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EXHIBIT 10.1
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF
FEBRUARY 7, 1997
AMONG
AMRESCO, INC.
AND THE OTHER ENTITIES DESIGNATED HEREIN
AS BORROWERS
AND
NATIONSBANK OF TEXAS, N.A.
AS AGENT
AND
NATIONSBANK OF TEXAS, N.A.
AND THE OTHER ENTITIES DESIGNATED HEREIN
AS LENDERS
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TABLE OF CONTENTS
ARTICLE I
TERMS DEFINED
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Singular and Plural of Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 1.3. Substantive Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 1.4. Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 1.5. Captions; References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 1.6. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE II
COMMITMENT
SECTION 2.1. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.2. Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.4. Additional Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III
TERMS OF THE CREDIT FACILITIES
SECTION 3.1. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.3. Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.4. Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.5. Conversion of Revolving Credit Advances; Interest Rate Elections under
Term Facility; Regulatory Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.6. Payments of Advances; Reduction of Commitment Amount . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.7. Schedules on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.8. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.9. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.10. Post-Default Interest; Past Due Principal and Interest . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.11. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.12. Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.13. Deposit of Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.14. Alternate Currency Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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ARTICLE IV
CONDITIONS TO CLOSING
SECTION 4.1. Conditions To Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.2. Conditions To All Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.3. Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE V
COLLATERAL
SECTION 5.1. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.2. Requirements For Assigned Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 5.3. Requirements for Mortgaged Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.4. Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.5. Timing of Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.6. Agent's Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.7. Lockbox; Lockbox Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.8. Requirements For High Yield Loans and Other Collateral . . . . . . . . . . . . . . . . . . . . 56
Section 5.9. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Existence and Power of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.3. Authorization; Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.4. Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.6. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.7. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.8. Taxes and Filing of Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.9. Ownership of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.10. Business; Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.11. Licenses, Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.12. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.13. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.14. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.15. Purpose of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.16. Governmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.17. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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SECTION 6.19. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.20. Due Diligence Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VII
AFFIRMATIVE COVENANTS
SECTION 7.1. Information From AMRESCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.2. Business of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.3. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.4. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.5. Payment of Taxes, Impositions and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.6. Compliance with Laws and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.7. Environmental Law Compliance and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.8. Covenant Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.9. Quantity and Quality of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.11. Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.12. Compliance With Due Diligence Standards; Offices and Files . . . . . . . . . . . . . . . . . . 67
SECTION 7.13. Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.14. ACMF Transaction Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE VIII
NEGATIVE COVENANTS
SECTION 8.1. Minimum Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 8.2. Consolidated Funded Debt to Consolidated Capitalization . . . . . . . . . . . . . . . . . . . . 69
Section 8.3. Coverage Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.4. Senior Consolidated Funded Debt to Consolidated EBITDA . . . . . . . . . . . . . . . . . . . . 69
Section 8.5. Limitation on Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 8.6. Limitation on Sale of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.7. Limitations on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.8. Limitation on Loans to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.9. Consolidations, Mergers, Sales of Assets, and Maintenance . . . . . . . . . . . . . . . . . . . 71
Section 8.10. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.11. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.12. Limitation on Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.14. Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.15. Use Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.16. Exceptions to Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.17. Fiscal Year and Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.18. Governmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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ARTICLE IX
DEFAULTS AND REMEDIES
SECTION 9.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.3. Rights of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 9.4. Remedies Cumulative, Concurrent and Non-Exclusive . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.5. No Conditions Precedent to Exercise Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.6. Release of and Resort to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.7. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 9.8. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 9.9. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 9.10. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE X
AGENT AND THE LENDERS
SECTION 10.1. Appointment and Authorization of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 10.2. Possession of Instruments by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.4. Delegation of Duties; Reliance; Consultation . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.5. Limitation of Agent's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.6. Default; Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10.7. Lenders' Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.8. Limitation of Liability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.9. Relationship of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.10.Debtor-Creditor Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 00.00.Xxxxxx Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.12.Removal of Agent . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.13.Resignation by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.14.Sharing of Payments and Setoffs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.15.Non-Advancing Lenders. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.16.Benefit of Lenders . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Continuing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
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SECTION 11.3. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.4. Expenses; Documentary Taxes; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.5. Amendments and Waivers; Consent to Deviation . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.6. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.7. Prior Understandings; No Defenses; Release; No Oral Agreements . . . . . . . . . . . . . . . . 91
SECTION 11.8. Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.9. Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 11.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 11.11. Senior Debt; Borrower Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.12. Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.13. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.14. APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.15. Submission To Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.16. JURY TRIAL WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.17. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.18. Inconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.19. Non-Waiver of Rights or Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
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SCHEDULES AND EXHIBITS
SCHEDULE I - LENDERS AND BORROWERS
SCHEDULE II - COMMITMENT FEE PERCENTAGE; LIBOR MARGIN
EXHIBIT A - SECOND AMENDED AND RESTATED REVOLVING NOTE
EXHIBIT A-1 - TERM NOTE
EXHIBIT B - REQUEST FOR ADVANCE
EXHIBIT C - FORM OF COMPLIANCE LETTER
EXHIBIT D - ASSIGNMENT AND ACCEPTANCE
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT is entered into as of
the 7th day of February, 1997, by and among AMRESCO, INC., a Delaware
corporation, and the entities designated as "Borrowers" on Schedule I attached
hereto (as modified from time to time), and NationsBank of Texas, N.A., a
national banking association, for itself and as agent, and the lending
institutions designated as "Lenders" on Schedule I hereto (as modified from
time to time).
PRELIMINARY STATEMENT
I. Agent, certain of the Lenders and the Borrowers therein named (the
"Original Borrowers") executed that certain First Amended and Restated
Revolving Loan Agreement (as modified and amended, the "Original Loan
Agreement") dated as of April 25, 1996, wherein certain of the Lenders agreed
to make a revolving credit facility available to the Original Borrowers in an
aggregate amount not to exceed Two Hundred Million and No/100 Dollars
($200,000,000).
II. The Original Loan Agreement was modified by (a) that certain First
Amendment to First Amended and Restated Revolving Loan Agreement dated as of
June 13, 1996, by and among the Original Borrowers, Agent, the Existing Lenders
(as therein defined) and the New Lenders (as therein defined), (b) that certain
Second Amendment to First Amended and Restated Revolving Loan Agreement dated
as of August 9, 1996, by and among the Required Lenders (as therein defined),
the Additional Lenders (as therein defined), the New Lender (as therein
defined), AMRESCO and the other entities designated as "Borrowers" in Schedule
I attached thereto, and (c) that certain Third Amendment to First Amended and
Restated Revolving Loan Agreement dated as of October 23, 1996, by and among
the Lenders (as therein defined), AMRESCO and the other entities designated as
"Borrowers" in Schedule I attached thereto.
III. Borrowers have requested, among other things, that Agent and Lenders
modify, amend and restate the Original Loan Agreement in order to, in part, (a)
increase the revolving credit facility to an aggregate amount not to exceed Two
Hundred Seventy-Five Million and No/100 Dollars ($275,000,000), and (b) create
a term facility in an amount not to exceed Seventy-Five Million and No/100
Dollars ($75,000,000). Upon and subject to the terms of this Agreement and
each of the other Loan Documents, Agent and Lenders are willing to modify,
amend and restate the Original Loan Agreement. Accordingly, in consideration
of the mutual covenants contained herein, Borrowers, Agent and Lenders agree as
follows:
ARTICLE I
TERMS DEFINED
SECTION 1.1. Definitions. The following terms, as used herein, have
the following meanings:
ACC means AMRESCO Capital Corporation, a Texas corporation.
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ACCC means AMRESCO Capital Conduit Corporation, a Delaware corporation,
which is the general partner of ACMF.
ACCC Guaranty has the meaning set forth in the definition of ACMF
Transaction Documents.
ACC Warehouse Line means the line of credit to ACC made by NationsBank
and guaranteed by AMRESCO, such line of credit being in the amount of Ten
Million and No/100 Dollars ($10,000,000.00) for the origination of Mortgage
Investments, as the same may be renewed, extended, modified, amended or
replaced from time to time.
Account Debtor means, collectively, the "borrower" and each other
obligor, guarantor or other liable party under any Assigned Loan.
ACL means AMRESCO Capital Limited, Inc., a Delaware corporation, which
is a limited partner of ACMF.
ACMF means AMRESCO Commercial Mortgage Funding, L.P., a Delaware limited
partnership, whose sole general partner is ACCC and whose limited partners are
ACL and MLQ Investors, L.P.
ACMF Cap Amount means the $25,000,000 initial capital investment in ACMF
by ACCC and ACL.
ACMF Custodial Agreement has the meaning set forth in the definition of
ACMF Transaction Documents.
ACMF Servicing Agreement has the meaning set forth in the definition of
ACMF Transaction Documents.
ACMF Transaction Documents means, collectively, (a) the Limited Keepwell
Agreement dated as of September 3, 1996, executed by and among AMRESCO, ACC and
GSMC (the "Keepwell Agreement"); (b) Guaranty dated as of September 3, 1996,
executed by ACCC (the "ACCC Guaranty"); (c) Amended and Restated Agreement of
Limited Partnership dated as of August 30, 1996, executed by ACCC as general
partner, ACL as one of two limited partners, and MLQ Investors, L.P. as the
other limited partner; (d) Master Repurchase Agreement dated as of September 3,
1996, executed by ACMF and GSMC, including Annex I thereto, dated as of
November 13, 1996 (the "Master Repurchase Agreement"); (e) Mortgage Loan
Origination and Sale Agreement dated as of September 3, 1996, between ACC and
ACMF (the "Origination Agreement"); (f) Custodial Agreement dated as of
September 3, 1996, between ACMF, GSMC, and LaSalle National Bank (the "ACMF
Custodial Agreement"); (g) the letter agreement between GSMC, ACC and ACMF
dated as of November 13, 1996, with respect to the purchase by ACMF of certain
mortgage loans (identified therein) originated by ACC from GSMC; (h) Interim
Servicing Agreement dated as of September 3, 1996, between ACMF and AMRESCO
Management, Inc. (the "ACMF Servicing Agreement"); (i) the letter agreement
between ACMF and GSMC dated as of November 13, 1996, with respect to the Master
Repurchase Agreement; and (j) the Securitization
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Agreement (the "Securitization Agreement") to be entered into between AMRESCO,
ACMF, ACC, AMRESCO Management, Inc., GSMC and Xxxxxxx Xxxxx & Co., which will
require an indemnification of Xxxxxxx Sachs & Co. against securities law
liability arising from securitizations contemplated thereby.
Acquired Loans means the loans and mortgages included in any Asset
Portfolio acquired by any of the Borrowers, and which have not been disposed of
by any such Borrower.
Acquisition means any transaction pursuant to which any Borrower or any
of its Subsidiaries, (a) whether by means of a capital contribution or purchase
or other acquisition of stock or other securities or other equity participation
or interest, (i) acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by any Borrower or such Subsidiary of tenders of
equity securities of such Person, or through one or more negotiated block,
market, private or other transactions, or a combination of any of the
foregoing, or (ii) makes any corporation a Subsidiary of any Borrower or such
Subsidiary, or causes any corporation, other than a Subsidiary of any Borrower
or such Subsidiary, to be merged into any Borrower or such Subsidiary (or
agrees to be merged into any other corporation other than a wholly-owned
Subsidiary (excluding directors' qualifying shares) of any Borrower or such
Subsidiary), or (b) purchases all or substantially all of the business or
assets of any Person or of any operating division of any Person.
Additional Debt means any Debt of any Borrower (other than AMRESCO)
which Borrower was or is hereafter established for the purpose of making
Mortgage Investments and conducting all activities ancillary to making Mortgage
Investments; provided that (a) other than the guaranty by AMRESCO of the ACC
Warehouse Line, neither AMRESCO nor any Borrower other than the Borrower using
the proceeds of such Debt for the purposes described above or co-borrowers
(other than AMRESCO) on such Debt, shall have any payment obligation with
respect to, or give any collateral to secure, such Debt, (b) any such Debt
shall be fully collateralized at its inception, and (c) in no event shall the
aggregate amount of Cash Contributed Capital exceed the greater of (i) 7.5% of
Total Capital or (ii) 10% of the balance sheet value of Mortgage Investments
securing the Additional Debt outstanding on the date of determination. The
balance sheet value of such Mortgage Investments shall be determined in
accordance with GAAP and marked to market no less than quarter-annually.
Additional Debt Report and Certification means a report (a) showing such
information concerning the Additional Debt as required by Agent from time to
time, including, without limitation, the amount of each such Additional Debt
and the entities obligated as borrowers thereunder, and (b) certifying
compliance by Borrowers with the limitations on Additional Debt and Cash
Contributed Capital contained in this Agreement, in detail satisfactory to
Agent.
Adjusted EBITDA means the difference between (a) Consolidated EBITDA and
(b) any non-cash gains from the sale of assets in connection with the creation
of asset-backed securities which would be required to be reported by any
Borrower on such Borrower's financial statements in accordance with GAAP for
the period for which such difference is being calculated, including, without
limitation, any non-cash revenues related to mortgage origination or mortgage
servicing.
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Adjusted LIBOR Rate shall mean on the applicable Effective Date, with
respect to a LIBOR Rate Advance or LIBOR Rate Portion, a rate per annum equal
to the sum of (a) the quotient of (i) the LIBOR Rate on the applicable
Effective Date, divided by (ii) the remainder of 1.00 minus the LIBOR Reserve
Requirement, if any, on the applicable Effective Date, plus (b) the FDIC
Percentage in effect on the applicable Effective Date, together with any
additional impositions, assessments, fees or surcharges that may be imposed on
Agent or any Lender (expressed as a percentage), to the extent such
impositions, assessments, fees or surcharges are not reflected in the FDIC
Percentage or the LIBOR Reserve Requirement and are generally imposed on banks
with capitalization and supervisory risk factors comparable to Agent, plus (c)
the LIBOR Margin.
Administrative Fee means an aggregate annual fee of Fifty Thousand and
No/100 Dollars ($50,000.00).
Advance means an Advance made by either the Revolving Lenders or the
Term Lenders, as applicable, to any Borrower under the applicable Credit
Facility pursuant to the terms and conditions of this Agreement.
Affiliate means, as to any Person, any Subsidiary of such Person, or any
Person which, directly or indirectly, controls, is controlled by, or is under
common control with such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
Agent means NationsBank, in its capacity as agent for the Lenders
hereunder, or any successor agent pursuant to Section 10.12 or Section 10.13 or
any agreement entered into pursuant to Section 10.16.
Aggregate Loan Percentage means, with respect to each Lender, the
fraction, expressed as a percentage, obtained by dividing (a) the sum of (i)
the aggregate principal amount outstanding on the date of determination under
the Term Note and/or Revolving Note payable to such Lender, plus (ii) such
Lender's portion of the Letter of Credit Exposure, divided by (b) the aggregate
principal amount outstanding on the date of determination under the Notes plus
the Letter of Credit Exposure.
Agreement means this Second Amended and Restated Loan Agreement and all
renewals, extensions, modifications, amendments and rearrangements thereof.
Alternate Currency means British pounds sterling, Canadian dollars, and
the currency of any other foreign country agreed to by the Revolving Lenders
from time to time.
Alternate Currency Base Rate means for any Interest Period for each
Alternate Currency Advance, the rate of interest determined by Agent at which
deposits in the applicable Alternate Currency (except for British pounds
sterling) for the relevant Interest Period are offered based on information
presented on the Telerate Screen as of 11:00 A.M. (London time) on the day
which is two (2) Business Days prior to the first day of such Interest Period;
provided, that if at least two such offered rates appear on the Telerate Screen
in respect of such Interest Period, the arithmetic mean of all such rates (as
determined by Agent) will be the rate used; provided, further, if (i) the
Telerate
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System ceases to provide the required quotation, or (ii) with respect to any
Alternate Currency Advance made in British pounds sterling, such rate shall be
the per annum rate of interest determined by the arithmetic average (rounded
upward, if necessary, to the nearest .01%) of the respective rates per annum at
which deposits in British pounds sterling or such other Alternate Currency
would be offered to each of the Reference Banks in the London interbank market
at approximately 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount approximately equal to the principal
amount in British pounds sterling or such other Alternate Currency of the
related Alternate Currency Advance to which such Interest Period is to apply
and for a period of time comparable to such Interest Period.
Alternate Currency Loss has the meaning set forth in Section 3.6(f).
Alternate Currency Note has the meaning set forth in Section 3.14.
Alternate Currency Advance means an Advance which is funded in Alternate
Currency and bears interest at the Alternate Currency Rate.
Alternate Currency Rate shall mean, on the applicable Effective Date
with respect to an Alternate Currency Advance, a rate per annum equal to the
sum of (a) the quotient of (i) the Alternate Currency Base Rate on the
applicable Effective Date, divided by (ii) the remainder of 1.00 minus the
LIBOR Reserve Requirement, if any, on the applicable Effective Date, plus (b)
the FDIC Percentage in effect on the applicable Effective Date, together with
any additional impositions, assessments, fees or surcharges that may be imposed
on Agent or any Lender (expressed as a percentage), to the extent such
impositions, assessments, fees or surcharges are not reflected in the FDIC
Percentage or the LIBOR Reserve Requirement and are generally imposed on banks
with capitalization and supervisory risk factors comparable to Agent, plus (c)
the LIBOR Margin.
Alternate Currency Option has the meaning set forth in Section 2.2(c).
Amendment Fee means the fee to be paid by Borrowers to each Lender on
the Closing Date pursuant to a separate letter executed by Borrowers and each
such Lender on or prior to the Closing Date.
AMRESCO means AMRESCO, INC., a Delaware corporation, that directly or
indirectly owns 100% of the other Borrowers.
AMRESCO Commercial means AMRESCO Commercial Mortgage I Funding
Corporation, a Delaware corporation.
Applicable Environmental Laws has the meaning set forth in Section 7.7.
Applicable Lending Office means with respect to each Lender, such
Lender's domestic lending office (as designated by such Lender) for Variable
Rate Advances or Variable Rate Portions, and such Lender's Eurodollar lending
office (as designated by such Lender) for LIBOR Rate Advances, LIBOR Rate
Portions and Alternate Currency Advances.
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Applicable Rate means at any time, (a) with respect to a Variable Rate
Advance or a Variable Rate Portion, a rate per annum equal to the Variable
Rate, (b) with respect to a LIBOR Rate Advance or LIBOR Rate Portion, a rate
per annum equal to the Adjusted LIBOR Rate, and (c) with respect to an
Alternate Currency Advance, a rate per annum equal to the Alternate Currency
Rate.
Approved Acquisitions means Acquisitions which are approved by the
Required Lenders as contemplated by Section 8.10 of this Agreement.
Approved Senior Debt means Debt issued by AMRESCO which is unsecured and
senior to other unsecured Debt of AMRESCO and the terms of which have been
approved in writing by the Required Lenders and shall include, without
limitation, the Debt evidenced by promissory notes aggregating $57,500,000
issued pursuant to the terms of the Senior Indenture as Series 1996-A due 1999,
and pursuant to that certain Officers' Certificate and Company Order dated as
of July 19, 1996.
Approved Subordinated Debt means Debt issued by AMRESCO which is
unsecured and subordinated to payment of the Credit Facilities and the terms of
which (including, without limitation, the subordination provisions thereof)
have been approved in writing by the Required Lenders, and shall include,
without limitation, (a) the Debt evidenced by notes made pursuant to the terms
of that certain Indenture (the "January Indenture") dated January 15, 1996,
executed by and between AMRESCO and Bank One, Columbus, N.A., as Trustee, and
(b) any other promissory notes evidencing subordinated debt issued on terms
consistent with those of the January Indenture, provided that (i) Agent has
received projections from AMRESCO showing financial covenant compliance
following issuance of such notes; (ii) no Default or Event of Default has
occurred and has not been cured; and (iii) Agent has approved the terms for the
issuance of such promissory notes, including, without limitation, the terms
regarding subordination of such promissory notes to the Credit Facilities.
ARCC means AMRESCO Residential Credit Corporation, a Delaware
corporation.
ARCI means AMRESCO Residential Conduit, Inc., a Delaware corporation.
ARCMI means AMRESCO Residential Capital Markets, Inc., a Delaware
corporation, formerly known as AMRESCO Residential Mortgage Corporation.
ARMC means AMRESCO Residential Mortgage Corporation, a Delaware
corporation.
ARMC Warehousing Facility means one or more warehouse lines of credit
made to ARMC, ARCI or ARCMI (without recourse or with recourse only to ARMC,
ARCI and/or ARCMI) from one or more institutional lenders in order to finance
the origination or purchase by ARMC or ARCMI of various single-family
residential real estate loans, as the same may be renewed, extended, modified,
amended or replaced from time to time.
ARMC Warehousing Loans means the single-family residential real estate
loans funded under the ARMC Warehousing Facility.
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Arranger means NationsBanc Capital Markets, Inc.
ARSC means AMRESCO Residential Securities Corporation, a Delaware
corporation.
Asset Portfolio Report means a report showing various information
concerning each Asset Portfolio which is included as an Eligible Investment,
such report being in form as attached to the Borrowing Base Schedule as Annex
A.
Asset Portfolios means one or more pools or portfolios of (a)
performing, non-performing or under-performing loans, and/or (b) real estate or
other assets acquired in connection with the foreclosure, restructure or
settlement of non-performing or under-performing loans, together with all
documents, instruments, certificates and other information related thereto;
provided, however, that the ARMC Warehousing Loans shall not be included in the
term "Asset Portfolios".
Assigned Loans means the Acquired Loans included in the Asset Portfolios
which are Eligible Investments, and which have not been disposed of by the
applicable Borrower as contemplated and permitted by this Agreement and the
other Loan Documents.
Assignment and Acceptance has the meaning set forth in Section 11.10.
Authorized Officer means, as to any Borrower, or any other Person, any
of its Chairman, Vice-Chairman, President, Executive Vice President(s), Chief
Financial Officer, Chief Accounting Officer, Treasurer or Assistant Treasurer,
who is duly authorized by the Board of Directors of such Person to execute the
Loan Documents or any other documents or certificates to be executed by such
Person hereunder or in connection with any Advance or Letter of Credit.
Base Rate means, on any date of determination, the greater of (a) the
rate of interest per annum most recently announced by Agent as its prime rate
in effect at its principal office (which, in the case of NationsBank shall mean
its principal office in Dallas, Texas), automatically fluctuating upward and
downward until and at the time specified in each such announcement without
special notice to any Borrower or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to a customer
and (b) the sum of the Federal Funds Rate plus .50%.
Borrower Due Diligence Reports means the various written reports,
information and other materials that a Borrower prepared or assembled and has
available at the offices designated in Section 7.12 hereof containing
descriptions and evaluations of the Acquired Loans and Mortgaged Properties
included in a particular Asset Portfolio, and the applicable Borrower's
assessments and projections regarding same, or other information regarding such
Acquired Loans and the Mortgaged Property, including copies of purchase
agreements, copies of any appraisals or environmental site assessments, and the
"Round Table" books for each such Asset Portfolio summarizing the applicable
Borrower's due diligence regarding such Acquired Loans and the Mortgaged
Property.
Borrowers means AMRESCO and each of the entities designated on Schedule
I as a "Borrower," as such Schedule I may be supplemented pursuant to Section
2.4.
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Borrowing Base means an amount equal to the lesser of (a) the sum of (i)
the Revolving Commitment, plus (ii) the aggregate amount outstanding under the
Term Facility, or (b) the sum of (i) the Portfolio Borrowing Base, plus (ii)
EBITDA Availability.
Borrowing Base Schedule means the schedule which (a) lists each Eligible
Investment and the current Net Investment Value thereof with any back-up
schedule required by Section 7.1(f) (including, without limitation, a completed
Asset Portfolio Report), (b) the aggregate Net Investment Values of the
Performing Assigned Loans included in Eligible Investments, (c) designates the
number of months since each such Eligible Investment was initially acquired by
any Borrower, (d) shows the net present value (discounted at nine percent (9%))
of the Projected Net Cash Flow from Eligible Investments for each Eligible
Investment, (e) shows the aggregate Net Investment Value and aggregate net
present values of Projected Net Cash Flow related to any Wholly-Owned Real
Estate Portfolios included in the Borrowing Base, (f) calculates the Borrowing
Base and shows how such calculation was made, and (g) shows the calculation of
EBITDA Availability.
Bridge Debt means Debt of AMRESCO or any other Borrower to one or more
of the Lenders in an aggregate amount outstanding at any time not to exceed
Twenty-Five Million and No/100 Dollars ($25,000,000.00), which Debt may be
included in the Obligations and secured by the Collateral, but, if it is
secured by the Collateral, shall be subordinate to the Credit Facilities for
certain purposes as set forth in Section 10.6.
Business Day means (a) for all purposes other than as covered by clause
(b) of this definition, any day of the week, other than Saturday, Sunday or
other day Agent or any Lender is required or authorized by law or executive
order to close, and (b) with respect to all requests, notices and
determinations in connection with LIBOR Rate Advances, LIBOR Rate Portions and
Alternate Currency Advances, a day which is a Business Day described in clause
(a) of this definition and which is a day other than a day on which banks are
required or authorized to close in the London interbank market or other city in
which an Alternate Currency Advance is to be paid or advanced.
Cash Contributed Capital means any capital or intercompany loan received
by any Borrower obligated to pay any Additional Debt for the purpose of funding
any part of the Equity Portion.
Change in Control means (a) the acquisition by a person (as such term is
used in Section 13(d) and Section 14(d)(2) of the Exchange Act) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act) of the beneficial ownership of issued and outstanding shares of
the voting stock of AMRESCO, the result of which acquisition is that such
person or such group possess in excess of 50% of the combined voting power of
all the issued and outstanding voting stock of AMRESCO, or (b) during any
period of twelve consecutive calendar months, individuals who were directors of
AMRESCO on the first day of such period shall cease to constitute a majority of
the Board of Directors of AMRESCO.
Closing Date means the effective date of execution of this Agreement as
designated in the first paragraph of this Agreement.
Code means the Internal Revenue Code of 1986, as amended.
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Collateral means all property, assets and interests of any kind securing
the Credit Facilities (including, without limitation, all Advances and the
Letters of Credit) pursuant to this Agreement or any of the other Loan
Documents, which shall include, without limitation, (a) all Assigned Loans, (b)
all High Yield Loans, (c) all of the issued and outstanding stock of each
Borrower (other than AMRESCO) and each Borrower's Subsidiaries (except for
certain Excluded Subsidiaries), (d) all present and future accounts receivable,
furniture, fixtures, equipment, general inventory, asset-backed securities, and
any material real property asset of any Borrower (a material real property
asset to include any asset with an acquisition cost in excess of $5,000,000),
(e) servicing contracts and minority interests or partnership shares in
portfolios of any Borrower (and proceeds therefrom), unless an assignment of
such servicing contracts, minority interests or partnership shares is
prohibited by the documents creating the same, and (f) all assets not otherwise
described in this definition which are owned by any Borrower which is a
borrower or co-borrower under any Additional Debt, and which are not pledged as
collateral for such Additional Debt.
Collateral Assignment means, collectively, all collateral assignments,
debentures and charges assigning or creating liens on promissory notes and
liens, executed by any Borrower in favor of Agent, on behalf and for the
benefit of Lenders, as security for the Credit Facilities, which collateral
assignment, debentures or charges are intended to cover all of the Assigned
Loans and High Yield Loans, and all renewals, modifications, amendments,
supplements and restatements thereof, including, without limitation, (a) that
certain Collateral Assignment of Promissory Notes and Liens dated as of the
Initial Closing Date, executed by and between certain of the Borrowers and
Agent and that certain Collateral Assignment of Promissory Notes and Liens
dated as of March 1, 1996, executed by and between certain of the Borrowers and
Agent, as modified by (i) that certain First Modification of Collateral
Assignment of Promissory Notes and Liens (herein so called) dated the April 25,
1996, executed by and between certain of the Borrowers and Agent, and (ii) that
certain Second Modification of Collateral Assignment of Promissory Notes and
Liens (herein so called) dated the Closing Date, executed by and between
Borrowers and Agent, substantially in the form agreed to by AMRESCO and Agent,
and (b) that certain Composite Guarantee and Debenture, as amended from time to
time, by and among AMRESCO UK Holdings Limited and others, and Agent.
Commercial Paper Reserve means a portion of the Revolving Credit
Facility to evidence support for commercial paper to be issued by AMRESCO.
Commitment Fee shall mean the non-refundable fee equal to the product of
(a) the applicable percentage in effect as computed pursuant to Schedule II
attached hereto, times (b) the average daily unused portion of the Revolving
Commitment after adjustment for the Letter of Credit Exposure.
Consequential Loss has the meaning set forth in Section 3.6(e).
Consolidated Capitalization means, as of any date, the sum of (a)
Consolidated Funded Debt plus (b) Consolidated Tangible Net Worth.
Consolidated EBITDA means, for any period, determined in accordance with
GAAP on a consolidated basis for AMRESCO and its Subsidiaries, the sum of
consolidated net income before taxes and non-recurring gains or losses, plus
depreciation, plus amortization, plus interest expense, each as deducted in
determining such consolidated net income before taxes.
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Consolidated Funded Debt means, as of any date, all Debt which is
evidenced by promissory notes, loan agreements, bonds or similar instruments,
as such amount is required to be shown on AMRESCO's consolidated financial
statements prepared in accordance with GAAP (including, without limitation, the
Credit Facilities, Approved Senior Debt, Approved Subordinated Debt and
Excluded Subsidiary Debt), but excludes Additional Debt and the Investment Line
of Credit.
Consolidated Interest Expense means, for any period, the interest
expense which is required to be shown as such on the financial statements of
AMRESCO and its Subsidiaries, on a consolidated basis, prepared in accordance
with GAAP.
Consolidated Lease Expense means, for any period, the lease expense
under all Operating Leases for AMRESCO and its Subsidiaries on a consolidated
basis.
Consolidated Net Income means, as of the first day of each calendar
quarter, the net income after taxes of AMRESCO and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP, for the immediately
preceding calendar quarter, which amount shall be zero if there was a net loss
for the immediately preceding calendar quarter.
Consolidated Tangible Net Worth means, as of any date, (a) the total
shareholder's equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock) which would appear on a
consolidated balance sheet of AMRESCO and its Subsidiaries prepared as of such
date in accordance with GAAP, less (b) the aggregate book value of Intangible
Assets shown on such balance sheet of such Person, prepared in accordance with
GAAP and less (c) unamortized debt discount and expenses.
Credit Facilities means the Revolving Credit Facility and the Term
Facility.
Credit Period means the period commencing on the date of this Agreement
and ending on the Revolving Facility Termination Date or Term Facility
Termination Date, as applicable.
Custodial Agreement means each Custodial Agreement in form approved by
Agent by and between the Custodian, AMRESCO, for itself and on behalf of
Borrowers, and Agent, whereby Custodian agrees to act as bailee for the
documents evidencing certain of the Assigned Loans and High Yield Loans, as any
such Custodial Agreement may be amended or supplemented from time to time,
together with any replacement or substitution therefor.
Custodian means a financial institution or other Person approved by the
Required Lenders to act as a custodian under a Custodial Agreement. The
initial Custodians are Fleet National Bank, a national banking association, and
Bank One, Texas, NA, a national banking association.
Debt of any Person means at any date, without duplication, (a) all
indebtedness, obligations and liabilities of such Person for borrowed money,
(b) all indebtedness, obligations and liabilities of such Person evidenced by
bonds, debentures, notes or other similar instruments, whether recourse or
non-recourse and whether secured or unsecured, (c) all other indebtedness
(including capitalized lease obligations) of such Person on which interest
charges are customarily paid or accrued, (d) all other indebtedness and
obligations of such Person including, without limitation, trade payables and
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obligations under Interest and Foreign Exchange Hedge Agreements, (e) all
obligations for indebtedness in respect of Guarantees by such Person, (f) the
unfunded or unreimbursed portion of all letters of credit issued for the
account of such Person, and (g) all personal liability of such Person as a
general partner or joint venturer of a partnership or joint venture for
obligations of such partnership or joint venture of the nature described in (a)
through (f) preceding.
Default means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
Default Rate means the fluctuating per annum rate of interest equal to
the lesser of (a) four percent (4.0%) plus the Base Rate, or (b) the Maximum
Lawful Rate.
Designated Countries means Canada, the United Kingdom and such
additional countries as approved from time to time by the Required Lenders.
Designated Successor Agent means, at any given time, the Lender other
than Agent which has the largest Aggregate Loan Percentage; provided, however,
if two or more such Lenders have the same Aggregate Loan Percentage at such
time, then the Designated Successor Agent shall be such of those Lenders having
the same Aggregate Loan Percentage which has the largest net worth; and,
provided further, that if the Required Lenders object to the newly named
Designated Successor Agent, or if any Lender determined to be a Designated
Successor Agent declines to serve as successor Agent, in writing delivered to
the outgoing Agent within seven (7) Business Days after such Designated
Successor Agent is determined, then the Lender other than Agent or such
rejected or declining Designated Successor Agent which has the next largest
Aggregate Loan Percentage shall be the Designated Successor Agent. For each
such Lender that is a member of a bank holding company, its net worth shall be
deemed to be the consolidated net worth of its bank holding company.
DIDMCA means the Depositary Institutions Deregulation and Monetary
Control Act of 1980, Public Law 96-221, as amended, codified at 12 U.S.C.
Section 1735f-7.
Distressed Assets means (a) one or more non-performing or under-
performing loans or (b) real estate or other assets acquired or received in
connection with the foreclosure, restructure or settlement of any non-
performing or under-performing loans.
Distribution by any Person, means (a) with respect to any stock issued
by such Person or any partnership or joint venture interest of such person, the
retirement, redemption, repurchase, or other acquisition for value of such
stock, partnership or joint venture interest, (b) the declaration or payment
(without duplication) of any dividend or other distribution, whether monetary
or in kind, on or with respect to any stock, partnership or joint venture of
any Person, and (c) any other payment or distribution of assets of a similar
nature or in respect of an equity investment.
Dollar Equivalent means the equivalent in Dollars of any Alternate
Currency or with respect to Letters of Credit, other currency approved by Agent
and the Issuing Lender. For purposes of this Agreement, Dollar Equivalent
shall be determined by using the quoted spot rate at which
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NationsBank or any affiliate of NationsBank offers to exchange Dollars for such
currency prior to 10:00 a.m. (Dallas, Texas time) two Business Days prior to
the date on which such equivalent is to be determined pursuant to the
provisions of this Agreement. Agent shall notify each affected Lender of such
determination on such date. The Dollar Equivalent of each Alternate Currency
Advance (or Letter of Credit denominated in an Alternate Currency or other
currency approved by Agent and the Issuing Lender) shall be recalculated
hereunder on each date it is necessary to determine the unused portion of each
Lender's Revolving Loan Commitment Amount or any Advances outstanding on such
date.
Dollars and the "$" symbol shall refer to currency of the United States
of America.
Domestic Portfolio means an Asset Portfolio consisting of Acquired Loans
secured by assets or payable by Persons located in the United States of America
and included in the Borrowing Base.
EBITDA Availability shall be equal to the lesser of (a) (i)
$250,000,000, if the aggregate amount of the Revolving Commitment and the Term
Loan Commitment Amounts is greater than $300,000,000, (ii) $225,000,000, if the
aggregate amount of the Revolving Commitment and the Term Loan Commitment
Amounts is greater than $275,000,000, but less than or equal to $300,000,000,
or (iii) $200,000,000, if the aggregate amount of the Revolving Commitment and
the Term Loan Commitment Amounts is less than or equal to $275,000,000, or (b)
the product of (i) 2.5 times (ii) Adjusted EBITDA calculated for the
immediately preceding twelve consecutive months, provided, that, if Adjusted
EBITDA declines for two (2) consecutive fiscal quarters, then, as of the
quarter end for the second quarter of such decline and continuing thereafter,
Adjusted EBITDA shall be the lesser of (x) Adjusted EBITDA calculated for the
immediately preceding twelve (12) months or (y) Adjusted EBITDA calculated for
the immediately preceding three (3) months and annualized.
Effective Date means the date selected by AMRESCO to be the first day of
the applicable Interest Period related to a LIBOR Rate Advance, LIBOR Rate
Portion or an Alternate Currency Advance.
Eligible Assignee means any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia;
(b) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank of any
country which is a member of the OECD; or (e) an insurance company, pension
fund, credit corporation or other finance company organized under the laws of
any state of the United States; provided, however, that no institution
described in clause (a), (b), (c), (d), or (e) above shall be an Eligible
Assignee unless it has total assets in excess of $5 billion; and, provided
further, that an institution described in clause (c) or (d) above must maintain
a branch or agency under the laws of the United States.
Eligible Investments are investments in Asset Portfolios (a) which are
wholly-owned by any Borrower, (b) for which Lenders have a perfected, first
priority lien or security interest in the related
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Acquired Loans and other assets included in such Asset Portfolios (except (i)
for the net profits interest granted by AMRESCO New Hampshire, Inc. to Xxxxxx
Financial, Inc. and referenced in Section 8.7(f) and (ii) that Lenders may not
have filed a Mortgage received with respect to any or all of the Mortgaged
Properties), and (c) with respect to which Borrowers have timely delivered all
related documents and agreements required to be delivered under the applicable
Custodial Agreements.
Employee Plan means at any time an employee benefit plan as defined in
Section 3(3) of ERISA that is now or was previously maintained, sponsored or
contributed to by any Borrower or any ERISA Affiliate of any Borrower.
Equity Portion means the excess of (a) the balance sheet value of
Mortgage Investments securing Additional Debt outstanding on the date of
determination, such value determined in accordance with GAAP and marked to
market no less than quarter-annually, less (b) the Additional Debt.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all regulations issued pursuant
thereto.
ERISA Affiliate means any person that is treated as a single employer
with any Borrower under Section 414 of the Code.
Event of Default has the meaning set forth in Section 9.1.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Excluded Loans means those loans which are secured by bank stock, time
shares, property with significant environmental clean up requirements (as
determined by Agent), any assets which are located outside of the United States
(other than Designated Countries), or other assets designated by Agent from
time to time in writing to AMRESCO.
Excluded Subsidiaries means, collectively, (a) Whiterock Investments,
Inc., a Delaware corporation, AMRESCO Advisors, Inc., a Texas corporation, and
any other existing or future Subsidiary of any Borrower which is subject to the
Investment Advisors Act of 1940, as amended, and (b) AMRESCO-MBS I, Inc., a
Delaware corporation, AMRESCO Commercial, ARSC, ACCC, and such other
Subsidiaries as are designated in writing to Agent by AMRESCO as Excluded
Subsidiaries.
Excluded Subsidiary Debt means Nonrecourse Debt of any Excluded
Subsidiary or Debt of any Excluded Subsidiary where recourse is limited just to
such Excluded Subsidiary.
FDIC Percentage shall mean, on any day, the net assessment rate
(expressed as a percentage rounded to the next highest 1/100 of 1%) which is in
effect on such day (under the regulations of the Federal Deposit Insurance
Corporation or any successor) for determining the assessments paid by Agent to
the Federal Deposit Insurance Corporation (or any successor) for insuring
Eurocurrency deposits made in dollars at Agent's principal offices (which for
NationsBank shall be its offices in
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Dallas, Texas, or, if applicable, the Applicable Lending Office). Each
determination of said percentage made by Agent shall, in the absence of
manifest error, be binding and conclusive.
Federal Funds Rate means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Agent on such day on such transactions from three Federal funds brokers of
recognized standing.
Fiscal Year means any fiscal year of any Borrower commencing on January
1 and ending on December 31.
Fixed Charge Coverage Ratio means, for any date of determination, the
ratio of (a) the sum of (i) Consolidated EBITDA plus (ii) Consolidated Lease
Expense, both for the immediately preceding twelve calendar months, to (b) the
sum of (i) Consolidated Interest Expense plus (ii) Consolidated Lease Expense,
both for the immediately preceding twelve calendar months.
Foreign Portfolio means an Asset Portfolio consisting primarily of
Acquired Loans secured by assets or payable by Persons located in the
Designated Countries and included in the Borrowing Base.
GAAP means generally accepted accounting principles consistently applied
as in effect at the time of application of the provisions hereof; provided,
however, that wherever in this Agreement principles of consolidation different
from those required by generally accepted accounting principles are specified,
the principles of consolidation specified in this Agreement shall govern.
Governmental Authority means any government, any state or other
political subdivision thereof, or any Person exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
GSMC means Xxxxxxx Xxxxx Mortgage Company.
Guaranty by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions, by "comfort letter"
or other similar undertaking of support or otherwise), or (b) entered into for
the purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part),
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provided that the term Guaranty shall not include endorsements for collection
or deposit in the ordinary course of business.
High Yield Loan means a loan, but not to include any Excluded Loan, for
the costs of acquiring or refinancing the acquisition of real estate and
construction (and secured by such real estate) or to entities engaged in the
broadcasting industry.
Impositions means all real estate and personal property taxes; charges
for any easement, license or agreement maintained for the benefit of any of the
real property of any Borrower, or any part thereof; and all other taxes,
charges and assessments and any interest, costs or penalties with respect
thereto, general and special, ordinary and extraordinary, foreseen and
unforeseen, of any kind and nature whatsoever, which at any time prior to or
after the execution hereof may be assessed, levied or imposed upon any of the
real property of any Borrower, or any part thereof, or the ownership, use,
sale, occupancy or enjoyment thereof, in each case which, if not timely paid or
otherwise discharged, would materially and adversely affect (a) such ownership,
use, sale, occupancy or enjoyment, or (b) the financial condition of any
Borrower.
Initial Closing Date means September 29, 1995.
Intangible Assets of any Person means those assets of such Person which
are (a) deferred assets, other than prepaid insurance and prepaid taxes, (b)
patents, copyrights, trademarks, tradenames, franchises, goodwill, experimental
expenses and other similar assets which would be classified as intangible
assets on a balance sheet of such Person, prepared in accordance with GAAP, (c)
unamortized discount and expenses, and (d) assets located, and notes and
receivables due from obligors domiciled, outside the United States of America,
other than Permitted Foreign Assets.
Interest Adjustment Date shall mean the earlier of either the last day
of an Interest Period or, as applicable, the Revolving Facility Termination
Date or Term Facility Termination Date.
Interest and Foreign Exchange Hedge Agreements shall mean any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, as the same may be
amended or modified and in effect from time to time, and any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
Interest Coverage Ratio means, for any date of determination, the ratio
of (a) Consolidated EBITDA for the immediately preceding twelve calendar months
to (b) Consolidated Interest Expense for the immediately preceding twelve
calendar months.
Interest Period shall mean, with respect to a LIBOR Rate Advance, LIBOR
Rate Portion or Alternate Currency Advance, a period selected by AMRESCO of
one, two, three, four or six months,
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commencing on the Effective Date of such LIBOR Rate Advance, LIBOR Rate Portion
or Alternate Currency Advance; provided that (a) any Interest Period ending on
a date later than the Revolving Facility Termination Date or the Term Facility
Termination Date, as applicable, shall be deemed to end on the Revolving
Facility Termination Date or the Term Facility Termination Date, as applicable;
(b) if any Interest Period would otherwise end on a day which is not a Business
Day, such Interest Period shall end on the next succeeding Business Day, except
that if the next Business Day would fall in the next calendar month, the
Interest Period shall end on the immediately preceding Business Day; and (c)
any Interest Period that begins on the last day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of a
calendar month.
Interest Rate Exposure Report shall mean a report showing the aggregate
amount of each Borrower's potential liability under each Interest and Foreign
Exchange Hedge Agreement and how such liability was calculated, together with
evidence satisfactory to Agent that the amount of such potential liability has
been confirmed by the bank counterparty to such secured Interest and Foreign
Exchange Hedge Agreement.
Investment Grade means a Qualified Investment Rating of BBB- or higher
using the rating classification employed by Duff & Xxxxxx, Inc. or such
comparable rating employed by another rating agency.
Investment Line of Credit means the line of credit to AMRESCO made by
NationsBank, such line of credit being in the amount of Eighty Million and
No/100 Dollars ($80,000,000.00) for the purchase of liquid short-term
investments, as the same may be renewed, extended, modified, amended or
replaced from time to time.
Issuing Lender means NationsBank in its capacity as issuer of the
Letters of Credit.
Keepwell Agreement has the meaning set forth in the definition of ACMF
Transaction Documents.
Legal Requirements means (a) any and all present and future judicial
decisions, statutes, laws, rulings, rules, orders, regulations, permits,
licenses, certificates, or ordinances of any Governmental Authority in any way
applicable to any Borrower or Subsidiary, (b) the presently or subsequently
effective bylaws and articles of incorporation and any other form of business
association agreement of any Borrower or Subsidiary, (c) any and all covenants,
conditions or restrictions applicable to the Collateral or the ownership, use
or occupancy thereof, and (d) any and all leases or contracts (written or oral)
of any nature that relate in any way to any Collateral, or any portion thereof,
or to which any Borrower or Subsidiary may be bound, and in each case which, if
violated, would materially and adversely affect (i) the present or potential
ownership, use, sale, occupancy or possession of the Collateral or any part
thereof, by any Borrower or Subsidiary, (ii) the Lenders' Liens or (iii) the
financial condition of any Borrower or Subsidiary.
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Lenders means each of the financial institutions listed as a "Lender" on
Schedule I attached hereto as the same may be modified or amended from time to
time, which term shall include both the Revolving Lenders and the Term Lenders.
Lenders' Liens means all liens, security interests, charges, pledges or
encumbrances created by the Loan Documents.
Letter of Credit Exposure means the aggregate amount of the unfunded
portion of each Letter of Credit outstanding at any time.
Letter of Credit Fee has the meaning set forth in Section 2.3(c).
Letters of Credit means all letters of credit issued by the Issuing
Lender for the account of any Borrower pursuant to this Agreement.
LIBOR Margin means the applicable margins based on AMRESCO's Senior
Consolidated Funded Debt to Consolidated EBITDA ratio computed as of the last
day of each calendar quarter on a trailing four-quarter basis or a Qualified
Investment Rating (whichever results in the lowest applicable margin), as
determined pursuant to Schedule II attached hereto.
LIBOR Rate shall mean, with respect to a LIBOR Rate Advance or LIBOR
Rate Portion for the Interest Period applicable thereto, the rate of interest
determined by Agent at which deposits in dollars for the relevant Interest
Period are offered based on information presented on the Telerate Screen as of
11:00 A.M. (London time) on the day which is two (2) Business Days prior to the
first day of such Interest Period; provided, that if at least two such offered
rates appear on the Telerate Screen in respect of such Interest Period, the
arithmetic mean of all such rates (as determined by Agent) will be the rate
used; provided, further, that if the Telerate System ceases to provide LIBOR
quotations, such rate shall be the average rate of interest determined by Agent
(rounded upward to the nearest .01%) at which deposits in Dollars are offered
for the relevant Interest Period by Agent (or its successor) to banks with
combined capital and surplus in excess of $500,000,000 in the London interbank
market as of 11:00 A.M. (London time) on the applicable Effective Date.
LIBOR Rate Advance shall mean an Advance under the Revolving Credit
Facility which bears interest computed with reference to the LIBOR Rate.
LIBOR Rate Portion shall mean any portion of the Term Facility which
bears interest computed with reference to the LIBOR Rate.
LIBOR Reserve Requirement shall mean, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Agent (including, without limitation,
basic supplemental, marginal and emergency reserves) under Regulation D with
respect to "Eurocurrency liabilities" as currently defined in Regulation D, or
under any similar or successor
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regulation with respect to Eurocurrency liabilities or Eurocurrency funding
(or, if reserves for Eurocurrency liabilities are not separately stated in such
regulations, the other applicable category of liabilities which includes
deposits by reference to which the interest rate on a LIBOR Rate Advance, LIBOR
Rate Portion or Alternate Currency Advance is determined). Each determination
by Agent of the LIBOR Reserve Requirement, shall, in the absence of manifest
error, be conclusive and binding.
Lien means with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
Loan Documents means this Agreement, the Notes, the Pledge Agreements,
the Letters of Credit, the LOC Applications, the Collateral Assignment, the
Lockbox Agreement, the Security Agreement, all related financing statements,
and all other agreements, statements, certificates, documents or instruments
evidencing, securing or pertaining to either or both of the Credit Facilities
(including the Letters of Credit) or otherwise executed and/or delivered from
time to time pursuant to or in connection with this Agreement, as the same may
be modified, amended, renewed, extended, rearranged, restated or replaced from
time to time.
LOC Application has the meaning set forth in Section 2.2(e).
Lockbox means a post office box, or collectively post office boxes,
established by Borrowers and Lockbox Agent pursuant to the provisions of
Section 5.7 and the Lockbox Agreement.
Lockbox Account means a cash collateral account or accounts maintained
with Lockbox Agent and styled "(name of particular Borrower) Lockbox Account
for the Benefit and Under the Control of NationsBank of Texas, N.A., as Agent
for Lenders," which accounts shall be (a) subject to the provisions of Section
5.7., and (b) pledged and assigned to Lenders as additional security for the
payment, performance and observance of the Obligations.
Lockbox Agent means NationsBank.
Lockbox Agreement means that certain Lockbox Agreement, dated as of the
Initial Closing Date, executed by and among certain of the Borrowers, Agent and
Lockbox Agent, and all amendments, modifications and replacements thereof,
including, without limitation, as modified by (a) that certain First
Modification of Lockbox Agreement (herein so called) dated the April 25, 1996,
executed by and between certain of the Borrowers, Agent and Lockbox Agent, and
(b) that certain Second Modification of Lockbox Agreement (herein so called)
dated the Closing Date, executed by and between Borrowers, Agent and Lockbox
Agent, substantially in the form agreed to by AMRESCO and Agent.
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Margin Regulations mean Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
Margin Stock means "margin stock" as defined in Regulation U.
Master Repurchase Agreement has the meaning set forth in the definition
of ACMF Transaction Documents.
Maximum Lawful Rate means the maximum rate (or, if the context so
permits or requires, an amount calculated at such rate) of interest which, at
the time in question would not cause the interest charged on either of the
Credit Facilities at such time to exceed the maximum amount which Lenders would
be allowed to contract for, charge, take, reserve, or receive under applicable
federal or state law after taking into account, to the extent required by
applicable law, any and all relevant payments, fees or charges under the Loan
Documents. If and to the extent the laws of the State of Texas are applicable
for purposes of determining the "Maximum Lawful Rate", such term shall mean the
"indicated rate ceiling" from time to time in effect under Article 5069-1.04,
Title 79, Revised Civil Statutes of Texas, 1925, as amended, or, if permitted
by applicable law and effective upon the giving of the notices required by such
Article 5069-1.04 (or effective upon any other date otherwise specified by
applicable law), the "quarterly ceiling" or "annualized ceiling" from time to
time in effect under such Article 5069-1.04, whichever Agent shall elect to
substitute for the "indicated rate ceiling," and vice versa, each such
substitution to have the effect provided in such Article 5069-1.04, and Agent
shall be entitled to make such election from time to time and one or more times
and, without notice to any Borrower, to leave any such substitute rate in
effect for subsequent periods in accordance with subsection (h)(1) of such
Article 5069-1.04. If under federal or state law there is no legal limitation
on the amount or rate of interest that may be charged on amounts outstanding
under either of the Credit Facilities, there shall be no Maximum Lawful Rate
under the applicable Credit Facility, notwithstanding any reference thereto
herein or in any of the Loan Documents.
Minimum Notice Requirement has the meaning set forth in Section 3.5.
Mortgage means any deed of trust or mortgage covering a Mortgaged
Property executed by any Borrower, granted to Agent, for the benefit of the
Lenders, to secure repayment of the Credit Facilities and the other
Obligations, substantially in the form approved by Agent, and all renewals,
extensions, modifications, amendments or supplements thereto, and all mortgages
or deeds of trust given in renewal, extension, modification, restatement or
replacement thereof.
Mortgage Investments means investments in commercial and residential
mortgages or mortgage-backed securities or such other debt assets as approved
by Agent.
Mortgaged Property or Mortgaged Properties means any and all lots or
parcels of land which any Borrower owns on the Closing Date or which it may
hereafter acquire as part of an Asset Portfolio or any Underlying Real Estate
which any Borrower may hereafter own as a result of a foreclosure or deed-in-
lieu of foreclosure or otherwise, and improvements, fixtures and personal
property located thereon and all other property referenced in and subject to
the Mortgages. The
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Mortgaged Property is intended to include all of the above-described real
property whether or not a Mortgage is actually granted or filed.
NationsBank means NationsBank of Texas, N.A., a national banking
association, and its successors.
Net Collections for any calendar month means an amount equal to (a) any
and all cash proceeds received by any Borrower from its ownership, management
and disposition of any and all assets in any Asset Portfolio, including,
without limitation, interest and principal payments on Acquired Loans from any
source, loan settlement payments, any restructure or commitment or other loan
fees, payments on any judgments or settlement of litigation with respect to
Acquired Loans, proceeds from the sale of Acquired Loans or Mortgaged Property,
income from any Mortgaged Property, but excluding any escrow deposits paid to
any Borrower for tax or insurance escrows under the Acquired Loans, minus (b)
expenses incurred and paid by any Borrower from, and any normal and customary
expenses reserved or accrued on a monthly basis related to, its ownership,
management and sale of assets in the Asset Portfolio (including without
limitation any advances of committed principal that any Borrower is legally
required to make under any of the Acquired Loans) (such expenses not to exceed
in the aggregate 10% of the gross collections from such assets); it being
expressly understood and agreed that there shall be no deduction for any
disbursements by any Borrower of any tax or insurance escrows held for the
Acquired Loans.
Net Investment Value means the Net Purchase Price less the Net
Collections actually received by a Borrower or Borrowers as of the date of
determination from the applicable Asset Portfolio less any write down of the
value of the applicable Asset Portfolio required by GAAP or otherwise made by
any Borrower.
Net Investment Value Availability means the sum of all amounts obtained
by multiplying the Net Investment Value of each Eligible Investment times the
applicable "Borrowing Percentage" set forth below (provided that (a) the
"Borrowing Percentage" of Performing Assigned Loans shall be 80%,
notwithstanding the time elapsed since the initial purchase, and (b) the Net
Investment Value Availability attributable to Performing Assigned Loans shall
not exceed the lesser of $20,000,000 or 25% of the Net Investment Value
Availability attributable to Non-Performing Assigned Loans):
Time Elapsed Since Initial
Purchase By Any Borrower Borrowing
of Eligible Investment Percentage
Less than 6 months 80%
Greater than or equal to 6 months, but less than 12 months 70%
Greater than or equal to 12 months, but less than 18 months 60%
Greater than or equal to 18 months, but less than 24 months 25%
Greater than or equal to 24 months 0%
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Net Present Value Availability means the quotient of (a) the net present
value (discounted at 9%) of the Projected Net Cash Flow from Eligible
Investments (provided, that, with respect to the Projected Net Cash Flow from
any Eligible Investment in which Xxxxxx Financial, Inc. has a profits interest
as described in Section 8.7(f), Borrowers shall include only 75% of the net
present value of such Projected Net Cash Flow for the purposes of this
calculation), divided by (b) 1.70.
Net Purchase Price means the actual purchase price paid by the
applicable Borrower or Borrowers for an Asset Portfolio, excluding (a) any
costs or adjustments for legal fees, travel, due diligence expenses or other
"soft" costs, and (b) the portion of the purchase price allocated to Excluded
Loans.
NIM Trusts means one or more net interest margin trusts created by ARSC
or any other Subsidiary.
Non-Performing Assigned Loan means any Assigned Loan that is not a
Performing Assigned Loan.
Nonrecourse Debt means indebtedness of any Person (a) used to finance
the acquisition of, or refinance the costs of carrying, assets by such Person
which is secured solely by the assets acquired or refinanced with such
financing and (b) with respect to which or to the portion of which such Person
has no liability for payment other than the assets pledged.
Notes means the Term Notes and the Revolving Notes.
Obligations means all present and future indebtedness, obligations and
liabilities, or any part thereof, of any Borrower now or hereafter existing or
arising under or in connection with this Agreement, the Notes or any other of
the Loan Documents (specifically including, without limitation, the principal
amount outstanding under the Notes), together with: (a) all interest accrued
thereon; (b) all reasonable costs, expenses, and attorneys' fees of counsel to
Agent and Lenders (as a group) and of counsel to any Lender (subject to the
limitations set forth in Section 11.4) incurred in the documentation of any
amendments, waivers or extensions of the Loan Documents or administration,
enforcement or collection thereof (specifically including, without limitation,
any of the foregoing incurred in connection with any bankruptcy or other
insolvency proceedings of any Borrower); (c) the reimbursement and payment of
all sums which might be advanced by Agent or any Lender to pay or satisfy
amounts required to be paid by any Borrower under this Agreement or under any
other Loan Document; (d) all liability which any Borrower may incur with
respect to any Interest and Foreign Exchange Hedge Agreements between any
Borrower and any Lender or under any Bridge Debt; and (e) all costs, charges,
reasonable commissions, reasonable attorneys' fees and expenses owing and to
become owing in connection with the documentation, administration, enforcement
and collection of the foregoing obligations and indebtedness, and those owing
or to become owing in connection with the repossession, operation, maintenance,
preservation or foreclosure of any or all of the Collateral; regardless of
whether such indebtedness, obligations and liabilities are direct, indirect,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
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several. The Obligations shall include all renewals, extensions,
modifications, rearrangements and replacements of any of the above-described
obligations and indebtedness.
Operating Lease means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13
dated November, 1976, or otherwise in accordance with GAAP.
Origination Agreement has the meaning set forth in the definition of
ACMF Transaction Documents.
Participation Fee means the nonrefundable participation fee to be paid
by Borrowers to each of the Lenders in accordance with Section 2.3 hereof in
the amounts shown for each such Lender on Schedule I attached hereto.
PBGC means the Pension Benefit Guaranty Corporation, or its successors.
Pension Plan means any Employee Plan that is now or was previously
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.
Performing Assigned Loan means each Assigned Loan (a) which, over the
immediately preceding 90-day period, has accrued and been paying interest and
principal no less often than quarterly (and with no less than two such payments
having been made) in an amount which is sufficient to amortize the legal
balance of the Assigned Loan as of the time of its acquisition by a Borrower
(less any payments received and applied to reduce such Assigned Loan), and
interest thereon at a rate not less than the existing Base Rate, in equal
installments over fifteen years, and (b) which at no time during the
immediately preceding 90-day period has been 30 or more days past due.
Permitted Encumbrances means with respect to any asset in an Asset
Portfolio or any Mortgaged Property:
(a) Liens securing the Notes in favor of the Lenders;
(b) Exceptions affecting title which are shown in a Title
Policy included in Borrowers' files or are described with respect to a
particular Assigned Loan, Mortgaged Property or parcel of the Underlying Real
Estate in the applicable Borrower Due Diligence Reports;
(c) In the case of any portion of the Mortgaged Property that
is not covered by a Title Policy, minor defects in title or customary
easements, platted building lines, restrictive covenants, mineral reservations
and similar exceptions affecting title which do not secure the payment of
money;
(d) Inchoate statutory or operators' liens securing
obligations for labor, services, materials and supplies furnished to the
Mortgaged Properties, which (i) are not delinquent, or (ii)
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are being contested by any Borrower in good faith and for which such Borrower
has obtained a proper payment and performance bond in the amount of the
contested claim;
(e) Mechanics', materialmen's, warehousemen's, journeymen's
and carriers' liens and other similar liens arising by operation of law or
statute in the ordinary course of business if (i) the underlying claim is not
delinquent and did not in any event cover a billing period not exceeding sixty
(60) days, or (ii) unless the claim giving rise to such lien is being contested
by any Borrower in good faith and for which such Borrower has obtained a proper
payment and performance bond in the amount of the contested claim; and
(f) Liens for Taxes or Impositions not yet due or not yet
delinquent, or, if delinquent, that are being contested by any Borrower as
permitted by and in accordance with the terms and conditions set forth in
Section 7.5.
Permitted Foreign Assets means only those assets which are (a) included
in an Asset Portfolio acquired by any Borrower either directly or through
investments in Persons who acquire Asset Portfolios, and (b) located in Canada,
Mexico, Australia, Japan or any country which is a member of the European
Economic Community.
Permitted Investments means (a) time deposits or certificates of deposit
in any bank having capital and surplus of not less than $750,000,000 or other
investments or securities offered by such banks (including eurodollar
deposits), (b) obligations backed by the full faith and credit of the United
States of America, and (c) commercial paper rated P-1 by Xxxxx'x Investors
Service, Inc. or A-1 by Standard & Poor's Ratings Group (a Division of XxXxxx-
Xxxx, Inc.) on the date of acquisition.
Person means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
Pledge Agreement shall mean the Stock Pledge Agreement or Stock Pledge
Agreements executed by and between the appropriate Borrowers and Agent,
covering all of the issued and outstanding stock of each Subsidiary of
Borrowers which is incorporated in the United States (other than stock of a
Subsidiary identified in clause (a) of the definition of Excluded Subsidiary,
ARSC, and AMRESCO Commercial) and sixty-five percent (65%) of the stock of each
Subsidiary of Borrowers incorporated outside the United States and all
amendments, modifications and replacements thereof, such amendments and
modifications substantially in the form previously agreed to by AMRESCO and
Agent.
Pledged Asset Schedule and Certification means a schedule of all assets
which are owned by Borrowers and required to be pledged to Agent for the
benefit of the Lenders pursuant to the Loan Documents, and a certification that
such assets have been so pledged; provided, that any assets listed therein but
not so pledged shall be pledged to Agent for the benefit of the Lenders as soon
as
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practical but in no case more than sixty (60) days after the end of the
immediately preceding calendar quarter.
Portfolio Borrowing Base shall be equal to the lesser of (a)
$150,000,000, (b) the Net Investment Value Availability, or (c) the Net Present
Value Availability; provided that the portion of the Portfolio Borrowing Base
attributable to (i) Wholly-Owned Real Estate Portfolios shall not exceed 33% of
the Wholly-Owned Non-Real Estate Portfolios, and (ii) the Foreign Portfolios
shall not exceed $75,000,000.
Principal Debt means, at the time of any determination thereof, the
aggregate unpaid principal balance of all Advances.
Projected Net Cash Flow means the net cash flow which Borrowers
reasonably expect to receive from an Asset Portfolio (excluding net cash flow
from Excluded Loans) which has been determined in a manner consistent with
Borrowers' past practices and not less comprehensive than Standard Industry
Practices, which cash flow projection has been made or updated not later than
six months from the date when it is to be used under this Agreement.
Purchase Money Lien has the meaning set forth in Section 8.7.
Qualified Investment Rating means the highest currently effective rating
of the Credit Facilities, rated together, at the time of determination, if any,
given by Fitch Investors Service, Inc., Standard & Poor's Ratings Group (a
Division of XxXxxx-Xxxx, Inc.), Xxxxx'x Investors Services, Inc., Duff &
Xxxxxx, Inc. or such other rating agency acceptable to the Required Lenders.
Real Estate Loans means Acquired Loans (a) which have a purchase price
of greater than Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00), (b) which are secured by land, office buildings, retail
centers, hotels/motels, multi-family properties, or industrial properties, (c)
if improved, which are secured by non-owner occupied facilities, and (d) where
the primary source of repayment is proceeds from the operation or liquidation
of the real estate. A loan must meet all of the above tests to be deemed a
Real Estate Loan.
Reference Banks means the Applicable Lending Office of NationsBank,
Xxxxx Fargo Bank (Texas), N.A. and Bank One, Texas, NA, and such substitute
bank or banks as may be mutually agreed to by Borrowers and Agent.
Register has the meaning set forth in Section 11.10 hereof.
Regulation U means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time and shall include any successor
or other regulation or official interpretation of the Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks that is applicable to member banks of the Federal
Reserve System.
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Regulatory Change shall mean the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority charged with the administration thereof.
Related Investments means (a) Acquisitions and (b) investments in any
Person which is not a Borrower, including, without limitation, any investments
in Excluded Subsidiaries, limited liability companies, partnerships and joint
ventures.
Related Investment Consideration means consideration given or the amount
of the investment made by any Borrower or any Subsidiary of any Borrower in a
Related Investment, including, without limitation, (a) capital stock or other
securities or equity so given or invested, plus (b) the fair market value of
any cash, property or services given or invested, plus (c) the amount of any
Debt assumed, incurred or guaranteed by any Borrower or any Subsidiary of any
Borrower in connection with such Related Investment.
Representatives has the meaning set forth in Section 10.4.
Request for Advance means a written request for an Advance or a Letter
of Credit, substantially in the form attached hereto as Exhibit B, which shall
(a) specify (i) the date of such Advance or Letter of Credit, which shall be a
Business Day, (ii) which portion, if any, of such Advance is to be a LIBOR Rate
Advance or Variable Rate Advance or an Alternate Currency Advance, and (iii)
the aggregate amount of all outstanding Advances or Letters of Credit before
and after giving effect to the requested Advance or Letter of Credit, as
applicable; and (b) contain a certification of an Authorized Officer of AMRESCO
(acting for itself and on behalf of any Borrower which will use the proceeds of
such Advance) as of the date of such Advance or Letter of Credit certifying (i)
as to the solvency of Borrowers (determined in accordance with Section 6.19),
(ii) that the intended use of the proceeds of such Advance or Letter of Credit
does not violate the provisions of this Agreement (including, without
limitation, Sections 2.1, 6.15 and 7.10) or any other Loan Document, (iii) as
to the matters set forth in Section 4.2(b) and (c), in the case of an Advance,
or the matters set forth in Section 4.3(c) and (d), in the case of a Letter of
Credit, and (iv) with respect to an Advance for the purchase of an Asset
Portfolio which is included in the then current Borrowing Base, that Borrowers
possess or will possess on the funding date of such Advance, the originals of
the promissory notes evidencing the Assigned Loans included in such Asset
Portfolio and will deliver such original promissory notes to a Custodian on the
Business Day following the acquisition of such Asset Portfolio.
Required Lenders means:
(a) The approval of all Lenders will be required to (i) change
the definition of Aggregate Loan Percentage, (ii) change subparagraphs
(a), (e), (f), (g) or (h) of the definition of Required Lenders, (iii)
release any Lenders' Liens on any Collateral after the occurrence of an
Event of Default, or, prior to the occurrence of an Event of Default,
release Lenders' Liens on all of the Collateral, thereby causing the
Credit Facilities to be unsecured, (iv) amend or modify Section 3.9 of
this Agreement, (v) after the occurrence of an Event of
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Default, change the Applicable Rate or any fees payable to any Lender
(excluding Agent in such capacity or the Arranger), (vi) increase the
amount of either Credit Facility, (vii) reinstate any of the Notes and
other indebtedness pursuant to the provisions in Section 9.2(a) hereof,
or (viii) change the consent of Lenders required by Section 11.10(a)(i)
hereof.
(b) The approval of all Revolving Lenders will be required to
(i) prior to the occurrence of an Event of Default, change the
Applicable Rate related to the Revolving Credit Facility, (ii) prior to
the occurrence of an Event of Default, change the amount of any fees
payable to the Revolving Lenders (excluding the Agent in such capacity
or the Arranger), (iii) extend the Revolving Facility Termination Date
or the due date of any installment of principal or interest or any fees
applicable to the Revolving Credit Facility, (iv) forgive any principal
or interest applicable to the Revolving Credit Facility, or (v) change
subparagraph (d) or this subparagraph (b) of the definition of Required
Lenders.
(c) The approval of all Term Lenders will be required to (i)
prior to the occurrence of an Event of Default, change the Applicable
Rate related to the Term Facility, (ii) prior to the occurrence of an
Event of Default, change the amount of any fees payable to the Term
Lenders (excluding the Agent in such capacity or the Arranger), (iii)
extend the Term Facility Termination Date or the due date of any
installment of principal or interest or any fees applicable to the Term
Facility, (iv) forgive any principal or interest applicable to the Term
Facility, or (v) change this subparagraph (c) of the definition of
Required Lenders.
(d) With respect to the determination of additional Designated
Countries in connection with Alternate Currency Advances, the Revolving
Lenders holding at the time in question a portion of the Revolving
Credit Facility (including participations in Letters of Credit) equal to
or greater than 75% of the sum of (i) the aggregate unpaid principal
amount of the Revolving Notes, plus (ii) the Letter of Credit Exposure,
plus (iii) the Commercial Paper Reserve (or, if no Advances or Letters
of Credit are outstanding, then Revolving Lenders holding at the time in
question 75% of the Revolving Commitment).
(e) With respect to (i) modifying the schedule of principal
payments to be made under any of the Notes other than as set forth in
subparagraphs (b) and (c) of this definition, (ii) modifying any
provisions of Section 3.6 hereof, or (iii) the determination of
additional Designated Countries in connection with Permitted Foreign
Assets, the Lenders holding at the time in question a portion of the
Credit Facilities (including participations in Letters of Credit) equal
to or greater than 75% of the sum of (1) the Revolving Commitment, plus
(2) the aggregate unpaid principal amount of the Term Notes.
(f) With respect to changing any of the financial covenants
set forth in the provisions of Sections 8.1, 8.2, 8.3 and 8.4 hereof,
the Lenders holding at the time in question a portion of the Credit
Facilities (including participations in Letters of Credit) equal to or
greater than 66.67% of the sum of (i) the Revolving Commitment, plus
(ii) the aggregate unpaid principal amount of the Term Notes.
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(g) Prior to the occurrence of an Event of Default, all other
decisions, consents and votes required by the Lenders will require the
approval of the Lenders holding at the time in question a portion of the
Credit Facilities (including participations in Letters of Credit) equal
to or greater than 51% of the sum of (i) the Revolving Commitment, plus
(ii) the aggregate unpaid principal amount of the Term Notes (unless the
approval or consent of only the Revolving Lenders or the Term Lenders is
specifically required by the Loan Documents).
(h) After the occurrence of an Event of Default, all other
decisions, consents and votes required by the Lenders will require the
approval of the Lenders holding at the time in question a portion of the
Credit Facilities (including participations in Letters of Credit) equal
to or greater than 51% of the sum of (i) the aggregate unpaid principal
amount of the Notes, plus (ii) the Letter of Credit Exposure, plus (iii)
the Commercial Paper Reserve (unless the approval or consent of only the
Revolving Lenders or the Term Lenders is specifically required by the
Loan Documents); provided, that, after the occurrence of an Event of
Default, the approval of Revolving Lenders holding at the time in
question a portion of the Revolving Credit Facility equal to or greater
than 51% of the Revolving Commitment shall be required to make any
Advances under the Revolving Credit Facility.
Residential Capital Markets Group means, collectively or individually,
ARMC, ARCI, ARCC, ARSC and ARCMI.
Residual Interests Report shall mean a report satisfactory to Agent
listing the Retained Residential Residual Interests owned by AMRESCO or any
Subsidiary, which report shall show, with respect to each such Retained
Residential Residual Interest, the book balance, date of purchase, net receipts
on assets to date, additional expenditures which the owner thereof contemplates
making, estimated market value and such other information requested by Agent.
Retained Commercial Residual Interests means any class of certificates,
or other portions of a securities issuance, related to a commercial mortgage-
backed security or similar instruments issued by any Borrower or any subsidiary
of any Borrower.
Retained Residential Residual Interests means any class of certificates,
or other portion of a securities issuance, related to a residential mortgage-
backed security or similar instrument issued by any Borrower or any subsidiary
of any Borrower.
Revolving Credit Facility means the revolving line of credit created
pursuant to this Agreement in an amount equal to the lesser of (a) $275,000,000
or (b) the Revolving Commitment.
Revolving Commitment means the aggregate Revolving Loan Commitment
Amounts committed to by Revolving Lenders under this Agreement on the date of
determination, evidenced by a promissory note to be made by Borrowers to each
Revolving Lender in the amount of such Revolving Lender's applicable Revolving
Loan Commitment Amount.
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Revolving Facility Termination Date means May 31, 1998.
Revolving Lenders means those Lenders designated as the Revolving
Lenders in Schedule I attached hereto, as modified or amended from time to time
pursuant to this Agreement, and their permitted successors and assigns.
Revolving Loan Commitment Amount means, with respect to each Revolving
Lender, the amount indicated as such Revolving Lender's Revolving Loan
Commitment Amount opposite the name of such Revolving Lender in Schedule I, as
such amount (a) may be reduced from time to time, as a result of a reduction in
the Revolving Commitment as provided herein, or (b) may be adjusted from time
to time to account for any assignment of a Revolving Lender's interest as
provided in Section 11.10 of this Agreement.
Revolving Loan Percentage means, with respect to the Revolving Credit
Facility and each Revolving Lender, the percentage indicated as such Lender's
Revolving Loan Percentage opposite the name of such Lender on Schedule I, as
such percentage may be adjusted from time to time to account for any
assignments of a Revolving Lender's interest as provided in Section 11.10.
Revolving Notes means those certain promissory notes evidencing the
Revolving Credit Facility, executed by Borrowers and payable to the order of
each Revolving Lender in the amount of such Revolving Lender's Revolving Loan
Commitment Amount, and in the form attached hereto as Exhibit A.
Rights means rights, remedies, powers, privileges and benefits.
SEC means the federal Securities and Exchange Commission, and its
successors.
Securitization Agreement has the meaning set forth in the definition of
ACMF Transaction Documents.
Security Agreement means a Security Agreement dated as of the Initial
Closing Date and any other security agreements, executed by and between certain
of the Original Borrowers and Agent, and all amendments, modifications and
replacements thereof, including, without limitation, as modified by (a) that
certain First Modification of Security Agreement (herein so called) dated the
April 25, 1996, executed by and between the Original Borrowers (other than
AMRESCO Jersey Ventures Limited, AMRESCO UK Holdings Limited, AMRESCO UK
Ventures Limited, AMRESCO UK Limited and Old Midland House Limited) and Agent,
and (b) that certain Second Modification of Security Agreement (herein so
called) dated the Closing Date, executed by and between Borrowers (other than
AMRESCO Jersey Ventures Limited, AMRESCO UK Holdings Limited, AMRESCO UK
Ventures Limited, AMRESCO UK Limited and Old Midland House Limited) and Agent,
substantially in the form agreed to by AMRESCO and Agent.
Security Documents means the Collateral Assignment, the Security
Agreement, the Pledge Agreements, the Lockbox Agreement, all Mortgages and all
other documents or instruments
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granting a Lien in favor of the Lenders (or Agent for the benefit or on behalf
of the Lenders) as collateral for the Credit Facilities, and all financing
statements related thereto, and all modifications, renewals or extensions
thereof and any documents executed in modification, renewal, extension or
replacement thereof.
Senior Consolidated Funded Debt means the Approved Senior Debt, the
Credit Facilities and the Excluded Subsidiary Debt.
Senior Indenture means that certain Indenture dated July 1, 1996,
executed by and between AMRESCO and Comerica Bank, as Trustee.
Standard Industry Practices means such due diligence, collateral control
and collection procedures that are customarily followed by Persons actively
engaged in the business of acquiring Distressed Assets in a bulk transaction.
Structure Fee means the fee to be paid by AMRESCO to the Arranger
pursuant to a separate letter to be executed by AMRESCO and Arranger on or
before thirty (30) days following the Closing Date.
Subsidiary means, (a) for any Person other than AMRESCO, any corporation
or other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions (including that of a general partner) are
at the time directly or indirectly owned, collectively, by such Person and any
Subsidiaries of such Person (provided that ACMF shall not be considered a
Subsidiary unless Borrowers acquire a greater equity interest in ACMF than is
owned by Borrowers on the date of this Agreement) or (b) for AMRESCO, any
corporation wholly-owned by AMRESCO or any other entity of which 100% of the
securities or other ownership interests are at the time directly or indirectly
owned, collectively, by AMRESCO and any Subsidiaries of AMRESCO. The term
Subsidiary shall include Subsidiaries of Subsidiaries (and so on).
Supplement to Schedule I means an addendum to this Agreement, the other
Loan Documents, Schedule I to the Collateral Assignment, and Schedule I to the
Security Agreement, in form as previously agreed to between AMRESCO and Agent
as contemplated by Section 2.4.
Taxes means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of
any nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
Telerate Screen means the display designated as Screen 3750 (as to
Dollars, British pounds sterling and any other applicable Alternate Currency
shown thereon) or Screen 3740 (as to Canadian dollars) on the Telerate System
or such other screen on the Telerate System as shall display the London
interbank offered rates for deposits in U.S. dollars or the applicable
Alternate Currency quoted by selected banks.
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Term Facility means the term facility created by this Agreement in an
amount not to exceed Seventy-Five Million and No/100 Dollars ($75,000,000.00),
evidenced by the promissory notes to be made by Borrowers to each Term Lender
in the amount of such Term Lender's Term Loan Commitment Amount.
Term Facility Termination Date means May 31, 2000.
Term Lenders means, as to the Term Facility, such financial institutions
listed as Term Lenders on Schedule I attached hereto, and their permitted
successors or assigns.
Term Loan Commitment Amount means, with respect to each Term Lender, the
amount indicated as such Term Lender's Term Loan Commitment Amount opposite the
name of such Term Lender in Schedule I, as such amount may be adjusted from
time to time to account for any assignment of a Term Lender's interest.
Term Loan Percentage means, with respect to the Term Facility and each
Term Lender, the percentage indicated as such Lender's Term Loan Percentage
opposite the name of such Term Lender on Schedule I, as such percentage may be
adjusted from time to time to account for any assignments of a Term Lender's
interest as provided in Section 11.10.
Term Notes means those certain promissory notes evidencing the Term
Facility, executed by Borrowers and payable to the order of each Term Lender in
the amount of such Lender's Term Loan Commitment Amount, and in the form as
attached hereto as Exhibit A-1.
Title Company means a title company or title companies selected by any
Borrower and not disapproved by Agent, together with any issuing agent that
issues all or any part of a Title Policy.
Title Policy means a Mortgagee or Loan Policy of Title Insurance issued
and underwritten by a Title Company for the benefit of (a) Agent, on behalf of
the Lenders, covering that portion of the Mortgaged Property therein described
and insuring the lien of the Mortgage which covers such portion of the
Mortgaged Property, or (b) any Borrower insuring a lien on Underlying Real
Estate securing an Assigned Loan.
Total Capital means the sum of Consolidated Tangible Net Worth plus the
outstanding balances of (a) Approved Subordinated Debt and (b) Approved Senior
Debt, in all cases calculated as of the end of the calendar month immediately
preceding the applicable date of determination.
Transfer of Lien means an absolute assignment of note and liens
(including, without limitation, all mortgages and any other security for each
of the Assigned Loans), executed by any Borrower to Agent, for the benefit of
the Lenders, in the form previously agreed to by Borrowers and Agent (which
document may also be referred to as an "Assignment of Lien" in certain states).
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UCC means the Uniform Commercial Code in effect under the laws of the
State of Texas, as amended, or, if stated with reference to another
jurisdiction, the Uniform Commercial Code as adopted in the relevant
jurisdiction.
UK Subsidiaries means, collectively, AMRESCO UK Holdings Limited,
AMRESCO UK Limited, AMRESCO UK Ventures Limited, AMRESCO Jersey Ventures
Limited, and Old Midland House Limited.
Underlying Obligor means any obligor under any residential or commercial
mortgage loan originated or funded by any Borrower, provided, that the primary
business of such Borrower is the origination or funding of such residential or
commercial mortgage loans.
Underlying Real Estate means the real property, together with all
improvements thereon, which secures any of the Assigned Loans or High Yield
Loans, as applicable, or any one of such parcels of real property.
Variable Rate means a fluctuating rate of interest equal to the Base
Rate.
Variable Rate Advance shall mean an Advance under the Revolving Credit
Facility which will bear interest computed with reference to the Variable Rate.
Variable Rate Portion shall mean that portion of the Term Facility which
bears interest computed with reference to the Variable Rate.
Wholly-Owned Non-Real Estate Portfolios means Asset Portfolios that are
100% owned by any Borrower where less than 50% of the Net Purchase Price is
allocated to Real Estate Loans.
Wholly-Owned Real Estate Portfolios means Asset Portfolios that are 100%
owned by any Borrower where 50% or more of the Net Purchase Price is allocated
to Real Estate Loans.
SECTION 1.2. Singular and Plural of Definitions. Each term defined in
the singular form in Section 1.1 shall mean the plural thereof when the plural
form of such term is used in this Agreement, and each term defined in the
plural form in Section 1.1 shall mean the singular thereof when the singular
form of such term is used in this Agreement.
SECTION 1.3. Substantive Definitions. The terms, provisions and
agreements set forth in the definitions contained in Section 1.1 shall be
substantive terms of this Agreement and fully binding on the parties hereto.
SECTION 1.4. Money. Unless stipulated otherwise, all references herein
or in any of the Loan Documents to "Dollars," "$," "money," "payments" or other
similar financial or monetary terms are references to lawful money of the
United States of America.
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SECTION 1.5. Captions; References. The captions in this Agreement and
in the table of contents hereof are for convenience of reference only and shall
not define, affect or limit any of the terms or provisions hereof. All
references herein to Articles and Sections are, unless specified otherwise,
references to articles and sections of this Agreement. Unless specifically
indicated otherwise, all references herein to an "Exhibit," "Annex" or
"Schedule" are references to exhibits, annexes or schedules attached hereto,
all of which are incorporated herein and made a part hereof for all purposes,
the same as if set forth fully herein, it being understood that if any exhibit,
annex or schedule attached hereto which is to be executed and delivered
contains blanks, the same shall be completed correctly and in accordance with
this Agreement prior to or at the time of the execution and delivery thereof.
The words "herein," "hereof," "hereunder" and other similar compounds of the
word "here" when used in this Agreement shall refer to the entire Agreement and
not to any particular provision or section unless specifically indicated
otherwise.
SECTION 1.6. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
ARTICLE II
COMMITMENT
SECTION 2.1. Commitment. Subject to and upon the terms, covenants and
conditions of this Agreement:
(a) Revolving Credit Facility Advances. Each Revolving Lender
severally agrees to make in the manner set forth in Section 2.2, its pro rata
part (based on its Revolving Loan Percentage) of one or more Advances for
general corporate purposes, which, subject to the Loan Documents, any Borrower
may borrow, repay, and reborrow under this Agreement; provided, that, (A) each
such Advance must occur on a Business Day and no later than the Business Day
immediately preceding the Revolving Facility Termination Date, (B) each such
Advance must be in an amount not less than the limitations provided in Section
2.2, and (C) on any date of determination, the outstanding principal balance of
the Revolving Credit Facility shall never exceed the lesser of (1) the
difference between (a) the Borrowing Base, minus (b) the aggregate amount
outstanding under the Term Facility, and (2) an amount equal to the difference
between (a) the Revolving Commitment, minus (b) the sum of (i) the Letter of
Credit Exposure, plus (ii) the Commercial Paper Reserve. In no event shall any
Revolving Lender be required to make any Advances in excess of such Lender's
Revolving Loan Percentage of the amount required to be advanced by the
Revolving Lenders under the above provisions of this Section 2.1 or which would
cause any Revolving Lender to have made Advances in excess of such Lender's
Revolving Loan Commitment Amount. In the event that as of the Closing Date,
the Revolving Commitment does not equal Two Hundred Seventy-Five Million and
No/100 Dollars
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($275,000,000.00), Revolving Lenders acceptable to both Agent and AMRESCO may
be added to this Agreement until such time that the Revolving Commitment equals
Two Hundred Seventy-Five Million and No/100 Dollars ($275,000,000.00). Agent
and Borrowers shall execute a supplement to this Agreement evidencing the
additional Revolving Lenders and their Revolving Loan Commitment Amount and
Revolving Loan Percentage, and shall distribute a copy of such schedule to the
other Lenders as soon as practicably possible.
(b) Letters of Credit. Each Revolving Lender agrees to cause
Letters of Credit to be issued by the Issuing Lender for the account of
Borrowers for any of the purposes for which Borrowers can obtain an Advance;
provided, that (i) each such Letter of Credit shall be issued on a Business
Day, (ii) after the issuance of any such Letter of Credit, (A) the Letter of
Credit Exposure must be less than or equal to the Revolving Commitment (as the
same may be adjusted as herein provided) less the sum of (1) all outstanding
Advances under the Revolving Credit Facility, plus (2) the Commercial Paper
Reserve, and (B) the Letter of Credit Exposure shall not exceed Twenty Million
and No/100 Dollars ($20,000,000.00), and (iii) each such Letter of Credit must
have an expiration date no later than the Revolving Facility Termination Date.
To the extent that funds are ever drawn under any of the Letters of Credit,
each such draw will be paid by the Issuing Lender, and each of the Revolving
Lenders will make an Advance in the amount of such Lender's Revolving Loan
Percentage of the amount so paid by the Issuing Lender to reimburse the Issuing
Lender for such draw.
(c) Commercial Paper Reserve. In addition, Borrowers shall be
entitled to reserve out of the Revolving Credit Facility the Commercial Paper
Reserve; provided, that, (i) if Borrowers are called on to fund any commercial
paper for which Borrowers have established a Commercial Paper Reserve,
Borrowers shall nonetheless be required to satisfy the terms of the Revolving
Credit Facility for obtaining an Advance thereunder in such amount; and (ii)
the aggregate Commercial Paper Reserves shall not exceed $50,000,000.00.
Notwithstanding the establishment of Commercial Paper Reserves, Lenders shall
have no obligation to issue Letters of Credit to support Borrowers' issuance of
commercial paper.
(d) Term Facility Advance. Each Term Lender severally agrees
to make an Advance under the Term Facility equal to its Term Loan Commitment
Amount. Term Lenders acceptable to both Agent and AMRESCO may be added to this
Agreement until such time that the Term Facility has been fully funded. In
such event, Agent and Borrowers shall execute a supplement to this Agreement
evidencing the additional Term Lenders and their Term Loan Commitment Amount
and Term Loan Percentage, and shall distribute a copy of such schedule to the
other Lenders as soon as practicably possible.
SECTION 2.2. Method of Borrowing under Revolving Credit Facility.
Subject to the terms and conditions of this Agreement, each Borrower shall be
entitled to obtain Advances and Letters of Credit from Revolving Lenders under
the Revolving Credit Facility pursuant to Section 2.1 in the following manner:
(a) Variable Rate Advances. In the case of any Variable Rate
Advance, AMRESCO (acting for itself or on behalf of any Borrower), through an
Authorized Officer, shall give Agent prior to 10:00 a.m., Dallas, Texas time,
on the date of any such proposed Advance, an
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irrevocable written notice of its intention to borrow or reborrow such Variable
Rate Advance hereunder. Such notice of borrowing shall specify the requested
funding date, which shall be a Business Day, the amount of the proposed
aggregate Variable Rate Advances to be made by Lenders and shall be accompanied
by the documents required to be delivered pursuant to Article IV. The
aggregate amount of Variable Rate Advances to be made on any funding date shall
not be less than One Million and No/100 Dollars ($1,000,000.00) or greater
whole multiples of One Hundred Thousand and No/100 Dollars ($100,000.00).
(b) LIBOR Rate Advances. In the case of LIBOR Rate Advances,
AMRESCO (acting for itself or on behalf of any Borrower), through an Authorized
Officer, shall give Agent at least three Business Days' irrevocable written
notice of its intention to borrow or reborrow such advance hereunder. Notice
shall be given to Agent prior to 10:00 a.m., Dallas, Texas time, in order for
such Business Day to count toward the minimum number of Business Days required.
LIBOR Rate Advances shall in all cases be subject to availability and to
Section 3.5 hereof. For LIBOR Rate Advances, the notice of borrowing shall
specify (i) the requested funding date, which shall be a Business Day, (ii) the
amount of the proposed aggregate LIBOR Rate Advances to be made by the
Revolving Lenders, (iii) the Interest Period selected by AMRESCO (provided that
no such Interest Period shall extend past the Revolving Facility Termination
Date) and (iv) AMRESCO's election of the Effective Date on which the LIBOR Rate
Advances shall begin. The aggregate amount of LIBOR Rate Advances to be made
on any funding date shall not be less than Five Million and No/100 Dollars
($5,000,000.00) or greater whole multiples of One Million and No/100 Dollars
($1,000,000.00).
(c) Alternate Currency Option. In the case of any Alternate
Currency Advance, AMRESCO (acting for itself or on behalf of any Borrower),
through an Authorized Officer, shall give Agent at least three Business Days'
irrevocable written notice of its intention to borrow or reborrow such advance
hereunder (the "Alternate Currency Option"). Notice shall be given to Agent
prior to 10:00 a.m., Dallas, Texas time, in order for such Business Day to
count toward the minimum number of Business Days required. Alternate Currency
Advances shall in all cases bear interest at the Alternate Currency Rate
computed with respect to the applicable Alternate Currency and be subject to
availability and to Section 3.5 hereof. Such notice of borrowing shall specify
(i) the requested funding date, which shall be a Business Day, (ii) the Dollar
Equivalent of the amount of the proposed Alternate Currency Advance, (iii) the
currency of such proposed Alternate Currency Advance, (iv) the Interest Period
selected by AMRESCO (provided that no such Interest Period shall extend past
the Revolving Facility Termination Date) and (iv) Borrower's election of the
Effective Date on which the Alternate Currency Advance shall begin. The
aggregate amount of Alternate Currency Advances to be made on any funding date
shall not be less than Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00) (in its Dollar Equivalent), or greater whole multiples of One
Million and No/100 Dollars ($1,000,000.00) (in its Dollar Equivalent).
(d) Notice To Revolving Lenders. Agent shall promptly notify
Revolving Lenders of each notice received from AMRESCO pursuant to this Section
2.2. Each Revolving Lender shall, not later than noon, Dallas, Texas time, on
the date of any such Advance, deliver to Agent, at its address set forth
herein, such Lender's Revolving Loan Percentage of such Advance
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in immediately available funds in accordance with Agent's instructions. Prior
to 2:00 p.m., Dallas, Texas time, on the date of any Advance hereunder Agent
shall, subject to satisfaction of the conditions set forth in Article IV,
disburse the amounts made available to Agent by the Revolving Lenders by (i)
transferring such amounts by wire transfer pursuant to AMRESCO's instructions,
or (ii) in the absence of such instructions, crediting such amounts to the
account of AMRESCO maintained with Agent. All Advances shall be made by each
Revolving Lender according to its Revolving Loan Percentage.
(e) Method of Issuing Letters of Credit. Not less than three
(3) Business Days prior to the requested date of issuance of any Letter of
Credit, AMRESCO (for itself or on behalf of any Borrower) shall deliver to
Agent a Request For Advance and shall execute and deliver to the Issuing Lender
the customary letter of credit application and agreement used by the Issuing
Lender from time to time (the "LOC Application"). Nothing in this Agreement
shall prohibit the Issuing Lender from modifying the form of LOC Application in
effect from time to time in connection with the issuance of any Letter of
Credit, provided that, such modification does not substantially modify this
Agreement to the detriment of Borrowers. In the event of a direct conflict
between the provisions of the LOC Application and this Agreement, the
provisions of this Agreement shall govern. In no event shall a Letter of
Credit have an expiration date which is later than the Revolving Facility
Termination Date. Letters of Credit may be standby letters of credit only and
may be issued on behalf of any Borrower. Upon satisfaction of the applicable
conditions precedent set forth in Article IV, and subject to the other terms
and conditions of this Agreement, the Issuing Lender shall issue Letters of
Credit for the account of any Borrower within three (3) Business Days from
receipt by the Issuing Lender of the fully-executed LOC Application (so long as
the requested terms of such Letter of Credit are acceptable to the Issuing
Lender in its reasonable discretion).
Borrower shall be entitled to have issued under the Revolving Credit
Facility, subject to the terms of this Agreement, Letters of Credit denominated
in an Alternate Currency or other currency as approved by Agent and the Issuing
Lender, provided, that, if drawn, each Lender shall be required to fund its pro
rata part of the Dollar Equivalent of such Advance. Each such Advance shall be
subject to the terms and conditions of this Agreement related to Advances. The
amount to be reserved under the Revolving Credit Facility related to any such
Letter of Credit issued in an Alternate Currency or other currency approved by
Agent and the Issuing Lender, and therefore the Letter of Credit Exposure
related thereto, shall be an amount equal to 115% of the amount remaining to be
funded under any said Letter of Credit from time to time (in Dollar Equivalent
calculated from time to time).
Immediately upon the issuance of each Letter of Credit, the Issuing
Lender shall be deemed to have sold and transferred to each Revolving Lender,
and each Revolving Lender shall be deemed to have purchased and received from
the Issuing Lender, in each case irrevocably and without any further action by
any party, an undivided interest and participation in such Letter of Credit,
each drawing thereunder and the obligations of Borrowers under this Agreement
in respect thereof in an amount equal to the product of (x) such Lender's
Revolving Loan Percentage times (y) the maximum amount available to be drawn
under such Letter of Credit (assuming compliance with all conditions to
drawing). Subject to the limits referred to above, Borrowers may request the
issuance of Letters
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of Credit under this Section 2.2(e), repay any Advances under the Revolving
Credit Facility resulting from drawings thereunder pursuant to this Section
2.2(e) and request the issuance of additional Letters of Credit under this
Section 2.2(e).
The payment by the Issuing Lender of a draft drawn under any Letter of
Credit shall constitute for all purposes of this Agreement the making by the
Issuing Lender of an Advance under the Revolving Credit Facility, which shall
bear interest at the Variable Rate, in the amount of such draft (but without
any requirement for compliance with the conditions set forth in Article IV
hereof). In the event that a drawing under any Letter of Credit is not
reimbursed by Borrowers by 10:00 a.m. (Dallas time) on the first Business Day
after such drawing, the Issuing Lender shall promptly notify Agent and each
other Revolving Lender. Each such Revolving Lender shall, on the first
Business Day following such notification, make an Advance, which shall bear
interest at the Variable Rate, and shall be used to repay the applicable
portion of the Issuing Lender's advance with respect to such Letter of Credit,
in an amount equal to the amount of its participation in such drawing for
application to reimburse the Issuing Lender (but without any requirement for
compliance with the applicable conditions set forth in Article IV hereof) and
shall make available to Agent for the account of the Issuing Lender, by deposit
at Agent's office, in same day funds, the amount of such Advance. In the event
that any Revolving Lender fails to make available to Agent for the account of
the Issuing Lender the amount of such Advance, the Issuing Lender shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest thereon at a rate per annum equal to the lesser of (i) the
Maximum Lawful Rate or (ii) the Federal Funds Rate.
SECTION 2.3. Fees.
(a) Participation Fee. In consideration for the commitment of each
Revolving Lender to make Advances under the Revolving Credit Facility upon the
terms and conditions set forth in this Agreement and the reserving of
sufficient funds by each Revolving Lender from which to make disbursement of
the Advances under the Revolving Credit Facility, Borrowers shall pay to each
such Revolving Lender on the Closing Date its Participation Fee. In
consideration for the commitment of each Term Lender to fund its pro rata part
of the Term Facility upon the terms and conditions set forth in this Agreement
and the reserving of sufficient funds by each Term Lender from which to make
such Advance under the Term Facility, Borrowers shall pay to each such Term
Lender its Participation Fee when such Term Lender funds its Term Loan
Commitment Amount.
(b) Commitment Fee. Throughout the Credit Period, Borrowers shall
pay to Agent for the account of each Revolving Lender, such Revolving Lender's
Revolving Loan Percentage of the Commitment Fee, such fee to be computed based
on the number of actual days elapsed assuming each calendar year consisted of
360 days, and due and payable quarterly in arrears, commencing on April 1,
1997, and continuing on the first day of each calendar quarter thereafter, with
a final payment of such Commitment Fee being due and payable upon the Revolving
Facility Termination Date.
(c) Letter of Credit Fees. Borrowers shall pay to Agent for the
account of each Revolving Lender a letter of credit fee (the "Letter of Credit
Fee") (which shall be payable quarterly
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in arrears, commencing on April 1, 1997, and continuing on the first day of
each calendar quarter thereafter, with a final payment of such Letter of Credit
Fee being due and payable on the Revolving Facility Termination Date) on the
average daily amount available for drawing under all outstanding Letters of
Credit (using the Dollar Equivalent for any Letters of Credit denominated in an
Alternate Currency) at the following per annum percentages, applicable in the
following situations:
Annual
Applicability Percentage
------------- ----------
(a) Qualified Investment Rating of 1.5%
below Investment Grade or unrated
(b) Qualified Investment Rating of 1%
Investment Grade or higher
The fee payable in respect of the Letters of Credit shall be subject to
reduction or increase, as set forth in the table above. Subject to Section
11.8 hereof, such fee shall be computed on the basis of the actual number of
days elapsed. In addition to the Letter of Credit Fee, Borrowers shall pay to
Agent for the account of the Issuing Lender an issuance fee (which shall be due
and payable on the date of issuance of each Letter of Credit) in an amount
equal to Three Hundred and No/100 Dollars ($300.00).
(d) Structure Fee. In consideration for the Arranger's
efforts in structuring the Credit Facilities and arranging for such Credit
Facilities, Borrowers agree to execute on or before thirty (30) days following
the Closing Date a letter reasonably satisfactory to Agent and Arranger
concerning the Structure Fee and to pay to Arranger the Structure Fee in
accordance with such letter.
(e) Administrative Fees. In consideration for Agent's
administration services under the Credit Facilities, Borrowers agree to pay
Agent the Administrative Fee in advance in equal quarterly payments, commencing
on April 1, 1997, and continuing on the first day of each calendar quarter
thereafter, until such time the Notes are paid in full, all Letters of Credit
have been terminated, and Lenders' commitment to make Advances under this
Agreement have been terminated.
(f) Amendment Fee. In consideration for the agreement of each
existing Revolving Lender to modify the terms of the Original Loan Agreement as
set forth herein and in the other Loan Documents, Borrowers agree to pay to
each such existing Revolving Lender which is a party to this Agreement, the
Amendment Fee on the Closing Date.
SECTION 2.4. Additional Borrowers. Upon the earlier to occur of (1)
thirty (30) days after the filing of articles of incorporation, certificates of
limited partnership or similar organizational documents with the appropriate
Governmental Authority of any future Subsidiary of any Borrower or (2) two (2)
Business Days prior to the date that such Subsidiary obtains an Advance under
the Revolving Credit Facility (or the proceeds of any Advance from another
Borrower) or includes any of its assets in the Borrowing Base, Borrowers shall
cause to be delivered to Agent (a) a Supplement
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to Schedule I properly executed by such future Subsidiary (other than an
Excluded Subsidiary), (b) a Pledge Agreement and all financing statements
related thereto, properly executed by the appropriate Borrower pursuant to
which all of the outstanding shares of stock of such future Subsidiary (other
than the Excluded Subsidiaries listed in clause (a) of the definition of
Excluded Subsidiaries and certain other Excluded Subsidiaries approved by
Agent) are pledged to Agent (for the benefit of Lenders), together with the
original stock certificates accompanied by stock powers executed in blank by
the appropriate Borrower evidencing all of such outstanding shares of stock,
and (c) all resolutions, certificates or documents Agent may reasonably request
relating to the formation, existence and good standing of such future
Subsidiary, corporate authority for the execution and validity of the Loan
Documents described in clauses (a) and (b) immediately above and any other
documents and matters relevant to the formation of such future Subsidiary and
its status as a Borrower hereunder (if applicable), all in form and substance
satisfactory to Agent, which resolutions, certificates and documents shall
include, without limitation, (i) the articles of incorporation and bylaws of
such future Subsidiary, (ii) resolutions of the board of directors of such
future Subsidiary authorizing the execution of the Loan Documents described in
clauses (a) and (b) immediately above on behalf of such future Subsidiary and
the granting of all the relevant Lenders' Liens as security for the Credit
Facilities and the Letters of Credit, (iii) certificates of incumbency for the
officers of such future Subsidiary, and (iv) certificates of corporate
existence and good standing issued by the state of incorporation of such future
Subsidiary and from the appropriate Governmental Authority of each state in
which such future Subsidiary is required by applicable law to be qualified.
ARTICLE III
TERMS OF THE CREDIT FACILITIES
SECTION 3.1. Notes. The Credit Facilities shall be evidenced by the
Notes. Each Revolving Lender shall receive an originally executed Revolving
Note in an amount equal to such Lender's Revolving Loan Commitment Amount.
Each Term Lender shall receive an originally executed Term Note in an amount
equal to such Lender's Term Loan Commitment Amount.
SECTION 3.2. Maturity. All outstanding principal of the Revolving
Notes, together with all accrued but unpaid interest and other amounts owed
with respect thereto, shall be due and payable in full on the Revolving
Facility Termination Date. All outstanding principal of the Term Notes,
together with all accrued but unpaid interest and other amounts owed with
respect thereto, shall be due and payable in full on the Term Facility
Termination Date.
SECTION 3.3. Interest Rate. Interest on the Notes shall accrue at a
rate per annum equal to the lesser of (a) the Applicable Rate as selected by
Borrower pursuant to this Agreement, subject, however, to the provisions of
Section 11.8, or (b) the Maximum Lawful Rate; provided, however, if at any time
the Applicable Rate exceeds the Maximum Lawful Rate, resulting in the charging
of interest hereunder to be limited to the Maximum Lawful Rate, then any
subsequent reduction in the Applicable Rate shall not reduce the rate of
interest below the Maximum Lawful Rate until the total
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amount of interest accrued on the indebtedness evidenced hereby equals the
amount of interest which would have accrued on such indebtedness if the
Applicable Rate had at all times been in effect.
Without notice to any Borrower or anyone else, the Variable Rate and the
Maximum Lawful Rate shall each automatically fluctuate upward and downward as
and in the amount by which the Base Rate and Maximum Lawful Rate, respectively,
fluctuate, subject always to limitations contained in this Agreement. In
addition, the Adjusted LIBOR Rate and the Alternate Currency Rate shall
fluctuate upward and downward as and in the amount by which the LIBOR Margin
fluctuates, subject always to limitations contained in this Agreement, any such
changes in the LIBOR Margin and, therefore, the Adjusted LIBOR Rate or
Alternate Currency Rate, as applicable, to occur on the Business Day following
the receipt by Agent of the quarterly financial statements and related
officer's certificate required to be delivered by AMRESCO pursuant to Sections
7.1(b) and (c) hereof.
SECTION 3.4. Interest Payments. Interest on the Notes, computed as
provided in Section 3.11, shall be due and payable as it accrues on (a) the
first day of each calendar quarter commencing on April 1, 1997, and continuing
on the first day of each January, April, July and October thereafter until, as
applicable, either the Revolving Facility Termination Date or the Term Facility
Termination Date, and (b) at the end of each Interest Period as to any LIBOR
Rate Portion, LIBOR Rate Advance or Alternate Currency Advance then expiring,
and on demand after, as applicable, the Revolving Facility Termination Date or
the Term Facility Termination Date so long as any principal of any Note remains
unpaid.
SECTION 3.5. Conversion of Revolving Credit Advances; Interest Rate
Elections under Term Facility; Regulatory Change.
(a) Upon at least three (3) Business Days' prior written notice from
AMRESCO to Agent ("Minimum Notice Requirement"), Borrowers may, on any Interest
Adjustment Date (other than the Revolving Facility Termination Date or Term
Facility Termination Date, as applicable), convert amounts of any LIBOR Rate
Advances or LIBOR Rate Portion, as applicable, into Variable Rate Advances or a
Variable Rate Portion, as applicable, with interest accruing thereon with
reference to the Variable Rate, as provided in Section 3.3 above.
(b) Upon satisfaction by AMRESCO of the Minimum Notice Requirement,
and subject to the conditions provided in this Agreement or the Notes,
Borrowers may, on any date prior to the Revolving Facility Termination Date or
Term Facility Termination Date, as applicable, convert amounts of not less than
Five Million and No/100 Dollars ($5,000,000.00) in the aggregate on the same
date, or any whole multiple of One Million and No/100 Dollars ($1,000,000.00)
in excess thereof of any Variable Rate Advances or a Variable Rate Portion, as
applicable, into LIBOR Rate Advances or LIBOR Rate Portions, as applicable,
with interest accruing thereon with reference to the Adjusted LIBOR Rate, as
provided in Section 3.3 above, for the Interest Period selected in such notice.
AMRESCO may make a LIBOR Rate election with respect to each Advance of the Term
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Facility by satisfying the Minimum Notice Requirement prior to the related
funding of the Term Facility.
Each notice of Adjusted LIBOR Rate election by Borrowers shall
include (i) the amount of the proposed aggregate LIBOR Rate Advances or the
LIBOR Rate Portions, as applicable, (ii) the Interest Period selected by
AMRESCO, and (iii) the Effective Date, and is subject to the following
conditions: (1) the Interest Period shall be limited to a period commencing on
the Effective Date and ending on a date one, two, three, four or six months
later elected by AMRESCO in its notice to Agent; (2) AMRESCO's written notice
of an election shall be received by Agent in time to satisfy the Minimum Notice
Requirement; (3) the last day of the Interest Period will not be subsequent in
time to the Revolving Facility Termination Date or Term Facility Termination
Date, as applicable; (4) in the case of a continuation of a LIBOR Rate Advance
or LIBOR Rate Portion, the Interest Period applicable after such continuation
shall commence on the last day of the preceding Interest Period; (5) no LIBOR
Rate election shall be made if Agent determines by reason of circumstances
affecting the interbank Eurodollar market that either adequate or reasonable
means do not exist for ascertaining the Adjusted LIBOR Rate for any Interest
Period, or it becomes impracticable for Agent or any Lender under the
applicable Credit Facility to obtain funds by purchasing U.S. dollars in the
interbank Eurodollar market, or if Agent or any Lender under the applicable
Credit Facility determines that the Adjusted LIBOR Rate will not adequately or
fairly reflect the costs to such Lender of maintaining the applicable LIBOR
Rate Advances or LIBOR Rate Portion, as applicable, at such rate, or if as a
result of any Regulatory Change, it shall become unlawful or impossible for
Lenders under the applicable Credit Facility to maintain any such LIBOR Rate
election; (6) there shall never be more than fifteen (15) LIBOR Rate Advances,
in the aggregate, in effect at any one time under the Revolving Credit Facility
and no more than five (5) LIBOR Rate Portions in effect at any one time under
the Term Facility; and (7) no LIBOR Rate election shall be made after the
occurrence and during the continuance of a Default or Event of Default.
(c) As a condition to each Alternate Currency Advance, Borrowers
shall select an Alternate Currency Rate (based on the applicable Alternate
Currency) to be applicable thereto; provided, that each such Alternate Currency
Advance must be in an amount of not less than Two Million Five Hundred Thousand
and No/100 Dollars ($2,500,000.00) (in its Dollar Equivalent) in the aggregate
on the same date, or any whole multiple of One Million and No/100 Dollars
($1,000,000.00) (in its Dollar Equivalent) in excess thereof; and provided,
further, that (1) no Alternate Currency election shall be made if Agent or any
Revolving Lender determines that, as a result of any Regulatory Change, it
shall become unlawful, impracticable or impossible for Revolving Lenders to
maintain any such Alternate Currency election; (2) there shall never be more
than five (5) Alternate Currency Advances, in the aggregate, in effect at any
one time under the Revolving Credit Facility; (3) in no event shall the Dollar
Equivalent amount of the requested Alternate Currency Advance plus the then
current outstanding balance of all previous Alternate Currency Advances based
on the Dollar Equivalent thereof (as of the Business Day immediately prior to
the date of such Advance) exceed $50,000,000 in the aggregate; (4) no Alternate
Currency election shall be made after the occurrence and during the continuance
of a Default or Event of Default; and (5) Revolving Lenders shall not be
required to make any Alternate Currency Advance
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if the applicable Alternate Currency Rate would be limited to the Maximum
Lawful Rate pursuant to Section 3.3. Upon the expiration of any Interest
Period applicable to an Alternate Currency Advance and provided that no Default
has occurred and Borrowers are entitled to have outstanding such Alternate
Currency Advance under this Agreement, the Alternate Currency Advance shall
continue for an Interest Period having the same duration as the Interest Period
then ended (but not beyond the Revolving Facility Termination Date) unless
Borrowers shall, upon three (3) Business Days prior written notice, elect a
different Interest Period. Upon the occurrence of an Event of Default, Agent
may convert all Alternate Currency Advances into the Dollar Equivalent at the
end of the respective Interest Periods therefor.
(d) To the extent Borrowers have not made an effective election under
and in accordance with subparagraphs (a) or (b) above (including, without
limitation, at the expiration of an Interest Period or, as of the Closing Date,
with respect to the Advance of the Term Facility), the Applicable Rate shall be
the Variable Rate. If Borrowers have failed to make such election at the end
of an Interest Period under the Revolving Credit Facility, the Revolving
Lenders shall be deemed to have made a Variable Rate Advance in Dollars and in
the amount, and in replacement, of the LIBOR Rate Advance then maturing. If
Borrowers have failed to make such elections at the end of any Interest Period
under the Term Facility, the applicable LIBOR Rate Portion shall expire and
convert to a Variable Rate Portion. To the extent Borrowers have not made an
effective election under clause (c) above prior to the expiration of the
applicable Interest Period with respect to Alternate Currency Advances, then
Borrowers shall be deemed to have elected an Interest Period in accordance with
the penultimate sentence of clause (c) above.
(e) If, on or after the Closing Date, any Regulatory Change shall
make it unlawful, impracticable or impossible for any Lender (or its Eurodollar
lending office) to make, maintain or fund LIBOR Rate Advances, LIBOR Rate
Portions or Alternate Currency Advances, as applicable, and such Lender shall
so notify Agent, Agent shall forthwith give notice thereof to the other
applicable Lenders and AMRESCO, whereupon until such Lender notifies AMRESCO
and Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Lender to maintain or fund LIBOR Rate Portions or
to make LIBOR Rate Advances or Alternate Currency Advances, as the case may be,
shall be suspended. If such Lender shall determine that it may not lawfully
continue to maintain and fund any of its outstanding LIBOR Rate Advances, LIBOR
Rate Portions or Alternate Currency Advances to maturity and shall so specify
in such notice, Borrowers shall immediately prepay in full the then outstanding
principal amount of such Lender's portion of the LIBOR Rate Advances or
Alternate Currency Advances, as the case may be, together with accrued interest
thereon, or, if applicable, any LIBOR Rate Portion shall immediately convert to
a Variable Rate Portion. Concurrently with prepaying such portion of the LIBOR
Rate Advances or Alternate Currency Advances, as the case may be, Borrowers
shall borrow a Variable Rate Advance and/or an Advance in Dollars, as the case
may be, in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related LIBOR Rate
Advances or Alternate Currency Advances, as the case may be, of the other
Lenders), and such Lender shall make such Variable Rate Advance or Advance in
Dollars, as the case may be. If a Lender shall be unable to make, maintain or
fund LIBOR Rate Advances, LIBOR Rate Portions or Alternate Currency Advances as
above provided for more than sixty days, and the other Lenders
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are not similarly restricted, Borrowers shall be entitled to designate an
Eligible Assignee acceptable to Agent to purchase the interest of the Lender
which is unable to fund LIBOR Rate Advances, LIBOR Rate Portions or Alternate
Currency Advances, as the case may be, and such Lender shall sell its interest
to such Eligible Assignee within ten Business Days of Borrowers' request. Any
such purchase shall be in accordance with and subject to the provisions of
Section 11.10.
(f) Borrowers shall promptly indemnify (i) Agent and Lenders against
any loss or expense which Agent or Lenders may, as a consequence of Borrowers'
failure to make a payment on the date such payment is due hereunder, or the
payment, prepayment or conversion of any LIBOR Rate Advances, LIBOR Rate
Portions or Alternate Currency Advances hereunder on a day other than an
Interest Adjustment Date, sustain or incur in liquidating or employing deposits
from third parties acquired to effect, fund or maintain any such LIBOR Rate
Advances, LIBOR Rate Portions or Alternate Currency Advances or any part
thereof, including, without limitation, any Consequential Loss or Alternate
Currency Loss; (ii) Lenders against and reimburse Lenders for increased costs
to Lenders, as a result of any Regulatory Change, in the maintaining of any
LIBOR Rate Advances, LIBOR Rate Portions or Alternate Currency Advances; Agent
shall give AMRESCO written notice of such costs within ninety (90) days of its
or any Lender's implementation and/or compliance with any such Regulatory
Change, and such costs shall be reimbursed to such Lender prior to the earlier
of (A) the Revolving Facility Termination Date or the Term Facility Termination
Date, as applicable, or (B) ten (10) days following written notice thereof from
Agent to AMRESCO; and (iii) Agent and Revolving Lenders against any loss which
Agent or Revolving Lenders may sustain or incur, as a consequence of Borrowers'
failure to (A) pay any Alternate Currency Advance on the date due or in the
Alternate Currency in which it was made or (B) borrow Alternate Currency
Advances on the date for such borrowing specified in the relevant Request for
Advance, including without limitation, any loss (1) arising from any change in
the value of Dollars in relation to any such Alternate Currency Advance which
was not paid on the date due between the date such payment was due and the date
of payment, or which was not paid in the Alternate Currency in which it was
made, or (2) incurred in liquidating or closing out any foreign currency
contract undertaken by such Revolving Lender in funding or maintaining such
Alternate Currency Advance, all as determined by such Revolving Lender in its
sole discretion. All payments made pursuant to this paragraph shall be made
free and clear, without reduction for, or account of, any present or future
taxes or other levies of any nature, excluding net income and franchise taxes.
SECTION 3.6. Payments of Advances; Reduction of Commitment Amount.
(a) At any time prior to the occurrence of an Event of Default,
Borrowers may by notice from AMRESCO to Agent prior to 10:00 a.m. (Dallas,
Texas time) on the date on which prepayment under this Section 3.6 is to be
made, voluntarily prepay amounts outstanding under the Revolving Credit
Facility from time to time and at any time, in whole or in part, without
premium or penalty; provided, that (i) each such partial payment must be in a
minimum amount of at least One Million and No/100 Dollars ($1,000,000.00) (or,
as to prepayment of portions thereof which are Alternate Currency Advances, the
Dollar Equivalent thereof), and (ii) Borrowers shall pay any related
Consequential Losses or Alternate Currency Losses within ten days after Agent's
demand therefor.
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Each such optional prepayment shall be applied to the Revolving Credit Facility
ratably in accordance with Section 3.9 to pay the amounts owed to each
Revolving Lender thereunder.
(b) Borrowers shall make mandatory prepayments under the Revolving
Credit Facility prior to the occurrence of an Event of Default in an amount
equal to (a) the excess, if any, of the sum of the outstanding principal
balance of the Revolving Credit Facility, plus the Letter of Credit Exposure,
plus the Commercial Paper Reserve, at any time over the lesser of (1) the
Borrowing Base less the amount outstanding under the Term Facility, and (2) the
Revolving Commitment; and, (b) the net sale proceeds received by any Borrower
from the sale of any asset which has either a value at the time of the sale (as
shown on the books of such Borrower), or an aggregate sales price and all other
consideration for such sale, in excess of $2,500,000.00 (excluding, however,
the proceeds from the sale of an Assigned Loan included in the Borrowing Base,
if, within five Business Days from the receipt by any Borrower of such sale
proceeds, either such proceeds are used to reduce the outstanding balance of
the Revolving Credit Facility or AMRESCO delivers to Agent an updated Borrowing
Base Schedule showing that the aggregate outstanding Advances under the
Revolving Credit Facility do not exceed an aggregate amount equal to the
Borrowing Base less the amount outstanding under the Term Facility). Borrowers
shall pay on demand given by Agent any Consequential Loss arising as a result
of any such mandatory prepayments.
(c) Borrowers shall make mandatory prepayments under the Revolving
Credit Facility prior to the occurrence of an Event of Default, and under both
Credit Facilities pro rata after the occurrence of an Event of Default, in the
amount of the proceeds received by any Subsidiary from the creation of the NIM
Trusts.
(d) Borrowers may, prior to the occurrence of an Event of Default,
fully or partially, reduce the Revolving Commitment, provided that (i) notice
of such reduction must be received by Agent by 10:00 a.m. Dallas, Texas, time
on the fifth Business Day preceding the effective date of such reduction, (ii)
each such reduction in the Revolving Commitment must be in a minimum amount of
$10,000,000.00 or any whole multiple of $1,000,000.00 in excess thereof (or, as
to the reduction of portions thereof which are Alternate Currency Advances, the
Dollar Equivalent thereof), (iii) Borrowers shall not be entitled to an
increase in the Revolving Commitment once it has been so reduced, (iv) if the
sum of the aggregate outstanding principal balance of the Revolving Credit
Facility, plus the Letter of Credit Exposure, plus the Commercial Paper Reserve
exceeds the Revolving Commitment as so reduced, Borrowers shall make a
mandatory prepayment on the principal amount of the Revolving Credit Facility
in at least the amount of such excess, together with any Consequential Loss or
Alternate Currency Loss arising as a result thereof, and (v) in no event shall
Borrowers be entitled to so reduce the Revolving Commitment below
$20,000,000.00, unless Borrowers have elected to terminate the Revolving Credit
Facility in full.
(e) If Borrowers shall prepay any LIBOR Rate Advance or LIBOR Rate
Portion prior to the expiration of its applicable Interest Period, a prepayment
fee shall be due to Revolving Lenders in an amount equal to the consequential
loss (the "Consequential Loss") incurred by such Revolving Lenders as a result
of any such prepayment, such Consequential Loss to be computed as the product
of (i) the amount of the sum so prepaid multiplied by (ii) the difference (but
not less than
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0.00) of (A) the 360-day interest yield (as of the applicable Effective Date
and expressed as a decimal) on a Treasury Obligation selected by Agent and
having, as of the applicable Effective Date, a remaining term until its
maturity approximately equal to the original Interest Period, minus (B) the
360-day interest yield (as of the Business Day immediately preceding the
prepayment date and expressed as a decimal) on a Treasury Obligation selected
by Agent and having, as of the Business Day preceding the prepayment date, a
remaining term until maturity approximately equal to the unexpired portion of
the Interest Period, multiplied by (iii) the quotient of (A) the number of
calendar days in the unexpired portion of the Interest Period, divided by (B)
360. For purposes of computing a prepayment fee, the Treasury Obligations
selected by Agent shall be from among those included in the over-the-counter
quotations supplied to The Wall Street Journal by the Federal Reserve Bank of
New York City based on transactions of $1,000,000.00 or more. Any prepayment
fee required to be paid by Borrowers pursuant to this Section 3.6 or any other
provisions of this Agreement or of the other Loan Documents in connection with
the prepayment of any LIBOR Rate Advances or LIBOR Rate Portions shall be due
and payable whether such prepayment is being made voluntarily or involuntarily,
including, without limitation, as a result of an acceleration of sums due under
LIBOR Rate Advances, LIBOR Rate Portions or any part thereof due to an Event of
Default.
(f) If Borrowers shall prepay any Alternate Currency Advance or for
whatever reason an Alternate Currency Advance is converted to Dollars prior to
the expiration of its applicable Interest Period, a prepayment fee shall be due
to Revolving Lenders for any loss, cost, liability, or expense (an "Alternate
Currency Loss") which any Revolving Lender incurs as a result thereof,
including, without limitation, (i) any loss or reasonable expense sustained or
incurred in liquidating or employing deposits from third Persons acquired to
effect or maintain such Alternate Currency Advance or any part thereof, (ii) an
amount equal to the excess, if any of (A) its cost of obtaining the funds for
the Alternate Currency Advance being prepaid or converted prior to the
expiration of its applicable Interest Period for the period from the date of
such prepayment or conversion to the last day of the Interest Period for such
Alternate Currency Advance, over (B) the amount of interest (as reasonably
determined by such Revolving Lender) that would be realized by such Revolving
Lender in re-employing the funds so prepaid or converted for such Interest
Period, (iii) any loss incurred in liquidating or closing out any foreign
currency contract undertaken by such Revolving Lender in funding or maintaining
such Alternate Currency Advance, and (iv) any loss arising from any change in
the value of Dollars in relation to any such Alternate Currency Advance which
was not paid on the date due between the date such payment was due and the date
of payment, or which was not paid in the Alternate Currency in which it was
made, all as determined by such Revolving Lender in its good faith discretion,
but otherwise without penalty. A Revolving Lender must request compensation
under this section as promptly as practicable after it obtains knowledge of the
event which entitles it to compensation pursuant to this section, but in any
event within 180 days after it obtains such knowledge and pursuant to a
certificate which sets forth the amount such Revolving Lender is entitled to
receive pursuant to this Section 3.6 and the basis for determining such amount,
which certificate shall be conclusive as to the matters set forth therein in
the absence of manifest error. Any amounts received by Agent from Borrowers
pursuant hereto shall be disbursed by Agent in immediately available funds to
the Revolving Lenders requesting such amounts.
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SECTION 3.7. Schedules on Notes. Each Revolving Lender is hereby
authorized to record the date and amount of the initial principal balance of
its Revolving Note and the date and amount of each advance and repayment of
principal on such Revolving Note, and to attach any such recording as a
schedule to the Revolving Note whereupon such schedule shall constitute a part
of such Revolving Note for all purposes. Any such recording shall constitute
prima facie evidence of the accuracy of the information so recorded; provided
that the absence or inaccuracy of any such schedule or notation thereon shall
not limit or otherwise affect the liability of Borrowers for the repayment of
all amounts outstanding under the Revolving Notes together with interest
thereon.
SECTION 3.8. General Provisions as to Payments. All payments and
indemnities required to be made by Borrowers under any of the Loan Documents
shall be joint and several obligations of Borrowers. Borrowers shall make each
payment of principal and interest on either of the Credit Facilities and all
fees payable hereunder or under any other Loan Document not later than 12:00
noon (Dallas time) on the date when due, in Federal or other funds immediately
available in Dallas, Texas, to Agent at Agent's address for payments set forth
in Schedule I. Agent will promptly (and if such payment is received by Agent
by 12:00 noon (Dallas, Texas time), and otherwise if reasonably possible, on
the same Business Day, and in any event not later than the next Business Day
after receipt of such payment) distribute to each Lender under the Credit
Facility on which a payment is made a payment on the applicable Note, in
accordance with such Lender's pro rata share of each such payment received by
Agent. For purposes of calculating accrued interest on either of the Credit
Facilities, any payment received by Agent as aforesaid by 12:00 noon (Dallas,
Texas time) on any Business Day shall be deemed made on such day; otherwise,
such payment shall be deemed made on the next Business Day after receipt by
Agent. Whenever any payment of principal or interest on either of the Credit
Facilities, or any fees under the Loan Documents, shall be due on a day which
is not a Business Day, the date for payment thereof shall be extended to the
next succeeding Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.
SECTION 3.9. Application of Payments. Prior to the occurrence of an
Event of Default, all payments made on either of the Credit Facilities shall be
applied against the Revolving Credit Facility or the Term Facility as
designated by AMRESCO and shall be ratably paid to each Revolving Lender or
Term Lender, as applicable, in accordance with its Revolving Loan Percentage or
Term Loan Percentage, respectively, subject to the provisions of Article X and
any provision in the Loan Documents or agreements among the applicable Lenders
providing for the application of such proceeds against expenses or other
amounts. After the occurrence of an Event of Default and for a period of
thirty days after notice of such Event of Default has been received and
acknowledged by, or delivered by, Agent, all payments made on the Credit
Facilities (other than scheduled payments on the Credit Facilities and any
provisions in the Loan Documents providing for the application of such proceeds
against expenses and other amounts) shall be applied first against the
Revolving Credit Facility. If an Event of Default continues uncured or
unwaived after said thirty-day period, payments on the Credit Facilities shall
be ratably paid to each Lender in accordance with its Aggregate Loan
Percentage, subject to Article X and any provision in the Loan Documents or
agreements among the Lenders providing for the application of such amounts.
Revolving Lenders and Borrowers agree that in the event an Event of Default
continues uncured or unwaived after the
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above-referenced thirty day period, the Revolving Lenders shall make an Advance
to each of the Term Lenders in an amount equal to the net aggregate payments
applied against the Revolving Credit Facility during such thirty-day period
times such Term Lender's Aggregate Loan Percentage. The Advance or Advances so
made shall not require any action on the part of any Borrower and shall be made
notwithstanding Borrowers' failure to comply with the conditions for making
Advances under the Revolving Credit Facility. Except as (a) to principal
payments made pursuant to Section 3.6(a),(b),(c) or (d)(iii), (b) provided in
Section 9.10, and (c) otherwise specifically provided in this Agreement or in
any Loan Document, all prepayments on the respective Credit Facilities shall be
applied against accrued but unpaid interest and then against the principal
portion of the applicable Credit Facility; provided, however, that, unless
otherwise designated by AMRESCO or required by law, prepayments and involuntary
payments received by the holder hereof and applied to principal hereunder shall
be applied first to the Variable Rate Advances or Variable Rate Portion, as
applicable, in Dollars (or that portion of LIBOR Rate Advances or LIBOR Rate
Portions, as applicable, not subject to a prepayment penalty), second to the
LIBOR Rate Advances or LIBOR Rate Portions, as applicable, in Dollars, and
third to the Alternate Currency Advances.
SECTION 3.10. Post-Default Interest; Past Due Principal and Interest.
After maturity of the Notes or the occurrence of an Event of Default, the
outstanding principal balance of the Notes shall, at the option of the Required
Lenders, bear interest at the Default Rate. Any past due principal of and, to
the extent permitted by law, past due interest on the Notes shall bear
interest, payable as it accrues on demand, for each day until paid at the
Default Rate. Such interest shall continue to accrue at the Default Rate
notwithstanding the entry of a judgment with respect to any of the Obligations
or the foreclosure of any of the Lenders' Liens, except as otherwise provided
by applicable law.
SECTION 3.11. Computation of Interest and Fees. All interest payable on
the Notes hereunder or the amount of any fees hereunder shall be computed based
on the number of days elapsed and 360 days per year (or 365 days for Alternate
Currency Advances in British pounds sterling), subject to the provisions hereof
limiting interest to the maximum permitted by applicable law.
SECTION 3.12. Capital Adequacy. If any present or future law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling such Lender and such Lender reasonably determines that the amount
of capital so required or expected to be maintained is increased by or based
upon the existence of the Credit Facilities or the Letters of Credit, then such
Lender may notify AMRESCO of such fact, and commencing ninety (90) days
following such notice, Borrowers shall pay to such Lender or Agent (for such
Lender) from time to time on demand, as an additional fee payable hereunder,
such amount as Lender shall determine in good faith and certify in a notice to
AMRESCO in reasonable detail to be an amount that will adequately compensate
such Lender in light of these circumstances for its increased costs of
maintaining such capital. Each Lender shall allocate such cost increases among
its customers in good faith and on an equitable basis.
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SECTION 3.13. Deposit of Cash Collateral. Upon the occurrence of any
Event of Default, Borrowers shall, on the next succeeding Business Day, deposit
in a segregated, interest bearing account with Agent such funds as Agent may
request, up to a maximum amount equal to the aggregate existing Letter of
Credit Exposure. Any funds so deposited shall be held by Agent as security for
the Obligations (including the Letters of Credit) and Borrowers will, in
connection therewith, execute and deliver such assignments and security
agreements in form and substance satisfactory to Agent which Agent may, in its
discretion, require. As drafts or demands for payment are presented under any
Letter of Credit, Borrowers hereby irrevocably direct Agent to apply such funds
to satisfy such drafts or demands. When all Letters of Credit have expired and
the Revolving Notes have been repaid in full (and Lenders have no obligation to
make further Advances or issue Letters of Credit hereunder) or such Event of
Default has been cured to the satisfaction of Agent, Agent shall release to
AMRESCO any remaining funds deposited under this Section 3.13. Whenever
Borrowers are required to make deposits under this Section 3.13 and fail to do
so on the day such deposit is due, Revolving Lenders may make such deposit
using any funds of Borrowers then available to any Revolving Lender.
SECTION 3.14. Alternate Currency Notes. In order to satisfy various
Legal Requirements applicable to certain Foreign Portfolios or for any other
purpose for which Borrowers can obtain an Alternate Currency Advance
(including, without limitation, Legal Requirements related to the deductibility
of interest on Alternate Currency Advances used to fund the acquisition of such
Foreign Portfolios or for such other purposes), Borrowers have requested that
they be allowed to separately document the fundings for, or refinancing of, the
acquisition of any such Foreign Portfolios or for such other purposes.
Revolving Lenders hereby approve such request subject to Agent being satisfied
that such additional documentation is appropriate. If approved by Agent, the
Borrower or Borrowers which desire to acquire the applicable Foreign Portfolio
or to make a capital contribution to the Borrower making any such acquisition
or to acquire or invest in any asset or Person for the purpose for which
Borrowers can obtain an Alternate Currency Advance may each execute and deliver
to NationsBank a promissory note or notes (the "Alternate Currency Note") in an
amount equal to the proceeds to be funded for such acquisition. The terms of
such Alternate Currency Note shall be satisfactory to Agent in all respects.
Agent, on behalf of Lenders, shall then acquire the Alternate Currency Note
from NationsBank, and Borrowers shall simultaneously with the delivery of the
Alternate Currency Note deliver to Agent a Request For Advance for an Alternate
Currency Advance in an amount sufficient to enable Revolving Lenders to acquire
the Alternate Currency Note. Borrowers and NationsBank understand and agree
that NationsBank shall not fund an Alternate Currency Note until such time that
Revolving Lenders have funded or are prepared to simultaneously fund an
Alternate Currency Advance to acquire such Alternate Currency Note. The
purchase price for each Alternate Currency Note shall be equal to the
outstanding principal balance thereof, together will all accrued but unpaid
interest thereon, and, upon such payment, NationsBank shall endorse such
Alternate Currency Note to Agent, on behalf of Revolving Lenders, without
recourse or warranty. Payments of principal and interest made on any Alternate
Currency Note shall be applied against the principal and interest on the
Alternate Currency Advance made by Revolving Lenders to acquire such Alternate
Currency Note. In addition, upon repayment by Borrowers of all principal and
accrued but unpaid interest on any Alternate Currency Advance used to acquire
an
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Alternate Currency Note, than Agent, on behalf of Revolving Lenders, shall
return such Alternate Currency Note to the maker thereof marked "Paid."
ARTICLE IV
CONDITIONS TO CLOSING
SECTION 4.1. Conditions To Closing. The obligation of Term Lenders to
fund the Term Facility, the Revolving Lenders to fund the first Advance under
the Revolving Credit Facility after the Closing Date or the Issuing Lender to
issue any Letter of Credit after the Closing Date, whichever is first, as
provided herein is subject to the satisfaction of the following conditions and
requirements:
(a) receipt by Agent of (i) this Agreement, properly executed
by Borrowers, and (ii) evidence acceptable to Agent that Borrowers have paid
all fees and expenses required to be paid by Borrowers as of the date of such
Advance or issuance;
(b) receipt by each Lender of its Note, properly executed by
Borrowers, together with its Participation Fee and Amendment Fee, if
applicable;
(c) receipt by Agent of one or more Pledge Agreements, and all
financing statements related thereto, properly executed by the appropriate
Borrowers, together with the original stock certificates accompanied by stock
powers executed in blank by the appropriate Borrowers evidencing all of the
outstanding shares of stock of each Subsidiary of Borrowers which is
incorporated in the United States (other than stock of a Subsidiary identified
in clause (a) of the definition of Excluded Subsidiary and ARSC and AMRESCO
Commercial) and sixty-five percent (65%) of the stock of each Subsidiary of
Borrowers incorporated outside the United States;
(d) receipt by Agent of each Second Modification of Collateral
Assignment and all financing statements related thereto, properly executed by
the appropriate Borrowers;
(e) receipt by Agent of the Second Modification of Security
Agreement and all financing statements related thereto, properly executed by
the appropriate Borrowers;
(f) receipt by Agent of the Second Modification of Lockbox
Agreement and all financing statements related thereto, properly executed by
Borrowers and the Lockbox Agent;
(g) receipt by the Custodians of the original promissory notes
evidencing the Assigned Loans owned by any Borrower as of the Closing Date,
together with allonge endorsements attached thereto (in form acceptable to
Agent) executed in blank by the appropriate Borrower, and all other documents
required to be delivered to the Custodian pursuant to the terms of the
Custodial Agreement, the Collateral Assignment or the other Loan Documents
(including, without limitation, as required by Sections 5.2 and 5.3 hereof);
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(h) receipt by Agent from each Custodian of the certificate
required to be delivered under its respective Custodial Agreement to reflect
receipt by the Custodian of the items referenced in (g) above;
(i) receipt by Agent of an opinion of general counsel for each
Borrower, opining as to the due organization and existence of each Borrower,
the enforceability of each of the Loan Documents and such other matters as
Agent may reasonably request, in form and substance satisfactory to Agent;
(j) receipt by Agent of all resolutions, certificates or
documents it may reasonably request relating to the formation, existence and
good standing of each Borrower on the date hereof, corporate authority for the
execution and validity of this Agreement and the other Loan Documents, and any
other matters relevant to this Agreement, all in form and substance
satisfactory to Agent, which resolutions, certificates and documents shall
include, without limitation, (i) the articles of incorporation and bylaws of
each Borrower, (ii) resolutions of the board of directors of each Borrower
authorizing the execution of the Loan Documents on behalf of each such Borrower
and the granting of all the Lenders' Liens as security for the Credit
Facilities and the Letters of Credit, (iii) certificates of incumbency for the
officers of each Borrower, and (iv) certificates of corporate existence and
good standing issued by the state of incorporation of each Borrower and from
the appropriate governmental authority of each state in which each Borrower is
required by applicable law to be qualified;
(k) receipt by Agent of filing officer certificates (or
commercial reports similar thereto, if satisfactory to Agent) under Section
9-407(2) of the UCC, releases or partial releases of liens or financing
statements, and other evidence satisfactory to Agent that there are no Liens on
any assets of any Borrower, except Permitted Encumbrances;
(l) satisfaction of all conditions contained in Section 4.2 if
an Advance is being made, or satisfaction of all conditions contained in
Section 4.3 if a Letter of Credit is being issued;
(m) receipt by Agent of copies of certificates of insurance
for each policy maintained by any Borrower, together with evidence of payment
of all premiums thereon; and
(n) receipt by Agent and/or Lenders of all other documents,
instruments, certificates and information to be delivered on or before the
Closing Date pursuant to the terms of this Agreement and the other Loan
Documents.
All the documents, instruments, certificates, information, evidences and
opinions referred to in this Section 4.1 shall be delivered to Agent no later
than the Closing Date, and Lenders shall not be bound by or obligated hereunder
until Agent has received all such items.
SECTION 4.2. Conditions To All Advances. The obligation of Lenders to
fund any Advance (including the funding of the Term Facility) as provided
herein is subject to the satisfaction of the following conditions and
requirements:
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(a) timely receipt by Agent of a Request For Advance (which
shall be appropriately modified to Agent's satisfaction with respect to the
funding of the Term Facility);
(b) immediately before and after giving effect to such
Advance, no Default shall have occurred and be continuing and the making of
such Advance shall not cause a Default;
(c) the representations and warranties contained in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Advance, except that all
representations and warranties that speak as of a particular date shall only be
required on the date of each such Advance to be true and correct in all
material respects as of the date to which such representation or warranty
speaks and not as of any subsequent date; and
(d) such other information and documentation as Agent shall
reasonably deem necessary or desirable in connection with the funding of such
Advance.
SECTION 4.3. Conditions to Letters of Credit. The obligation of the
Issuing Lender to issue any Letter of Credit as provided herein is subject to
the satisfaction by Borrowers of the following conditions and requirements:
(a) timely receipt by the Issuing Lender of a fully completed
LOC Application;
(b) timely receipt by Agent of a Request For Advance;
(c) immediately before and after the issuance of such Letter
of Credit, no Default shall have occurred and be continuing and the issuance of
any Letter of Credit shall not cause a Default;
(d) the representations and warranties contained in this
Agreement and in the other Loan Documents shall be true in all material
respects on and as of the date of issuance of such Letter of Credit, except
that all representations and warranties that speak as of a particular date
shall only be required on the date of issuance of each such Letter of Credit to
be true and correct in all material respects as of the date to which such
representation or warranty speaks and not as of any subsequent date;
(e) timely receipt by Agent (on behalf of the Issuing Lender)
of the issuance fee required to be paid by the Issuing Lender related to the
issuance of such Letter of Credit; and
(f) such other information and documentation as Agent or the
Issuing Lender shall reasonably deem necessary or desirable in connection with
the issuance of such Letter of Credit.
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ARTICLE V
COLLATERAL
SECTION 5.1. Security. The Credit Facilities, the Letters of Credit,
and the Obligations (as modified and increased pursuant to this Agreement)
shall all be secured by the liens and security interests created by the
Security Documents and any and all other Collateral described herein, and all
proceeds thereof, until the particular item of Collateral is released or until
the Letters of Credit have expired and the Credit Facilities and all the
Obligations are paid and performed in full (and any obligation of Lenders to
make Advances has been terminated). Borrowers and Lenders understand and agree
that the term "Obligations" as used in the Security Documents is intended to,
and shall mean, the Obligations as modified and increased by this Agreement,
and therefore, the liens and security interests created and evidenced by the
Security Documents secure all such Obligations.
SECTION 5.2. Requirements For Assigned Loans. With respect to each of
the Assigned Loans, Borrower shall deliver to a Custodian the documents
required by the applicable Custodial Agreement which shall include, without
limitation, the following:
(a) Either (i) the original promissory note or notes
evidencing the Assigned Loan properly endorsed showing endorsements thereof
from the original holder thereof, and all subsequent holders, to a Borrower,
together with an endorsement thereof by such Borrower to Agent, on behalf of
Lenders (in form satisfactory to Agent), which endorsement may be an allonge
endorsement, (ii) with respect to any Assigned Loan where the original
promissory note has been lost, an original lost note affidavit in form which is
sufficient under the UCC or the laws of any applicable jurisdiction to enable
the owner thereof to maintain an action on the related promissory notes and
recover from any party liable thereon, and properly executed by the Person
which sold such promissory note to the applicable Borrower, (iii) with respect
to any Assigned Loan for which a Borrower has a participation interest, the
original or a copy of the participation certificate or agreement evidencing the
applicable Borrower's interest in such Assigned Loan, or (iv) with respect to
any Assigned Loan for which a Borrower has a judgment, an original Assignment
of Judgment (as defined in the Collateral Assignment);
(b) Copies of the mortgage, deed of trust or other security
documents by which a lien or security interest has been granted to secure the
Assigned Loan;
(c) With respect to Domestic Portfolios, an original Transfer
of Liens properly executed and acknowledged by the appropriate Borrower and,
with respect to Foreign Portfolios, such fixed or floating charges or other
evidence of direct or collateral transfer as Agent may require;
(d) To the extent in the possession of a Borrower or an
Affiliate of a Borrower, a Title Policy and certificate of hazard and/or
liability insurance with respect to any Underlying Real Estate; and
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(e) Such other information related to the Underlying Real
Estate, to the extent in the possession of any Borrower or an Affiliate of any
Borrower, as Agent shall reasonably request.
SECTION 5.3. Requirements for Mortgaged Properties. With respect to
each of the Mortgaged Properties, the Borrower which owns such Mortgaged
Property shall deliver to a Custodian the documents required by the applicable
Custodial Agreement with respect thereto which shall include, without
limitation, the following:
(a) A copy of the deed or conveyance instrument by which the
applicable Borrower took title to the Mortgaged Property;
(b) A Title Policy (which Title Policy may be a mortgagee
policy of title insurance which has converted to an owner's policy of title
insurance after foreclosure), for each Mortgaged Property with a value in
excess of One Hundred Thousand and No/100 Dollars ($100,000.00) and, unless
covered under an umbrella policy approved by Agent, a certificate of hazard
and/or liability insurance covering the Mortgaged Property;
(c) An original, properly executed and acknowledged Mortgage,
together with a financing statement related thereto; and
(d) Such other information as Agent shall reasonably request.
SECTION 5.4. Recording. The Custodial Agreements shall provide that
the Custodian shall hold the original of each Mortgage (and related financing
statement) and Transfer of Liens for recording in the appropriate real estate
(or UCC, as appropriate) records if and when (i) a Default occurs, or (ii)
Agent delivers ten (10) days prior written notice to the Custodians and AMRESCO
that the Required Lenders require the recordation of such Mortgages (and
related financing statements) or Transfers of Liens. After the occurrence of
any of the above events, the Custodians or Agent shall record all Mortgages
(and related financing statements) and Transfers of Liens then held by the
Custodians, and Borrowers shall be required to pay, or reimburse the Lenders
for the payment of, all filing fees, mortgage and stamp taxes and other
expenses incurred by Lenders, Agent or Custodians in connection with the
recordation of the Mortgages (and related financing statements) and Transfers
of Liens.
SECTION 5.5. Timing of Deliveries. The items referenced in Sections
5.2 and 5.3 must be delivered to a Custodian under a Custodial Agreement within
the time periods specified in such Custodial Agreement, and Borrowers must
deliver to Agent a supplement to the Collateral Assignment covering any
Assigned Loans or Mortgaged Property acquired by any Borrower after the Closing
Date, no later than the earlier to occur of (i) a Default, (ii) thirty (30)
days after the effective date of the acquisition by the applicable Borrower of
such Assigned Loans or Mortgaged Property, or (iii) the date on which Borrower
requests that such Assigned Loans or Mortgaged Property be included in the
Borrowing Base.
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SECTION 5.6. Agent's Discretion. All requirements for the Collateral
are imposed solely and exclusively for the benefit of the Lenders but are to be
enforced and monitored solely and exclusively by Agent in accordance with the
provisions of the Loan Documents. No Person (including Borrower or any other
Lender) other than Agent shall have any standing to require satisfaction of any
such requirements. Agent shall be entitled to require delivery of the items
referenced in Section 5.2 and Section 5.3 at any time and, from time to time
(subject to the limitation contained in Section 5.4), and the failure of Agent
to request any such items at any particular time shall not constitute a waiver
of the Lenders' rights to thereafter require that such items be delivered.
SECTION 5.7. Lockbox; Lockbox Account.
(a) Notwithstanding any provision herein or in the other Loan
Documents to the contrary, Borrowers agree that they have instructed, or will
cause instructions to be given to, all Account Debtors, or contemporaneously
with the execution of this Agreement or within thirty (30) days after the
addition of an Asset Portfolio to the Borrowing Base will instruct, or will
cause instructions to be given to, all Account Debtors, pursuant to a letter
from the appropriate Borrower or the seller of such Asset Portfolio in form
approved by Agent, to mail all payments and other remittances owing with
respect to the Assigned Loans directly to the Lockbox. Lockbox Agent will have
exclusive and unrestricted access to the Lockbox and will have complete and
exclusive authority to receive, pick up and open all mail addressed to the
Lockbox, whether registered, certified, insured or otherwise. Borrowers will
have no access to or control over the Lockbox or any checks or monies received
in the Lockbox. All items received and monies collected in connection with the
Assigned Loans will be processed by the Lockbox Agent pursuant to the terms of
the Lockbox Agreement, and in the event any checks or monies shall be submitted
to any Borrower by any Account Debtor under the Assigned Loans, or shall
otherwise come into the possession of any Borrower, the same shall be deemed
held by such Borrower in trust for Lenders, and such Borrower shall deliver the
same to the Lockbox Agent within three (3) Business Days after received by such
Borrower, endorsed if appropriate, for deposit into the Lockbox Account.
(b) Prior to the occurrence of a Default, on each Business Day
during each Credit Period, the Lockbox Agent shall, and Borrowers hereby
authorize and instruct the Lockbox Agent to, withdraw all funds from the
Lockbox Account, if any, and deposit same into AMRESCO's operating account at
NationsBank as designated in writing from time to time by AMRESCO to the
Lockbox Agent. Upon the occurrence of a Default and thereafter, all amounts in
the Lockbox Account shall be disbursed to and applied by Lockbox Agent and
Agent to reduce the outstanding obligations as provided in Section 9.10.
(c) Notwithstanding anything herein to the contrary, Agent
shall be entitled to establish, in lieu of the lock-box arrangement otherwise
described in this Section 5.7, a trust or similar account arrangement in those
countries where lock-box arrangements are not commonly used. Without limiting
the generality of the previous sentence, Lenders and Borrowers agree that
AMRESCO UK Holdings Limited, AMRESCO UK Ventures Limited, AMRESCO UK Limited
and Old Midland House Limited shall not be subject to the previous provisions
of this Section 5.7, but shall be subject to similar obligations with respect
to any "Trust Account" established by or for the
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benefit of such Borrowers in the United Kingdom as set forth in Clause 6 of
that certain Composite Guarantee and Debenture dated June 7, 1996, executed by
and among each of such Borrowers and Agent.
SECTION 5.8. Requirements For High Yield Loans and Other Collateral.
With respect to each of the High Yield Loans and any other Collateral not
specifically addressed in the other provisions of this Article V, Borrower
shall take such actions and deliver to Agent or any Person designated by Agent
all original promissory notes, endorsements, lost note affidavits,
participation certificates or agreements, assignments, mortgages, deeds of
trust, financing statements or other security documents, title policies and/or
certificates of hazard and/or liability insurance with respect to any
Underlying Real Estate, and such other documents, instruments, agreements and
information related to any High Yield Loan or any such Collateral, as Agent
shall reasonably request.
SECTION 5.9. Release of Collateral. Prior to the occurrence of a
Default or an Event of Default, Borrowers shall be entitled to obtain a release
of the Lenders' Liens with respect to certain of the Collateral designated by
Borrowers so long as (a) the Collateral being released is not required to be
pledged to the Lenders pursuant to the terms of this Agreement, the Collateral
being released is being sold by such Borrower, or the Collateral being released
is being pledged by such Borrower to secure Debt which such Borrower is
entitled to incur under Section 8.5 and such Borrower is entitled under Section
8.7 to xxxxx x xxxx on such Collateral being released in favor of the Person
for whom, and securing the Debt which, such lien is then being created to
secure, (b) Borrowers shall continue to be in compliance under this Agreement
following the release of such Lenders' Liens, and (c) Borrowers have reduced
the Credit Facilities in an amount deemed satisfactory by Agent, in its sole
discretion, due to such release of Collateral.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Lenders that:
SECTION 6.1. Existence and Power of Borrowers. Each Borrower (a) is a
corporation or partnership, as appropriate, duly created, validly existing and
in good standing under the laws of the state, province or country under which
it is organized, and is or will be qualified and in good standing as a foreign
corporation or partnership, as appropriate, under the laws of each state where
such qualification is necessary for such Borrower to conduct its business; and
(b) has all corporate or partnership, as appropriate, powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and as contemplated to be conducted, except
where the failure to have any such item would not have a material adverse
effect on such Borrower's business and financial condition.
SECTION 6.2. Subsidiaries. Other than the Excluded Subsidiaries, all
direct and indirect Subsidiaries of AMRESCO are Borrowers. All stock of each
Subsidiary which is incorporated in
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the United States, and sixty-five percent (65%) of the stock of each Subsidiary
incorporated outside the United States, has been collaterally assigned to Agent
(on behalf of Lenders) pursuant to a Pledge Agreement, other than stock of a
Subsidiary identified in clause (a) of the definition of Excluded Subsidiary,
ARSC and AMRESCO Commercial. No Borrower is an Excluded Subsidiary.
SECTION 6.3. Authorization; Contravention. The execution, delivery and
performance of this Agreement, the Notes, the LOC Applications, the Security
Documents and the other Loan Documents by each Borrower are within each such
Borrower's corporate or partnership, as appropriate, powers have been duly
authorized by all necessary corporate or partnership, as appropriate, action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation, bylaws or partnership agreement, as appropriate, of any such
Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon any such Borrower or result in the creation or
imposition of any Lien on any asset of any such Borrower except Liens securing
the Notes.
SECTION 6.4. Enforceable Obligations. This Agreement, the Notes, the
LOC Applications and the other Loan Documents each constitutes a valid and
binding agreement of each Borrower which is a party thereto, enforceable in
accordance with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer or similar laws
affecting creditors rights generally, and (b) the availability of equitable
remedies may be limited by equitable principles of general applicability.
SECTION 6.5. Financial Information.
(a) The current financial statements of each Borrower and all
of the other financial reports and information of each Borrower that have been
delivered to Lenders are true and correct in all material respects as of the
date of such current financial statements and other reports and information.
(b) Except as disclosed in writing to Lenders prior to the
execution and delivery of this Agreement, since September 30, 1996, there has
been no material adverse change in the business, financial position or results
of operations of any Borrower; and, there exists no condition, event or
occurrence that, individually or in the aggregate, could reasonably be expected
to result in a material adverse change in the business, financial position or
results of operations of any Borrower.
SECTION 6.6. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of any Borrower, threatened against or
affecting, any Borrower before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
financial position or results of operations of such Borrower or which could in
any manner draw into question the validity of the Loan Documents.
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SECTION 6.7. ERISA.
(a) Each Employee Plan has been maintained and administered in
substantial compliance with the applicable requirements of the Code and ERISA.
No circumstances exist with respect to any Employee Plan that could have a
material adverse effect on any Borrower.
(b) With respect to each Pension Plan, (i) no accumulated
funding deficiency (within the meaning of Section 412(a) of the Code), whether
waived or unwaived, exists; (ii) the present value of accrued benefits (based
on the most recent actuarial valuation prepared for each such plan, if any, in
accordance with ongoing assumptions) does not exceed the current value of plan
assets allocable to such benefits by a material amount; (iii) no reportable
event (within the meaning of Section 4043 of ERISA) other than purchases and
sales of securities from a plan trustee as reported in the audited financial
statements of such plan has occurred; (iv) no uncorrected prohibited
transactions (within the meaning of Section 4975 of the Code) exist which could
have a material adverse effect on any Borrower; (v) to the extent such plan is
covered by PBGC, no material liability to the PBGC exists and no circumstances
exist that could reasonably be expected to result in any such liability; and
(vi) no material withdrawal liability (within the meaning of Section 4201(a) of
ERISA) exists and no circumstances exist that could reasonably be expected to
result in any such liability.
(c) As of the date hereof, no Borrower has any obligation
under any Employee Plan to provide post-employment health care benefits to any
of its current or former employees, except as may be required by Section 4980B
of the Code.
SECTION 6.8. Taxes and Filing of Tax Returns. Each Borrower has filed
all material tax returns required to have been filed and has paid all Taxes
shown to be due and payable on such returns, including interest and penalties,
and all other Taxes which are payable by such party, to the extent the same
have become due and payable other than Taxes with respect to which a failure to
pay would not have a material adverse effect on such Borrower. None of the
Borrowers has any knowledge of any proposed Tax assessment against any Borrower
other than customary ad valorem taxes or other Taxes to become due in the
normal course of business, and all Tax liabilities of each Borrower are
adequately provided for. No income tax liability of any Borrower has been
asserted by the Internal Revenue Service for Taxes in excess of those already
paid, the payment of which would have a material adverse affect on such
Borrower.
SECTION 6.9. Ownership of Assets. Each Borrower has good and
indefeasible title to all of the Collateral and all other assets reflected on
its most current financial statements delivered to Lenders. Except for
Permitted Encumbrances, there is no Lien on any property of any Borrower, and
the execution, delivery, performance or observance of the Loan Documents will
not require or result in the creation of any Lien (except Lenders' Liens) on
any such property. Borrowers have properly granted to Lenders a perfected
security interest or lien in all Assigned Loans and other Collateral and a
valid first lien on all Mortgaged Properties owned by Borrowers which have not
been previously released pursuant to the terms of the applicable Custodial
Agreement (including, without limitation, all Assigned Loans and Mortgaged
Properties included in the current Borrowing
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Base). Borrowers have requested as an accommodation to Borrowers because of
the number of Assigned Loans and for ease of administering the Credit
Facilities that the Assigned Loans be endorsed by using an allonge endorsement,
and Borrowers acknowledge that, if an allonge endorsement is so used in
connection with an Assigned Loan, Borrowers intend such endorsement to be a
part of the Assigned Loan as fully as if such endorsement was made on the
instrument itself.
SECTION 6.10. Business; Compliance. Each Borrower has performed and
abided by all obligations required to be performed by it under any license,
permit, order, authorization, grant, contract, agreement, or regulation to
which it is a party or by which it or any of its assets are bound and which, if
such Borrower were to fail to perform or abide by, such failure would have a
material adverse effect on the business operations of such Borrower.
SECTION 6.11. Licenses, Permits. Each Borrower possesses such valid
franchises, licenses, permits, consents, authorizations, exemptions and orders
of Governmental Authorities, as are necessary to carry on its business as now
being conducted, other than violations which would not (either individually or
collectively) have a material adverse effect on the financial condition or
operations of such Borrower.
SECTION 6.12. Compliance with Law. The business and operations of each
Borrower have been and are being conducted in accordance with all applicable
laws, rules and regulations of all Governmental Authorities, other than
violations which would not (either individually or collectively) have a
material adverse effect on the financial condition or operations of such
Borrower.
SECTION 6.13. Full Disclosure. All information heretofore furnished by
any Borrower (or any other party on any Borrower's behalf) to Agent and Lenders
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by any
Borrower to Agent and any Lender will be, true and accurate in every material
respect and shall be, to the best of the knowledge and belief of the party
furnishing such information, without material omission. Each of the Borrowers
has, to the best of its knowledge, disclosed to Agent in writing any and all
facts which might reasonably be expected to materially and adversely affect the
business, operations, prospects or condition, financial or otherwise, of any
Borrower, or the ability of any Borrower to perform its obligations under this
Agreement or the other Loan Documents.
SECTION 6.14. Environmental Matters.
(a) With respect to assets of Borrowers, other than any Mortgaged
Property, and except for conditions, circumstances or violations that would
not, individually or in the aggregate, have a material adverse effect on the
financial condition, operation or business of any Borrower, none of the
Borrowers (i) knows of any environmental condition or circumstance, such as the
presence of any hazardous substance (as defined in Section 7.7), adversely
affecting the properties or operation of any Borrower, (ii) has received any
report of a violation by any Borrower of any Applicable Environmental Law, or
(iii) knows that any Borrower is under any obligation to remedy any violation
of any Applicable Environmental Laws.
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(b) With respect to the Mortgaged Properties, (i) no portion of any
Mortgaged Property is contaminated by any substance or material presently
identified to be toxic or hazardous according to any Applicable Environmental
Law, including, without limitation, any asbestos, polychlorinated biphenyl,
radioactive substance, methane, volatile hydrocarbons, industrial solvents or
any other material or substance which has in the past or could foreseeably at
the present time or at any time in the future cause or constitute a material
health, safety or other environmental hazard to any Person or property, except
as otherwise disclosed in the Borrower Due Diligence Reports or otherwise
disclosed in writing to Agent, (ii) none of the Borrowers nor, to the knowledge
of any Borrower, any other Person has caused or suffered to occur a discharge,
spillage, uncontrolled loss, seepage or filtration of oil or petroleum or
chemical liquids or solids, liquid or gaseous products or hazardous waste, or
hazardous substance at, upon, under or within any portion of any Mortgaged
Property or any contiguous real estate which either (A) would be a violation of
Applicable Environmental Law or (B) has not been remediated so as to cure any
violation of Applicable Environmental Law (such remediation having been
accomplished without increasing the potential environmental liability of any
Borrower or Lender), (iii) none of the Borrowers nor, to the knowledge of any
Borrower, any other Person has been or is involved in operations at or near any
portion of any Mortgaged Property which could lead to the imposition on any
Borrower or any operator of such Mortgaged Property of liability which could
have a material adverse effect on the financial condition or business
operations of any Borrower, or the creation of a lien on such property, under
any Applicable Environmental Law, (iv) none of the Borrowers nor any other
Person has permitted any tenant or occupant of any portion of any Mortgaged
Property, to engage in any activity that could lead to the imposition of
liability on such tenant or occupant, any Borrower or any operator of any of
such property which could have a material adverse effect on the financial
condition or business operations of any Borrower, or could lead to the creation
of a lien on such property, under any Applicable Environmental Law, or (v) to
the knowledge of any Borrower, no part of any Mortgaged Property is
contaminated by any substance or material presently identified to be toxic or
hazardous according to any Applicable Environmental Law, except as otherwise
disclosed in the Borrower Due Diligence Reports or otherwise described in
writing to Agent.
(c) With respect to the Underlying Real Estate, to the knowledge of
any Borrower, no part of any Underlying Real Estate is contaminated by any
substance or material presently identified to be toxic or hazardous according
to any Applicable Environmental Law, or if any part of any Mortgaged Property
or any Underlying Real Estate is so contaminated the holder of the related
Assigned Loan is not subject to liability resulting from such contamination
because such party is a secured lender, as opposed to an owner, of such
property.
SECTION 6.15. Purpose of Credit. Each Borrower will use the proceeds of
the Credit Facilities for the purposes stated in Section 2.1(a) hereof. No
part of the proceeds of either of the Credit Facilities will be used, directly
or indirectly, for a purpose which violates any law, rule or regulation. No
Borrower will, directly or indirectly, use any of the proceeds of either of the
Credit Facilities for the purpose of purchasing or carrying, or retiring any
Debt which was originally incurred to purchase or carry, any "margin stock" as
defined in the Margin Regulations, or to purchase or carry any "security that
is publicly-held" within the meaning of Regulation T of the Board of Governors
of the Federal Reserve System, or otherwise take or permit any action which
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would involve a violation of such Margin Regulations or any other regulation of
such Board of Governors. The Credit Facilities are not secured, directly or
indirectly, in whole or in part, by collateral that includes any "margin stock"
within the meaning of the Margin Regulations. No Borrower will engage
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any "margin stock"
within the meaning of the Margin Regulations.
SECTION 6.16. Governmental Regulations. No Borrower is subject to
regulation under the Investment Advisers Act of 1940, as amended. No Borrower
is subject to regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, any Margin
Regulations or any other law, rule or regulation which regulates the incurrence
of Debt.
SECTION 6.17. Indebtedness. No Borrower is an obligor on any Debt other
than Debt permitted by Section 8.5. No Borrower is (nor will any Borrower ever
become) an obligor on any Debt of any Excluded Subsidiary, and none of the
assets of any Borrower have been pledged to secure, or otherwise given as
security for, any Debt of any Excluded Subsidiary.
SECTION 6.18. Insurance. Each Borrower maintains with financially
sound, responsible and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and business against such casualties and
contingencies and of such types and in such amounts (and with co-insurance and
deductibles) as is customary for the same or similar businesses.
SECTION 6.19. Solvency. On a consolidated basis as of the Closing Date
(a) the aggregate fair market value of Borrowers' assets exceeds their
liabilities (whether contingent, subordinated, unmatured, unliquidated, or
otherwise), (b) Borrowers have sufficient cash flow to enable them to pay their
Debts as they mature, and (c) Borrowers have a reasonable amount of capital to
conduct their respective businesses as presently contemplated.
SECTION 6.20. Due Diligence Procedures. The due diligence, collateral
control and collection procedures used by Borrowers with respect to the
Assigned Loans are no less stringent than Standard Industry Practices. All
Borrower Due Diligence Reports have been prepared or reviewed by a Borrower.
The factual information contained in the Borrower Due Diligence Reports,
including without limitation, regarding title to and the condition of each
Assigned Loan (but not including valuation amounts and cash flow projections)
has not been intentionally misstated by Borrowers, and, with respect to the
Asset Portfolios taken as a whole, the Borrower Due Diligence Reports
accurately reflected the material facts concerning each of the Assigned Loans
and Mortgaged Properties included in such Asset Portfolios at the time the
Borrower Due Diligence Reports were prepared.
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ARTICLE VII
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, so long as the Revolving
Lenders' commitment to make Advances under the Revolving Credit Facility
remains in effect, any amounts remain outstanding under the Term Facility, any
Letters of Credit remain outstanding or any of the Obligations remain unpaid:
SECTION 7.1. Information From AMRESCO. AMRESCO will deliver, or cause
to be delivered, to Agent on behalf of Lenders:
(a) As soon as available and in any event within one hundred
twenty (120) days after the end of each Fiscal Year of AMRESCO, a consolidated
balance sheet of AMRESCO and its Subsidiaries as of the end of such Fiscal Year
and the related statements of income and cash flow for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all reported by AMRESCO in accordance with GAAP and audited by
Deloitte & Touche (or its successors) or other independent public accountants
reasonably acceptable to Agent.
(b) As soon as available and in any event within forty-five
(45) days after the end of each calendar quarter, a consoldiated cash flow
statement and a consolidating and consolidated balance sheet and related
statement of income of AMRESCO and its Subsidiaries as of the end of such
quarter and year-to-date, all certified by the chief financial officer, the
chief accounting officer or Treasurer of AMRESCO as to fairness of presentation
and as to whether such financial statements fairly reflect the financial
condition of AMRESCO and its Subsidiaries as of the date of delivery thereof,
subject to year-end adjustments. Such financial statements shall be prepared
in conformity with GAAP, except that certain information and note disclosures
normally included in annual financial statements prepared in accordance with
GAAP may be condensed or omitted provided that the disclosures made are
adequate to make the information presented not misleading, and GAAP shall be
applied on a basis consistent with the financial statements referred to in
Section 7.1(a).
(c) Simultaneously with the delivery of each set of financial
statements referred to in Sections 7.1(a) and (b), a certificate of an
Authorized Officer of AMRESCO, in the form as attached hereto as Exhibit C, (i)
setting forth in reasonable detail the calculations required to establish
whether Borrowers were in compliance with the requirements of Sections 8.1
through and including Section 8.4 on the date of such financial statements, and
(ii) with respect to only the financial statements delivered pursuant to
Sections 7.1(a) and (b), stating, to the best of such Authorized Officer's
knowledge and belief, whether or not such financial statements fairly reflect
the financial condition of AMRESCO and its Subsidiaries and results of
AMRESCO's and its Subsidiaries' operations as of the date of the delivery of
such financial statements.
(d) Promptly after the filing thereof, a true, correct and
complete copy of each Form 10-K and Form 10-Q and each other report filed by or
on behalf of AMRESCO with the SEC.
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(e) Immediately upon the occurrence of any Default, a
certificate of an Authorized Officer of AMRESCO setting forth the details
thereof and the action which AMRESCO or any applicable Borrower is taking or
proposes to take with respect thereto.
(f) Within fifteen (15) days after the end of each calendar
month, a current Borrowing Base Schedule, including an Asset Portfolio Report
(which, at the request of Agent, shall include a detailed listing of each
Assigned Loan included in the Borrowing Base). If Agent disapproves a
Borrowing Base Schedule, the most recent Borrowing Base Schedule which has not
been disapproved by Agent shall be deemed to be the effective Borrowing Base
Schedule. AMRESCO shall also deliver a Borrowing Base Schedule with each
Request for Advance if, since the date of the currently effective Borrowing
Base Schedule, Borrowers have (A) sold or otherwise disposed of either (x) an
asset which contributed an amount equal to or greater than Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000.00) to the Net Investment Value
of its applicable Asset Portfolio or (y) any Asset Portfolio included in the
currently effective Borrowing Base or (B) desire to include new Eligible
Investments in the Borrowing Base.
(g) Upon Agent's request from time to time, an Interest Rate
Exposure Report.
(h) Within forty-five (45) days after the end of each calendar
quarter, (i) a Residual Interests Report, (ii) an organizational chart showing
AMRESCO and its Subsidiaries, (iii) an Additional Debt Report and
Certification, and (iv) a Pledged Asset Schedule and Certification.
(i) Prompt notification of (i) any material adverse change in
the financial condition of any Borrower, including, without limitation, the
occurrence of any litigation which could reasonably be expected to have a
material adverse effect on any Borrower, or (ii) the occurrence of any
acceleration of the maturity of any indebtedness owing by any Borrower, or any
default under any indenture, mortgage, agreement, contract or other instrument
to which any Borrower is a party or by which any Borrower or any properties of
any Borrower are bound, if such default or acceleration might have a material
adverse effect upon the financial condition of any Borrower.
(j) From time to time such additional information regarding
the financial position or business of any Borrower and/or any of Borrower's
Subsidiaries as Agent, at the request of any Lender, may reasonably request,
including, without limitation, financial projections of any Borrower and
information concerning the insurance being maintained by Borrowers.
SECTION 7.2. Business of Borrowers. The primary business of Borrowers
is, and Borrowers covenant that it shall remain, mortgage banking and other
similar financial services and the acquisition, ownership and disposition of
Asset Portfolios either directly or through investments in Persons who acquire,
own and dispose of Asset Portfolios, or other businesses ancillary or related
to such primary business.
SECTION 7.3. Right of Inspection; Confidentiality and Non-Solicitation.
Each Borrower will permit Agent or any Lender, or any officer, employee or
agent of any such party, to visit and
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inspect any of the assets of any Borrower, examine the books of record and
accounts of any Borrower (including, without limitation, all Borrower Due
Diligence Reports), take copies and extracts therefrom, and discuss the
affairs, finances and accounts of any Borrower with the respective officers,
accountants and auditors of such Borrower, all at such reasonable times and as
often as Agent or any Lender may reasonably require, all at the expense of
Borrowers; provided, that, prior to the occurrence of a Default, each Lender
will make no more than two such visits or inspections in any twelve month
period. Each Lender covenants and agrees to preserve the confidentiality of
any financial data concerning any Borrower, any Subsidiary of any Borrower or
related to any Borrower's, or any Borrower's Subsidiaries' businesses or
operations or any information with respect to which any Borrower has (a) an
obligation of confidentiality to a third party (to the extent such obligation
has been disclosed to such Lender) or (b) informed such Lender of the
confidential nature of the specific information, except to the extent such
Lender is required to disclose such information pursuant to any applicable law,
rule, regulation or order of any Governmental Authority; provided that (i) any
information contained in any annual report, or any Form 10-K, Form 10-Q or Form
8-K reports (if any) which have been delivered to the SEC, or any other annual
or quarterly reports to the stockholders of any Borrower subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended,
proxy material delivered to the stockholders of any Borrower or any report
delivered to the SEC, or any other information that is in the public domain or
has become publicly known, shall not in any event be deemed confidential, and
(ii) each Lender may make any information received by it available (A) to a
transferee of or participant in any interest in either of the Credit Facilities
or the Notes, provided that such transferee or participant agrees in writing to
be bound by the provisions of this Section 7.3, (B) to any accountants or other
professionals engaged by such Lender, provided that each such accountant or
professional agrees to be bound by the provisions of this Section 7.3, or (C)
in connection with the enforcement of any of the Loan Documents or any
litigation in connection therewith. Additionally, each Lender covenants and
agrees to preserve the confidentiality of this Agreement and the transactions
contemplated herein, except as set forth in (ii)(A),(B) and (C) of the
preceding sentence. Further each Lender agrees that, during the term of the
Credit Facilities, it will not use the information provided by AMRESCO and not
otherwise generally known or obtainable through sources other than AMRESCO to
take any action to personally, by telephone or mail, solicit any Underlying
Obligor for any purpose which is in conflict with the services and products
which AMRESCO is providing or can provide with AMRESCO's current products and
services to such Underlying Obligor, including to refinance loans made by
AMRESCO to such Underlying Obligor, without the prior written consent of
AMRESCO. It is understood and agreed that all rights, title and interest in
and to the list of such Underlying Obligors and data relating to their
mortgages are the property of AMRESCO, and Lenders shall take no action to
undermine these rights and benefits.
SECTION 7.4. Maintenance of Insurance. Each Borrower will at all times
maintain or cause to be maintained insurance covering its respective risks as
are customarily carried by businesses similarly situated including, without
limitation, the following: (a) workmen's compensation insurance; (b)
comprehensive general public liability and property damage insurance in respect
of all activities in which such Borrower might incur personal liability for the
death or injury of an employee or third person, or damage to or destruction of
another's property; (c) insurance against loss or damage by fire, lightning,
hail, tornado, explosion and other similar risk; and
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(d) comprehensive automobile liability insurance. Each Borrower shall maintain
coverage with respect to the foregoing risks in such coverage amounts as are
customarily carried by businesses similarly situated.
SECTION 7.5. Payment of Taxes, Impositions and Claims. Each Borrower
shall pay (a) all Taxes imposed upon it or any of its assets or with respect to
any of its franchises, business, income or profits, and all Impositions not
later than the due date thereof, or before any material penalty or interest may
accrue thereon and (b) all material claims (including, without limitation,
claims for labor, services, materials and supplies) for sums which have become
due and payable and which by law have or might become a Lien on any of its
assets; provided, however, payment of Taxes, Impositions or claims shall not be
required if and for so long as (i) the amount, applicability or validity
thereof is currently being contested in good faith by appropriate action
promptly initiated and diligently conducted in accordance with good business
practices and no material part of the property or assets of any Borrower are
subject to levy or execution, (ii) such Borrower as required in accordance with
GAAP, shall have set aside on its books reserves (segregated to the extent
required by GAAP) deemed by it to be adequate with respect thereto, and (iii)
such Borrower has notified Agent of such circumstances, in detail satisfactory
to Agent, and, provided further, that such Borrower shall pay any such Tax,
Imposition or claim if such contest is not successful and in any event prior to
the commencement of any action to realize upon or foreclose any Lien against
any part of the Collateral.
SECTION 7.6. Compliance with Laws and Documents. Each Borrower shall
at all times comply, and cause each of its Subsidiaries to comply, with all
Legal Requirements, the articles of incorporation and bylaws of such Borrower,
and each Borrower's Subsidiaries and any other agreement to which any Borrower,
or any Subsidiary of any Borrower is a party, unless its failure to so comply
alone or in the aggregate would not have a material adverse effect on the
financial condition or operations of such Borrower, together with its
Subsidiaries taken as a whole.
SECTION 7.7. Environmental Law Compliance and Indemnity. Borrowers
agree to promptly pay and discharge when due all debts, claims, liabilities and
obligations with respect to any clean-up measures necessary for any Borrower to
comply with Applicable Environmental Laws affecting any Borrower, provided
that, with respect to any single tract or parcel of real property, any Borrower
shall not be required to take such action if failure to take such action would
not have a material adverse effect on the financial condition of any Borrower
or would, in the reasonable opinion of Agent, have the potential for creating
any liability or claim against Agent or any of the Lenders. Borrowers hereby
indemnify and agree to defend and hold Agent and each Lender and its successors
and assigns harmless from and against any and all claims, demands, causes of
action, loss, damage, liabilities, costs and expenses (including reasonable
attorneys' fees and court costs) of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Agent or any
Lender at any time and from time to time including, without limitation, those
asserted or arising subsequent to the payment or other satisfaction of the
Notes and expiration of the Letters of Credit, by reason of, arising out of or
related in any way to Agent's and Lenders' entering into this Agreement and the
transactions herein contemplated, INCLUDING MATTERS ARISING OUT OF THE ORDINARY
NEGLIGENCE OF AGENT OR ANY LENDER, BUT EXCLUDING
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MATTERS ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AGENT OR
ANY LENDER. It shall not be a defense to the covenant of Borrowers to
indemnify that the act, omission, event or circumstance did not constitute a
violation of any Applicable Environmental Law at the time of its existence or
occurrence. The terms "hazardous substance" and "release" shall have the
meanings specified in the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), and the terms "solid waste" and "disposed" shall have the meanings
specified in the Resource Conservation and Recovery Act of 1976 ("RCRA");
provided, to the extent that any other applicable laws of the United States of
America or political subdivision thereof establish a meaning for "hazardous
substance," "release," "solid waste," or "disposed" which is broader than that
specified in either XXXX or RCRA, such broader meaning shall apply. As used in
this Agreement, "Applicable Environmental Law" shall mean and include the
singular, and "Applicable Environmental Laws" shall mean and include the
collective aggregate of the following: Any law, statute, ordinance, rule,
regulation, order or determination of any governmental authority or any board
of fire underwriters (or other body exercising similar functions), or any
restrictive covenant or deed restriction (recorded or otherwise) affecting any
Borrower pertaining to health, safety or the environment, including, without
limitation, all applicable flood disaster laws and health, safety and
environmental laws and regulations pertaining to health, safety or the
environment, including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, the Resource Conservation
and Recovery Act of 1976, the Superfund Amendments and Reauthorization Act of
1986, the Occupational Safety and Health Act, the Texas Water Code, the Texas
Solid Waste Disposal Act, the Texas Workers' Compensation Laws, and any
federal, state or municipal laws, ordinances, regulations or law which may now
or hereafter require removal of asbestos or other hazardous wastes from any
property of any Borrower or impose any liability on Agent or any Lender related
to asbestos or other hazardous wastes in any property of any Borrower. The
provisions of this Section 7.7 shall survive the repayment of the Notes and
expiration of the Letters of Credit. In the event of the transfer of the Notes
or any portion thereof, each Lender or any prior holder of the Notes and any
participants shall continue to be benefitted by this indemnity and agreement
with respect to the period of such holding of the Notes.
SECTION 7.8. Covenant Compliance. Each Borrower shall perform and
comply with all covenants, obligations and agreements contained in this
Agreement and in the other Loan Documents.
SECTION 7.9. Quantity and Quality of Documents. All certificates,
opinions, reports and documents to be delivered from time to time hereunder
shall be in such number of counterparts as Agent may reasonably request and in
form reasonably acceptable to Agent, and counterpart signature pages to any
such documents may be attached to and shall, together with all counterparts,
constitute one and the same document.
SECTION 7.10. Use of Proceeds. Each Borrower will use the proceeds of
the Credit Facilities (including the Letters of Credit) solely for the purposes
represented in this Agreement and shall not use such proceeds, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock, and none of such proceeds will be used
in violation of applicable law (including, without limitation, the Margin
Regulations).
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SECTION 7.11. Additional Documents. Within ten (10) Business Days after
request by Agent, each Borrower shall execute and deliver or cause to be
executed and delivered to Agent upon Agent's request such other and further
instruments, documents or certificates as in the judgment of Agent may be
required to better effectuate the transactions contemplated herein or to
conform, create, evidence, perfect, preserve or maintain the Lenders' Liens
(including, without limitation, the Lenders' Liens with respect to the
Securities (as defined in the Pledge Agreement) Retained Commercial Residual
Interests and Retained Residential Residual Interests) or the Lenders' rights
hereunder or under the other Loan Documents, and each Borrower shall do all
such additional acts, give such assurances and execute such instruments as
Agent may reasonably require to vest more completely in and assure to Lenders
their rights under this Agreement.
SECTION 7.12. Compliance With Due Diligence Standards; Offices and
Files. Borrowers shall at all times comply with Standard Industry Practices
and Borrowers' past procedures related to due diligence, collateral control,
collection and reporting procedures with respect to all Acquired Loans.
Borrower's chief executive office shall at all times be maintained at 000 X.
Xxxxx Xxxxxx, Xxxxx 0000, LB# 342, Xxxxxx, Xxxxx, 00000, and Borrowers' books,
records and files related to the Assigned Loans (including, without limitation,
the Borrower Due Diligence Reports) shall at all times be maintained at
Borrowers' chief executive office or Borrowers' office at 10 Xxxxxxxx Street,
Providence, Rhode Island, or Xxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000, unless in either such instance, AMRESCO gives Agent thirty (30) days
prior written notice of a change in address. Borrowers shall maintain all
files related to the Assigned Loans in a reasonably prudent manner.
SECTION 7.13. Appraisals. Agent may require, and Borrowers shall
deliver to Agent promptly upon request therefor (but no more than once each
twelve month period) with respect to any given portion of the Mortgaged
Property which has a cost in excess of One Hundred Thousand and No/100 Dollars
($100,000.00) and for which the Lenders have requested the recordation of a
Mortgage under this Agreement, a new appraisal for such portion of the
Mortgaged Property. If required by applicable regulations, Agent may order any
such appraisal directly, and Borrowers shall reimburse Agent for the reasonable
cost of such appraisal upon request by Agent. Agent shall provide AMRESCO with
a copy of any such appraisal ordered by Agent. Each such appraisal shall be in
form and substance satisfactory to Agent.
SECTION 7.14. ACMF Transaction Limitations. Those Borrowers which are
parties to the ACMF Transaction Documents shall be entitled to take all action
required by the ACMF Transaction Documents, provided that the total payments
which constitute investments by one or more of the Borrowers (or their
Subsidiaries) pursuant to the ACMF Transaction Documents may not exceed an
aggregate amount of $60,000,000; provided, further, that ACCC and ACL shall
only be authorized to made Mandatory Additional Capital Contributions (as
defined in the Partnership Agreement of ACMF) under such Partnership Agreement
of ACMF in an aggregate amount not to exceed the ACMF Cap Amount; and provided,
further, that the Borrowers (and their Subsidiaries) shall be authorized to
make payments which constitute investments arising in connection with any of
the ACMF Transaction Documents in an aggregate amount not to exceed (i)
$35,000,000, plus (ii) any portion of the ACMF Cap Amount not already paid by
ACCC and ACL, plus (iii) any
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undistributed net profits of ACMF allocable to ACCC or ACL. Notwithstanding
the foregoing, no provision of this Agreement shall restrict or require any
consent for the Borrowers (and their Subsidiaries) to make any payments arising
in connection with any of the ACMF Transaction Documents (i) in respect of a
breach of a representation or warranty with respect to a Loan (as defined in
the Partnership Agreement for ACMF) (including, without limitation, any
Mandatory Additional Capital Contributions required to fund the purchase by
ACMF of any loan as to which a representation or warranty has been breached),
(ii) in respect of any securities law indemnification or contribution
obligations contained in any of the ACMF Transaction Documents or any related
securitization documents, or (iii) as servicing advances under the Interim
Servicing Agreement between ACMF and AMRESCO Management, Inc., dated September
3, 1996, or under any applicable pooling and servicing agreement, including in
connection with the securitization of any Loan (as defined in the Partnership
Agreement for ACMF). Nothing in this Agreement shall restrict any Borrower or
any Subsidiary from acting as depositor or servicer in compliance with this
Agreement in connection with the securitization of Loans (as defined in the
Partnership Agreement for ACMF) contemplated by the ACMF Transaction Documents.
Borrowers shall not modify or amend the ACMF Transaction Documents without the
prior written consent of the Required Lenders; provided, that Borrowers may
modify or amend the Origination Agreement, ACMF Custodial Agreement and the
ACMF Servicing Agreement upon obtaining the prior written consent of Agent.
ARTICLE VIII
NEGATIVE COVENANTS
Each Borrower covenants and agrees that without the prior written
consent of the Required Lenders, so long as Lenders' commitment to make
Advances under the Revolving Credit Facility remains in effect, any amounts
remain outstanding under the Term Facility, any Letters of Credit remain
outstanding or any of the Obligations remain unpaid:
SECTION 8.1. Minimum Consolidated Tangible Net Worth. Borrowers shall
not permit Consolidated Tangible Net Worth to be less than the sum of (a) One
Hundred Seventeen Million Nine Hundred Fifty-Two Thousand and No/100 Dollars
($117,952,000.00), plus (b) fifty percent (50%) of the cumulative Consolidated
Net Income for each calendar quarter commencing on October 1, 1996, through the
quarter ending immediately prior to, or on, the date as of which compliance
with this covenant is being measured, plus (c) the amount of any proceeds (less
reasonable and customary transaction costs) received by AMRESCO from the
issuance of any additional shares of stock or other equity instruments,
including, without limitation, any such proceeds received by AMRESCO since
October 1, 1996, less (d) the value of intangible assets shown on the financial
statements of Borrowers as prepared in accordance with GAAP (net of
amortization) attributable to Approved Acquisitions.
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SECTION 8.2. Consolidated Funded Debt to Consolidated Capitalization.
Borrowers shall not permit Consolidated Funded Debt as a percentage of
Consolidated Capitalization to be greater than 72.5% from the Closing Date to
June 30, 1997, and 70.0% after June 30, 1997.
SECTION 8.3. Coverage Ratios. Borrowers shall not permit (a) the Fixed
Charge Coverage Ratio to be less than 2.00 to 1.00; and (b) the Interest
Coverage Ratio to be less than 2.00 to 1.00.
SECTION 8.4. Senior Consolidated Funded Debt to Consolidated EBITDA.
As of the last day of any calendar quarter, Borrowers shall not permit Senior
Consolidated Funded Debt to Consolidated EBITDA (for the immediately preceding
four calendar quarters) to be greater than 3.0 to 1.0 until June 30, 1997; and
2.75 to 1.0 thereafter.
SECTION 8.5. Limitation on Debt. No Borrower or Subsidiary of a
Borrower shall incur any Debt, except (a) the Credit Facilities (including the
Letters of Credit); (b) the Residential Capital Markets Group or an Excluded
Subsidiary may have liability under unsecured Interest and Foreign Exchange
Hedge Agreements in an aggregate notional amount not to exceed $500,000,000, so
long as (i) there is no recourse to AMRESCO or any Subsidiary under any such
Interest and Foreign Exchange Hedge Agreements, other than the Residential
Capital Markets Group or an Excluded Subsidiary, (ii) each such Interest and
Foreign Exchange Hedge Agreement has a maturity of no more than 18 months,
other than Interest and Foreign Exchange Hedge Agreements in an aggregate
notional amount not to exceed $100,000,000, which can have a maturity of no
more than seven years, (iii) the purpose of each such Interest and Foreign
Exchange Hedge Agreement is to hedge the Borrowers' interest rate or foreign
exchange or other business risk, and is not speculative in nature, and (iv) the
Borrowers do not deviate from their current practices and policies related to
obtaining Interest and Foreign Exchange Hedge Agreements; (c) obligations under
secured Interest and Foreign Exchange Hedge Agreements, so long as the provider
of any such Interest and Foreign Exchange Hedge Agreements is a Lender and such
Lender's Liens are evidenced by the Security Documents securing the Credit
Facilities; (d) the Investment Line of Credit and all Additional Debt in an
aggregate amount outstanding not to exceed One Billion Five Hundred Million and
No/100 Dollars ($1,500,000,000); (e) Debt of any Borrower to any other
Borrower; (f) Debt secured by purchase money security interests not to exceed
$250,000.00 in the aggregate at any time; (g) Guaranties in connection with
Debt otherwise permitted in this Section 8.5 except where such guaranties are
specifically prohibited by this Agreement; (h) Guaranties in the form of
indemnity obligations or typical repurchase obligations related to the sale by
any Borrower of assets in the ordinary course of its business, including the
securitization of loans; and including, without limitation, indemnification,
contribution and repurchase obligations arising in connection with the
transactions contemplated by the ACMF Transaction Documents; (i) Leases of
office space and office equipment used by any Borrower in the ordinary course
of its business; (j) Debt in respect of current accounts payable incurred in
the ordinary course of any Borrower's business; (k) Approved Subordinated Debt
or Approved Senior Debt; provided that no Borrower or Subsidiary shall make
payments on or redeem, or approve by board of director action or otherwise the
payment of any amounts on, or redemption of, the Approved Subordinated Debt or
Approved Senior Debt after the occurrence of a Default or, prior to the
occurrence of a Default, which would exceed the scheduled payments due under
the documents evidencing the Approved Subordinated Debt or the Approved
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Senior Debt, such prohibited payments including any payments made under Article
11 of that certain Indenture, dated January 15, 1996, by and between AMRESCO
and Bank One, Columbus, N.A., as Trustee; (l) Excluded Subsidiary Debt in an
aggregate amount not to exceed One Hundred Million and No/100 Dollars
($100,000,000.00); (m) Debt or Guaranties of any Borrower or Subsidiary of a
Borrower pursuant to the ACMF Transaction Documents; (n) Debt of ARMC to DLJ
Mortgage Capital, Inc., as evidenced by a Master Repurchase Agreement dated
October 25, 1996, and secured by subordinate certificates from DLJ 1996-QB and
DLJ 1996-QJ; (o) Debt of the UK Subsidiaries (or any of them) not to exceed
$1,000,000 in the aggregate, provided that such Debt is nonrecourse and secured
only by one or more Letter(s) of Credit issued pursuant to the Revolving Credit
Facility; and (p) the Bridge Debt (Lenders hereby agreeing that Agent shall be
entitled to execute on behalf of Lenders any documents or agreements approved
by Agent acknowledging that the Bridge Debt is included in the Obligations and
secured by the Collateral, subject, however, to the provisions of Section 10.6
hereof).
SECTION 8.6. Limitation on Sale of Properties. No Borrower shall sell,
assign, convey, exchange, lease or otherwise dispose of any of its properties,
rights, assets or business, whether now owned or hereafter acquired, except in
the ordinary course of its business.
SECTION 8.7. Limitations on Liens. No Borrower shall, and no Borrower
shall permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its assets (including, without limitation, the stock
of any Subsidiary incorporated outside of the United States and not pledged to
Lenders) or to give a negative pledge to any Person with respect to any of its
assets, except for (a) the Lenders' Liens; (b) the Permitted Encumbrances; (c)
with respect to equipment or inventory, (i) landlord's Liens arising in the
ordinary course of any Borrower's business and (ii) Liens on equipment or
supplies hereafter acquired by any Borrower in the ordinary course of such
Borrower's business to secure the purchase price of such equipment or supplies
and any such Lien existing on such equipment or supplies at the time of
acquisition by such Borrower (individually, a "Purchase Money Lien"), provided
that (1) no Purchase Money Lien shall cover any property other than the
equipment or supplies so acquired, and (2) the Debt secured by such Purchase
Money Lien shall not exceed one hundred percent (100%) of the purchase price of
such equipment or supplies; (d) Liens on the Collateral to secure obligations
under Interest and Foreign Exchange Hedge Agreements, so long as the provider
of any such Interest and Foreign Exchange Hedge Agreement is a Lender and such
Liens are evidenced by the Security Documents securing the Credit Facilities;
(e) Liens to secure permitted Excluded Subsidiary Debt, provided that (i) no
such Lien shall cover any property other than property purchased or refinanced
with proceeds of permitted Excluded Subsidiary Debt, and (ii) the Excluded
Subsidiary Debt secured by such Lien shall not exceed one hundred percent
(100%) of the purchase price of such property; (f) the six percent (6%) net
profits interest granted by AMRESCO New Hampshire, Inc. to Xxxxxx Financial,
Inc. pursuant to Section 3.6 of that certain Term Loan Agreement, dated as of
December 31, 1993, among AMRESCO New Hampshire, Inc., AMRESCO Holdings, Inc.
and Xxxxxx Financial, Inc.; (g) Liens involuntarily filed against any asset of
any Borrower or Subsidiary, provided, that within fifteen (15) days after such
filing, the applicable Borrower or Subsidiary has obtained a release of any
such Lien or is contesting the filing of such Lien in good faith and an
adequate bond has been obtained to satisfy in full any claim which such Lien
secures; (h) Liens securing the Investment Line
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of Credit or any Additional Debt (limited, as to the liens securing the
Additional Debt, to the Mortgage Investments funded or acquired with such
Additional Debt); and (i) Liens in favor of DLJ Mortgage Capital, Inc. against
certain subordinate certificates issued to Quality Mortgage USA, Inc. and
purchased by ARMC from DLJ Series 1996-QB and 1996-QJ.
SECTION 8.8. Limitation on Loans to Shareholders. No Borrower shall
advance any Debt to any Borrower's shareholders, except for Debt advanced to a
shareholder which is also a Borrower, without the prior written consent of the
Required Lenders.
SECTION 8.9. Consolidations, Mergers, Sales of Assets, and Maintenance.
No Borrower shall, and no Borrower shall permit any of its Subsidiaries to, (a)
consolidate or merge with or into any other Person except for (i) mergers of
any Borrower into another Borrower or (ii) mergers of any Borrower (other than
AMRESCO) with or into any other Person which also becomes a "Borrower" under
this Agreement and delivers all Loan Documents required by this Agreement and
otherwise complies with Section 2.4, so long as (A) the tangible net worth (as
determined in accordance with GAAP) of the Person which is being merged with a
Borrower does not exceed Five Million and No/100 Dollars ($5,000,000.00) and
(B) in the case of a consolidation or merger by any Subsidiary of AMRESCO with
another Person, AMRESCO will remain the direct or indirect owner of all of the
outstanding capital stock and other equity securities of the continuing or
surviving corporation, (b) sell, lease, abandon or otherwise transfer all or
any material part of its assets to any Person, in one or a series of related
transactions, other than the sale of assets singly or in bulk in the normal
course of business, (c) other than in connection with (i) a consolidation or
merger permitted in clause (a) immediately above or (ii) the dissolution of any
Borrower of which Agent has been notified and the distribution of all of the
assets of such Borrower to another Borrower, terminate, or fail to maintain,
its corporate existence or qualification, as applicable, in the state of its
incorporation and any other applicable jurisdiction where the business of such
Borrower requires such qualification (provided that nothing herein shall permit
the dissolution of AMRESCO or the failure of AMRESCO to maintain its corporate
existence and qualification to do business as elsewhere required in this
Agreement), or (d) terminate, or fail to maintain, its good standing and
qualification to transact business in all jurisdictions where the failure to
maintain its good standing or qualification to transact business could have a
material adverse effect on its financial condition or operations.
SECTION 8.10. Investments. Without the prior written consent of
Required Lenders, no Borrower shall, and no Borrower shall permit any of its
Subsidiaries to, directly or indirectly, make any loans, advances, extensions
of credit or capital contributions to, make any investment in, or purchase any
stock or securities of, or interest in, any Person (including, without
limitation, a Subsidiary of any Borrower unless such Subsidiary has become a
"Borrower" under the Credit Facilities), except for (a) Permitted Investments;
(b) Related Investments with respect to which (i) in the case of an
Acquisition, the board of directors of the entity being acquired has approved
such Acquisition, (ii) the assets, property or business acquired or invested in
shall be in a business or activity consistent with the business and activity
presently engaged in by Borrowers and approved under the Loan Documents, and
(iii) either clause (h) of this Section 8.10 is satisified in connection with
such Related Investment, the Related Investment Consideration is less than 5%
of Total Capital
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or, with respect to any Acquisition of a corporate entity which causes a change
of control of such entity, such Related Investment Consideration does not
exceed $10,000,000; (c) any investment in or purchase of any Asset Portfolio
which does not exceed 15% of Total Capital; (d) any investment in or purchase
of any Acquired Loan which does not exceed 5% of Total Capital; (e) any
investment in or a funding of any High Yield Loan where the investment in or
funding of the original principal balance of such High Yield Loan does not
exceed 5% of Total Capital; (f) investments in Interest and Foreign Hedge
Agreements; (g) investments in commercial and residential mortgages or
mortgage-backed securities (including, without limitation, purchased
residuals), other than the Retained Residential Residual Interests and the
Retained Commercial Residual Interests, provided, that each such investment
shall not exceed 10% of Total Capital; (h) investments in real estate or in
Excluded Subsidiaries formed for the sole purpose of purchasing real estate so
long as the aggregate of such investments does not exceed 15% of Total Capital;
(i) investments in Retained Residential Residual Interests or Retained
Commercial Residual Interests; (j) any investment in or purchase of Permitted
Foreign Assets (based on Dollar Equivalent) which does not exceed 10% of Total
Capital; (k) loans to any employee of any Borrower or any Subsidiary of any
Borrower so long as the aggregate of such loans does not exceed $1,500,000, and
(l) investments in NIM Trusts so long as the aggregate of such investments at
any time does not exceed 20% of Total Capital; provided, that in no event shall
any investment permitted pursuant to the preceding clauses (b) through (l) be
permitted if there shall exist a Default or Event of Default, or if after
giving effect to any such investment, Borrowers shall not be in compliance with
any covenant set forth in the Loan Documents.
SECTION 8.11. Distributions. No Borrower shall make or declare any
Distributions after the occurrence of a Default. Prior to the occurrence of a
Default, (a) AMRESCO shall be entitled to make Distributions in any Fiscal Year
in an amount not to exceed twenty-five percent (25%) of the net income of
AMRESCO (determined in accordance with GAAP) for such Fiscal Year on a
consolidated basis and (b) each Borrower (other than AMRESCO) shall be entitled
to make Distributions in any Fiscal Year to another Borrower.
SECTION 8.12. Limitation on Contingent Liabilities. No Borrower shall
create, incur, assume or suffer to exist any contingent liabilities, except for
Guaranties permitted by Section 8.5 and litigation claims which do not result
in a violation of Section 9.1(i).
SECTION 8.13. Transactions with Affiliates. No Borrower shall engage in
any transaction with an Affiliate of any Borrower unless such transaction is
generally as favorable to such Borrower as could be obtained in an arm's length
transaction with an unaffiliated Person in accordance with prevailing industry
customs and practices.
SECTION 8.14. Employee Plans.
(a) Each Borrower shall, and shall cause each member of its
Controlled Group (as that term is defined in the Code) to, maintain and
administer any Employee Plan in accordance with the applicable requirements of
the Code and ERISA. No Borrower shall permit or suffer to
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exist any circumstances with respect to any Employee Plan that could have a
material adverse effect on such Borrower.
(b) With respect to any Pension Plan, no Borrower shall (i)
permit any accumulated funding deficiency (within the meaning of Section 412(a)
of the Code), whether waived or unwaived, to exist; (ii) permit the present
value of accrued benefits (based on the most recent actuarial valuation
prepared for each such plan, if any, in accordance with ongoing actuarial
assumptions) to exceed the current value of plan assets allocable to such
benefits by a material amount; (iii) permit any reportable event (within the
meaning of Section 4043 of ERISA) to occur, other than purchases and sales of
securities from a plan trustee as reported in the audited financial statements
of such plan; (iv) permit a prohibited transaction (within the meaning of
Section 4975 of the Code) to occur which has or could have a material adverse
effect on any Borrower; (v) incur any material liability to the PBGC; or (vi)
incur any material withdrawal liability (within the meaning of Section 4201(a)
of ERISA).
(c) No Borrower shall incur a material obligation to provide
post-employment health care benefits to any of its current or former employees,
except as may be required by Section 4980B of the Code or otherwise required by
law.
SECTION 8.15. Use Violations. No Borrower shall use, maintain, operate
or occupy, or allow the use, maintenance, operation or occupancy of, any of its
properties in any manner which (a) violates any Legal Requirement unless such
violation would not have a material adverse effect on the financial condition,
operations or business of any Borrower, (b) may be dangerous unless safeguarded
as required by law, (c) constitutes a public or private nuisance, (d) makes
void, voidable or cancelable any insurance then in force with respect thereto
or (e) makes void, voidable, or cancelable any governmental permit.
SECTION 8.16. Exceptions to Covenants. No Borrower shall take or permit
to be taken any action or fail to take any action which is permitted by any of
the covenants contained in this Agreement if such action or omission would
result in the breach of any other covenant contained in this Agreement.
SECTION 8.17. Fiscal Year and Accounting Methods. No Borrower will
change its Fiscal Year or its method of accounting (other than changes as are
concurred with by such Borrower's independent public accountants as being
required by GAAP).
SECTION 8.18. Governmental Regulations. No Borrower will conduct its
business in such a way that it will become subject to regulation under the
Investment Advisers Act of 1940, as amended. No Borrower will conduct its
business in such a way that it will become subject to regulation under the
Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended, or any other laws, rules or regulations which
regulate the incurrence of Debt.
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ARTICLE IX
DEFAULTS AND REMEDIES
SECTION 9.1. Events of Default. The term "Event of Default" as used in
this Agreement, shall mean any one of the following:
(a) The failure of any Borrower to pay when due any principal
of or interest on the Notes, or any fees, charges or any other amounts payable
to Agent, Arranger, or any Lender hereunder or under any of the Notes or other
Loan Documents, including, without limitation, the Participation Fees, the
Commitment Fees, the Agent's Administrative Fee, the Structure Fee and Letter
of Credit Fees;
(b) The failure, refusal or neglect of any Borrower to
observe, perform or comply with any covenant or agreement contained in Article
VIII other than Sections 8.13 and 8.14;
(c) The failure, refusal or neglect of any Borrower to
properly observe, perform or comply with any covenant, agreement or obligation
contained in this Agreement, or any of the other Loan Documents [other than
those covered by Sections 9.1(a) and (b)] and the continuation of such failure,
refusal or neglect for fifteen (15) days after written notice thereof has been
given to AMRESCO by Agent or a representative of Agent;
(d) Any representation, warranty, certification or statement
made by any Borrower (either for itself or for any other Person) in this
Agreement or by any Borrower or any other Person on behalf of any Borrower in
any certificate, financial statement or other document delivered pursuant to
this Agreement or any other Loan Document shall prove to have been untrue in
any material respect when made or deemed to have been made;
(e) The occurrence of (1) any event or condition which (i)
results in the acceleration of the maturity of any Debt of any Borrower, or
(ii) constitutes a default under any Debt of any Borrower, provided, that if
notice is required to be given under the documents evidencing or securing such
Debt prior to acceleration thereof, it shall not be an Event of Default
hereunder until Borrower has received written notice of such default, or (2) a
default or event of default under the documents evidencing or securing (i) the
Approved Subordinated Debt, (ii) the Approved Senior Debt, (iii) any
indebtedness under the ACMF Transaction Documents, (iv) the Additional Debt, or
(v) any Bridge Debt, or the payment by any Borrower, or the approval of the
board of directors of any Borrower for the payment, of amounts under any of the
preceding clauses (2)(i) or (2)(ii) in excess of the regularly scheduled
payments thereunder, or which would otherwise cause a violation by any Borrower
of any covenant or condition contained in any of the Loan Documents;
(f) The filing or commencement by any Borrower or any
Subsidiary of any Borrower of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other
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similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or any Borrower or any Subsidiary of any
Borrower shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing; provided,
however, that, with respect to any violation of this Section 9.1(f) that
pertains to a Subsidiary of any Borrower (which Subsidiary is not also a
Borrower), it shall not be an Event of Default if such violation does not (i)
otherwise result in an Event of Default or (ii) have a material adverse effect
on the business, financial position or results of operations of any Borrower;
(g) The filing or commencement of an involuntary case or other
proceeding against Borrower or any Subsidiary of any Borrower seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of sixty (60) days; or an order for relief shall be entered
against any Borrower or any Subsidiary of any Borrower under the federal
bankruptcy laws as now or hereafter in effect; provided, however, that, with
respect to any violation of this Section 9.1(g) that pertains to a Subsidiary
of any Borrower (which Subsidiary is not also a Borrower), it shall not be an
Event of Default if such violation does not (i) otherwise result in an Event of
Default or (ii) have a material adverse effect on the business, financial
position or results of operations of any Borrower;
(h) The liquidation or dissolution of any Borrower, other than
any liquidation or dissolution of any Borrower (other than AMRESCO) permitted
by Section 8.9;
(i) One or more judgments or orders for the payment of money
aggregating in excess of $500,000.00 shall be rendered against any Borrower
and/or any Subsidiary of any Borrower and such judgment or order (A) shall
continue unsatisfied and unstayed (unless bonded with a supersedeas bond at
least equal to such judgment or order) for a period of thirty (30) days, unless
any such Borrower or Subsidiary has obtained an indemnification of the full
amount of such judgment or order by a third party approved by the Required
Lenders [it being acknowledged that an indemnification from any Lender or the
Resolution Trust Corporation shall be deemed an approved third party for
purposes of this subparagraph (i)] pursuant to a written indemnification
agreement approved by the Required Lenders, or (B) is not fully paid and
satisfied at least ten (10) days prior to the date on which any of its assets
may be lawfully sold to satisfy such judgment or order;
(j) The Lenders' Liens with respect to the Collateral, or any
part thereof, shall not constitute first and prior liens and/or security
interests; or
(k) There shall occur a Change in Control.
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It is understood and agreed by each Borrower that any of the foregoing
"Events of Default" shall constitute an Event of Default under each of the
Notes, and that such "Events of Default" are cumulative and in addition to any
default or events of default contained in any of the other Loan Documents, and
that in the event of any discrepancy or inconsistency between any Event of
Default hereunder and any default or event of default contained in any other
Loan Document, the description of the Event of Default stated herein shall
control.
SECTION 9.2. Remedies. Upon the occurrence of an Event of Default,
Agent, at the direction and election of the Required Lenders, acting by or
through any of its agents, trustees or other Persons, without notice (unless
expressly provided for herein), demand or presentment (including, without
limitation, notice of default, notice of intent to accelerate or of
acceleration) all of which are hereby waived, and in addition to any other
provision of this Agreement or any other Loan Document, to exercise any or all
of the following rights, remedies and recourses:
(a) Declare the unpaid principal balance of each of the Notes,
the accrued and unpaid interest thereon and any other accrued but unpaid
portion of the Obligations to be immediately due and payable, without notice
(expressly including, but not limited to, notice of default, notice of intent
to accelerate or of acceleration), except any notice that is expressly required
by the terms of this Agreement, presentment, protest, demand or action of any
nature whatsoever, each of which hereby is expressly waived by each of the
Borrowers, whereupon the same shall become immediately due and payable.
Notwithstanding the foregoing or anything to the contrary contained herein or
in any other Loan Document, upon the occurrence of an Event of Default
described in Section 9.1(f) or Section 9.1(g) by any Borrower, the entire
unpaid principal balance of the Notes, and all accrued, unpaid interest thereon
shall automatically be accelerated and immediately be due and payable in full,
without notice (expressly including, but not limited to, notice of default,
intent to accelerate or of acceleration), presentment, protest, demand or
action of any nature whatsoever, each of which hereby is expressly waived by
each of the Borrowers; provided, however, that if accelerated automatically
pursuant to this sentence, the Notes and all such indebtedness may be
reinstated at the option and upon the written approval of the Required Lenders.
(b) Enter upon the Mortgaged Property or any other Collateral
or any part thereof and take exclusive possession thereof and of all books,
records and accounts relating thereto (including, without limitation, all
Borrower Due Diligence Reports). If any Borrower remains in possession of all
or any part of the Collateral after an Event of Default occurs and is
continuing and without Agent's prior written consent thereto, Agent may invoke
any and all legal remedies to dispossess any Borrower, including specifically
one or more actions for declaratory or injunctive relief, forcible entry and
detainer, trespass to try title and writ of restriction. Nothing contained in
the foregoing sentence shall, however, be construed to impose any greater
obligation or any prerequisites to acquiring possession of the Collateral or
any part thereof after an Event of Default occurs than would have existed in
the absence of such sentence.
(c) Hold, lease, manage, operate or otherwise use or permit
the use of the Mortgaged Property, the Assigned Loans and all other Collateral,
or any part thereof, either by itself or by other Persons, in such manner, for
such time and upon such other terms as Agent may deem
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to be prudent and reasonable under the circumstances (making such repairs,
alterations, additions and improvements thereto and taking any and all other
action with reference thereto, from time to time, as Agent shall deem necessary
or desirable), and apply all proceeds from the Mortgaged Property, the Assigned
Loans and all other Collateral in connection therewith in accordance with the
provisions of Section 9.10 hereof.
(d) Sell or offer for sale the Collateral, or any part
thereof, in such portions, order and parcels as Agent may determine, with or
without having first taken possession of same, in accordance with the
provisions of the applicable Loan Documents and applicable Legal Requirements.
(e) Make application to a court of competent jurisdiction, as
a matter of strict right and, except as otherwise provided by applicable law,
without notice to any Borrower or without regard to the adequacy of the
Collateral for the payment of the Obligations, for the appointment of a
receiver of the Collateral, or any part thereof, and, to the extent permitted
by applicable law, each Borrower does hereby irrevocably consent to such
appointment. Any such receiver shall have all the usual powers and duties of
receivers in similar cases, including the full power to rent, maintain, sell,
dispose and otherwise operate the Collateral, or any part thereof, upon such
terms that may be approved by the court, and shall apply all proceeds from such
operation of the Collateral in accordance with the provisions of Section 9.10
hereof.
(f) Exercise any and all other rights, remedies and recourses
granted hereunder or under the other Loan Documents or otherwise now or
hereafter existing in equity, at law, by virtue of statute or otherwise.
SECTION 9.3. Rights of Set-Off.
(a) In addition to the Lender's Liens, each Borrower hereby
expressly grants to Lenders the right of setoff against all deposits and other
sums at any time held or credited by or due from any Lender to each Borrower,
in accordance with the provisions of this Section 9.3. The rights of each
Lender under this Section 9.3 are in addition to other rights and remedies
(including, without limitation, other rights of setoff under law or equity)
which such Lender may have under law or by agreement.
(b) Upon the occurrence and during the continuance of any
Event of Default, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, at its option, without notice or
demand and without liability, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, excepting, however,
any fiduciary or escrow accounts established by any Borrower into which only
funds of unrelated third-parties are deposited, and provided that such Borrower
has informed such Lender and Agent of the nature of such accounts) at any time
held, and other indebtedness at any time owing, by any Lender to or for the
credit or the account of any Borrower against any and all of the Obligations
now or hereafter existing under this Agreement, the Notes and the other Loan
Documents, in such order and manner as such Lender may determine, subject,
however, to the agreements contained in Section 10.14
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hereof, regardless of whether such Lender shall have made any demand under this
Agreement or the Notes and although such obligations may be unmatured.
(c) Each Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that each Lender and any holder of a
participation in any of the Notes (with the appropriate consent of such Lender)
may exercise rights of setoff or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of such Borrower in the amount of such participation.
SECTION 9.4. Remedies Cumulative, Concurrent and Non-Exclusive.
Lenders shall have all rights, remedies and recourses granted in the Loan
Documents, and available at law or equity and same (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently against
any Borrower, or any others obligated under any of the Notes, or against any
one or more of them, at the sole discretion of Lenders, (c) may be exercised as
often as the occasion therefor shall arise, it being agreed by each Borrower
that the exercise or failure to exercise any of same shall in no event be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, non-exclusive.
SECTION 9.5. No Conditions Precedent to Exercise Remedies. Each
Borrower and other Person hereafter obligated for payment or fulfillment of all
or any part of the Obligations shall not, except as otherwise provided by
applicable law, be relieved of such obligation by reason of (a) the failure of
a trustee to comply with any request of any Borrower, or any other Person so
obligated to foreclose the Lenders' Liens or to enforce any provisions of the
Loan Documents, (b) the release, regardless of consideration, of any Person
obligated with respect to the Obligations, or of the Collateral or any part
thereof, or the addition of any other property to the Collateral, (c) any
agreement or stipulation between any subsequent owner of the Collateral and
Agent or any Lender extending, renewing, rearranging or in any other way
modifying the terms of the Loan Documents without first having obtained the
consent of, given notice to or paid any consideration to any Borrower, or such
other Person, and in such event, each Borrower and all such other Persons shall
continue to be liable to make payments in accordance with the terms of any such
extension or modification agreement unless expressly released and discharged in
writing by the Required Lenders, and (d) any other act or occurrence, save and
except the complete payment of the Obligations. Each Borrower waives any right
to require Lenders to proceed against any other Person, exhaust any Collateral,
or pursue any other remedy in Lenders' power. All dealings between any
Borrower and any Lender, whether or not resulting in the creation of the
Obligations, shall conclusively be presumed to have been had or consummated
upon reliance upon this Agreement. Each Borrower authorizes Lenders, without
notice or demand and without any reservation of rights against any Borrower and
without affecting liability hereunder or on the Obligations, from time to time,
to (i) renew, extend for any period, accelerate, modify, compromise, settle, or
release the obligation of any other Person that may be obligated with respect
to any or all of the Obligations or Collateral; (ii) take and hold any other
property as collateral, other than the Collateral, for the payment of any or
all of the Obligations, and exchange, enforce, waive, and release any or all of
the Collateral or other property; and (iii) after the occurrence of an Event of
Default, apply the
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Collateral or other property and direct the order or manner of sale thereof in
accordance with the terms of this Agreement and the Security Documents.
SECTION 9.6. Release of and Resort to Collateral. The release or
substitution of all or any part of the Collateral, regardless of consideration,
shall not in any way impair, affect, subordinate, or release the Lenders' Liens
or their status as first and prior Liens in and to any remaining Collateral.
For payment and performance of the Obligations, Lenders may resort to any other
security therefor held by a trustee in such order and manner as Required
Lenders may elect.
SECTION 9.7. Waivers. To the full extent permitted by law, each
Borrower hereby irrevocably and unconditionally waives and releases (a) all
benefit that might accrue to any Borrower by virtue of any present or future
law exempting the Collateral from attachment, levy or sale on execution or
providing for any appraisement, evaluation, stay of execution, exemption from
civil process, redemption or extension of time for payment, (b) except as
specifically provided for herein, all notices of any Default or Event of
Default or of any trustee's or Lenders' election to exercise or his or their
actual exercise of any right, remedy or recourse provided for under the Loan
Documents, (c) any right to a marshalling of assets with respect to the Notes
or the Letters of Credit or any of the Collateral or any Debt of any Borrower,
or a sale in inverse order of alienation and (d) except as specifically
provided for herein, any and all right to receive demand, grace, notice,
presentment for payment, protest, notice of intention to accelerate the
Obligations or notice of acceleration of the Obligations.
SECTION 9.8. Discontinuance of Proceedings. In case Agent shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon same for any
reason, Agent shall have the unqualified right to do so and, in such event,
each Borrower and Lenders shall be restored to their former positions with
respect to the Obligations, the Loan Documents, the Collateral and otherwise,
and the rights, remedies, recourses and powers of Agent and Lenders shall
continue as if same had never been invoked.
SECTION 9.9. Power of Attorney. Each Borrower hereby irrevocably
appoints Agent, acting for all the Lenders, as the true and lawful attorney of
such Borrower with full power of substitution for, and on behalf of such
Borrower, and in its name, upon the request and instruction of Borrower and in
any event after the occurrence of an Event of Default (or prior to the
occurrence of any Event of Default if Agent otherwise reasonably believes it is
necessary to take such action), to take any action to preserve, maintain,
protect or enforce the rights and interests of such Borrower with respect to
the Collateral, including, without limitation, to (i) endorse any Assigned
Loans to Agent, on behalf of Lenders, or to any other Person, (ii) enforce,
cure any default or otherwise act with respect to any leases, sales contracts,
management or marketing contracts or any other agreements pertaining to or
affecting any of the Mortgaged Property, (iii) take all such action and to
execute all such documents as Agent deems necessary or desirable to operate or
preserve or protect the Assigned Loans and the collateral therefor, the
Mortgaged Property or any other Collateral, (iv) xxx for, demand or collect any
sums owing to any Borrower under the Assigned Loans or under leases or other
agreements affecting the Mortgaged Property and (v) exercise rights of any
Borrower under any purchase agreement related to any Assigned Loan. The power
so vested in Agent under this
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Section 9.9 is one coupled with an interest and shall be irrevocable, except by
written instrument executed jointly by each Borrower and Agent and filed for
record in the Office of the County Clerk of Dallas County, Texas.
Notwithstanding the foregoing, Agent shall be under no obligation to exercise
any of the foregoing rights or take any action necessary to preserve any right
in any asset subject to the Lenders' Liens against any other Person, and Agent,
to the extent permitted herein or by applicable law, may exercise any of the
foregoing rights without incurring any responsibility or liability to any
Borrower or any other Person and without in any way affecting the Obligations
or any other obligations of any Borrower to Lenders. Borrowers, jointly and
severally, agree to reimburse Agent and Lenders upon demand for any costs and
expenses, including, without limitation, reasonable attorneys' fees and
collection costs, that Agent or any Lender may incur while acting as the
attorney-in-fact of each Borrower as provided hereunder (or pursuant to the
attorney-in-fact herein created), all of which costs and expenses shall be
included in the Obligations.
SECTION 9.10. Application of Proceeds. All payments on the Notes or the
Letters of Credit received by any Lender during the existence of an Event of
Default (unless otherwise elected by Lenders), and the proceeds of any sale or
disposition of, and all proceeds generated by the holding, leasing, operation
or other use of, the Collateral, or any part thereof, during the existence of
an Event of Default and upon the exercise of Lenders' rights and remedies
hereunder or under any of the other Loan Documents, shall be applied by
Lenders, the applicable trustee or the receiver, if one is appointed, to the
extent that funds are so available therefrom, as determined by the Required
Lenders (provided that, as among themselves, Lenders agree that any such
proceeds shall be applied as contemplated by Article X hereof).
ARTICLE X
AGENT AND THE LENDERS
SECTION 10.1. Appointment and Authorization of Agent.
(a) Each Lender hereby irrevocably appoints and authorizes Agent as
its nominee and agent, in its name and on its behalf: (i) to act as nominee for
and on behalf of such Lender in and under all Loan Documents; (ii) to arrange
the means whereby the funds of the Lenders are to be made available to
Borrowers under the Loan Documents; (iii) to take such action as may be
requested by any Lender under the Loan Documents (when such Lender is entitled
to make such request under the Loan Documents and after such requesting Lender
has obtained the concurrence of such other Lenders as may be required under the
Loan Documents); (iv) to receive all documents and items to be furnished to
Lenders under the Loan Documents; (v) to promptly distribute to each Lender the
material information, requests, documents and items received from Borrowers
under the Loan Documents; (vi) to promptly distribute to each Lender such
Lender's Aggregate Loan Percentage of each payment or prepayment in accordance
with the terms of the Loan Documents; and (vii) to deliver to the appropriate
Persons requests, demands, approvals and consents received from Lenders.
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(b) The obligations of Agent hereunder are only those expressly set
forth herein. Each Lender and each Borrower agree that Agent is not a
fiduciary for Lenders or for Borrowers but simply is acting in the capacity
described herein to alleviate administrative burdens for both Borrowers and
Lenders and that Agent has no duties or responsibilities to Lenders or
Borrowers except those expressly set forth herein. Without limiting the
generality of the foregoing, Agent shall not be required to take any action or
exercise any right or remedy with respect to any Default or Event of Default,
except if requested by the Required Lenders. Notwithstanding the
administrative authority delegated to Agent, Agent shall not cause or permit
any modification of the Loan Documents or take other action relating to either
or both of the Credit Facilities specifically requiring the consent or approval
of the Required Lenders without such consent or approval. Action taken by
Agent including, without limitation, any exercise of remedies or initiation of
suit or other legal proceedings made in accordance with the instructions of the
Required Lenders or as otherwise permitted by this Article X, shall be binding
upon each of the Lenders. Each Lender specifically acknowledges that it has
reviewed and approved the voting and other provisions of this Agreement and the
other Loan Documents setting forth the relative rights and obligations among
the Lenders and agrees to be bound by such provisions notwithstanding that such
Lender is only a Revolving Lender or only a Term Lender, and acknowledges that
Agent (and counsel for the Lenders, as a group) are acting on behalf of all the
Lenders and not the Revolving Lenders, as a group, and Term Lenders, as a
separate group.
(c) Agent, in its capacity as a Lender, shall have the same Rights
under the Loan Documents as any other Lender and may exercise the same as
though it were not acting as Agent, and any resignation by Agent hereunder
shall not impair or otherwise affect any Rights which it has or may have in its
capacity as an individual Lender.
(d) Agent may now or hereafter be engaged in one or more loan, letter
of credit, leasing, or other financing transactions with any Borrower, act as
trustee or depositary for any Borrower or otherwise be engaged in other
transactions with any Borrower and/or its Affiliates (collectively, the "other
activities") not the subject of the Loan Documents. Without limiting the
Rights of Lenders specifically set forth in the Loan Documents, Agent shall not
be responsible to account to Lenders for such other activities, and no Lender
shall have any interest in any other activities, any present or future
guaranties by or for the account of any Borrower which are not contemplated or
included in the Loan Documents (any present or future offset exercised by Agent
in respect of such other activities), any present or future property taken as
security for any such other activities, or any property now or hereafter in the
possession or control of Agent which may be or become security for the
Obligations by reason of the general description of indebtedness secured or of
property contained in any other agreements, documents or instruments related to
any such other activities; provided that, if any payments in respect of such
guaranties, such property or the proceeds thereof or any offset shall be
applied to reduction of the Obligations, then each Lender shall be entitled to
share in such application pursuant to the terms of this Agreement.
SECTION 10.2. Possession of Instruments by Agent. Agent shall
exercise all rights and remedies under the Loan Documents and take all actions
with respect thereto in accordance with the request or direction of the
Required Lenders, or otherwise as and to the extent provided herein
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or in the other Loan Documents; provided, however, that Agent may take such
actions in its name without the joinder of Lenders, and Borrowers and all third
parties shall be entitled to rely on the actions taken by Agent with respect to
the execution by Agent of any and all agreements, financing statements,
affidavits, notices or any other type of document or instrument pertaining
thereto, including, without limitation, in connection with the exercise of any
rights or remedies of Lenders under the Loan Documents (and specifically
including any foreclosure proceedings under any of the Security Documents or
other legal proceedings), and the same shall be binding upon all Lenders as to
any third party relying on such actions of Agent. Agent shall also be the
named secured party or beneficiary under the Security Documents and shall take
and maintain possession of all the Security Documents, as agent for and on
behalf of all Lenders, and the grant to Agent of any Lien under any Security
Document shall be for the ratable benefit of all Lenders.
SECTION 10.3. Expenses. Each Lender shall pay its Aggregate Loan
Percentage of any reasonable expenses (including, without limitation, court
costs, reasonable attorneys' fees and other costs of collection) incurred by
Agent in connection with any of the Loan Documents if Agent does not receive
reimbursement therefor from other sources within thirty (30) days after
incurred; provided that, and subject to the terms and conditions of Section
11.4, each Lender shall be entitled to receive its Aggregate Loan Percentage of
any reimbursement for such expenses, or part thereof, which Agent subsequently
receives from such other sources.
SECTION 10.4. Delegation of Duties; Reliance; Consultation.
Lenders may perform any of their duties or exercise any of their Rights under
the Loan Documents by or through Agent, and Lenders and Agent may perform any
of their duties or exercise any of their Rights under the Loan Documents by or
through their respective officers, directors, employees, attorneys, agents, or
other representatives (collectively, "Representatives"). Agent, Lenders, and
their respective Representatives shall (a) be entitled to rely upon (and shall
be protected in relying upon) any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telecopy, telegram, telex or
teletype message, statement, order or other documents or conversation believed
by any of them to be genuine and correct and to have been signed or made by the
proper Person and, with respect to legal matters, upon opinion of counsel
selected by Agent or such Lender, (b) be entitled to deem and treat each Lender
as the owner and holder of its Revolving Loan Percentage or Term Loan
Percentage, as applicable, for all purposes until, subject to Section 11.10,
written notice of the assignment or transfer thereof shall have been given to
and received by Agent (and, any request, authorization, consent or approval of
any Lender shall be conclusive and binding on each subsequent holder, assignee,
or transferee of such Lender's Revolving Loan Percentage or Term Loan
Percentage, as applicable, or Participant therein until such notice is given
and received), and (c) not be deemed to have notice of the occurrence of a
Default or an Event of Default unless notified thereof by another Lender or
AMRESCO. Agent may consult with legal counsel, independent public accountants,
consultants, appraisers and other experts selected by Agent, and shall not be
liable for any action taken or omitted to be taken by Agent in good faith in
accordance with the advice of such counsel, accountants or experts. Any such
counsel, accountants or other experts shall be engaged to represent and render
services to all Lenders as a group, and not the Revolving Lenders as a group,
and the Term Lenders as a separate group, unless otherwise specified by Agent.
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SECTION 10.5. Limitation of Agent's Liability.
(a) Neither Agent nor any of its Representatives shall be liable for
any action taken or omitted to be taken by it or them under the Loan Documents
in good faith and believed by it or them to be within the discretion or power
conferred upon it or them by the Loan Documents or be responsible for the
consequences of any error of judgment or negligence, except for gross
negligence or willful misconduct, and neither Agent nor any of its
Representatives has a fiduciary relationship with any Lender by virtue of the
Loan Documents (provided that nothing herein shall negate the obligation of
Agent to account for funds received by it for the account of any Lender).
(b) Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Agent shall not be compelled to do any act under the
Loan Documents or to take any action toward the execution or enforcement of the
powers thereby created or to prosecute or defend any suit in respect of the
Loan Documents. If Agent requests instructions from Lenders with respect to
any act or action (including, but not limited to, any failure to act) in
connection with any Loan Document, Agent shall be entitled (but shall not be
required) to refrain (without incurring any liability to any Person by so
refraining) from such act or action unless and until it has received such
instructions. In no event, however, shall Agent or any of its Representatives
be required to take any action which it or they reasonably determine could
incur for it or them criminal or civil liability.
(c) Agent (and its Representatives) shall not be responsible in any
manner to any Lender or any participant of a Lender for, and each Lender
represents and warrants that it has not relied upon Agent in respect of, (i)
the creditworthiness of Borrowers and the risks involved to such Lender, (ii)
the effectiveness, enforceability, genuineness, validity, or the due execution
of any Loan Document, (iii) any representation, warranty, document,
certificate, report, or statement made therein or furnished thereunder or in
connection therewith, (iv) the existence, priority, or perfection of any Lien
granted or purported to be granted under any Loan Document, (v) the observation
of or compliance with any of the terms, covenants, or conditions of any Loan
Document on the part of Borrowers, or (vi) the relative Rights of the Lenders
as among themselves. Each Lender jointly and severally agrees to indemnify
Agent and hold it harmless from and against (but limited to such Lender's
Aggregate Loan Percentage of) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, reasonable expenses, and
reasonable disbursements of any kind or nature whatsoever (including counsel
fees and disbursements) which may be imposed on, asserted against, or incurred
by Agent in any way relating to or arising out of the Loan Documents or any
action taken or omitted by Agent under the Loan Documents (PROVIDED THAT,
ALTHOUGH AGENT SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR ITS ORDINARY
NEGLIGENCE, AGENT SHALL NOT HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR ITS
OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT).
SECTION 10.6. Default; Collateral. Upon the occurrence and
continuance of a Default or an Event of Default, Agent shall make a
recommendation to Lenders of any actions to be taken, and each Lender agrees to
promptly confer with the other Lenders in order that Lenders can consider such
course of action or any other actions to be taken for the enforcement of the
Rights of Lenders;
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provided that Agent shall be entitled (but not obligated) to proceed to take
any actions necessary in its reasonable judgment to preserve Rights, pending
agreement by Lenders on the course of action to be taken. If the Required
Lenders cannot agree on a course of action to be taken within sixty (60) days
following Agent's initial recommendation, Agent shall thereafter take such
action as Agent deems advisable to enforce the Rights of Lenders; provided,
that if, after Agent has begun taking such action, the Required Lenders agree
on a course of action contrary to that undertaken by Agent, then Agent shall
change its course of action so as to follow the course of action agreed upon by
the Required Lenders. Any action directed or approved by the Required Lenders,
including without limitation, any exercise of remedies or initiation of suit or
other legal proceedings, shall be binding upon each Lender. In actions with
respect to any property of Borrowers, Agent is acting for the account of each
Lender to the extent of each Lender's Aggregate Loan Percentage. Any and all
agreements to subordinate (whether made heretofore or hereafter) other
indebtedness or obligations of Borrowers to the Obligations shall be construed
as being for the benefit of each Lender to the extent of its respective
Aggregate Loan Percentage. If Agent acquires any security for the Obligations
or any guaranty of the Obligations upon or in lieu of foreclosure, the same
shall be held for the benefit of each Lender in proportion to such Lender's
respective Aggregate Loan Percentage.
Lenders agree, among themselves, that unless otherwise agreed to by
Agent and the Required Lenders, all monies collected or received by Agent in
respect of the security for the Credit Facilities, directly or indirectly,
shall be applied (a) to the Administrative Fee and all costs of collection or
maintenance of the Collateral, and then to either interest or principal of the
Credit Facility as recommended by Agent and approved by the Required Lenders
(except that any amounts to be applied to interest or principal shall be
distributed to Lenders based on their Aggregate Loan Percentage) until the
Credit Facilities are paid in full, (b) to the amounts owed to any Lender under
any Interest and Foreign Exchange Hedge Agreement, only after payment in full
of the outstanding principal and interest under the Credit Facilities, and (c)
to the amounts owed under the Bridge Debt, but only after payment in full of
the outstanding principal and interest under the Credit Facilities and the
amounts owed to all Lenders under any Interest and Foreign Exchange Hedge
Agreement.
SECTION 10.7. Lenders' Decision. Lenders agree as among
themselves that any decisions or elections to be made by Lenders (and not
Agent) under this Agreement and the other Loan Documents shall be made by the
Required Lenders, except in the case, if any, where a specific different number
or percentage of Lenders is expressly required under this Agreement or any
other Loan Documents (use of the terms "Lenders" in any of the Loan Documents,
without an express provision for different voting rights other than as set
forth in the definition of Required Lenders, does not imply that unanimous
consent is thereby required). Agent may, at its election, request any
determination, vote, consent or approval by Lenders in writing or orally (by
telephone or in person), and Agent shall be entitled to take or refrain from
taking any action if it has received the oral or written approval of those
Lenders which would satisfy the requirements set forth in the definition of
Required Lenders, without having to contact or solicit the vote of any other
Lenders. In addition, if any request by Agent for Lenders' determination or
approval hereunder is made in writing and such writing contains written notice
to Lenders requesting a response within five Business Days, or longer, from the
date Lenders are deemed to have received notice as herein provided (and setting
forth the actual date of the last day of the Lender reply period), then Lenders
shall use reasonable
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efforts to reply within the applicable reply period, provided, that if any such
Lender does not reply within the applicable reply period, such Lender shall be
deemed not to have approved of or consented to or concurred with such
recommendation or determination.
SECTION 10.8. Limitation of Liability of Lenders. To the extent
permitted by law, (a) neither Agent nor any Lender or participant of a Lender
shall incur any liability to any other Lender or participant of a Lender except
for acts or omissions in bad faith, and (b) neither Agent nor any Lender or
participant of a Lender shall incur any liability to Borrowers or any other
Person for any act or omission of any other Lender or any participant.
SECTION 10.9. Relationship of Lenders. Nothing herein shall be
construed as creating a partnership or venture among Agent and Lenders or
among Lenders.
SECTION 10.10. Debtor-Creditor Relationship. Each Lender has and
shall maintain a direct creditor-debtor relationship with Borrowers and will
have direct recourse, singly or in the aggregate, against Borrowers, subject to
the terms and conditions of the Loan Documents. Notwithstanding the foregoing,
any right, remedy, action, omission or waiver respecting this Agreement, the
Notes, the Security Documents and the other Loan Documents shall only be
exercised, made, taken, or permitted by Agent, acting upon the direction of the
Required Lenders, as the agent for all Lenders; provided, however, that if the
Required Lenders have elected and directed Agent to institute suit against any
Borrower for payment of any past due amounts under the Notes or any other
Obligations for which Lenders have recourse against any Borrower, or in the
event of any bankruptcy proceedings or other legal proceedings relating to this
Agreement against any Borrower, each Lender shall be entitled, at its option,
to bring or join in such proceedings in its own name.
SECTION 10.11. Credit Decisions. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and each of the
other Loan Documents to which it is a party or to which Agent is a party for
its benefit. Each Lender also acknowledges that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement or
with respect to either Credit Facility.
SECTION 10.12. Removal of Agent. Lenders, acting by written
notice to Agent from and agreed to by all Lenders other than Agent, may remove
for cause the then current Agent, as Agent, and appoint one of the other
Lenders as the successor Agent. Upon the appointment of a successor Agent, the
removed Agent and the successor Agent shall execute such documents as any
Lender may reasonably request to reflect such appointment of a successor Agent
and shall notify AMRESCO of such change in the Agent. The successor Agent
shall be vested with all rights, powers and privileges and be bound to all
duties, obligations and responsibilities of Agent in and under this Agreement
and the other Loan Documents; provided, however, that until such time as
AMRESCO is notified in writing signed by both the removed and successor Agent
as to the
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appointment of the successor Agent, Borrowers shall be entitled to rely on any
decision, approval or other act by the removed Agent as binding on Lenders, and
may pay to Agent any amounts due or owing by Borrowers under the Loan
Documents.
SECTION 10.13. Resignation by Agent. An Agent's status as Agent
under this Agreement shall automatically terminate fifteen (15) days after the
closing or liquidation of such Agent or fifteen (15) days after such Agent is
adjudicated insolvent. Additionally, Agent may resign its position as Agent at
any time by giving at least thirty (30) days written notice thereof to AMRESCO
and the other Lenders. Upon any such occurrence causing a termination of Agent
or the delivery of such notice of resignation from Agent, the Required Lenders
and AMRESCO shall select a successor Agent. If the Required Lenders and
AMRESCO cannot agree upon the choice of the successor Agent within ten (10)
days after the occurrence causing a termination in the case of a termination of
Agent, or ten (10) days prior to the effective resignation date set forth in
Agent's resignation notice in the case of a resignation by Agent, then the
Designated Successor Agent shall become the successor Agent. AMRESCO shall be
entitled to participate in the selection of the replacement Agent only prior to
the occurrence of a Default. Upon any such termination or resignation, (a) the
successor Agent shall automatically be vested with all rights, powers and
privileges and be bound to all duties, obligations and responsibilities of
Agent in and under this Agreement and the other Loan Documents and shall
thereafter be deemed the "Agent" for all purposes under the Loan Documents and
(b) such terminating or resigning Agent shall act only in a custodial capacity
for the holding by it of any funds theretofore received from Borrowers and any
such funds shall be held in trust for the benefit of Lenders or Borrowers, as
the case may be. Additionally, upon the successor Agent becoming Agent as
provided in this Section 10.13, the terminating or resigning Agent and the new
Agent shall execute such documents as any Lender may reasonably request to
reflect such succession. All costs incurred in connection with the execution
of such documents shall be paid by Lenders in proportion to each Lender's
Aggregate Loan Percentage.
SECTION 10.14. Sharing of Payments and Setoffs. Each Lender
agrees that if it should receive any amount (whether by voluntary payment, by
realization upon any Collateral, by the exercise of the right of setoff or
banker's lien, by counterclaim or cross action, by the enforcement of any right
under the Loan Documents or otherwise) which is applicable to the payment of
the principal of or interest on either of the Credit Facilities, of a sum which
with respect to the related sum or sums received by the other Lenders exceeds
such Lender's Aggregate Loan Percentage, then such Lender receiving such excess
payment shall purchase without recourse or warranty from the other Lenders an
interest in the indebtedness of any Borrower to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. This
Section 10.14 shall not impair the right of any Lender to exercise any right of
setoff or counterclaim it may have with respect to any funds in an account
pledged to such Lender to secure only indebtedness other than the Obligations,
and to apply the amount received or subject to such exercise to the payment of
such other indebtedness, it being expressly agreed by all Lenders, however,
that until the Obligations are paid and satisfied in full, any and all amounts
received by
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any Lender from offset of any account of any Borrower that either (a)
constitutes Collateral or (b) contains funds exclusively derived from or
related to the Collateral, shall be applied to the Obligations, and not to any
other indebtedness of any Borrower to such Lender, except in the case of a
certificate of deposit or other designated account (but in no event any
operating account of any Borrower) that is specifically pledged or assigned to
a Lender as security for indebtedness other than the Obligations.
SECTION 10.15. Non-Advancing Lenders. In the event that
Revolving Lender shall fail or refuse to advance its Revolving Loan Percentage
of any Advance under the Revolving Credit Facility, or any Lender shall fail or
refuse to advance its Aggregate Loan Percentage of any payment or reimbursement
by Lenders as required hereunder, or of any amount to be funded pursuant to
Section 10.3, when it is obligated to do so, Agent shall notify, in the case of
the failure or refusal to make an Advance under the Revolving Credit Facility,
the Revolving Lenders, and, in all other instances, the other Lenders, and such
remaining Revolving Lenders or all other Lenders, as applicable, or any of
them, may elect, at their sole option and discretion (without any obligation
whatsoever to do so), to advance such non-advancing Lender's portion, pro rata
in accordance with the proportion that (i) in the case of the failure or
refusal to make an Advance under the Revolving Credit Facility, the Revolving
Loan Percentage of each Revolving Lender electing to make such advance bears to
the Revolving Loan Percentages of all Revolving Lenders electing to make such
advance, or (ii) in all other instances, the Aggregate Loan Percentage of each
Lender electing to make such advance bears to the Aggregate Loan Percentage of
all Lenders electing to make such advance. Upon making any such advance, and
notwithstanding anything to the contrary expressed or implied herein or in the
Notes or any other Loan Document, all subsequent payments made on the Revolving
Credit Facility, or both Credit Facilities, as applicable, and all proceeds
realized from the sale of any Collateral securing the Credit Facilities or from
the exercise of right of setoff or other remedies under this Agreement or the
other Loan Documents, shall be applied, in the manner described below, only to
Revolving Lenders, or all other Lenders, as applicable, other than the
non-advancing Lender (and the non-advancing Lender shall not be entitled to
receive the same), until the amounts advanced by such advancing Revolving
Lenders, or all other Lenders, as applicable, on behalf of the non-advancing
Lender (together with the interest earned thereon pursuant to this Agreement
and the applicable Notes), have been repaid in full. As among Lenders other
than the non-advancing Lender, Lenders that advanced funds on behalf of the
non-advancing Lender shall receive the portion the non-advancing Lender would
have been entitled to receive had it advanced (together with the interest
earned thereon pursuant to this Agreement and the applicable Notes), to be
applied pro rata in accordance with the amounts advanced by each such advancing
Lender, until the amounts advanced by such Lenders on behalf of the
non-advancing Lender (together with the interest earned thereon pursuant to
this Agreement and the applicable Notes), have been repaid in full; any
Revolving Lender that advanced only on its own behalf based on its Revolving
Loan Percentage shall be repaid based on such Revolving Loan Percentage or its
Aggregate Loan Percentage, as applicable. In addition, any Lenders that
advance funds on behalf of a non-advancing Lender pursuant to this Section
10.15 shall (i) receive a proportionate share (based on the amounts so advanced
by such Lenders) of the amount the non-advancing Lender would have been
entitled to receive of any distribution of any Collateral securing the Credit
Facilities in the event the same are distributed among Lenders, and (ii) have a
claim against such
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non-advancing Lender for the amounts so advanced and shall be entitled to all
rights and remedies at law or in equity to recover any unpaid amounts. A non-
advancing Lender shall not be entitled to vote on any matters hereunder or
related to either or both of the Credit Facilities (and its interest shall be
excluded for purposes of determining the requisite percentage or number of
Lenders for a vote) so long as such Lender remains a non-advancing Lender.
SECTION 10.16. Benefit of Lenders. All terms, conditions and
agreements set forth in this Article X, specifically including, without
limitation, the provisions of Section 10.14 are for the sole and exclusive
benefit of Lenders, and neither Borrowers nor any other Person shall be
entitled to rely on or seek the benefit of such provisions; provided, however,
that Borrowers shall be entitled to rely on any decision, approval or other act
by Agent as binding Lenders.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Continuing Agreement. This is a continuing
Agreement and all the rights, powers and remedies of Lenders hereunder and all
agreements and obligations of Borrowers and Lenders hereunder, shall continue
to exist until the Notes have been paid in full, the commitment of Lenders to
make Advances hereunder has been terminated, all Letters of Credit have been
terminated and all other Obligations have been paid in full.
SECTION 11.2. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telecopy or similar writing), except for any telephone notices as specifically
provided for herein, may be personally served or sent by telecopier, mail or
the express mail service of the United States Postal Service, Federal Express
or other equivalent overnight or expedited delivery service, and (a) if given
by personal service or telecopier (confirmed by telephone), it shall be deemed
to have been given upon receipt; (b) if sent by telecopier without telephone
confirmation, it shall be deemed to have been given twenty-four (24) hours
after being given; (c) if sent by mail, it shall be deemed to have been given
upon the earlier of (i) actual receipt, or (ii) three (3) Business Days after
deposit in a depository of the United States Postal Service, first class mail,
postage prepaid; (d) if sent by Federal Express, the express mail service of
the United States Postal Service or other equivalent overnight or expedited
delivery service, it shall be deemed given upon the earlier of (i) actual
receipt or (ii) twenty-four (24) hours after delivery to such overnight or
expedited delivery service, delivery charges prepaid, and properly addressed to
Agent or the applicable Borrower or Lender; provided that notices to Agent
under Article III and Article IV shall not be effective until received. For
purposes hereof, the address of the parties to this Agreement shall be as set
forth in Schedule I attached hereto. Any party may, by proper written notice
hereunder to the other parties, change the address to which notices shall
thereafter be sent to it. Notwithstanding anything to the contrary implied or
expressed herein, the notice requirements herein (including the method, timing
or deemed giving of any notice) is not intended to and shall not be deemed to
increase the number of days or to modify the method of notice or to otherwise
supplement or affect the requirements for any notice required or sent pursuant
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to any Legal Requirement (including, without limitation, any applicable
statutory or law requirement), or otherwise given hereunder, that is not
required under this Agreement or the other Loan Documents. The provisions of
this Section 11.2 shall control over any conflicting contractual notice
provisions contained in the Loan Documents.
SECTION 11.3. No Waivers. No failure or delay by Agent or any
Lender in exercising any right, power or privilege hereunder or under the Notes
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law or in any of the other Loan Documents.
SECTION 11.4. Expenses; Documentary Taxes; Indemnification.
Borrowers, jointly and severally, agree to pay (a) all expenses of Agent and
the reasonable fees and disbursements of legal counsel for Lenders as a group,
in connection with the negotiation, documentation and closing of the Credit
Facilities, and thereafter all reasonable expenses of Agent and Lenders in
connection with any waiver or consent hereunder or under the other Loan
Documents or any amendment, supplement or replacement of any of the Loan
Documents, or any Default or alleged Default hereunder; and (b) if a Default or
an Event of Default occurs, all out-of-pocket expenses incurred by Agent or
Lenders, including fees and disbursements of legal counsel in connection with
such Event of Default and collection and other enforcement proceedings
resulting therefrom (including, without limitation, any bankruptcy or other
insolvency proceedings), fees of auditors and consultants incurred in
connection therewith and investigation expenses incurred by Lenders in
connection therewith. Borrowers shall, jointly and severally, indemnify Agent
and each Lender against any Taxes (other than Taxes on the income of any
Lender) imposed by reason of the execution and delivery of this Agreement or
the Notes. Borrowers further shall, jointly and severally, indemnify Agent and
each Lender and hold Agent and each Lender harmless from and against any and
all liabilities, losses, damages, costs and expenses of any kind (including,
without limitation, the reasonable fees and disbursements of counsel for Agent
and Lenders in connection with any investigative, administrative or judicial
proceeding, whether or not Agent or Lenders shall be designated a party
thereto) which may be incurred by Agent or any Lender relating to or arising
out of this Agreement or any actual or proposed use of proceeds of the Notes or
the Letters of Credit; PROVIDED THAT NEITHER AGENT NOR ANY LENDER SHALL HAVE
THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, IT BEING THE INTENTION HEREBY THAT AGENT AND EACH LENDER SHALL BE
INDEMNIFIED FOR THE CONSEQUENCES OF ITS NEGLIGENCE.
SECTION 11.5. Amendments and Waivers; Consent to Deviation. Any
provision of this Agreement, the Notes or the other Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed by Borrowers, Agent and Required Lenders.
SECTION 11.6. Survival. All representations, warranties and
covenants made by any Borrower herein or in any certificate or other instrument
delivered by it or on its behalf under the Loan Documents shall be considered
to have been relied upon by Lenders and shall survive the
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delivery to Agent or Lenders of such Loan Documents or the extension of any of
the Notes or the issuance of any of the Letters of Credit (or any part
thereof), regardless of any investigation made by or on behalf of Agent or any
Lender.
SECTION 11.7. Prior Understandings; No Defenses; Release; No Oral
Agreements. This Agreement supersedes all other prior understandings and
agreements, whether written or not, between the parties hereto relating
specifically to the transactions provided for herein. Each Borrower confirms
that there are no existing defenses, claims, counterclaims or rights of offset
against any Lender in connection with the negotiation, preparation, execution,
performance or any other matters related to this Agreement or any of the other
Loan Documents executed as of the date hereof and any of the transactions
contemplated thereby, and each Borrower hereby expressly releases and
discharges each Lender, and its Representatives, from any and all such claims,
known or unknown. Each Borrower further confirms that no Lender has made any
agreements with, or commitments or representations to, any Borrower (either in
writing or orally) other than as expressly stated herein or in the other Loan
Documents executed as of the date hereof.
THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER WRITTEN LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
To the fullest extent applicable, each Borrower and Lender acknowledges and
agrees that this Agreement and each of the other Loan Documents shall be
subject to Section 26.02 of the Texas Business and Commerce Code.
SECTION 11.8. Limitation on Interest. It is expressly stipulated
and agreed to be the intent of Borrowers and Lenders at all times to comply
with the applicable law governing the maximum rate or amount of interest
payable on or in connection with the Notes, the Credit Facilities and the
Letters of Credit. If the applicable law is ever judicially interpreted so as
to render usurious any amount called for under the Notes or under any of the
other Loan Documents, or contracted for, charged, taken, reserved or received
with respect to any of the Notes or the Letters of Credit, or if acceleration
of the maturity of the Notes, any prepayment by any Borrower, or any other
circumstance whatsoever, results in any Lender having been paid any interest in
excess of that permitted by applicable law, then it is the express intent of
Borrowers and Lenders that all excess amounts theretofore collected by Lenders
be credited on the principal balance of the Notes (or, if the Notes have been
or would thereby be paid in full, refunded to Borrowers), and the provisions of
the Notes and the other applicable Loan Documents immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
the maturity of the Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lenders
do not intend to collect any
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unearned interest in the event of acceleration. All sums paid or agreed to be
paid to Lenders for the use, forbearance or detention of the indebtedness
evidenced hereby or by the Notes shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the rate or amount of interest
on account of such indebtedness does not exceed the Maximum Lawful Rate or
maximum amount of interest permitted under applicable law. The term
"applicable law" as used herein shall mean the laws of the State of Texas, or
DIDMCA or any other applicable United States federal law to the extent that it
permits Lenders to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law. The provisions of this Section 11.8
shall control all agreements between Borrowers and Lenders.
SECTION 11.9. Invalid Provisions. If any provision of the Loan
Documents is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term thereof, such provision shall be fully
severable, the Loan Documents shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
thereof, and the remaining provisions thereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision there shall be added automatically as a
part of the Loan Documents a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal, valid and
enforceable.
SECTION 11.10. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided that (i) no Borrower shall, directly or indirectly, assign or
transfer, or attempt to assign or transfer, any of its rights, duties or
obligations under this Agreement without the express prior written consent of
the Required Lenders, and (ii) Lenders may not assign or transfer any of their
rights or interests in this Agreement, the Notes, the other Loan Documents or
either or both of the Credit Facilities, other than to an Affiliate of such
Lender, except in accordance with this Section 11.10. Prior to entering into
any discussions with any potential participant or assignee of its interest in
either or both of the Credit Facilities, the applicable Lender shall obtain
AMRESCO's prior consent (if AMRESCO's consent is required in connection with
any assignment or participation) and shall cause such proposed participant or
assignee to execute a confidentiality agreement to the same effect as that
contained in Section 7.3 hereof.
(b) Each Lender shall have the right, at any time and from time to
time, to assign all or a part of its rights, interests and obligations under
this Agreement and the other Loan Documents and to sell or transfer to any
Person a participation interest in such Lender's portion of the applicable
Credit Facility, subject to and in accordance with the following provisions:
(i) In the case of a participation, such Lender shall remain
the "Lender" for all purposes under the Loan Documents (including
without limitation any votes, elections or other decisions of the
Lenders hereunder) and shall remain fully liable for its obligations
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hereunder, and Agent shall continue to deal directly and solely with
such Lender under the Loan Documents and shall have no duty or
obligation to deal with any participant in any manner (including without
limitation, delivery of information or distribution of any funds to any
participant).
(ii) AMRESCO and Agent shall have given their prior written
consent for such assignment or participation; provided that AMRESCO's
consent shall not be unreasonably withheld or delayed, and shall not be
required during the continuance of a Default.
(iii) Any such assignment or participation must be to an
Eligible Assignee and, as to the Term Facility, in an amount equal to
or in excess of Five Million and No/100 Dollars ($5,000,000.00), and ,
as to the Revolving Credit Facility, an amount equal to or in excess of
the lesser of Five Million and No/100 Dollars ($5,000,000.00) or 6% of
the Revolving Commitment in effect from time to time.
(c) In addition to the conditions and requirements set forth in
Section 11.10(b), any assignment by any Lender shall be subject to the
following conditions:
(i) Each assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and obligations under
this Agreement and the other Loan Documents.
(ii) The parties to any assignment shall execute and deliver to
Agent, for recording in the Register (as hereinafter defined), with a
copy thereof to AMRESCO, an Assignment and Acceptance, substantially in
the form of Exhibit D hereto (an "Assignment and Acceptance"), together
with any of the Notes subject to such assignment.
Upon execution of an Assignment and Acceptance, delivery by the
transferor Lender of an executed copy thereof to AMRESCO and Agent (together
with notice that payment of the purchase price, as hereinafter provided, shall
have been made), and payment by such Purchaser to such transferor Lender of an
amount equal to the purchase price agreed between such transferor Lender and
such Purchaser, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance (which effective date shall be at
least five Business Days after the execution thereof), (A) the assignee
thereunder shall be a party to this Agreement as a "Lender" hereunder and, to
the extent provided in such Assignment and Acceptance, shall have the rights
and obligations of a Lender hereunder, and (B) the assigning Lender shall, to
the extent provided in such assignment and upon payment to Agent of the
registration fee referred to in Section 11.10(e), be released from its
obligations under this Agreement, except for the confidentiality agreements
contained in Section 7.3, which shall survive any such assignment, and any such
other obligations which by their nature should survive any such assignment.
(d) By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the claim,
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the assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto; (ii) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or any other Person primarily or secondarily liable in respect of any
of the Obligations, or the performance or observance by any Borrower or any
other Person primarily or secondarily liable in respect of any of the
Obligations or any of its Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements delivered to Lenders by each Borrower and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the assigning Lender,
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee
represents and warrants that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto; (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement and the other Loan Documents are required to be performed by
it as a Lender; and (viii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance.
(e) Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register or similar list (the "Register") for the
recordation of the names and addresses of Lenders and the applicable Term Loan
Percentages, Revolving Loan Percentages and Aggregate Loan Percentages of, and
principal amount of the applicable Credit Facility owing to Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by AMRESCO and
Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to
Agent a registration fee in the sum of $3,500.00.
(f) Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such assignment,
Agent shall (i) record the information contained therein in the Register, and
(ii) give prompt notice thereof to AMRESCO and Lenders (other than the
assigning Lender), and Schedule I shall automatically be deemed revised to
reflect the name, address, Revolving Loan or Term Loan Commitment Amount and
Revolving Loan or Term Loan Percentage of the new Lender and the deletion of or
changed information for the assigning Lender, and Agent shall deliver to
AMRESCO and Lenders, upon request by AMRESCO or any Lender, an amended Schedule
I reflecting such changes. Within five (5) Business Days after receipt of such
notice, Borrowers, at the applicable Lender's expense, shall
Page 91
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execute and deliver to Agent, in exchange for each surrendered Note, a new Note
payable to the order of such Eligible Assignee in an amount equal to the amount
assigned to such Eligible Assignee pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained some portion of its obligations
hereunder, a new Note payable to the order of the assigning Lender in an amount
equal to the amount retained by it hereunder. Such new Notes shall provide
that they are replacements for the surrendered Notes, shall be in an aggregate
principal amount equal to the aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be cancelled and returned to AMRESCO.
(g) Any Lender may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Note) to any of the twelve Federal Reserve Banks organized under Section 4 of
the Federal Reserve Act, 12 U.S.C. Section 1341. No such pledge or the
enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Loan Documents.
(h) Notwithstanding anything to the contrary contained herein, a
Lender may not sell or participate any of its interests for a purchase price
which, directly or indirectly, reflects a discount from face value (i.e., the
aggregate outstanding principal portion of the applicable Credit Facility to be
sold or participated plus accrued and unpaid interest thereon), without first
offering such sale or participation at such discounted price to the other
Lenders in such Credit Facility on a pro rata basis, in which event such other
Lenders shall have thirty (30) days in which to elect whether to purchase the
interest to be sold.
(i) Any participant or new Lender hereunder shall agree in writing to
keep in confidence any financial information regarding any Borrower that such
Purchaser or Participant may receive as provided in Section 7.3.
SECTION 11.11. Senior Debt; Borrower Subordination. The
indebtedness of Borrowers hereunder and under the Notes and all of the
Obligations is intended to be and shall be senior to any subordinated
indebtedness of any Borrower or any other indebtedness of any Borrower secured
by a Lien on any portion of the Collateral (the foregoing shall not in any way
imply Lenders' consent to any such subordinate debt or Liens which is not
otherwise permitted by this Agreement). The Notes and any other amounts
advanced to or on behalf of any Borrower or any other Person pursuant to the
terms of this Agreement or any other Loan Document, shall never be in a
position subordinate to any Debt of Borrower owing to any other Person, except
with the knowledge and written consent of Lenders. If any Borrower is now or
hereafter becomes indebted to any other Borrower, (a) such indebtedness and all
interest thereon shall, at all times, be subordinate in all respects to the
Obligations and to all liens, security interests and rights now or hereafter
existing to secure the Obligations; and (b) any Borrower holding such inter-
company indebtedness shall not be entitled after the occurrence of a Default to
enforce or receive payment, directly or indirectly, of any such indebtedness
until the Obligations have been fully and finally paid and performed.
Page 92
100
SECTION 11.12. Revolving Loan. Borrowers and Lenders hereby agree
that, except for Section 15.10(b) thereof, the provisions of Art. 5069-15.01 et
seq. of the Revised Civil Statues of Texas, 1925, as amended (regulating
certain revolving credit loans and revolving triparty accounts) shall not
govern or in any manner apply to the Notes, the Letters of Credit or the Loan
Documents.
SECTION 11.13. Construction. The parties hereto acknowledge and
agree that neither this Agreement nor any other Loan Document shall be
construed more favorably in favor of one than the other based upon which party
drafted the same, it being acknowledged that all parties hereto contributed
substantially to the negotiations and preparation of this Agreement and the
other Loan Documents.
SECTION 11.14. APPLICABLE LAW. THIS AGREEMENT, THE NOTES AND ALL
THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR
THE REMEDIES, RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT
UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8 OR OTHERWISE.
SECTION 11.15. Submission To Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to this Agreement or
the Notes or any other Loan Document may be brought in the courts of the State
of Texas or of the United States of America for the Northern District of Texas,
and, by execution and delivery of this Agreement, each Borrower hereby accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Each Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such
Borrower at its address provided herein.
(c) Nothing contained in this Section 11.15 shall affect the right of
Agent, any Lender or any holder of a Note to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against any
Borrower in any other jurisdiction.
SECTION 11.16. JURY TRIAL WAIVER. BORROWERS AND LENDERS EACH
HEREBY WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR
RELATING TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Page 93
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SECTION 11.17. Counterparts. This Agreement and all amendments
hereto, and all the other Loan Documents may be executed in any number of
original counterparts, each of which when so executed and delivered shall be an
original, and all of which, collectively, shall constitute one and the same
agreement, it being understood and agreed that the signature pages may be
detached from one or more counterparts and combined with the signature pages
from any other counterpart in order that one or more fully executed originals
may be assembled.
SECTION 11.18. Inconsistent Provisions. In the event of any
conflict or inconsistency between the terms of this Agreement and the terms of
the other Loan Documents, the terms of this Agreement shall control.
SECTION 11.19. Non-Waiver of Rights or Remedies. Except as
otherwise set forth herein, this Agreement shall not be deemed (a) a waiver of,
or consent by Agent or any Lender to any default or event of default which may
exist or hereafter occur under the Original Loan Agreement or any of the Loan
Documents, (b) a waiver by Agent or any Lender of any of Borrowers' obligations
under the Original Loan Agreement or the Loan Documents, or (c) a waiver by
Agent or any Lender of any rights, offsets, claims, or other causes of action
that Agent or any Lender may have against any Borrower.
Page 94
102
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers effective as of the
Closing Date.
BORROWERS:
AMRESCO, INC., a Delaware corporation
By: /s/ XXXXXX X. XXXXXX
----------------------------------
Xxxxxx X. Xxxxxx,
Treasurer
AFC EQUITIES, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CANADA, INC.
AMRESCO CAPITAL CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CONSOLIDATION CORP. f/k/a
AMRESCO MORTGAGE CAPITAL, INC.
AMRESCO EQUITIES CANADA INC.
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO INSTITUTIONAL, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO JERSEY VENTURES LIMITED
AMRESCO MANAGEMENT, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC. f/k/a AMRESCO
SERVICES, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RESIDENTIAL CAPITAL MARKETS,
INC.
AMRESCO RESIDENTIAL CONDUIT, INC.
AMRESCO RESIDENTIAL CREDIT
CORPORATION
Page 95
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AMRESCO RESIDENTIAL MORTGAGE
CORPORATION
AMRESCO RHODE ISLAND, INC.
AMRESCO SERVICES CANADA INC.
AMRESCO UK HOLDINGS LIMITED
AMRESCO UK LIMITED
AMRESCO UK VENTURES LIMITED
AMRESCO VENTURES, INC. f/k/a AMRESCO
GENERAL PARTNERS, INC.
AMRESCO 1994-N2, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
GRANITE EQUITIES, INC.
XXXXXXXX XXXXXXXX, INC.
LIFETIME HOMES, INC., f/k/a LIFETIME
HOMES OF NEW JERSEY, INC.
OAK CLIFF FINANCIAL, INC.
OLD MIDLAND HOUSE LIMITED
PRESTON HOLLOW ASSET HOLDINGS, INC.
By: AMRESCO, INC., a Delaware
corporation, as
attorney-in-fact
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Xxxxxx X. Xxxxxx, as
Treasurer
Page 96
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AGENT:
-----
NATIONSBANK OF TEXAS, N.A.,
a national banking association, as
Agent for Lenders
By:/s/ XXXXX X. XXXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxxx,
Vice President
REVOLVING LENDERS:
-----------------
NATIONSBANK OF TEXAS, N.A., a
national banking association
By:/s/ XXXXX X. XXXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxxx,
Vice President
BANK ONE, TEXAS, NA,
a national banking association
By:/s/ XXXXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
-------------------------------
XXXXX FARGO BANK (TEXAS), N.A.,
a national banking association
By:/s/ XXXXX X. XXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
105
COMERICA BANK - TEXAS,
a state banking association
By: /s/ XXXXX XXXXX
----------------------------------
Name: Xxxxx Xxxxx
--------------------------------
Title: Assistant Vice President
-------------------------------
BANK UNITED,
a federal savings bank
By:/s/ XXXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxxx X. XxXxxxx
--------------------------------
Title: Regional Director, Mortgage
-------------------------------
Banker Financing
-------------------------------
THE BANK OF NEW YORK,
a national banking association
By:/s/ XXXXXX X. XXXXX
----------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Vice President
-------------------------------
THE NIPPON CREDIT BANK, LTD.,
a national banking association
By:/s/ XXXX X. XXXXXXXX
----------------------------------
Name: Xxxx X. Xxxxxxxx
--------------------------------
Title: Vice President
-------------------------------
106
SCHEDULE I
LENDERS AND BORROWERS
I. LENDERS, AGENT AND ARRANGER
A. AGENT:
NationsBank of Texas, N.A.
Commercial Banking Division
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
B. ARRANGER:
NationsBanc Capital Markets, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx, Xx.
Fax No.: (000) 000-0000
C. REVOLVING LENDERS:
NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
BANK ONE, TEXAS, NA
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx Xxxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXX FARGO BANK (TEXAS), N.A.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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COMERICA BANK - TEXAS
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
BANK UNITED OF TEXAS
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE BANK OF NEW YORK
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE NIPPON CREDIT BANK, LTD.
NEW YORK BRANCH
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Page 2
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Additional
INITIAL Revolving Loan New Revolving New Revolving
REVOLVING LOAN Commitment Loan Commitment Loan Participation
COMMITMENT Amount Amount Percentage Fee Amount
AMOUNT
REVOLVING LENDERS:
NationsBank $50,000,000 $0 $50,000,000 23.809523810
Bank One $35,000,000 $10,000,000 $45,000,000 21.428571428 $25,000
Xxxxx Fargo $25,000,000 $0 $25,000,000 11.904761905
Comerica $20,000,000 $0 $20,000,000 9.523809523
Bank United $30,000,000 $0 $30,000,000 14.285714285
Bank of New York $15,000,000 $15,000,000 $30,000,000 14.285714285 $22,500
Nippon Credit Bank $10,000,000 $0 $10,000,000 4.761904761
----------------------------------------------------------------------------------------------
Total $185,000,000 $25,000,000 $210,000,00 100% $47,500
====================================================================================================================
Page 3
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II. BORROWERS
AFC EQUITIES, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CANADA, INC.
AMRESCO CAPITAL CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CONSOLIDATION CORP. f/k/a AMRESCO
MORTGAGE CAPITAL, INC.
AMRESCO EQUITIES CANADA INC.
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO INSTITUTIONAL, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO JERSEY VENTURES LIMITED
AMRESCO MANAGEMENT, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC. f/k/a AMRESCO
SERVICES, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
AMRESCO RESIDENTIAL CONDUIT, INC.
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
AMRESCO RHODE ISLAND, INC.
AMRESCO SERVICES CANADA INC.
AMRESCO UK HOLDINGS LIMITED
AMRESCO UK LIMITED
AMRESCO UK VENTURES LIMITED
AMRESCO VENTURES, INC. f/k/a AMRESCO GENERAL
PARTNERS, INC.
AMRESCO 1994-N2, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
Page 4
110
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
GRANITE EQUITIES, INC.
XXXXXXXX XXXXXXXX, INC.
LIFETIME HOMES, INC., f/k/a LIFETIME HOMES OF
NEW JERSEY, INC.
OAK CLIFF FINANCIAL, INC.
OLD MIDLAND HOUSE LIMITED
PRESTON HOLLOW ASSET HOLDINGS, INC.
c/o AMRESCO, INC.
000 X. Xxxxx Xxxxxx
Xxxxx 0000, XX 342
Dallas, Texas 75201-7424
Attn: Treasurer
Fax No.: (000) 000-0000
Page 5
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SCHEDULE II
COMMITMENT FEE PERCENTAGE; LIBOR MARGIN
====================================================================================================================
Qualified Applicable Commitment
Senior Consolidated Funded Debt/ Investment LIBOR Fee
Consolidated EBITDA Rating Margin Percentages
--------------------------------------------------------------------------------------------------------------------
Greater than 2.5 to 1.0 BB+/Ba1, or lower (a) 175.0 b.p. 37.5 b.p.
(b) 225.0 b.p.
--------------------------------------------------------------------------------------------------------------------
Less than or equal to 2.5 to 1.0, but BBB-/Baa3 (a) 150.0 b.p. 25.0 b.p.
greater than 1.75 to 1.0 (b) 200.0 b.p.
--------------------------------------------------------------------------------------------------------------------
Less than or equal to 1.75 to 1.0, but BBB/Baa2 (a) 125.0 b.p. 25.0 b.p.
greater than 1.25 to 1.0 (b) 175.0 b.p.
--------------------------------------------------------------------------------------------------------------------
Less than or equal to 1.25 to 1.0 A-/A3, or better (a) 100.0 b.p. 20.0 b.p.
(b) 150.0 b.p.
====================================================================================================================
(a) - The Applicable LIBOR Margin for the Revolving Credit Facility.
(b) - The Applicable LIBOR Margin for the Term Facility.
Borrowers' Senior Consolidated Funded Debt to Consolidated EBITDA ratio
shall be computed on a trailing four quarter basis. The applicable LIBOR
Margin or Commitment Fee Percentage shall be based on whichever of the Senior
Consolidated Funded Debt to Consolidated EBITDA ratio or Qualified Investment
Rating would produce the lowest LIBOR Margin or Commitment Fee Percentage. The
above Qualified Investment Ratings are based on the classifications used by
Duff & Xxxxxx, Inc., such that, if another rating agency approved by the
Required Lenders is used to rate the Credit Facilities, the comparable
classifications used by such other rating agency shall be substituted for the
above Qualified Investment Ratings.
SOLO PAGE
112
EXHIBIT A
SECOND AMENDED AND RESTATED REVOLVING NOTE
$________________ Dallas, Texas February 7, 1997
FOR VALUE RECEIVED, AMRESCO, INC., a Delaware corporation, and the other
parties executing this Note or hereafter added hereto as "Maker" (collectively
"Makers"), hereby, jointly and severally, promise to pay to the order of
_____________________________ ("Lender") in care of Agent, at its banking house
in the City of Dallas, Dallas County, Texas, or at such other address in Dallas
County, Texas, given to Makers by Agent, the principal sum of
____________________________ Dollars ($______________), or so much thereof as
may be advanced and outstanding, together with interest, as hereinafter
described.
This Note has been executed and delivered pursuant to the terms of that
certain Second Amended and Restated Loan Agreement (as the same may be
modified, amended, supplemented, extended or restated from time to time, the
"Loan Agreement") dated the date hereof, executed by and among Makers, Agent
and the Lenders (which includes the payee of this Note) and is one of the notes
defined therein as a "Revolving Note", the terms and provisions of the Loan
Agreement related to this Note being incorporated herein by reference for all
purposes. Each capitalized term not expressly defined herein shall have the
meaning given to such term under the Loan Agreement. The terms of the Loan
Agreement shall govern in the case of any inconsistency between such terms and
the terms hereof.
This Note is secured by the Collateral Assignment, the Pledge
Agreements, the Security Agreement, the Mortgages, the other Security Documents
and all the other Loan Documents, and all liens and security interests created
or evidenced thereby. Any holder shall be entitled to all benefits and
remedies and security set forth in the Loan Agreement and all the other Loan
Documents. This Note renews, extends and replaces that certain Promissory Note
dated April 25, 1996, in the amount of $________, executed by Makers, payable
to Lender, which promissory note had previously consolidated, renewed, extended
and replaced the following in their entirety: (a) Promissory Note (Corporate
Facility) dated November 21, 1995, in the amount of $_____, executed by Makers,
payable to Lender, and (b) Promissory Note (Portfolio Facility) dated November
21, 1995, in the amount of $________, executed by Makers, payable to Lender.
1. Interest and Payment.
(a) Maturity. The principal of this Note and all accrued but
unpaid interest hereon shall be due and payable in full on the Revolving
Facility Termination Date.
(b) Accrual of Interest. Subject to Paragraph 1(f) below,
interest on this Note shall accrue at a rate per annum equal to the lesser of
(i) at Makers' option, the Variable Rate or the Adjusted LIBOR Rate, subject,
however, to the provisions of the Loan Agreement, or (ii) the Maximum Lawful
Rate; provided, however, that as to any portion of the outstanding principal
Page 1
113
balance hereof that is not subject to an effective election of or conversion to
the Adjusted LIBOR Rate in accordance with the terms of the Loan Agreement,
interest on such portion of this Note shall accrue interest at the lesser of
(i) the Variable Rate or (ii) the Maximum Lawful Rate. Interest on this Note
shall be calculated at a daily rate equal to 1/360 of the annual percentage
rate which this Note bears, subject to the provisions hereof limiting interest
to the Maximum Lawful Rate. Without notice to any Maker or any other Person,
the Variable Rate and the Maximum Lawful Rate shall each automatically
fluctuate upward and downward as and in the amount by which the Base Rate and
the Maximum Lawful Rate, respectively, fluctuate, subject always to limitations
contained in this Note and the Loan Agreement.
(c) Agreements Concerning Pricing Election. Reference should
be made to the provisions of Section 3.5 of the Loan Agreement concerning the
terms, manner and agreements related to the interest rate elections available
to Makers under this Note.
(d) Principal and Interest Payments. Principal and interest
hereon shall be due and payable as is provided in Article III of the Loan
Agreement, which provides, in part, for quarterly payments of interest on the
first (1st) day of each calendar quarter, commencing on April 1, 1997, and
continuing on the first (1st) day of each January, April, July and October
during the Credit Period.
(e) Costs Due to Regulatory Changes. Makers shall indemnify
Lender against and reimburse Lender for increased costs to Lender, as a result
of any Regulatory Change, in the maintaining of any LIBOR Rate Advance or
Alternate Currency Advance. All payments made pursuant to this paragraph shall
be made free and clear, without reduction for, or account of, any present or
future taxes or other levies of any nature, excluding net income and franchise
taxes.
(f) Default Rate. After maturity of this Note or the
occurrence of an Event of Default, the outstanding principal balance of this
Note shall, at the option of the Required Lenders, bear interest at the Default
Rate. Any past due principal, and to the extent permitted by law, past due
interest on this Note shall bear interest, payable as it accrues on demand, for
each day until paid at the Default Rate. Such interest shall continue to
accrue at the Default Rate notwithstanding the entry of a judgment with respect
to any of the Obligations or the foreclosure of any of the Lenders' Liens,
unless otherwise provided by law.
(g) Maximum Lawful Rate Adjustments. If at any time the
Applicable Rate shall be limited to the Maximum Lawful Rate, any subsequent
reductions in the Applicable Rate shall not reduce the rate of interest on this
Note below the Maximum Lawful Rate until the total amount of interest accrued
equals the amount of interest which would have accrued if the Applicable Rate
had at all times been in effect. In the event that at maturity (stated or by
acceleration), or at the final payment of the Revolving Credit Facility, the
total amount of interest paid or accrued on the Revolving Credit Facility is
less than the amount of interest which would have accrued if the Applicable
Rate had at all times been in effect with respect thereto, then at such time,
to the extent permitted by law, Makers shall pay to Agent, for the ratable
benefit of the Lenders, an amount equal to the difference between (a) the
lesser of the amount of interest which would have accrued if the Applicable
Rate had at all times been in effect and the amount of interest which would
have accrued if the Maximum Lawful Rate had at all times been in effect, and
(b) the amount of interest actually paid on the Revolving Credit Facility.
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2. Default. The occurrence of a Default or an Event of Default,
under and as defined in the Loan Agreement, shall constitute, respectively, a
Default or an Event of Default under this Note.
3. Remedies.
(a) All Remedies Available. Upon the occurrence of an Event
of Default, the holder hereof, acting by and through Agent in accordance with
the terms of Articles IX and X of the Loan Agreement, shall have the right to
declare the entire unpaid principal balance of, and all accrued unpaid interest
on, this Note at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any and all liens and security
interests securing payment hereof, to offset against this Note any sum or sums
owed by it to Maker, and to exercise any of its other rights, powers and
remedies under this Note, under the Loan Agreement or any other Loan Document,
or at law or in equity.
(b) No Waiver. Neither the failure by the holder hereof to
exercise, nor delay by the holder hereof in exercising, the right to accelerate
the maturity of this Note or any other right, power or remedy upon any Default
or Event of Default shall be construed as a waiver of such Default or Event of
Default or as a waiver of the right to exercise any such right, power or remedy
at any time. No single or partial exercise by the holder hereof of any right,
power or remedy shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy may be exercised at any
time and from time to time. All rights and remedies provided for in this Note
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and the holder hereof
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and
remedies as may now or hereafter exist at law or in equity for the collection
of the indebtedness owing hereunder, and the resort to any right or remedy
provided for hereunder or under any such other Loan Document or provided for by
law or in equity shall not prevent the concurrent or subsequent employment of
any other appropriate rights or remedies. Without limiting the generality of
the foregoing provisions, the acceptance by the holder hereof from time to time
of any payment under this Note which is past due or which is less than the
payment in full of all amounts due and payable at the time of such payment,
shall not (i) constitute a waiver of or impair or extinguish the rights of the
holder hereof to accelerate the maturity of this Note or to exercise any other
right, power or remedy at the time or at any subsequent time, or nullify any
prior exercise of any such right, power or remedy, or (ii) constitute a waiver
of the requirement of punctual payment and performance, or a novation in any
respect.
4. Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or in
any other Loan Documents, expressed or implied, to the contrary, in no event
shall any interest rate charged hereunder or under any of the other Loan
Documents, or any interest contracted for, collected or received by Lender or
any holder hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and agreed
to be the intent of Makers and Lender at all times to comply with the
applicable law governing the maximum rate or amount of interest payable on or
in connection with this Note. If the applicable law is ever judicially
Page 3
115
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to this Note, or if acceleration of the
maturity of this Note, any prepayment by Makers, or any other circumstance
whatsoever, results in Lender having been paid any interest in excess of that
permitted by applicable law, then it is the express intent of Makers and Lender
that all excess amounts theretofore collected by Lender be credited on the
principal balance of this Note (or, if this Note has been or would thereby be
paid in full, refunded to Makers), and the provisions of this Note and the
other applicable Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity of this Note
does not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Lender does not intend to collect
any unearned interest in the event of acceleration. All sums paid or agreed to
be paid to Lender for the use, forbearance or detention of the indebtedness
evidenced hereby or by any other Loan Document shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the rate or amount
of interest on account of such indebtedness does not exceed the Maximum Lawful
Rate. The term "applicable law" as used herein shall mean the laws of the
State of Texas, or DIDMCA or any other applicable United States federal law to
the extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under Texas law. The provisions of
this paragraph shall control all agreements between Makers and Lender.
5. General Provisions.
(a) Business Days. Whenever any payment shall be due under
this Note on a day which is not a Business Day, the date on which such payment
is due shall be extended to the next succeeding Business Day, and such
extension of time shall be included in the computation of the amount of
interest then payable.
(b) Manner of Payment. The manner in which payments are to be
made on this Note shall be governed by the provisions hereof and the Loan
Agreement, including, without limitation, Article III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided in
Section 3.6 of the Loan Agreement are required to be made, on this Note subject
to and in accordance with Section 3.6 of the Loan Agreement.
(d) Application of Payments. All payments made on this Note
shall be applied in accordance with Sections 3.6, 3.9 and 9.10 of the Loan
Agreement, as applicable. Nothing herein shall limit or impair any rights of
any holder hereof to apply as provided in the Loan Documents any past due
payments, any proceeds from the disposition of any collateral by foreclosure or
other collections after default. Except to the extent specific provisions are
set forth in this Note or another Loan Document with respect to application of
payments, all payments received by the holder hereof shall be applied, to the
extent thereof, to the indebtedness owing by Makers to the holder hereof in
such order and manner as the Required Lenders shall deem appropriate, any
instructions from Makers or anyone else to the contrary notwithstanding.
Page 4
116
(e) Costs of Collection. If any holder of this Note retains
an attorney in connection with any default or at maturity or to collect,
enforce or defend this Note or any other Loan Document in any lawsuit or in any
probate, reorganization, bankruptcy or other proceeding, or if any Maker sues
any holder of this Note in connection with this Note or any other Loan Document
and does not prevail, then Makers agree to pay to each such holder, in addition
to principal and interest, all costs and expenses incurred by such holder in
trying to collect this Note or in any such suit or proceeding, including
reasonable attorneys' fees.
(f) Waivers and Acknowledgments. Each Maker and all sureties,
endorsers, guarantors and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (i) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all
other notice (except only for any notice that is specifically required by the
terms of the Loan Agreement or any other Loan Document), filing of suit and
diligence in collecting this Note or enforcing any of the security herefor;
(ii) agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon;
(iii) agree that the holder hereof shall not be required first to institute
suit or exhaust its remedies against any Maker or others liable or to become
liable hereon or to enforce its rights against them or any security herefor;
(iv) consent to any extension or postponement of time of payment of this Note
for any period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (v) submit (and waive all rights to object) to
personal jurisdiction in the State of Texas, and venue in Dallas County, Texas,
for the enforcement of any and all obligations under the Loan Documents.
(g) Amendments in Writing. This Note may not be changed,
amended or modified except in a writing expressly intended for such purpose and
executed by the party against whom enforcement of the change, amendment or
modification is sought.
(h) Purpose of Proceeds. The proceeds of this Note will be
used solely for business purposes and not for personal, family, household or
agricultural purposes.
(i) Notices. Any notice required or which any party desires
to give under this Note shall be given and effective as provided in Section
11.2 of the Loan Agreement.
(j) Assignments/Participations. Makers acknowledge and agree
that the holder of this Note may, at any time and from time to time, assign all
or a portion of its interest in the Revolving Credit Facility or transfer to
any Person a participation interest in the Revolving Credit Facility, subject
to and in accordance with the terms and conditions of the Loan Agreement,
including Section 11.10 thereof.
(k) Successors and Assigns. All of the covenants,
stipulations, promises and agreements contained in this Note by or on behalf of
Makers shall bind their successors and assigns and shall be for the benefit of
Lender and any holder hereof, and their successors and assigns, whether so
expressed or not, subject, however, to the provisions of Section 11.10 of the
Loan Agreement.
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117
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR
THE REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT
UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8 OF THE LOAN
AGREEMENT OR OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in this
Note with respect to all of Makers' obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Page 6
118
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKERS:
------
AMRESCO, INC., a Delaware
corporation
By:
---------------------------
Xxxxxx X. Xxxxxx,
Treasurer
(VARIOUS MAKERS)
By:
-------------------------
Name:
-------------------------
Title:
------------------------
Page 7
119
EXHIBIT A-1
TERM NOTE
$________________ Dallas, Texas February 7, 1997
FOR VALUE RECEIVED, AMRESCO, INC., a Delaware corporation, and the other
parties executing this Note or hereafter added hereto as "Maker" (collectively
"Makers"), hereby, jointly and severally, promise to pay to the order of
_____________________________ ("Lender") in care of Agent, at its banking house
in the City of Dallas, Dallas County, Texas, or at such other address in Dallas
County, Texas, given to Makers by Agent, the principal sum of
____________________________ Dollars ($______________), or so much thereof as
may be advanced and outstanding, together with interest, as hereinafter
described.
This Note has been executed and delivered pursuant to the terms of that
certain Second Amended and Restated Loan Agreement (as the same may be
modified, amended, supplemented, extended or restated from time to time, the
"Loan Agreement") dated the date hereof, executed by and among Makers, Agent
and the Lenders (which includes the payee of this Note) and is one of the notes
defined therein as a "Term Note", the terms and provisions of the Loan
Agreement related to this Note being incorporated herein by reference for all
purposes. Each capitalized term not expressly defined herein shall have the
meaning given to such term under the Loan Agreement. The terms of the Loan
Agreement shall govern in the case of any inconsistency between such terms and
the terms hereof.
This Note is secured by the Collateral Assignment, the Pledge
Agreements, the Security Agreement, the Mortgages, the other Security Documents
and all the other Loan Documents, and all liens and security interests created
or evidenced thereby. Any holder shall be entitled to all benefits and
remedies and security set forth in the Loan Agreement and all the other Loan
Documents.
1. Interest and Payment.
(a) Maturity. The principal of this Note and all accrued but
unpaid interest hereon shall be due and payable in full on the Term Facility
Termination Date.
(b) Accrual of Interest. Subject to Paragraph 1(f) below,
interest on this Note shall accrue at a rate per annum equal to the lesser of
(i) at Makers' option, the Variable Rate or the Adjusted LIBOR Rate, subject,
however, to the provisions of the Loan Agreement, or (ii) the Maximum Lawful
Rate; provided, however, that as to any portion of the outstanding principal
balance hereof that is not subject to an effective election of or conversion to
the Adjusted LIBOR Rate in accordance with the terms of the Loan Agreement,
interest on such portion of this Note shall accrue interest at the lesser of
(i) the Variable Rate or (ii) the Maximum Lawful Rate. Interest on
Page 1
120
this Note shall be calculated at a daily rate equal to 1/360 of the annual
percentage rate which this Note bears, subject to the provisions hereof
limiting interest to the Maximum Lawful Rate. Without notice to any Maker or
any other Person, the Variable Rate and the Maximum Lawful Rate shall each
automatically fluctuate upward and downward as and in the amount by which the
Base Rate and the Maximum Lawful Rate, respectively, fluctuate, subject always
to limitations contained in this Note and the Loan Agreement.
(c) Agreements Concerning Pricing Election. Reference should
be made to the provisions of Section 3.5 of the Loan Agreement concerning the
terms, manner and agreements related to the interest rate elections available
to Makers under this Note.
(d) Principal and Interest Payments. Principal and interest
hereon shall be due and payable as is provided in Article III of the Loan
Agreement, which provides, in part, for quarterly payments of interest on the
first (1st) day of each calendar quarter, commencing on April 1, 1997, and
continuing on the first (1st) day of each January, April, July and October
during the Credit Period.
(e) Costs Due to Regulatory Changes. Makers shall indemnify
Lender against and reimburse Lender for increased costs to Lender, as a result
of any Regulatory Change, in the maintaining of any LIBOR Rate Portion. All
payments made pursuant to this paragraph shall be made free and clear, without
reduction for, or account of, any present or future taxes or other levies of
any nature, excluding net income and franchise taxes.
(f) Default Rate. After maturity of this Note or the
occurrence of an Event of Default, the outstanding principal balance of this
Note shall, at the option of the Required Lenders, bear interest at the Default
Rate. Any past due principal, and to the extent permitted by law, past due
interest on this Note shall bear interest, payable as it accrues on demand, for
each day until paid at the Default Rate. Such interest shall continue to
accrue at the Default Rate notwithstanding the entry of a judgment with respect
to any of the Obligations or the foreclosure of any of the Lenders' Liens,
unless otherwise provided by law.
(g) Maximum Lawful Rate Adjustments. If at any time the
Applicable Rate shall be limited to the Maximum Lawful Rate, any subsequent
reductions in the Applicable Rate shall not reduce the rate of interest on this
Note below the Maximum Lawful Rate until the total amount of interest accrued
equals the amount of interest which would have accrued if the Applicable Rate
had at all times been in effect. In the event that at maturity (stated or by
acceleration), or at the final payment of the Term Facility, the total amount
of interest paid or accrued on the Term Facility is less than the amount of
interest which would have accrued if the Applicable Rate had at all times been
in effect with respect thereto, then at such time, to the extent permitted by
law, Makers shall pay to Agent, for the ratable benefit of the Lenders, an
amount equal to the difference between (a) the lesser of the amount of interest
which would have accrued if the Applicable Rate had at all times been in effect
and the amount of interest which would have accrued if the Maximum Lawful Rate
had at all times been in effect, and (b) the amount of interest actually paid
on the Term Facility.
Page 2
121
2. Default. The occurrence of a Default or an Event of Default,
under and as defined in the Loan Agreement, shall constitute, respectively, a
Default or an Event of Default under this Note.
3. Remedies.
(a) All Remedies Available. Upon the occurrence of an Event
of Default, the holder hereof, acting by and through Agent in accordance with
the terms of Articles IX and X of the Loan Agreement, shall have the right to
declare the entire unpaid principal balance of, and all accrued unpaid interest
on, this Note at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any and all liens and security
interests securing payment hereof, to offset against this Note any sum or sums
owed by it to Maker, and to exercise any of its other rights, powers and
remedies under this Note, under the Loan Agreement or any other Loan Document,
or at law or in equity.
(b) No Waiver. Neither the failure by the holder hereof to
exercise, nor delay by the holder hereof in exercising, the right to accelerate
the maturity of this Note or any other right, power or remedy upon any Default
or Event of Default shall be construed as a waiver of such Default or Event of
Default or as a waiver of the right to exercise any such right, power or remedy
at any time. No single or partial exercise by the holder hereof of any right,
power or remedy shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy may be exercised at any
time and from time to time. All rights and remedies provided for in this Note
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and the holder hereof
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and
remedies as may now or hereafter exist at law or in equity for the collection
of the indebtedness owing hereunder, and the resort to any right or remedy
provided for hereunder or under any such other Loan Document or provided for by
law or in equity shall not prevent the concurrent or subsequent employment of
any other appropriate rights or remedies. Without limiting the generality of
the foregoing provisions, the acceptance by the holder hereof from time to time
of any payment under this Note which is past due or which is less than the
payment in full of all amounts due and payable at the time of such payment,
shall not (i) constitute a waiver of or impair or extinguish the rights of the
holder hereof to accelerate the maturity of this Note or to exercise any other
right, power or remedy at the time or at any subsequent time, or nullify any
prior exercise of any such right, power or remedy, or (ii) constitute a waiver
of the requirement of punctual payment and performance, or a novation in any
respect.
4. Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or in
any other Loan Documents, expressed or implied, to the contrary, in no event
shall any interest rate charged hereunder or under any of the other Loan
Documents, or any interest contracted for, collected or received by Lender or
any holder hereof, exceed the Maximum Lawful Rate.
Page 3
122
(b) Intent of Parties. It is expressly stipulated and agreed
to be the intent of Makers and Lender at all times to comply with the
applicable law governing the maximum rate or amount of interest payable on or
in connection with this Note. If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to this Note, or if acceleration of the
maturity of this Note, any prepayment by Makers, or any other circumstance
whatsoever, results in Lender having been paid any interest in excess of that
permitted by applicable law, then it is the express intent of Makers and Lender
that all excess amounts theretofore collected by Lender be credited on the
principal balance of this Note (or, if this Note has been or would thereby be
paid in full, refunded to Makers), and the provisions of this Note and the
other applicable Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity of this Note
does not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Lender does not intend to collect
any unearned interest in the event of acceleration. All sums paid or agreed to
be paid to Lender for the use, forbearance or detention of the indebtedness
evidenced hereby or by any other Loan Document shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the rate or amount
of interest on account of such indebtedness does not exceed the Maximum Lawful
Rate. The term "applicable law" as used herein shall mean the laws of the
State of Texas, or DIDMCA or any other applicable United States federal law to
the extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under Texas law. The provisions of
this paragraph shall control all agreements between Makers and Lender.
5. General Provisions.
(a) Business Days. Whenever any payment shall be due under
this Note on a day which is not a Business Day, the date on which such payment
is due shall be extended to the next succeeding Business Day, and such
extension of time shall be included in the computation of the amount of
interest then payable.
(b) Manner of Payment. The manner in which payments are to be
made on this Note shall be governed by the provisions hereof and the Loan
Agreement, including, without limitation, Article III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided in
Section 3.6 of the Loan Agreement are required to be made, on this Note subject
to and in accordance with Section 3.6 of the Loan Agreement.
(d) Application of Payments. All payments made on this Note
shall be applied in accordance with Sections 3.6, 3.9 and 9.10 of the Loan
Agreement, as applicable. Nothing herein shall limit or impair any rights of
any holder hereof to apply as provided in the Loan Documents any past due
payments, any proceeds from the disposition of any collateral by foreclosure or
other
Page 4
123
collections after default. Except to the extent specific provisions are set
forth in this Note or another Loan Document with respect to application of
payments, all payments received by the holder hereof shall be applied, to the
extent thereof, to the indebtedness owing by Makers to the holder hereof in
such order and manner as the Required Lenders shall deem appropriate, any
instructions from Makers or anyone else to the contrary notwithstanding.
(e) Costs of Collection. If any holder of this Note retains
an attorney in connection with any default or at maturity or to collect,
enforce or defend this Note or any other Loan Document in any lawsuit or in any
probate, reorganization, bankruptcy or other proceeding, or if any Maker sues
any holder of this Note in connection with this Note or any other Loan Document
and does not prevail, then Makers agree to pay to each such holder, in addition
to principal and interest, all costs and expenses incurred by such holder in
trying to collect this Note or in any such suit or proceeding, including
reasonable attorneys' fees.
(f) Waivers and Acknowledgments. Each Maker and all sureties,
endorsers, guarantors and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (i) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all
other notice (except only for any notice that is specifically required by the
terms of the Loan Agreement or any other Loan Document), filing of suit and
diligence in collecting this Note or enforcing any of the security herefor;
(ii) agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon;
(iii) agree that the holder hereof shall not be required first to institute
suit or exhaust its remedies against any Maker or others liable or to become
liable hereon or to enforce its rights against them or any security herefor;
(iv) consent to any extension or postponement of time of payment of this Note
for any period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (v) submit (and waive all rights to object) to
personal jurisdiction in the State of Texas, and venue in Dallas County, Texas,
for the enforcement of any and all obligations under the Loan Documents.
(g) Amendments in Writing. This Note may not be changed,
amended or modified except in a writing expressly intended for such purpose and
executed by the party against whom enforcement of the change, amendment or
modification is sought.
(h) Purpose of Proceeds. The proceeds of this Note will be
used solely for business purposes and not for personal, family, household or
agricultural purposes.
(i) Notices. Any notice required or which any party desires
to give under this Note shall be given and effective as provided in Section
11.2 of the Loan Agreement.
(j) Assignments/Participations. Makers acknowledge and agree
that the holder of this Note may, at any time and from time to time, assign all
or a portion of its interest in the Term Facility or transfer to any Person a
participation interest in the Term Facility, subject to and in accordance with
the terms and conditions of the Loan Agreement, including Section 11.10
thereof.
Page 5
124
(k) Successors and Assigns. All of the covenants,
stipulations, promises and agreements contained in this Note by or on behalf of
Makers shall bind their successors and assigns and shall be for the benefit of
Lender and any holder hereof, and their successors and assigns, whether so
expressed or not, subject, however, to the provisions of Section 11.10 of the
Loan Agreement.
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR
THE REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT
UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8 OF THE LOAN
AGREEMENT OR OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in this
Note with respect to all of Makers' obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Page 6
125
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKERS:
------
AMRESCO, INC., a Delaware
corporation
By:
---------------------------
Xxxxxx X. Xxxxxx,
Treasurer
(VARIOUS MAKERS)
By:
-------------------------
Name:
-------------------------
Title:
------------------------
Page 7
