefit plan covered by
Title IV of ERISA (other than a Multiemployer Plan) that is maintained for
employees of Borrower or any ERISA Affiliate or with regard to which Borrower
or an ERISA Affiliate has an obligation to contribute.
"Permitted Debt" means Indebtedness of Borrower or any Subsidiary of
the Borrower which is now or hereafter outstanding under one or more (i)
warehouse facilities; provided, however that the assets purchased with the
proceeds of such Indebtedness are or, prior to any funding under the warehouse
facility with respect to such assets, were eligible to be recorded as held for
sale on the consolidated balance sheet of Borrower in accordance with GAAP;
and/or (ii) the Senior Loan Agreement and any other credit facilities which are
secured by a security interest in the residual interest in securitization
assets provided that the advance rate under these facilities are equal to or
greater than the greater of (x) 70% of the fair market value determined in
accordance with the formula set forth in such credit
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facilities or (y) 60% of the book value determined on a consolidated basis in
accordance with GAAP.
"Permitted Liens" means:
(i) the existing and proposed Liens listed in Schedule 1 or incurred
in connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, including any Lien from time to time granted in
connection with or permitted to exist under the Senior Loan Agreement;
(ii) Liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved or otherwise
appropriately provided for in accordance with GAAP;
(iii) Liens of landlords, materialmen, mechanics, warehousemen,
carriers or employees or other like Liens imposed by law arising in the
ordinary course of business and securing obligations either not delinquent or
being contested in good faith by appropriate proceedings and which are
adequately reserved or otherwise appropriately provided for in accordance with
GAAP and which do not in the aggregate materially impair the use or value of
the property to which they attach or risk the loss or forfeiture of title
thereto;
(iv) Liens consisting of deposits or pledges to secure the payment of
worker's compensation, unemployment insurance or other social security benefits
or obligations, or to secure the performance of bids, trade contracts, leases,
public or statutory obligations, surety or appeal bonds or other obligations of
a like nature incurred in the ordinary course of business (other than for
indebtedness or any Liens arising under ERISA);
(v) easements, rights of way, covenants, consents, reservations,
encroachments, variations and other similar restrictions, charges or
encumbrances (whether or not recorded) which do not (x) secure Indebtedness or
the deferred purchase price of any asset, (y) interfere materially with the
ordinary course of business or (z) in the aggregate materially impair the use
or value of the property to which they attach or risk the loss or forfeiture of
title thereto;
(vi) any judgment, attachment or similar Lien, but only if (A) the
judgment it secures has been discharged or execution thereof effectively stayed
pending appeal while such judgment is being contested in good faith and by
appropriate proceedings within thirty (30) days of the entry thereof, or shall
have been discharged within five Business Days of the expiration of any such
stay or (B) all such Liens in the aggregate (excluding Liens covered by
subclause (A)) at any time outstanding for the Borrower and its Subsidiaries do
not exceed $500,000 at any time;
(vii) Liens existing on any property acquired by Borrower or its
Subsidiaries at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon; and
(viii) Liens on assets of corporations which become Subsidiaries of
Borrower after the date hereof; provided that such Liens existed at the time
the respective corporations became Subsidiaries of Borrower and were not
created in anticipation thereof and provided, further, that neither Borrower
nor any other Subsidiary of Borrower shall have any liability in respect of
such Liens or the obligations secured by such Liens.
"Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization or any other entity of whatever nature or
any Governmental Authority.
"Plan" means any employee pension benefit plan as defined in Section
3(2) of ERISA (including any Multiemployer Plan) and any employee welfare
benefit plan, as defined in Section 3(1) of ERISA (including any plan providing
benefits to former employees or their survivors) established or maintained by
Borrower or to which Borrower or any ERISA Affiliate has an obligation to
contribute.
"Preferred Stock" means stock or other preferred equity security of
the Borrower which is senior in right of liquidation of Borrower's common
stock.
"Premises" means any and all real property, including all buildings
and improvements now or hereafter located thereon and all appurtenances
thereto, now or hereafter owned, leased, occupied or used by Lender.
"Responsible Officer" means, with respect to any Person, the chief
executive officer, the president, the chief financial officer or the treasurer
of such Person, or any other senior officer of such Person having substantially
the same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of any such
Person, or any other senior officer of such Person involved principally in the
financial administration or controllership function of such Person and having
substantially the same authority and responsibility.
"Restricted Payments" means dividends on any shares of common stock
and Preferred Stock and any other distribution not related to investments in
the ordinary course of business or an investment in the auto finance business.
"Senior Event of Default" means the occurrence of any Event of Default
under and as from time to time
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defined in the Senior Loan Agreement, or the Borrower's failure to pay any
installment of principal or interest on any Senior Obligations when due,
whether at stated maturity, by acceleration or otherwise, or failure to pay any
other amount due under any other Senior Obligations within five (5) days after
the due date or any other Event of Default under the Senior Obligations.
"Senior Lender" means State Street Bank and Trust Company for itself
and as Agent for all Banks from time to time party to the Senior Loan
Agreement, and each such Bank, individually, and each of their respective
participants, successors and assigns as holders or participants of Senior
Obligations and any other holder of Senior Obligations.
"Senior Obligations" means (i) that certain Excess Servicing and Trust
Receivable Revolving Credit and Term Loan Agreement dated as of January 31,
1996, by and among the Borrower and State Street Bank and Trust Company, for
itself and as Agent for BankBoston, N.A., formerly known as The First National
Bank of Boston, and such other banks as may from time to time be party thereto,
as heretofore and hereafter amended from time to time (as amended, the "Senior
Loan Agreement"), including any refinancings or extensions of such Senior Loan
Agreement, (ii) the principal of, premium, if any, and interest on loans and
other extensions of credit under any other loan agreement or other evidence of
Indebtedness in favor of any Senior Lender, all expenses, fees, reimbursements,
indemnities and other amounts owing pursuant to any such agreements and any
refinancings or extensions of such agreements and (ii) all Indebtedness of the
Borrower, including principal and interest on such Indebtedness, whether
outstanding on the date of this Agreement or thereafter created, incurred or
assumed, unless the instrument under which such Indebtedness is created,
incurred, assumed or guaranteed expressly provides that such Indebtedness is
not senior or superior in right of payment to the Notes; provided, however,
that the term "Senior Obligations" shall not include (a) any Indebtedness of
the Borrower to an Affiliate of the Borrower or any refinancings thereof, or
(b) any Indebtedness to any employee of Borrower or (c) any Indebtedness which
by its terms or the terms of the instrument creating or evidencing it, is
subordinated in right to payment to or pari passu with the Notes. All interest
accrued on any Senior Obligations shall constitute Senior Obligations both for
periods before and for periods after the commencement of any proceeding under
the Bankruptcy Code, regardless of whether the Senior Lender's claim for such
interest is allowable in any proceedings under the Bankruptcy Code.
"Solvent" means, as to any Person at any time, that (i) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (ii) the present fair saleable value of the
property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (iii) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinate Liabilities" means all Indebtedness of Borrower to Lender
for (a) principal of and interest on the Notes, together with any fees or
premiums under the Notes or this Agreement, and (b) all other indebtedness or
liabilities of Borrower , direct or indirect, contingent or noncontingent, now
existing or hereafter incurred or now or hereafter due and owing to Lender
under or with respect to the Notes or this Agreement, including fees, expenses,
costs, and post-petition interest in bankruptcy.
"Subsidiary" means any corporation, association, partnership, joint
venture or other business entity of which more than 50% of the voting stock or
other equity interest is owned directly or indirectly by any Person or one or
more of the other Subsidiaries of such Person or a combination thereof.
"Taxes" has the meaning set forth in Section 5.02(a).
"Term Commitment Expiry Date" means February 24, 2000.
"Term Loan" has the meaning set forth in Section 2.01.
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"Termination Event" means any of the following:
(i) with respect to a Pension Plan, a reportable event
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a reportable event not subject to the provisions for thirty (30)-day
notice to the PBGC under such regulations);
(ii) the withdrawal of Borrower or an ERISA Affiliate from
a Pension Plan during a plan year in which the withdrawing employer was a
"substantial employer" as defined in ERISA;
(iii) the taking of any actions (including the filing of a
notice of intent to terminate) to terminate a Pension Plan or the treatment of
a Plan amendment as a termination of a Pension Plan under Section 4041 of
ERISA;
(iv) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; or
(v) the complete or partial withdrawal of Borrower or an
ERISA Affiliate from a Multiemployer Plan.
"Unfunded Accrued Benefits" means the excess of the present value of a
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA, determined
under such Plan as of the most recent valuation date for such Plan.
"United States" and "U.S." each means the United States of America.
"Warrant" means that certain warrant issued in favor of Lender by
Borrower on the date hereof, substantially in the form of Exhibit "B".
SECTION 1.02 Accounting Terms; GAAP Changes.
(a) Accounting Terms. Unless otherwise defined or the
context otherwise requires, all accounting terms not expressly defined herein
shall be construed, and all accounting determinations and computations required
under the Loan Documents shall be made, in accordance with GAAP, consistently
applied.
(b) GAAP Changes. If any changes in GAAP from those used
in the preparation of the financial statements dated as of December 31, 1996
referred to in Section 8.01(m) ("GAAP Changes") hereafter occasioned by the
promulgation of rules, regulations, pronouncements and opinions by or required
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successors thereto or agencies with similar
functions) result in a change in the method of calculation of, or in different
components in, any of the financial covenants, definitional provisions,
standards or other terms or conditions found in this Agreement, (i) the parties
hereto agree to enter into negotiations with respect to amendments to this
Agreement to conform those covenants, definitional provisions, standards or
other terms and conditions as criteria for evaluating Borrower's financial
condition and performance to substantially the same criteria as were effective
prior to such GAAP Change, and (ii) Borrower shall be deemed to be in
compliance with the affected covenant or other provision during the 90-day
period following any such GAAP Change if and to the extent that Borrower would
have been in compliance therewith under GAAP as in effect immediately prior to
such GAAP Change; provided, however, that this Section 1.02(b) shall not be
deemed to require Borrower or Lender to agree to modify any provision of this
Agreement or any other Loan Document to reflect any such GAAP Change and, if
the parties, in their sole discretion, fail to reach agreement on such
modifications prior to the end of the 90-day period referred to in clause (ii),
the terms of this Agreement shall remain unchanged and the compliance of
Borrower with the covenants and other provisions contained herein shall, upon
the expiration of such 90-day period, be calculated in accordance with GAAP
without giving effect to such GAAP Change.
SECTION 1.03 Interpretation. In the Loan Documents, except to the
extent the context otherwise requires:
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(i) Any reference to an Article, a Section, a Schedule or
an Exhibit is a reference to an article or section thereof, or a schedule or an
exhibit thereto, respectively, and to a subsection or a clause is, unless
otherwise stated, a reference to a subsection or a clause of the Section or
subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder"
and the like mean and refer to this Agreement or any other Loan Document as a
whole and not merely to the specific Article, Section, subsection, paragraph or
clause in which the respective word appears.
(iii) The meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation."
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of the Loan Documents.
(vi) References to statutes or regulations are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document.
(viii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding"; and the
word "through" means "to and including."
(ix) The use of a word of any gender shall include each of
the masculine, feminine and neuter genders.
ARTICLE II
THE TERM LOANS
SECTION 2.01 The Term Loans. Lender agrees, on the terms and
conditions hereinafter set forth, to make term loans (each a "Term Loan" and,
collectively, the "Term Loans") to Borrower from time to time as Borrower may
request (but in any event no later than the Term Commitment Expiry Date), in a
principal amount up to but not exceeding the Commitment. The Borrower may
borrow and repay and reborrow any amount under this Agreement.
SECTION 2.02 Borrowing Procedure. Each Borrowing by Borrower shall
be made upon written or telephonic notice (in the latter case to be confirmed
promptly in writing) from Borrower to Lender, which notice shall be received by
Lender not later than 10:00 a.m. (California time) on any business day prior to
the Term Commitment Expiry Date. Each such notice (a "Notice of Borrowing")
shall be in substantially the form of Exhibit "C" and shall be irrevocable and
binding upon Borrower. Provided that Borrower is then in compliance with the
applicable conditions set forth in Section 7.02, not later than 11:00 a.m.
(California time) on the date three Business Days following Lender's receipt of
a Notice of Lending, Lender shall make available such Borrowing, in immediately
available funds, to Borrower for Borrower's account as designated in the Notice
of Borrowing.
SECTION 2.03 Evidence of Indebtedness. As additional evidence of the
Indebtedness of Borrower to Lender resulting from the Term Loans made by
Lender, Borrower shall execute and deliver for account of Lender a Note, dated
the date of the corresponding Borrowing, in the principal amount of the Term
Loan made by Lender on such date.
SECTION 2.04 Minimum Amounts. Any Borrowing hereunder shall be in an
amount (a "Minimum Amount") no less than $500,000.
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ARTICLE III
INTEREST AND FEES
SECTION 3.01 Interest.
(a) Interest Rate. Borrower shall pay interest on the
unpaid principal amount of each Term Loan made to Borrower from the date of
such Term Loan until the payment in full thereof, at the rate of nine and
one-half (9.5%) percent per annum.
(b) Interest Payment Dates. Interest on the Term Loans
shall be payable in arrears monthly on the last day of each month following the
month in which the related Borrowing was made and at the Maturity Date or the
Extended Maturity Date, as applicable, until payment in full. In the event any
Term Loan is prepaid, all accrued interest on the amount so prepaid shall be
payable.
SECTION 3.02 Fees.
(a) Commitment Fee. Borrower agrees to pay to Lender a
commitment fee of $200,000 at the closing.
(b) Fees Nonrefundable. All fees payable under this
Section 3.02 shall be nonrefundable.
SECTION 3.03 Computations. All computations of fees and interest
hereunder shall be made on the basis of a year of 365 days for the actual
number of days occurring in the period for which such interest is payable.
Notwithstanding the foregoing, if any Term Loan is repaid on the same day on
which it is made, such day shall be included in computing interest on such Term
Loan.
SECTION 3.04 Highest Lawful Rate. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other
payments which are treated as interest under applicable law, as provided for
herein or in any other Loan Document, would exceed the maximum rate of interest
which may be charged, contracted for, reserved, received or collected by Lender
in connection with this Agreement under applicable law (the "Maximum Rate"),
Borrower shall not be obligated to pay, and Lender shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Maximum
Rate, and during any such period the interest payable hereunder shall be
limited to the Maximum Rate.
ARTICLE IV
REDUCTION OR TERMINATION;
REPAYMENT; PREPAYMENT;
OPTION TO TERM OUT
SECTION 4.01 Reduction or Termination of the Commitments. Borrower
may, upon prior notice to Lender as provided herein, terminate in whole or
reduce ratably in part, as of the date specified by Borrower in such notice,
any then unused portion of the Commitment, provided that each artial reduction
shall be in a Minimum Amount; and provided further, that once reduced in
accordance with this Section 4.01, the Commitment may not be increased.
SECTION 4.02 Repayment of the Term Loans. Borrower shall only be
required to pay interest on the outstanding Term Loans prior to the Maturity
Date at which time all outstanding principal and accrued and unpaid interest
shall be due in full unless Borrower has elected by written notice delivered
not less than ten (10) days prior to the Maturity Date to extend the Maturity
Date, provided no Default or Event of Default shall have occurred and be
continuing as of the Maturity Date (the "Extended Maturity Date") for three (3)
years from the date of the original Maturity Date. Borrower shall repay to
Lender the aggregate principal amount of the Term Loans in equal consecutive
monthly installments together with accrued and unpaid interest thereon,
commencing on the last day of the first month after the Maturity Date and
continuing until the Extended Maturity Date.
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SECTION 4.03 Prepayments.
(a) Optional Prepayments. Borrower may, upon three
Business Days' notice to Lender, prepay the outstanding amount of any Term
Loans in whole or ratably in part, without premium or penalty. Any amount so
repaid may be reborrowed prior to the Term Commitment Expiry Date.
(b) Notice; Application. The notice given of any
prepayment pursuant to Section 4.03(a) (a "Notice of Prepayment") shall be
substantially in the form of Exhibit "D". If Borrower gives a Notice of
Prepayment, Borrower shall make such prepayment and the prepayment amount
specified in such Notice shall be due and payable on the date specified
therein, with accrued interest to such date on the amount prepaid.
ARTICLE V
PAYMENTS
SECTION 5.01 Payments.
(a) Payments. Borrower shall make each payment to be
made by it under the Loan Documents, unconditionally in full without set-off,
counterclaim or other defense, not later than 12:00 p.m. (California time) on
the day when due to Lender in Dollars and in same day or immediately available
funds, to the account designated by Lender.
(b) Application of Payments. Each payment by or on
behalf of Borrower hereunder shall, unless a specific determination is made by
Lender with respect thereto, be applied in the following order: (A) first, to
any fees, costs, expenses and other amounts due Lender; (B) second, to accrued
and unpaid interest due Lender; and (C) third, to principal due Lender.
(c) Extension. Whenever any payment hereunder shall be
stated to be due, or whenever any Interest Payment Date or any other date
specified hereunder would otherwise occur, on a day other than a Business Day,
then, except as otherwise provided herein, such payment shall be made, and such
Interest Payment Date or other date shall occur, on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees hereunder.
SECTION 5.02 Taxes.
(a) No Reduction of Payments. Borrower shall pay all
amounts of principal, interest, fees and other amounts due under the Loan
Documents free and clear of, and without reduction for or on account of, any
present and future taxes, levies, imposts, duties, fees, assessments, charges,
deductions or withholdings and all liabilities with respect thereto excluding,
in the case of Lender, income and franchise taxes imposed on it by the
jurisdiction under the laws of which Lender is organized or in which its
principal executive offices may be located or any political subdivision or
taxing authority thereof or therein, and by the jurisdiction of Lender's
principal place of business and any political subdivision or taxing authority
thereof or therein (all such nonexcluded taxes, levies, imposts, duties, fees,
assessments, charges, deductions, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Taxes shall be required by law to
be deducted or withheld from any payment from Borrower, Borrower shall increase
the amount paid so that Lender receives when due (and is entitled to retain),
after deduction or withholding for or on account of such Taxes (including
deductions or withholdings applicable to additional sums payable under this
Section 5.02), the full amount of the payment provided for in the Loan
Documents.
(b) Deduction or Withholding; Tax Receipts. If Borrower
makes any payment hereunder in respect of which it is required by law to make
any deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed
for such payment under applicable law and promptly thereafter shall furnish to
Lender an original or certified copy of a receipt
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evidencing payment thereof, together with such other information and documents
as Lender may reasonably request.
ARTICLE VI
SUBORDINATION
SECTION 6.01 Subordination. So long as any Senior Obligations are
outstanding, Lender agrees, for itself and each future holder of the
Subordinate Liabilities, that the Subordinate Liabilities are and shall be
expressly subordinate and junior in right of payment and exercise of remedies
to all Senior Obligations in the manner and solely to the extent set forth in
this Article VI.
SECTION 6.02 Insolvency, Etc.
(a) In the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceedings,
relative to Borrower or to its property, or in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of Borrower, whether or
not involving insolvency or bankruptcy, so long as any Senior Obligations are
outstanding, the holders of Senior Obligations shall be entitled in any such
proceedings to receive payment in full in cash of all Senior Obligations before
Lender is entitled in such proceedings to receive any payment on account of the
Subordinate Liabilities, and to that end in any such Proceedings, so long as
any Senior Obligations remain outstanding, any payment or distribution of any
kind or character, whether in cash or in other property, to which Lender would
be entitled but for the provisions hereof (except securities which are
subordinate and junior in right of payment to all Senior Obligations then
outstanding) shall be delivered to the holders of Senior Obligations to the
extent necessary to make payment in full in cash of all Senior Obligations
remaining unpaid, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Obligations in respect thereof.
(b) So long as any Senior Obligations remain outstanding and
at any time after the notice period required in the immediately following
sentence, the holders of Senior Obligations (or their representatives) are
authorized and empowered, in any proceedings described in Section 6.02(a), in
their own names or in the name of Lender, to (i) file claims, proofs of claim
and other instruments of similar character reasonably necessary to enforce the
obligations of Borrower in respect of the Subordinate Liabilities, and (ii)
receive and apply to the Senior Obligations every payment or distribution
referred to in Section 6.02(a) to which Lender is entitled in respect thereof
and give acquittance therefor. In the event that Lender shall fail to take
such action requested by the holders of Senior Obligations within five (5)
Business Days after such request, the holders of Senior Obligations may, as
attorney-in-fact for Lender, take such action on behalf of Lender in such
proceedings, and Lender hereby appoints the holders of Senior Obligations, or
any agent or representative designated by them for the purpose, as
attorney-in-fact for Lender, to (i) demand, ▇▇▇ for, collect and receive any
and all such monies or other assets and give acquittance therefor and to file
any claim, proof of claim or other instrument of similar character, and (ii) to
take such other action incidental thereto in its own name or in the name of
Lender as the holders of Senior Obligations may reasonably deem necessary; and
Lender will execute and deliver such other and further powers of attorney or
other instruments as the holders of Senior Obligations, or any agent or
representative designated by them for the purpose, may request in order to
accomplish the foregoing. Notwithstanding the foregoing, neither this Section
6.02 nor any other provision of this Agreement or the other Loan Documents or
Borrower's charter documents shall be construed to give any holder of Senior
Obligations any right to vote any Note, any shares of common stock of Borrower
represented by the Warrant or issued pursuant to the exercise of the Warrant or
any claim thereunder or with respect thereto, or any portion of any such Notes,
shares or claim, whether in connection with any resolution, arrangements, plan
of reorganization, compromise, settlement, election of trustees or otherwise.
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SECTION 6.03 Senior Acceleration. In the event that all or any part
of the Senior Obligations held by any of the Senior Lenders have become due and
payable (at stated maturity, by demand, by acceleration or otherwise) under
circumstances in which Section 6.02 is not applicable, Lender shall not be
entitled to receive or retain any direct or indirect payment (in cash,
property, by set-off or otherwise) on or with respect to the Subordinate
Liabilities until payment in full in cash of all such accelerated Senior
Obligations shall have been made or otherwise provided for to the satisfaction
(confirmed in writing) of the holders thereof.
SECTION 6.04 Senior Events of Default.
(a) So long as a Senior Event of Default has occurred and
is continuing under circumstances in which Sections 6.02 and 6.03 are not
applicable, subject to Section 6.04(b), Lender shall not be entitled to receive
or retain any direct or indirect payment (in cash, property, by set-off or
otherwise) on or with respect to the Subordinate Liabilities.
(b) Notwithstanding the restrictions set forth in Section
6.04(a), if any amount which becomes due and payable (at stated maturity, by
demand, by acceleration or otherwise) on or with respect to the Subordinate
Liabilities is not paid as a result of the continuance of a Senior Event of
Default (under circumstances in which Sections 6.02 and 6.03 are not
applicable), Lender shall be entitled to receive and retain such amount after
the earlier of:
(i) the date on which all Senior Events of
Default have been cured or waived in writing by the Senior Lender; and
(ii) the date occurring one hundred twenty (120)
days after the date the Lender has received notice of the occurrence of a
Senior Event of Default (the period of time from the Lender's receipt of notice
of the occurrence of a Senior Event of Default to the earlier of the date on
which Senior Events of Default shall have been cured or waived or such one
hundred twenty (120) days being hereinafter referred to as the "Standstill
Period").
SECTION 6.05 Turn-Over of Payments Received.
(a) In the event that Borrower shall make any payment on
the Subordinate Liabilities or Lender shall receive any such payment, whether
by exercise of legal rights and remedies (including without limitation set-off)
or otherwise, including without limitation any exercise of remedies upon the
expiration of the remedy standstill period under Section 6.10 below, which
Lender is or was not permitted to receive and retain pursuant to Sections 6.02,
6.03, or 6.04, such payment shall be held in trust for the benefit of, and
shall be paid over promptly on demand to, the holders of Senior Obligations, or
their representative or representatives, as their respective interests may
appear, for application to the payment of all Senior Obligations remaining due
and payable until the same shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Obligations, provided, however, notwithstanding anything herein to the
contrary, Lender shall not be required to turn over any payment made to Lender
more than ninety (90) days prior to any demand pursuant to Section 6.04(a)
above. Without limiting the foregoing, the Lender shall be entitled to retain
all payments made in respect of the Subordinate Liabilities in accordance with
the terms of this Agreement unless, within ninety (90) days after receipt by
the Lender of any such payment, the Agent on behalf of the Senior Lenders shall
have notified the Lender of a Senior Event of Default, in which case the
Lenders shall forthwith pay over to the Agent on behalf of the Senior Lender
such payment or an amount of cash equal thereto for application in payment of
the Senior Obligations, provided, however, that if a trustee or debtor in
possession in bankruptcy of Borrower makes a demand on Lender to turn over any
payments received in the ninety (90)-day period immediately preceding the
bankruptcy filing, then the Lender shall be permitted to make payments of such
amounts to the trustee or debtor in possession in lieu of making such payments
to the Senior Lender.
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Nothing contained in this Article VI shall at any time prevent
Borrower from making, or prevent Lender from receiving or retaining, except as
provided in Sections 6.02, 6.03, 6.04, and 6.05, payments with respect to
Subordinate Liabilities in accordance with their respective terms as in effect
on the date hereof.
(b) The proceeds of any sale or other disposition (other
than to Lender) of Subordinate Liabilities in compliance with Section 6.12
hereof, which may be received by a holder thereof, shall not be treated as a
payment to which the holders of Senior Obligations are entitled under this
Agreement.
SECTION 6.06 Obligations Absolute. The provisions of this Article VI
are solely for the purpose of defining the relative rights of the holders of
Senior Obligations on the one hand and Lender on the other hand with respect to
the priority of payment and exercise of remedies of the various obligations of
Borrower to each of them. Nothing herein shall impair, as between Borrower and
Lender, the obligations of Borrower, which are unconditional and absolute, set
forth in this Agreement, nor shall anything in this Article VI prevent the
occurrence of any event of default under this Agreement or the Notes, or
prevent any Lender from exercising all remedies otherwise permitted by this
Agreement and the Notes, applicable law or otherwise, subject to (a) the
rights, if any, of the holders of Senior Obligations under Section 6.05 of this
Agreement to receive cash or property otherwise payable or deliverable to
Lender, and (b) the other restrictions on Lender in favor of the holders of
Senior Obligations set forth in Article VI.
SECTION 6.07 Subrogation. Upon and subject to the payment in full in
cash of the Senior Obligations, Lender shall be subrogated to the rights of the
holders of Senior Obligations to receive payments or distributions of assets of
Borrower applicable to the Senior Obligations until the Subordinate Liabilities
shall be paid in full in cash; and, for the purposes of such subrogation, no
payments or distributions to the holders of Senior Obligations to which Lender
would be entitled except for the provisions of this Article VI shall, as
between Borrower and its creditors other than the holders of Senior Obligations
and Lender, be deemed to be a payment on account of the Senior Obligations.
Lender hereby waives any claim against the Senior Lenders based on impairment
of Lender's rights of subrogation against Borrower due to the action or
inaction of the Senior Lenders or otherwise.
SECTION 6.08 Subordination Not Affected. Without the necessity of
any reservation of rights against or any notice to or further assent by Lender,
any demand for payment of any Senior Obligations made by any holder of Senior
Obligations may be rescinded in whole or in part by such holder and any Senior
Obligations may be continued, the holders of Senior Obligations may exercise or
refrain from exercising any rights and/or remedies against the Borrower and
others, if any, liable under the Senior Obligations, or any collateral security
therefor or right of offset with respect thereto, the Senior Indebtedness and
any agreement or instrument evidencing, securing or otherwise relating thereto
(including, without limitation the Senior Loan Agreement and the Notes, the
Security Documents and other Loan Documents (as each such term is defined in
the Senior Loan Agreement) may be amended, extended, modified, accelerated,
compromised, waived, surrendered or released by the holders of the Senior
Obligations, and any other agreement or instrument evidencing, securing or
otherwise relating to the Senior Obligations may be amended or modified in any
manner the Senior Lender deems in its best interest, all without impairing,
abridging, releasing or affecting the subordination provided for herein.
Lender waives any and all notice of or proof of reliance by the holders of
Senior Obligations upon the subordination provided for herein. The Senior
Obligations shall conclusively be deemed to have been created, contracted or
incurred in reliance upon the provisions of this Article VI.
SECTION 6.09 Right To Retain Payment Received. Notwithstanding
anything to the contrary herein, any payment in respect of the Subordinate
Liabilities which is not required to be held in trust for the benefit of, or
paid over to, the holders of Senior Obligations pursuant to Section 6.05 or
Section 6.10, and which is received by the Lender shall become the sole and
absolute property of Lender and shall not, by virtue of the provisions of this
Agreement or otherwise, be subject to any payment over or any distribution to
or claim by any holders of Senior Obligations or any other person.
SECTION 6.10 Remedy Standstill. For a period of one hundred twenty
(120) days following the commencement of any payment blockage under Section
6.02, 6.03 or 6.04, the Lender shall not, without the prior written consent of
each of the Senior Lenders:
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(a) Accelerate or otherwise make due and payable prior to
the original stated maturity thereof any Subordinated Liabilities or bring suit
or initiate any other proceedings to enforce its rights under the Agreement,
and the Notes;
(b) Exercise any rights (including, without limitation,
rights of set-off) with respect to any collateral, if any, securing the
Subordinated Liabilities, including any foreclosure or other action thereon; or
(c) Commence or cause to be commenced, or join with any
creditor other than the Senior Lenders in commencing, any bankruptcy,
insolvency or receivership proceeding against the Borrower.
To the extent that Lender is required under Section 6.05 to turn over
the proceeds of any exercise of its remedies against Borrower, then (i) any
exercise of remedies by the Lender upon the expiration of the remedy standstill
period set forth in this Section 6.10 shall be for the economic benefit of the
holders of the Senior Obligations; and (ii) any amounts which may be paid to or
otherwise recovered or obtained by the Lender in reliance on the expiration of
the remedy standstill period shall be held in trust for the benefit of, and
shall be paid over promptly on demand to, the holders of the Senior
Obligations, or their representative or representatives, as their respective
interest may appear, for application to the payment of all Senior Obligations
remaining due and payable until the same shall have been paid in full in cash.
SECTION 6.11 Notices.
(a) By Lender to the Senior Lenders. Lender shall
provide each of the Senior Lenders with notice of any default under this
Agreement simultaneously with giving notice to Borrower, provided, however,
that Lender shall have no liability to the Senior Lenders for Lender's failure
to provide the Senior Lenders with any notice required under this Section 6.11.
(b) By Borrower to Lender. Borrower shall promptly
provide Lender with copies of all notices of any default or intention to
exercise any remedies received by it from any Senior Lender immediately upon
its receipt thereof.
(c) By Senior Lenders to Lender. Any Senior Lender may
provide Lender with notice of a Senior Event of Default, and such notice shall
be effective if given in accordance with Section 12.02 below. Failure by any
Senior Lender to provide such notice shall not affect or impair the
enforceability of the subordination provisions of Article VI of this Agreement.
SECTION 6.12 Transfers. Lender shall not sell, assign or otherwise
transfer, in whole or in part, any Subordinate Liabilities or any interest
therein, to any other person or entity (a "Transferee") unless such Transferee
signs an acknowledgment in the form of Exhibit "E" hereto and delivers a signed
counterpart hereof acknowledged by Borrower to each Senior Lender, whereby each
such Transferee expressly acknowledges the subordination provided for in this
Article VI and agrees to be bound by all of the terms thereof.
SECTION 6.13 Modifications. No amendment, modification, termination
or waiver of any provision of this Article VI, or consent to any departure
therefrom, shall in any event be effective without the written concurrence of
the Senior Lenders, Lender and Borrower. However, nothing in this Article VI
or in the right of the Senior Lenders to collect, enforce or receive payment of
the Senior Obligations shall be construed to restrict in any respect whatsoever
the right of Lender to amend any other portion of the Loan Documents; provided
that no change to any payment or repayment terms or amortization rates of any
of Borrower's obligations to Lender may be made without the prior written
consent of the Senior Lenders.
SECTION 6.14 Termination. This Article VI shall remain in full force
and effect until payment in full of all Senior Obligations; provided that
payment in full of all or any Senior Obligations in connection with a
refinancing thereof shall not operate to terminate the provisions of this
Article VI, and; provided further that this Article VI shall continue to be
effective or be reinstated (as the case may be) if at any time payment of any
of the Senior Obligations is refunded or must otherwise be returned by the
Senior Lenders upon the bankruptcy, arrangement, reorganization or similar
proceeding for relief of debtors under state or federal law, all as though such
payment had not been made.
SECTION 6.15 Warranties, Representations, Covenants and
Acknowledgments of Lender.
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(a) The Lender represents to the Senior Lenders that to
the extent of any Term Loans made hereunder all Indebtedness of the Borrower to
the Lender is outstanding under this Agreement and the Notes issued pursuant
hereto, and that said Indebtedness has not heretofore been assigned, pledged
to, or subordinated in favor of, any other Person.
(b) The Lender represents to and covenants with the
Senior Lender that any and all Indebtedness of the Borrower to the Lender is
and shall remain unsecured.
(c) The Lender hereby covenants and agrees with the
Senior Lender that it will not amend or permit amendment of the terms of this
Agreement or any other agreement, document or instrument hereafter evidencing
any Subordinated Liabilities, without the prior written consent of the Senior
Lenders if such amendment would: (i) increase the principal amount of any
Subordinate Liabilities by more than $10,000,000; (ii) increase the rate of
interest accruing on the Subordinated Liabilities; (iii) change in any manner
the dates upon which any principal or interest payment on the Subordinated
Liabilities is due; (iv) change in any manner, or add, any affirmative or
negative covenants, events of default, redemption provisions or subordination
provisions of any Subordinated Liabilities that would have a Material Adverse
Effect on the Borrower.
(d) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the part of the
Lender, and this Agreement constitutes a valid and binding obligation of the
Lender, enforceable against it in accordance with its terms.
(e) The Lender acknowledges and agrees that this
Agreement is a "subordination agreement" within the meaning of Section 510(a)
of the United States Bankruptcy Code, 11 U.S.C. Section 510(a).
(f) The Lender will not in any proceeding, whether in
connection with a bankruptcy or insolvency or other event described in 6.02 or
otherwise, challenge or contest (or join in any challenge or contest by any
third party, or encourage any third party to challenge or contest) the Senior
Indebtedness or the perfection, superiority, priority, validity or
enforceability of any security interest or lien granted to the Senior Lenders
pursuant to the Senior Loan Agreement, the Notes, the Security Documents or
other Loan Documents (as each term is defined in the Senior Loan Agreement),
nor will the Lender challenge the validity or enforceability of such Loan
Agreement, Notes, Security Documents or other Loan Documents, or any provision
thereof. The Lender hereby acknowledges that the provisions of Article VI of
this Agreement are intended to be enforceable at all times, whether before or
after any proceeding or other event described in Section 6.02 of this
Agreement. The Lender hereby waives any right to require the Senior Lenders or
other holders of the Senior Obligations to marshal the collateral for such
Senior Obligations.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 Conditions Precedent to Initial Borrowing. The
obligation of Lender to make its initial Term Loan hereunder shall be subject
to the satisfaction of each of the following conditions precedent before or
concurrently with such initial Term Loan:
(a) Loan Documents. Lender shall have received the
following Loan Documents in form and substance satisfactory to it: (i) this
Agreement, executed by Borrower, the Note evidencing the first Term Loan,
executed by Borrower; and (ii) each of the other Loan Documents, executed by
each of the respective parties thereto, reasonably requested by Lender.
(b) Additional Closing Documents and Actions. Lender
shall have received the following, in form and substance satisfactory to it:
(i) evidence of completion to the satisfaction of
Lender of such investigations, reviews and audits with respect to Borrower and
its operations as Lender reasonably may deem appropriate;
(ii) evidence that all (A) authorizations or
approvals of any Governmental Authority and (B) approvals or consents of any
other Person, required in connection with the execution, delivery and
performance of the Loan Documents shall have been obtained;
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(iii) the audited consolidated balance sheet of
Borrower and its Subsidiaries as at December 31, 1996, and the related
consolidated statements of income, shareholders' equity and cash flows for the
Fiscal Year then ended;
(iv) a certificate of a Responsible Officer of
Borrower, dated the date of the initial Borrowing, stating that (A) the
representations and warranties contained in Article VIII and in the other Loan
Documents are true and correct on and as of the date of such certificate as
though made on and as of such date and (B) on and as of the date of the initial
Borrowing, no Default shall have occurred and be continuing or shall result
from the initial Borrowing;
(c) Corporate Documents. Lender shall have received the
following, in form and substance satisfactory to it:
(i) certified copies of the certificate of
incorporation of Borrower, together with certificates as to good standing from
the Secretary of State or other Governmental Authority, as applicable, of
Borrower's state of incorporation and principal place of business, each dated
as of a recent date prior to the initial Borrowing;
(ii) a certificate of the Secretary or Assistant
Secretary of Borrower, dated the date of the initial Borrowing, certifying (A)
copies of the bylaws of Borrower and the resolutions of the Board of Directors
of Borrower authorizing the execution, delivery and performance of the Loan
Documents to which Borrower is a party and (B) the incumbency, authority and
signatures of each officer of Borrower authorized to execute and deliver such
Loan Documents to which Borrower is a party and act with respect thereto, upon
which certificate Lender may conclusively rely until Lender shall have received
a further certificate of the Secretary or an Assistant Secretary of Borrower
cancelling or amending such prior certificate;
SECTION 7.02 Conditions Precedent to All Term Loans. The obligation
of Lender to make any Term Loan to be made by it hereunder (including its
initial Term Loan) is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing date:
(a) Notice. Lender shall have received a Notice of
Borrowing;
(b) Material Adverse Effect. On and as of the date of
such Borrowing, there shall have occurred no Material Adverse Effect since the
date of this Agreement (in the case of the initial Borrowing) or the date of
the most recent Borrowing (in the case of any subsequent Borrowing), as the
case may be.
(c) Representations and Warranties; No Default. On the
date of such Borrowing, both before and after giving effect thereto and to the
application of proceeds therefrom: (i) the representations and warranties
contained in Article VIII and in the other Loan Documents shall be true,
correct and complete in all material respects on and as of the date of such
Borrowing as though made on and as of such date; and (ii) no Default shall have
occurred and be continuing or shall result from such Borrowing. For purposes
of this Section 7.02(c), (I) references in Article VIII to financial statements
dated as of December 31, 1996 shall be deemed instead to refer to the last day
of the most recent month, quarter and year for which financial statements have
then been delivered in respect of the representation and warranty made in
Section VIII; and (II) effect shall be given to any amendments to the Schedules
and other disclosures made in writing by Borrower to Lender after the date of
the initial Borrowing and approved by Lender. The giving of any Notice of
Borrowing and the acceptance by Borrower of the proceeds of each Borrowing
shall each be deemed a certification to Lender on and as of the date of such
Borrowing such statements are true in all material respects.
(d) Additional Documents. Lender shall have received, in
form and substance satisfactory to it, such additional approvals, documents and
other information as Lender may reasonably request. Each Notice of Borrowing
submitted by Borrower hereunder shall constitute a representation and warranty
by Borrower, as of the date of each such notice and as of the date of each
Borrowing, that the conditions in subsections 7.02(b) and (c) have been
satisfied.
(e) No Senior Event of Default. No Senior Event of
Default shall have occurred and be continuing.
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01 Representations and Warranties. Borrower represents and
warrants to Lender as of the date hereof and continuing hereafter that, except
as set forth in a schedule hereto:
(a) Organization and Powers. Borrower is a corporation
duly organized, validly existing and in good standing under the law of the
jurisdiction of its incorporation, is qualified to do business and is in good
standing in each jurisdiction in which the failure so to qualify or be in good
standing would result in a Material Adverse Effect and has all requisite power
and authority to own its assets and carry on its business and to execute,
deliver and perform its obligations under the Loan Documents to which it is a
party.
(b) Authorization; No Conflict. The execution, delivery
and performance by Borrower of the Loan Documents have been duly authorized by
all necessary corporate action of Borrower and do not and will not (i)
contravene the terms of the certificate of incorporation and the bylaws of
Borrower or result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to
which Borrower is a party or by which it or its properties may be bound or
affected; (ii) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree or the like binding on or affecting Borrower; or
(iii) result in, or require, the creation or imposition of any Lien upon or
with respect to any of the properties of Borrower.
(c) Binding Obligation. The Loan Documents constitute,
or when delivered under this Agreement will constitute, legal, valid and
binding obligations of Borrower enforceable against Borrower in accordance with
their respective terms.
(d) Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, is required for the due
execution, delivery or performance by Borrower of any of the Loan Documents.
(e) No Defaults. Borrower is not in default under any
material contract, lease, agreement, judgment, decree or order to which it is a
party or by which it or its properties may be bound are likely to result in a
Material Adverse Effect.
(f) Title to Properties; Liens. Borrower has good and
marketable title to, or valid and subsisting leasehold interests in, its
properties and assets, and there is no Lien upon or with respect to any of such
properties or assets except for Permitted Liens.
(g) Litigation. There are no actions, suits or
proceedings pending or, to the best of Borrower's knowledge, threatened against
or affecting Borrower or the properties of Borrower before any Governmental
Authority or arbitrator which if determined adversely to Borrower is likely to
result in a Material Adverse Effect.
(h) Compliance with Environmental Laws. Except for
activities or situations that are unlikely to give rise to a liability that
could have a Material Adverse Effect: (i) Borrower is in full compliance with
all Environmental Laws, whether in connection with the ownership, use,
maintenance or operation of its Premises or the conduct of any business
thereon, or otherwise; (ii) there are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best of
Borrower's knowledge, threatened against or affecting Borrower with respect to
the ownership, use, maintenance and operation of the Premises, relating to
Environmental Laws or Hazardous Substances.
(i) ERISA.
(i) all Plans comply in all material respects, and
have been administered in material compliance with, the applicable provisions
of foreign law, ERISA and the Internal Revenue Code, and in accordance with
each Plan's terms;
(ii) no Termination Event has occurred and is
continuing, or is reasonably expected to occur;
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(iii) to the best knowledge of Borrower, there is no
condition or event under which Borrower, any ERISA Affiliate, or any Plan
maintained by Borrower or any ERISA Affiliate could be subject to any risk of
material liability under ERISA or the Internal Revenue Code, regardless of
whether Borrower or any ERISA Affiliate engaged in a transaction giving rise to
the liability; and
(iv) Borrower is not a party to any Multiemployer
Plans.
(j) Subsidiaries. The name, capital structure and
ownership of each Subsidiary of Borrower on the date of this Agreement is as
set forth in Schedule 2. All of the outstanding capital stock of, or other
interest in, each such Subsidiary has been validly issued, and is fully paid
and nonassessable. Except as set forth in Schedule 2, on the closing Borrower
has no equity interest in any Person.
(k) Taxes. Borrower has duly filed all tax and
information returns required to be filed (the failure of which to file is
likely to have a Material Adverse Effect), and has paid all taxes, fees,
assessments and other governmental charges or levies that have become due and
payable (the failure of which to pay is likely to have a Material Adverse
Effect), except to the extent such taxes or other charges are being contested
in good faith and are adequately reserved against or otherwise provided for in
accordance with GAAP.
(l) Insurance. The properties of Borrower are insured,
with financially sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as is customarily carried by companies
engaged in similar businesses and owning similar properties in the localities
where Borrower or such Subsidiary operates.
(m) Financial Statements. The audited consolidated
balance sheet of Borrower and its Subsidiaries as at December 31, 1996, and the
related consolidated statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended, are complete and correct and fairly present the
financial condition of Borrower and its Subsidiaries as at such dates and the
results of operations of Borrower and its Subsidiaries for the periods covered
by such statements, in each case in accordance with GAAP consistently applied
except as otherwise expressly noted therein. Since December 31, 1996, there
has been no Material Adverse Effect.
(n) Liabilities. Neither Borrower nor any of its
Subsidiaries has any material liabilities, fixed or contingent, that are not
reflected in the financial statements referred to in subsection (n), in the
notes thereto or otherwise disclosed in writing to Lender, other than
liabilities arising in the ordinary course of business since December 31, 1996.
(o) Labor Disputes, Etc. There are no strikes, lockouts
or other labor disputes against Borrower or any of its Subsidiaries, or, to the
best of Borrower's knowledge, threatened against or affecting Borrower or any
of its Subsidiaries, and no Event of Loss has occurred with respect to any
assets or property of Borrower which is likely to result in a Material Adverse
Effect.
(p) Solvency. Each of Borrower and its Subsidiaries is
Solvent.
(q) Investment Company Act. Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
(r) Disclosure. None of the representations or
warranties made by Borrower in the Loan Documents as of the date of such
representations and warranties, and none of the statements contained in each
exhibit or report furnished by or on behalf of Borrower to Lender in connection
with the Loan Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading.
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ARTICLE IX
AFFIRMATIVE COVENANTS
SECTION 9.01 Reporting Covenants. So long as any of the Obligations
shall remain unpaid or Lender shall have any Commitment, Borrower hereby agrees
as to itself and its Subsidiaries, that:
(a) Payment of Notes. Borrower shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Lender, holds as of
10:00 a.m. California Time on the due date money deposited by the Borrower in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
(b) Reports. Borrower shall furnish to Lender (i) within
45 days after the end of each of the first three quarterly fiscal periods in
each fiscal year of Borrower, unaudited consolidated financial statements of
the Borrower and its Subsidiaries and (ii) within ninety (90) days after the
end of each fiscal year of Borrower, annual audited consolidated financial
statements of Borrower and its Subsidiaries.
(c) Compliance Certificate. Borrower shall deliver to
Lender, within ninety (90) days after the end of each fiscal year, an officers'
certificate stating that a review of the activities of the Borrower and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Borrower has kept, observed, performed and fulfilled its obligations under this
Agreement, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge Borrower has kept,
observed, performed and fulfilled each and every covenant contained in this
Agreement and is not in default in the performance or observance of any of the
material terms, provisions and conditions of this Agreement (or, if a Default
or Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action Borrower is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(d) Taxes. Borrower shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to Lender.
(e) Corporate Existence. Borrower shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of Borrower or any
such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of Borrower and its Subsidiaries; provided, however, that Borrower
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Borrower and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to Lender.
(f) Maintenance of Insurance. Borrower will keep all the
material property used in its business in good repair, working order and
condition, ordinary wear and tear excepted, and Borrower will, and will cause
each of its Subsidiaries to, carry and maintain in full force and effect, at
its own expense and with financially sound and reputable insurance companies,
insurance in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where Borrower or its Subsidiaries
operate, including
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fire, extended coverage, business interruption, public liability, property
damage and worker's compensation; provided, however, that Borrower may maintain
a system of self-insurance in place of the aforementioned insurance, in an
amount not exceeding an amount as is customary for companies engaged in the
same or similar businesses and owning similar properties in the localities
where Borrower or its Subsidiaries operate.
(g) Keeping of Records and Books of Account. Borrower
will, and will cause each of its Subsidiaries to, keep adequate records and
books of account, in which complete entries will be made in accordance with
GAAP, reflecting all financial transactions of Borrower and its Subsidiaries.
(h) Additional Permitted and Senior Debt. Borrower will
provide to Lender (i) copies of any amendments to the Senior Loan Agreement and
(ii) written notice describing any Senior Debt or Permitted Debt which Borrower
incurs after the date of this Agreement. The only additional Senior Debt
incurred by Borrower shall be (i) incurred in connection with the refinancing
of the Senior Loan Agreement, (ii) warehouse financings, or (iii) residual
interest in securitization financings.
ARTICLE X
NEGATIVE COVENANTS
SECTION 10.01 Negative Covenants. So long as any of the Obligations
shall remain unpaid or Lender shall have any Commitment, Borrower hereby agrees
as to itself and its Subsidiaries, that:
(a) Restricted Payments. Borrower shall not make any
Restricted Payment during the term of this Agreement.
(b) Limitation on Additional Funded Debt. Borrower shall
not incur additional Funded Debt unless the ratio of Funded Debt to the latest
quarter Consolidated Net Worth is less than .75 to 1.
(c) Transactions with Affiliates. Borrower shall not,
and shall not permit any of its Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms
that are no less favorable to the Borrower or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by Borrower or
such Subsidiary with an unrelated Person.
(d) Limitation on Investment Company Status. Borrower
and its Subsidiaries shall not take any action, or otherwise permit to exist
any circumstance, that would require Borrower to register as an "investment
company" under the Investment Company Act of 1940, as amended.
(e) Restrictions on Fundamental Changes. Borrower will
not, nor will it permit any of its Subsidiaries to, merge with or consolidate
into any Person, except where:
(i) the successor entity is a United States Person;
(ii) the successor entity executes an assumption
agreement assuming all of the obligations of Borrower hereunder;
(iii) the pro forma financial statements for such a
merger or consolidation do not indicate an Event of Default; and
(iv) the pro forma financial statements for such a
merger or consolidation indicate that the successor entity would be eligible to
incur an additional $1.00 of Funded Debt.
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ARTICLE XI
EVENTS OF DEFAULT
SECTION 11.01 Events of Default. Any of the following events which
shall occur shall constitute an "Event of Default":
(a) Payments. Borrower shall fail to pay (i) within five
days following the date when due, any interest on any Term Loan or Notes (ii)
on the date when due, any principal of any Term Loan or Notes.
(b) Failure by Borrower to Perform Certain Negative
Covenants. Borrower allows thirty (30) days to pass on the noncompliance of
negative covenants after the earlier to occur of written notice or such
noncompliance first becomes known to any executive officer of Borrower.
(c) Failure by Borrower to Perform Certain Affirmative
Covenants. Borrower allows sixty (60) days to pass on the noncompliance of
affirmative covenants after the earlier to occur of written notice or such
noncompliance first becomes known to any executive officer of Borrower.
(d) Breach of Representations and Warranties. Any
representation or warranty by Borrower under this Agreement shall prove to have
been incorrect in any material respect when made and such representation and
warranty is not capable of being cured or the Borrower shall fail to make such
representation and warranty correct in all material respects within thirty (30)
days from the date such noncompliance becomes known to any executive officer of
Borrower.
(e) Bankruptcy. Borrower or any of its respective
Subsidiaries shall admit in writing its inability to, or shall fail generally
or be generally unable to, pay its debts (including its payrolls) as such debts
become due, or shall make a general assignment for the benefit of creditors; or
Borrower, or any such Subsidiary shall file a voluntary petition in bankruptcy
or a petition or answer seeking reorganization, to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Code or
under any other state or federal law relating to bankruptcy or reorganization
granting relief to debtors, including without limitation the appointment of a
receiver, whether now or hereafter in effect, or shall file an answer admitting
the jurisdiction of the court and the material allegations of any involuntary
petition filed against Borrower or any such Subsidiary pursuant to the
Bankruptcy Code or any such other state or federal law; or Borrower or any such
Subsidiary shall be adjudicated a bankrupt, or shall make an assignment for the
benefit of creditors, or shall apply for or consent to the appointment of any
custodian, receiver or trustee for all or any substantial part of Borrower's or
any such Subsidiary's property, or shall take any action to authorize any of
the actions or events set forth above in this subsection; or an involuntary
petition seeking any of the relief specified in this subsection shall be filed
against Borrower or any such Subsidiary and shall not be dismissed within sixty
(60) days; or any order for relief shall be entered against Borrower or any
such Subsidiary in any involuntary proceeding under the Bankruptcy Code or any
such other state or federal law referred to in this subsection (d).
(f) Default Under Other Indebtedness. Borrower or any of
its respective Subsidiaries shall fail (i) to make any payment of any principal
of, or interest or premium on, any Indebtedness (other than in respect of the
Term Loans) in an aggregate principal amount outstanding of at least $2,000,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) or (ii) to perform or observe any term, covenant or
condition on its part to be performed or observed under any agreement or
instrument relating to any such Indebtedness, when required to be performed or
observed, and such failure shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such failure
to perform or observe is to cause the holder of such Indebtedness to exercise a
right to accelerate the maturity of such Indebtedness.
(g) Judgments. A final judgment or order for the payment
of money in excess of $1,000,000 which is not fully covered by third-party
insurance shall be rendered against any Borrower or any of its Subsidiaries;
provided, however, that there shall be a period of sixty (60) consecutive days
following such final judgment or
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order during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect.
(h) Tax Lien. A tax lien shall be filed against Borrower
for an amount in excess of $1,000,000.
SECTION 11.02 Effect of Event of Default. If any Event of Default
shall occur and be continuing, Lender may (i) by notice to Borrower, (A)
declare the Commitment to be terminated, whereupon the same shall forthwith
terminate, (B) declare the entire unpaid principal amount of the Term Loans and
the Notes, all interest accrued and unpaid thereon and all other Obligations to
be forthwith due and payable, whereupon such amounts with respect to the Term
Loans and the Notes, all such accrued interest and all such other Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrower, and (C) exercise on behalf of itself all rights and remedies
available to it under the Loan Documents or applicable law; provided that if an
event described in Section 11.01(d) shall occur, the results specified in this
clause (i) shall occur automatically, without the giving of any notice by
Lender to Borrower; and (ii) whether or not the actions referred to in clause
(i) have been taken, proceed to enforce all other rights and remedies available
to Lender under the Loan Documents and applicable law.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Amendments and Waivers. Except as otherwise provided
herein or in any other Loan Document, (i) no amendment to any provision of this
Agreement or any of the other Loan Documents shall in any event be effective
unless the same shall be in writing and signed by the parties thereto; and (ii)
no waiver of any provision of this Agreement or any other Loan Document, or
consent to any departure by Borrower or other party therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender.
Any such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 12.02 Notices. All notices and other communications provided
for hereunder and under the other Loan Documents shall, unless otherwise stated
herein, be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by
any party in a written notice to the other parties hereto. All such notices
and communications shall be effective (i) if delivered by hand, when delivered;
(ii) if sent by mail, upon the earlier of the date of receipt or five Business
Days after deposit in the mail, first class (or air mail, with respect to
communications to be sent to or from the United States), postage prepaid; and
(iii) if sent by facsimile transmission, when sent.
SECTION 12.03 No Waiver; Cumulative Remedies. No failure on the part
of Lender to exercise, and no delay in exercising, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies under the Loan
Documents are cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to Lender.
SECTION 12.04 Survival. All covenants, agreements, representations
and warranties made in any Loan Documents shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
Borrowings contemplated by this Agreement and the execution and delivery of the
Notes, and shall continue in full force and effect following the date hereof so
long as Lender has any Commitment, any Term Loans remain outstanding or any
other Obligations remain unpaid or any obligation to perform any other act
under any Loan Document remains unsatisfied during such period.
SECTION 12.05 Binding Effect; Assignment.
24.
25
(a) Binding Effect. This Agreement shall become
effective as to Borrower and Lender when it shall have been executed by such
parties and thereafter shall be binding upon, inure to the benefit of and be
enforceable by Borrower and Lender and their respective successors and assigns.
(b) Assignment by Borrower. Neither Borrower nor Lender
shall have the right to assign its respective rights and obligations hereunder
or under the other Loan Documents or any interest herein or therein without the
prior written consent of the other party.
SECTION 12.06 Confidentiality. Lender shall hold all non-public
information relating to Borrower and its Subsidiaries obtained by it under the
Loan Documents in accordance with its customary procedures for handling
confidential information of this nature. Prior to any disclosure by Lender of
such non-public information, it shall, if permitted by applicable laws or
judicial order, notify Borrower of such pending disclosure.
SECTION 12.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 12.08 Entire Agreement. The Loan Documents reflect the
entire agreement by and between Borrower and Lender with respect to the matters
set forth herein and therein and supersede any prior agreements, commitments,
drafts, communications, discussions and understandings, oral or written, with
respect thereto and is intended by each of the parties hereto to be the
complete statement of the terms and conditions, and the final expression, of
their agreement relating to the subject matter hereof and thereof.
SECTION 12.09 Interpretation. The Loan Documents are the result of
negotiations between and have been reviewed by counsel to Lender and Borrower
and are the product of all parties thereto. Accordingly, the Loan Documents
shall not be construed against Borrower merely because of Borrower's
involvement in the preparation thereof.
SECTION 12.10 Severability. Whenever possible, each provision of the
Loan Documents shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of any
of the Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or
effectiveness of such provision in any other jurisdiction.
SECTION 12.11 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement.
SECTION 12.12 Transaction Costs. Borrower shall reimburse the Lender
for the reasonable out-of-pocket costs incurred in the documentation of this
Agreement including, without limitation, the reasonable fees and disbursements
of outside counsel of the Lender.
SECTION 12.13 Arbitration. The parties shall submit any dispute
concerning this interpretation or the enforcement of rights and duties under
this Agreement to final and binding arbitration pursuant to the rules of the
American Arbitration Association. At the request of any party, the
arbitrators, attorneys, parties to the arbitration, witnesses, experts, court
reporters, or other persons present at the arbitration shall agree in writing
to maintain the strict confidentiality of the arbitration proceedings.
Arbitration shall be conducted by a single, neutral arbitrator, or, at the
election of any party, three neutral arbitrators, appointed in accordance with
the arbitral rules identified above. The award of the arbitrator(s) shall be
enforceable according to the applicable provisions of the California Code of
Civil Procedure. The arbitrator(s) may award damages and/or permanent
injunctive relief, but in no event shall the arbitrator(s) have the authority
to award punitive or exemplary damages. Notwithstanding the foregoing, a party
may apply to a court of competent jurisdiction for relief in the form of a
temporary restraining order or preliminary injunction, or other provisional
remedy pending final determination of a claim through arbitration in accordance
with this paragraph. If proper notice of any hearing has been given, the
arbitrator(s) will have full power to proceed to take evidence or to perform
any other acts necessary to arbitrate the matter in the absence of any party
who fails to appear.
SECTION 12.14 Jury Trial Waivers. To the fullest extent permitted by
law, and as separately bargained-for-consideration, each party hereby waives
any right to trial by jury in any action, suit, proceeding, or counterclaim of
any kind arising out of or relating to this Agreement. Each party hereby
expressly acknowledges the inclusion of this jury trial waiver through the
initials of its duly authorized representative.
25.
26
ONYX ACCEPTANCE CORPORATION BAYVIEW BANK
INITIALS_________ INITIALS_________
SECTION 12.15 Attorneys' Fees. If either party to this Agreement shall
bring any action, suit, counterclaim, appeal, arbitration, or mediation for any
relief against the other, declaratory or otherwise, to enforce the terms hereof
or to declare rights hereunder (collectively, an "Action"), the losing party
shall pay to the prevailing party a reasonable sum for attorneys' fees and
costs (at the prevailing party's attorneys' then-prevailing rates as increased
from time to time by the giving of advance written notice by such counsel to
such party) incurred in bringing and prosecuting such Action and/or enforcing
any judgment, order, ruling, or award (collectively, a "Decision") granted
therein, all of which shall be deemed to have accrued on the commencement of
such Action and shall be paid whether or not such Action is prosecuted to a
Decision. Any Decision entered in such Action shall contain a specific
provision providing for the recovery of attorneys' fees and costs incurred in
enforcing such Decision. The court or arbitrator may fix the amount of
reasonable attorneys' fees and costs on the request of either party. For the
purpose of this paragraph, attorneys' fees shall include, without limitation,
fees incurred in the following: (1) postjudgment motions and collection
actions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third
party examinations; (4) discovery; and (5) bankruptcy litigations. "Prevailing
party" within the meaning of this paragraph includes, without limitation, a
party who agrees to dismiss an Action on the other party's payment of the sums
allegedly due or performance of the covenants allegedly breached, or who
obtains substantially the relief sought by it.
23.
27
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
BORROWER
ONYX ACCEPTANCE CORPORATION
By: ______________________________________
▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇ ▇. ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
LENDER
BAYVIEW CAPITAL CORPORATION
By: ______________________________________
Name:
Title:
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
ACKNOWLEDGEMENT AND AGREEMENT OF LENDER AND SENIOR LENDERS
The Lender, by its signature below, acknowledges that the
subordination provisions set forth in Article VI of this Agreement have been
negotiated with and for the primary benefit of the Senior Lenders named below,
and further acknowledges that the Senior Lenders have consented to the
Borrower's execution of this Agreement and the continued availability of funds
to the Borrower under the Senior Loan Agreement in reliance upon the provisions
of Article VI. THE LENDER BY ITS SIGNATURE BELOW AGREES THAT THE PROVISIONS OF
ARTICLE VI SHALL BE ENFORCEABLE BY THE SENIOR LENDERS (SEVERALLY OR THROUGH
STATE STREET BANK AND TRUST COMPANY, AS AGENT FOR THE SENIOR LENDERS UNDER THE
SENIOR LOAN AGREEMENT.
24.
28
IN WITNESS WHEREOF, this Agreement has been executed by the Lender in
favor of the Senior Lenders as an instrument under seal as of the date first
above written.
LENDER
BAYVIEW CAPITAL CORPORATION
By: ______________________________________
Name:
Title:
Address:
__________________________________
__________________________________
__________________________________
SENIOR LENDERS
STATE STREET BANK AND TRUST COMPANY,
INDIVIDUALLY AND AS AGENT
By: ______________________________________
Name:
Title:
Address:
__________________________________
__________________________________
__________________________________
BANKBOSTON, N.A., formerly known as
THE FIRST NATIONAL BANK OF BOSTON
By: ______________________________________
Name:
Title:
Address:
__________________________________
__________________________________
__________________________________
25.
29
EXHIBIT "A"
TO TERM LOAN AGREEMENT
FORM OF NOTE
THIS NOTE IS SUBJECT TO THE SUBORDINATION PROVISIONS CONTAINED IN THAT CERTAIN
TERM LOAN AGREEMENT DATED AS OF FEBRUARY __, 1998 BY AND BETWEEN ONYX
ACCEPTANCE CORPORATION AS BORROWER AND BAYVIEW CAPITAL CORPORATION AS LENDER,
AND THE PRINCIPAL AND INTEREST OWING UNDER THIS NOTE ARE SUBORDINATED THEREBY
TO CERTAIN SENIOR OBLIGATIONS OF THE BORROWER AND THE HOLDER HEREOF IS BOUND BY
THE PROVISIONS CONTAINED IN SUCH TERM LOAN AGREEMENT TO WHICH REFERENCE IS
HEREBY MADE FOR ALL PURPOSES. A COPY OF THE TERM LOAN AGREEMENT AND THE
SUBORDINATION PROVISIONS CONTAINED THEREIN IS AVAILABLE FOR INSPECTION AT THE
BORROWER'S EXECUTIVE OFFICES.
SUBORDINATED PROMISSORY NOTE
Irvine, California
$__________ ______, 199__
For value received, the undersigned, Onyx Acceptance
Corporation, a Delaware corporation ("Borrower"), hereby unconditionally
promises to pay to the order of BayView Capital Corporation, a Delaware
corporation ("Lender"), the principal sum of ______________________
($__________) on the Maturity Date, or if Borrower has exercised its right
under Section 4.02 of the Term Loan Agreement (as defined below) on the
Extended Maturity Date. If such right is exercised, then the aggregate
outstanding principal amount under this Note on the Maturity Date shall be
repaid in 36 equal consecutive monthly installments, commencing on the first
month after the Maturity Date and continuing until the Extended Maturity Date.
Borrower further promises to pay interest on the Loan
outstanding hereunder from time to time at the interest rates, and payable on
the dates, set forth in the Term Loan Agreement referred to below.
Both principal and interest are payable in lawful money of the
United States of America and in same day or immediately available funds to
Lender, into the account designated by Lender.
Lender shall record the date and amount of the Loan made, the
amount of principal and interest due and payable from time to time hereunder,
each payment thereof and the resulting unpaid principal balance hereof, in
Lender's internal records, and any such recordation shall be rebuttable
presumptive evidence of the accuracy of the information so recorded; provided,
however, that Lender's failure so to record shall not limit or otherwise affect
the obligations of Borrower hereunder and under the Term Loan Agreement to
repay the principal of and interest on the Loan.
A-1
30
This promissory note is one of the Notes referred to in, and
is subject to and entitled to the benefits of, the Term Loan Agreement, dated
as of February ____, 1998, (as amended, modified, renewed or extended from time
to time, the "Term Loan Agreement") by and between Borrower and Lender.
Capitalized terms used herein shall have the respective meanings assigned to
them in the Term Loan Agreement.
The Term Loan Agreement provides, among other things, for
acceleration (which in certain cases shall be automatic) of the maturity hereof
upon the occurrence of certain stated events, in each case without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived.
This promissory note is subject to prepayment in whole or in
part as provided in the Term Loan Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
ONYX ACCEPTANCE CORPORATION
By:_____________________________________
▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
A-2
31
EXHIBIT "B"
FORM OF WARRANT
B-1
32
EXHIBIT "C"
TO THE TERM LOAN AGREEMENT
FORM OF NOTICE OF BORROWING
[DATE]
BayView Capital Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Notice of Borrowing Pursuant to Section 2.02 of Term Loan Agreement
Ladies and Gentlemen:
The undersigned, Onyx Acceptance Corporation (the "Borrower"),
refers to the Term Loan Agreement dated as of February __, 1998 (as amended,
modified, renewed, extended, or replaced from time to time, the "Term Loan
Agreement"), between the Borrower and BayView Capital Corporation (the
"Lender"), the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.02 of the Credit
Agreement, of the borrowing specified herein:
1. The Business Day of the proposed borrowing is
______________.
2. The aggregate amount of the proposed borrowing is
$__________.
3. The payment instructions with respect to the funds to
be made available to the Borrower are as follows: ______________.
4. The Borrower hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
proposed borrowing, before and after giving effect thereto and to the
application of the proceeds therefrom.
(a) the representations and warranties of the
Borrower contained in Section 8.01 of the Credit Agreement are
true and correct as though made on and as of each such date
(except to the extent such representations and warranties
relate solely to an earlier date, in which case they are true
and correct as of such date, except that Section 8.01(m) of
the Credit Agreement shall be deemed instead to refer to the
last day of the most recent fiscal year and month for which
financial statements have then been delivered and except as
set forth in amendments to Schedules and other disclosures
made in writing to the Lender and approved by it); and
C-1
33
(b) no Default exists or would result from such
proposed borrowing;
(c) the proposed borrowing equals or exceeds a
Minimum Amount, as required by Section 2.04 of the Credit
Agreement.
ONYX ACCEPTANCE CORPORATION
By:___________________________________
Its:__________________________________
C-2
34
EXHIBIT "D"
FORM OF NOTICE OF PREPAYMENT
[DATE]
BayView Capital Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Notice of Prepayment Pursuant to Section 4.03(b) of the Term Loan
Agreement
Ladies and Gentlemen:
The undersigned, Onyx Acceptance Corporation (the "Borrower")
refers to the Term Loan Agreement dated as of February __, 1998 (as amended,
modified, renewed, extended or replaced from time to time the "Term Loan
Agreement") between the Borrower and BayView Corporation (the "Lender"), the
terms defined therein being used herein as therein defined, and hereby gives
you notice irrevocably pursuant to 403(b) of a prepayment of the outstanding
loans as follows:
1. The Business Day of the proposed prepayment is
____________.
2. The aggregate amount of the proposed prepayment is
$________ in principal and $________ of accrued and unpaid interest to the date
of the prepayment.
ONYX ACCEPTANCE CORPORATION
By:___________________________________
Its:__________________________________
D-1
35
EXHIBIT "E"
FORM OF TRANSFERENCE ACKNOWLEDGMENT
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
ONYX ACCEPTANCE CORPORATION
1. Intentionally Omitted 09/21/94
Filing terminated
2. UCC-1 Financing 07/08/94 94138331 Comdisco, Inc. Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Corporation title and interest in
State) Equipment Schedule No.
VL-1, to Master Lease,
dated 1-7-94
3. Intentionally Omitted 02/15/96
Filing terminated
4. UCC-1 Financing 09/14/94 94186957 Comdisco, Inc. Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Corporation title and interest in
State) Equipment Schedule No.
VL-1, to Master Lease,
dated 1-7-94
5. UCC-1 Financing 09/21/94 94189286 Onyx Acceptance Onyx Acceptance Flow purchase of
Statement (CA Secretary of Financial Corporation, Corporation, as contracts
State) as Purchaser Seller
5.1 UCC-2 Amendment 04/12/96 96106C0017 Onyx Acceptance Onyx Acceptance (Filed to reflect change
to Financing Statement (CA Financial Corporation, Corporation, as of Onyx's State of
Secretary of State) as Purchaser Seller Incorporation to
Delaware)
5.2 UCC-2 Amendment 03/25/97 97085C0033 Onyx Acceptance Onyx Acceptance (Filed to add the name to
to Financing Statement (CA Corporation, as Seller Financial "Automotive Banking
Secretary of State) Corporation, as Network" as a trade name)
Purchaser
5.3 UCC-3 Amendment 08/28/97 97241C1090 Onyx Acceptance Onyx Acceptance (Filed to reflect
to Financing Statement (CA Financial Corporation Corporation, as evidence of release on
Secretary of State) Seller collateral as described
in Exhibit A to UCC-1)
5.4 UCC-2 Amendment 01/13/98 98014C0505 Onyx Acceptance Onyx Acceptance (Filed to amend
to Financing Statement Financial Corporation Corporation, as replacement of No.
(CA etary of State) Seller 94189286 Schedule I with
Schedule I as filed and
amended)
1
37
UCC NO. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
6. UCC-1 Financing 10/12/94 9429961051 Capital Market Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest in and
State) to Account No. ▇▇▇▇▇▇▇-
000 (Spread Account)
maintained by First
Interstate Bank
6.1 UCC-2 Amendment 02/15/96 96046C0715 Capital Market Onyx Acceptance All of Debtor's right,
to Financing Statement (CA Assurance Corporation Corporation title and interest in and
Secretary of State) to Account No. ▇▇▇▇▇▇▇-
000 (Spread Account)
maintained by First
Interstate Bank
7. UCC-1 Financing 10/12/94 9429961058 Bankers Trust Company, Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of as Yield Supplement Corporation title and interest in and
State) Agent for the to Account No. 360402657
Certificate holders and (Yield Supplement Reserve
the Insurer Account) maintained by
First Interstate Bank
8. UCC-1 Financing 01/20/95 9502561211 Comdisco, Inc. Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Corporation title and interest in
State) Equipment Schedule No.
VL-1, to Master Lease,
dated 1-7-94
9. UCC-1 Financing 04/20/95 9511160503 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest in and
State) to Account No. 14726
(Spread Account)
maintained by Bankers
Trust Company
9.1 UCC-2 Amendment 02/15/96 96047C0160 Capital Markets Onyx Acceptance All of Debtor's right,
to Financing Statement (CA Assurance Corporation Corporation title and interest in and
Secretary of State) to Account No. 14726
(Spread Account)
maintained by Bankers
Trust Company
10. UCC-1 Financing 04/24/95 9511760281 Banker Trust Company, Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of as Yield Supplement Corporation title and interest in and
State) Agent for the to Account No. 360102670
Certificateholders and (Yield Supplement Reserve
the Insurer Account) maintained by
First Interstate Bank
11. UCC-1 Financing 04/25/95 9511761264 Comdisco, Inc. Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Corporation title and interest in
State) Equipment Schedule No.
VL-1, to Master Lease,
dated 1-7-94
12 UCC-1 Financing 10/19/95 9529660866 Comdisco, Inc. Onyx Acceptance This filing is for notice
Statement (CA Secretary of Corporation purposes only to evidence
State) a "true lease".
(Collateral: Furniture
and computer hardware as
described on Exhibit to
UCC-1)
13 UCC-1 Financing 01/17/96 9601860530 Comdisco, Inc. Onyx Acceptance This filing is for notice
Statement (CA Secretary of Corporation purposes only to evidence
State) a "true lease".
(Collateral: Furniture
and computer hardware as
described on Exhibit to
UCC-1)
2
38
UCC NO. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
14. UCC-1 Financing 12/12/95 9534760422 Lighthouse Capital Onyx Acceptance All presently existing
Statement (CA Secretary of Partners, L.P. Corporation and hereafter acquired
State) equipment leased by
Secured Party to Debtor
15. UCC-1 Financing 12/12/95 9534760433 Lighthouse Capital Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Partners, L.P. Corporation title and interest in and
State) to all presently existing
and hereafter acquired
computer software
16. UCC-1 Financing 12/12/95 9534760446 Lighthouse Capital Onyx Acceptance Computer hardware as
Statement (CA Secretary of Partners, L.P. Corporation specifically described on
State) Annex A to UCC-1
17. UCC-1 Financing 12/12/95 9534760459 Lighthouse Capital Onyx Acceptance Computer software as
Statement (CA Secretary of Partners, L.P. Corporation specifically described on
State) Annex A to UCC-1
18. UCC-1 Financing 02/16/96 ▇▇▇▇▇▇▇▇▇▇ Lighthouse Capital Onyx Acceptance Computer hardware and
Statement (CA Secretary of Partners, L.P. Corporation telephone equipment as
State) specifically described on
Annex A to UCC-1
19 UCC-1 Financing 04/04/96 9609660028 Lighthouse Capital Onyx Acceptance Computer hardware and
Statement (CA Secretary of Partners, L.P. Corporation telephone equipment as
State) specifically described on
Annex A to UCC-1
20 UCC-1 Financing 04/04/96 9609660030 Lighthouse Capital Onyx Acceptance Computer software as
Statement (CA Secretary of Partners, L.P. Corporation specifically described on
State) Annex A to UCC-1
21 UCC-1 Financing 07/09/96 9619360279 Lighthouse Capital Onyx Acceptance Computer hardware, office
Statement (CA Secretary of Partners, L.P. Corporation furniture and telephone
State) equipment as specifically
described on Annex A to
UCC-1
22 UCC-1 Financing 10/09/96 9628560263 Lighthouse Capital Onyx Acceptance Computer hardware, office
Statement (CA Secretary of Partners, L.P. Corporation furniture and telephone
State) equipment as specifically
described on Annex A to
UCC-1
23. UCC-1 Financing 01/12/96 9601660029 State Street Bank and Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Trust Company, as Agent Corporation title and
State) interest in all assets
other than Excluded
Assets
23.1 UCC-2 02/05/96 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Onyx Acceptance All of Debtor's right,
Amendment to Financing Trust Company, as Agent Corporation title and interest in
Statement (CA Secretary of all assets other than
State) Excluded Assets
23.2 UCC-2 01/09/97 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Onyx Acceptance All of Debtor's right,
Amendment to Financing Trust Company, as Agent Corporation title and interest in all
Statement (CA Secretary of assets other than
State) Excluded Assets
3
39
UCC NO. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
23.3 UCC-2 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Onyx Acceptance (Filed to reflect release
Amendment to Financing 08/29/97 Trust Company, as Agent Corporation of collateral as
Statement (CA Secretary described in Schedule A
of State) to UCC-1)
23.4 UCC-2 10/09/97 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Onyx Acceptance (Amended to reflect
Amendment to Financing Trust Company, as Agent Corporation substitution of original
Statement (CA Secretary of filed Schedule I with
State) Amended and Restated
Schedule I)
24. UCC-1 Financing 02/15/96 9604760481 Onyx Acceptance Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Financial Corporation, Corporation, as title and interest
State) as Purchaser Seller arising from and in
connection with the 1995-
1 Spread Account
25. UCC-1 Financing 02/15/96 9604660978 Onyx Acceptance Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Financial Corporation, Corporation, as title and interest
State) as Purchaser Seller arising from and in
connection with the 1994-
1 Spread Account
26. UCC-1 Financing 02/15/96 9604760531 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State) arising from and in
connection with the 1996-
1 Spread Account
27. UCC-1 Financing 05/15/96 9613860049 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State arising from and in
connection with the 1996-
2 Spread Account
28. UCC-1 Financing 09/17/96 9626260267 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State arising from and in
connection with the 1996-
3 Spread Account
29. UCC-1 Financing 12/23/96 9635860961 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State) arising from and in
connection with the 1996-
4 Spread Account
30. UCC-1 Financing 12/23/96 9635860943 Bankers Trust Company Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Corporation title and interest
State) arising from and in
connection with the Yield
Supplement Reserve
Account GT 1996-4
31. UCC-1 Financing 03/25/97 9708560018 Bankers Trust Company, Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of as Yield Supplement Corporation title and interest
State) Agent arising from and in
connection with the Yield
Supplement Reserve
Account GT 1997-1
4
40
UCC NO. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
32. UCC-1 Financing 03/25/97 9708560055 Capital Markets Onyx Acceptance All of Debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State) arising from and in
connection with the 1997-
1 Spread Account
33. UCC-1 Financing 02/06/97 9704460446 Winthrop Resources Onyx Acceptance This filing is for
Statement (CA Secretary of Corporation Corporation notices purposes only to
State) evidence a "true lease".
(Collateral: any and all
equipment now or
hereafter the subject of
any lease agreements or
lease schedule as
described on Addendum No.
1 to UCC-1.)
34. UCC-1 Financing 05/27/97 0714860129 FBS Business Finance Onyx Acceptance 50% deposit of tenant
Statement (CA Secretary of Corporation Corporation improvement contract
State) amount, office furniture,
computer hardware and
leasehold improvements as
stated on Schedule A to
UCC-1
35. UCC-1 Financing 06/18/97 9717061106 Capital Markets Onyx Acceptance All of debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State) arising from and in
connection with the 1997-
2 spread account
36. UCC-1 Financing 09/11/97 9725560810 Capital Markets Onyx Acceptance All of debtor's right,
Statement (CA Secretary of Assurance Corporation Corporation title and interest
State) arising from and in
connection with the 1997-
3 spread account
37. UCC-1 Financing 08/11/97 ▇▇▇▇▇▇▇▇▇▇ First Commercial Onyx Acceptance Telephone equipment as
Statement (CA Secretary of Capital Corp. assigning Corporation specifically described on
State) to Community First Schedule A to UCC-1
Financial, Inc.
37.1 UCC-3 10/06/97 97282C0259 Community First Onyx Acceptance Assigning security
Assignment of Financing Financial, Inc. Corporation interest created by UCC-1
Statement (CA Secretary of File No. ▇▇▇▇▇▇▇▇▇▇ from
State) First Commercial Capital
Corp.
38. UCC-1 Financing 09/26/97 9727460109 First Commercial Onyx Acceptance All presently existing
Statement (CA Secretary of Capital Corp. and Linc Corporation and hereafter acquired
State) Capital, Inc. computer equipment,
telephone equipment,
office furniture and
machines, as stated in
Exhibit A and Schedule A
to UCC-1
39. UCC-1 Financing 10/07/97 9728760099 First Commercial Onyx Acceptance Computer hardware as
Statement (CA Secretary of Capital Corp. and Linc Corporation specifically described on
State) Capital, Inc. Schedule A to UCC-1
39.1 UCC-3 01/06/98 98007C0543 Linc Capital, Inc. Onyx Acceptance Assigning security
Assignment of Financing Corporation interest granted by UCC-1
Statement (CA Secretary of file No. 9728760099 from
State) First Commercial Capital
Corp.
5
41
UCC NO. & DESCRIPTION FILE FILE NO. SECURED PARTY DEBTOR DESCRIPTION OF COLLATERAL
--------------------- ---- -------- ------------- ------ -------------------------
DATE
----
40. UCC-1 Financing 01/02/98 9800860267 First Commercial Onyx Acceptance All presently existing
Statement (CA Secretary of Capital Corp. Corporation and hereafter acquired
State) computer equipment,
telephone equipment,
office furniture and
machines, as stated in
Exhibit A to UCC-1
6
42
SCHEDULE 2
LIST OF SUBSIDIARIES
1. Onyx Acceptance Financial Corporation, a Delaware corporation.
2. Onyx Acceptance Funding Corporation, a Delaware corporation.
3. ABNI, Inc., a Delaware corporation
4. C.U. Acceptance Corporation, a Delaware corporation.
1