Exhibit 4.D1
EXECUTION COPY
AMENDED AND RESTATED LOAN PURCHASE AGREEMENT
(Existing Program)
Dated as of
January 30, 1998
Between
UNITED RESOURCES, INC.
as Seller
UNITED GROCERS, INC.
as Guarantor
And
NATIONAL CONSUMER COOPERATIVE BANK
as Buyer
TABLE OF CONTENTS
Page
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Article I
DEFINITIONS
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SECTION 1.01 Defined Terms............................................. 1
SECTION 1.02 General Principles Applicable to Definitions.............. 16
SECTION 1.03 Accounting Terms.......................................... 16
Article II
THE COMMITMENT
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SECTION 2.01 Loans Sold and Purchased as of Effectiveness Date;
Agreement to Purchase and Sell Loans...................... 17
SECTION 2.01A Incremental Purchase...................................... 20
SECTION 2.02 Agreement to Accept Renewal Notes......................... 21
Article III
CLOSING PROCEDURE; CONDITIONS TO PURCHASE
-----------------------------------------
SECTION 3.01 Payment................................................... 22
SECTION 3.02 Acceptance -Renewal Loans................................. 22
SECTION 3.03 Effective Date for each Purchase.......................... 22
SECTION 3.04 Buyer's Conditions Precedent to Acceptance................ 22
SECTION 3.05 Additional Delivery Requirements for Effectiveness Date... 25
SECTION 3.06 Seller's Conditions Precedent to Sale..................... 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 4.01 Seller's corporate Representations and Warranties......... 28
SECTION 4.02 Seller's Closing Date Representations and
Warranties with respect to Loans.......................... 32
SECTION 4.03 Seller's Renewal Date Representations and Warranties...... 39
SECTION 4.04 Buyer's Representations and Warranties.................... 40
SECTION 4.05 Repurchase Upon Breach of Certain Representations and
Warranties................................................ 40
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ARTICLE V
SERVICING AND COLLECTIONS
-------------------------
SECTION 5.01 Servicing and Collections................................. 42
SECTION 5.02 Documentation and Servicing; Maintenance of System
and Lien Priority......................................... 42
SECTION 5.03 Lockboxes................................................. 43
SECTION 5.04 Payment of Guaranty Fees; Anticipated Payments and
Other Amounts............................................. 43
SECTION 5.05 Applicable Rate........................................... 43
SECTION 5.06 Computation and Payment of Guaranty Fees.................. 44
SECTION 5.07 Access to Certain Documentation and Certain Information
Regarding the Loans....................................... 45
ARTICLE VI
SELLER'S COVENANTS
------------------
SECTION 6.01 Covenants................................................. 46
SECTION 6.02 Special Covenant of Seller................................ 51
ARTICLE VIII
GUARANTOR AND GUARANTY
----------------------
SECTION 7.01 Guarantor's Guaranty and Repurchase Guaranty;
Security Interest......................................... 53
SECTION 7.02 Guarantor Representations and Warranties.................. 53
SECTION 7.03 Covenants of Guarantor.................................... 56
SECTION 7.04 Grant of Security Interest................................ 65
ARTICLE VIII
SELLER OBLIGATIONS AND REPURCHASE OPTIONS
SECTION 8.01 Purchase of Interest Rate Protection...................... 68
SECTION 8.02 Optional Repurchase of Defaulted Loans and after
Obligor Default........................................... 68
SECTION 8.03 Minimal Balances.......................................... 68
SECTION 8.04 Retransfer of Loans....................................... 69
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ARTICLE IX
TERMINATION EVENTS
------------------
SECTION 9.01 Termination Events........................................ 70
SECTION 9.02 Consequences of Termination Event......................... 72
SECTION 9.03 Remedies of a Secured Party............................... 72
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Further Assurances........................................ 74
SECTION 10.02 Indemnities............................................... 74
SECTION 10.03 No Waiver: Remedies Cumulative............................ 75
SECTION 10.04 Governing Law............................................. 75
SECTION 10.05 Consent to Jurisdiction: Waiver of Immunities............. 75
SECTION 10.06 Notices................................................... 75
SECTION 10.07 Assignment................................................ 75
SECTION 10.08 Capital Markets Funding................................... 76
SECTION 10.09 Severability.............................................. 76
SECTION 10.10 Attorney's Fees........................................... 76
SECTION 10.11 Setoff.................................................... 76
SECTION 10.12 Limitation on Third Party Beneficiaries................... 76
SECTION 10.13 Entire Agreement; Amendment............................... 77
SECTION 10.14 Headings.................................................. 77
SECTION 10.15 Term of Agreement......................................... 77
SECTION 10.16 Counterparts.............................................. 77
Exhibit A - Information re: Corporate Names of Seller and
Guarantor
Exhibit B - Form of Notice of Assignment
Exhibit C - Form of Renewal Note
Exhibit D - Form of Monthly Report
Exhibit E - Credit and Collection Policies
Exhibit F - Information Regarding Litigation, etc.
Exhibit G - Form of Purchase Notice for Incremental Purchase
Exhibit H - Form of Officers' Certificate of Seller
(Incremental Purchase)
Exhibit I - Form of Officers' Certificate of Guarantor
(Incremental Purchase)
Exhibit J - Permitted Lockboxes and Lockbox Banks
iii
Schedule I - Loan Schedule
Schedule II - Exception Loans
Schedule III - Loans Secured by Real Property
Schedule IV - Promissory Notes and Other Obligations
iv
AMENDED AND RESTATED
--------------------
LOAN PURCHASE AGREEMENT
-----------------------
(EXISTING PROGRAM)
------------------
This AMENDED AND RESTATED LOAN PURCHASE AGREEMENT (Existing
Program) is executed as of January 30, 1998 between UNITED RESOURCES, INC., an
Oregon corporation, as seller ("United Resources" or "Seller"), UNITED GROCERS,
INC., an Oregon corporation, as guarantor ("United Grocers" or "Guarantor") and
NATIONAL CONSUMER COOPERATIVE BANK, a financial institution organized under the
laws of the United States ("Buyer").
RECITALS
WHEREAS, Seller, Guarantor and Buyer entered into a certain
Loan Purchase and Servicing Agreement dated as of May 13, 1994 and certain
amendments thereto as of July 15, 1994, September 28, 1995 and December 30, 1996
(as amended, the "Original Agreement") which provides for (i) United Resources
to sell and Buyer to purchase Loans satisfying the terms and conditions of the
Original Agreement, (ii) United Resources to service the Loans sold to Buyer and
(iii) United Grocers to provide certain guaranties with respect to such Loans;
WHEREAS, United Resources, United Grocers and Buyer desire to
make a number of significant changes to the Original Agreement;
WHEREAS, United Resources, United Grocers and Buyer have
determined to enter into this Amended and Restated Loan Purchase Agreement
(Existing Program) (this "Agreement") to reflect and govern such changed
program; and
WHEREAS, Buyer currently owns Loans purchased under the
Original Agreement and may purchase additional Loans pursuant to the terms and
conditions set forth in this Agreement.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. The following terms, as used
herein, have the following meanings:
"Affiliate" shall mean, with respect to a Person, any other
Person (or group of related Persons) which (i) directly or indirectly controls,
is controlled by or is under common control with, such Person, or (ii) directly
or indirectly owns more than 5% of such Person's voting stock, or (iii) is a
director or officer of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Aggregate Exposure" shall mean, for any Obligor Group, an
amount, without duplication, equal to the sum of (i) the aggregate Principal
Balance of all Loans with respect to which any member of such Obligor Group is
an Obligor or Loan Guarantor and (ii) the aggregate outstanding principal amount
of all promissory notes and evidences of indebtedness which are owed or
guaranteed by any member of the related Obligor Group to or for the benefit of
Buyer or which give the Buyer exposure to the credit of any member of the
related Obligor Group.
"Anticipated Payment" shall have the meaning given in Section
5.04.
"Applicable Rate" shall mean during each Interest Accrual
Period, a per annum rate of 150 basis points in excess of LIBOR determined on
the related LIBOR Determination Date, each calculated on the basis of actual
days elapsed and a 360-day year.
"Available Funds" shall mean Collections, Principal
Prepayments, Payaheads, Net Liquidation Proceeds, Insurance Proceeds, Guaranty
Payments and Repurchase Proceeds.
"Bank Act" shall mean the National Consumer Cooperative Bank
Act, 12 U.S.C. xx.xx. 3001-3051, and any regulations and policies adopted
thereunder.
"Business Day" shall mean any day other than Saturday, Sunday
and a day on which banks in Portland, Oregon or Washington, D.C. are authorized
to close.
"Buyer" or "NCB" shall mean National Consumer Cooperative
Bank, a financial institution organized under the laws of the United States, and
its Successors and assigns.
"Capital Leases" means all leases which shall have been, or in
accordance with U.S. GAAP, should be recorded as capital leases.
"Carry-Forward Amount" shall mean, with respect to any Payment
Date, the excess, if any, of the Anticipated Payment for the preceding Payment
Date over the amount of Available Funds actually paid to Buyer on the preceding
Payment Date, plus interest on such excess, to the extent permitted by law, at
the Applicable Rate.
"Cash Flow Ratio" shall mean, with respect to any Obligor
Group, at any date and for the period reflected in the related Obligor Group
Financial Statements, the consolidated ratio (expressed as a percentage) of (a)
EBITDA to (b) Cash Interest Expense plus CPLTD; provided that if the Obligor
Group has taken on new debt which is not reflected on the Obligor Group
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Financial Statements, or if a new loan has been approved but not yet funded, the
denominator of the ratio will be adjusted to account for the CPLTD of the new
debt or loan and related interest expense.
"Cash Interest Expense" shall mean, for any period, gross
interest expense for such period determined in accordance with U.S. GAAP.
"Closing Date" shall mean the date of each Incremental
Purchase.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" shall mean all or any portion of the collateral,
whether real or personal, tangible or intangible, or otherwise, pledged by any
Obligor or Loan Guarantor to secure repayment of its Loan and the related Note
(other than Seller's capital stock and patronage dividends).
"Collateral Coverage Ratio" shall mean, with respect to any
Obligor Group, as of any date, as evidenced by Obligor Group Financial
Statements, the consolidated ratio (expressed as a percentage) of (a) the value
of all Collateral, to (b) the aggregate Principal Balance of all Loans for such
Obligor Group. For purposes of determining value, furniture, fixtures and
equipment of a retail grocery store will be valued at 3.5 times the respective
store's average weekly sales net of any prior Liens, as evidenced on the related
Obligor Group Financial Statements. For purposes of determining value, inventory
located in Oregon or Washington will be net of any inventory against which there
are prior Liens and will be valued at book value as reflected on the related
Obligor Group Financial Statements or a more recent physical inventory valuation
by Seller. For purposes of determining value, inventory located in California
will be net of any inventory against which there are prior Liens and be valued
at ninety percent of book value as reflected on the related Obligor Group
Financial Statements or a more recent physical inventory valuation by Seller.
For purposes of determining value, real estate will be net of any real estate
against which there are prior Liens and will be valued at either (i) the
assessed value, as shown on the local assessor's lists, established no earlier
than 9 months before the date of the Incremental Purchase by Buyer hereunder or
(ii) the value established by an MAI appraisal dated no earlier than 9 months
before the date of the Incremental Purchase by Buyer hereunder, provided that
real estate Collateral will be valued at $0.00 if neither full Minimum
Documentation nor Standard Documentation is delivered with respect to such
Collateral for the purpose of making the representation in Section 4.02 (oo)
hereof, the calculation of Collateral Coverage Ratio shall be modified as
provided in Section 4.02 (oo).
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"Collections" shall mean any and all amounts received from or
on behalf of the obligors in respect of Loans and related Notes or Related
Documents during any applicable Due Period regardless of how received and
including, without limitation, receipt of Monthly Payments and payments from
guarantors.
"Consolidated Net Worth" shall mean, with respect to any
Person, as of any date of determination, the consolidated balance sheet "net
worth" of such Person determined in accordance with U.S. GAAP.
"Consolidated Tangible Net Worth" shall have the meaning set
forth in Section 7.03 (q) hereof.
"Controlled Group" means, with respect to any Person, all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which together with such
Person are treated as a single employer under Section 414 (b) or 414 (c) of the
Code.
"CPLTD" shall mean, with respect to any Person, for any
period, that portion of such Person's long-term Debt (that is, Debt with a term
of greater than one year) which matures and is due and payable within such
period.
"Credit and Collection Policy" means, with respect to Seller,
the credit, collection, enforcement and other policies and practices of Seller,
relating to Loans, related Notes and Related Documents existing on the date
hereof and as set forth in Exhibit E hereto, as the same may be modified from
time to time with the consent of Buyer, which consent will not be unreasonably
withheld.
"Credit Agreement" shall mean the secured lending facility
dated as of September 15, 1997, by and among United Grocers, the Credit
Providers and Bank of America National Trust and Savings Association, as
Administrative Agent for the Credit Providers.
"Credit Providers" shall mean the financial institutions party
to the Credit Agreement.
"Cut-Off Date" shall mean the first (1st) day of the month in
which each Incremental Purchase occurs.
"Debt" of any Person means at any date, without duplication,
(i) all items of indebtedness or liability (except capital, surplus, deferred
credits and reserves, as such) which, in accordance with U.S. GAAP, would be
included in determining total liabilities as shown on the liability side of a
balance sheet as of the date as of which indebtedness is determined, (ii)
indebtedness secured by any Lien, whether or not such indebtedness shall have
been assumed, (iii) any other indebtedness or liability for borrowed money or
for the deferred purchase price of property or services for which such person is
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directly or contingently liable as obligor, guarantor, or otherwise, or in
respect of which such Person otherwise assures a creditor against loss, and (iv)
any other obligations of such Person under Capital Leases. For all purposes of
this Agreement, the Debt of any Person shall include all recourse Debt of any
partnership or joint venture formed as a partnership where such Person is a
general partner or is otherwise liable for the Debt of such partnership or joint
venture.
"Defaulted Loan" shall mean, as of any date, a Loan with
respect to which any of the following has occurred: (a) there has occurred an
Obligor Default with respect to such Loan and such Obligor Default has been
continuing for a period of 10 days, or (b) the Obligor under such Loan has
sought protection under the United States Bankruptcy Code or is the subject of
an involuntary bankruptcy.
"Due Date" shall mean the day of the month on which the
Monthly Payment is due from the Obligor on a Loan.
"Due Period" shall mean, with respect to any Payment Date, the
calendar month preceding the month in which such Payment Date occurs.
"EBITDA" means, for any Person, for any period, the
consolidated net income (or net loss) of such Person for such period as
determined in accordance with U.S. GAAP, plus (a) the sum of (i) depreciation
expense, (ii) amortization expense, (iii) Cash Interest Expense plus the amount
of amortized debt discount deducted in determining Cash Interest Expense and
fees, (iv) total income tax expense, and (v) extraordinary or unusual losses
(and other after-tax losses on sales of assets outside of the ordinary course of
business and not otherwise included in U.S. GAAP extraordinary or unusual
losses), less (b) the sum of (i) extraordinary or unusual gains (and other after
tax gains on sales of assets outside of the ordinary course of business and not
otherwise included in U.S. GAAP extraordinary or unusual gains) of the Person
for such period and (ii) the net income (or loss) of any Person that is
accounted for by the equity method of accounting, except to the extent of the
amount of dividends or distributions paid to such Person.
"Effectiveness Date" shall mean January 30, 1998.
"Eligible Loan" shall mean a Loan as to which each applicable
representation and warranty in Section 4.2 is true and accurate on the
applicable Closing Date.
"Environmental Laws" means all federal, state and local
statutes, regulations, ordinances, and requirements, now or hereafter in effect,
pertaining to environmental protection, contamination or cleanup, including
without limitation (i) the Federal Resource Conservation and Recovery Act of
1976 (42 U.S.C. ss. 6901, et seq.), (ii) the Federal Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et
5
seq.), (iii) the Federal Hazardous Materials Transportation Control Act (49
U.S.C. ss. 1801, et seq.), (iv) the Federal Clean Air Act (42 U.S.C. ss. 7401,
et seq.), (v) the Federal Water Pollution Control Act, Federal Clean Water Act
(33 U.S.C. ss. 1251 et seq.), (vi) the Federal Insecticide, Fungicide, and
Rodenticide Act, Federal Pesticide Act (7 U.S.C. ss. 136, et seq.), (vii) the
Federal Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), and (viii)
the Federal Safe Drinking Water Act (42 U.S.C. ss. 300f et seq.), all as now or
hereafter amended.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Full Recourse Loan" shall mean any Loan that is an Eligible
Loan as to which Seller has received at least 12 Monthly Payments of principal.
"Government Approval" means an approval, permit, license,
authorization, certificate or consent of any Governmental Authority.
"Governmental Authority" means the government of the United
States or any State or any foreign country or any political subdivision of any
thereof or any branch, department, agency, instrumentality, court, tribunal or
regulatory authority which constitutes a part or exercises any sovereign power
of any of the foregoing.
"Guaranty" shall mean the first loss guaranty of Liquidation
Losses provided by Guarantor in accordance with Section 7.01(a) of this
Agreement.
"Guaranty Amount" shall mean, at any time, an amount equal to
(a) the sum of (i) twenty percent (20%) of the Principal Balance of each Loan,
minus (b) all amounts previously remitted or paid hereunder by Guarantor to
Buyer pursuant to the Guaranty, the Holdback Guaranty or the New Origination
Guaranty; provided, however, that at no time shall the Guaranty Amount be less
than the sum of the Purchase Price of the sum of the three largest Loans or the
sum of the three largest Aggregate Exposures, whichever is greater at such time.
"Guaranty Collateral" shall mean the collateral in which the
Guarantor grants a security interest in favor of the Buyer pursuant to Section
7.04(a) hereof.
"Guaranty Fee" shall have the meaning given in Section 5.06 of
this Agreement.
"Guaranty Payments" shall mean the amounts paid by Guarantor
to Buyer pursuant to the Guaranty or the Repurchase Guaranty, as applicable.
"Guarantor" shall mean United Grocers, Inc., an Oregon
corporation, and its Successors and assigns.
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"Hazardous Substances" means any substance or material defined
or designated as hazardous or toxic waste, hazardous or toxic material, a
hazardous, toxic or radioactive substance, or other similar terms, by any
federal, state or local environmental statute, regulation or ordinance presently
in effect, including but not limited to the Environmental Laws.
"Holdback Guaranty" shall mean the Guaranty provided by the
Guarantor pursuant to Section 2.1(a) of the Holdback Guaranty Agreement.
"Holdback Guaranty Agreement" shall mean the Amended and
Restated Guaranty Agreement (Holdback Program) dated as of January 30, 1998, by
and between United Grocers, as guarantor, and NCB, as the same may be further
amended or supplemented from time to time.
"Holdback Guaranty Amount" shall mean the "Guaranty Amount"
available under the Holdback Guaranty Agreement.
"Holdback Loan Purchase Agreement" shall mean the Amended and
Restated Loan Purchase Agreement (Holdback Program) dated as of January 30,
1998, by and between United Resources, as seller, and NCB, as buyer, as the same
may be further amended or supplemented from time to time.
"Incremental Purchase" shall have the meaning ascribed to such
term in Section 2.01A hereof.
"Insurance Proceeds" shall mean proceeds paid by any insurer
pursuant to any insurance policy covering a Loan or Collateral, including but
not limited to title, hazard, life, health and/or accident insurance policies.
"Interest Accrual Period" shall mean, with respect to each
Payment Date, the period commencing on the first day of the month preceding such
Payment Date and ending on the last day of the month of such Payment Date,
except that, with respect to the first Payment Date hereunder, the initial
Interest Accrual Period shall commence on the Effectiveness Date.
"LIBOR" shall mean, for any Interest Accrual Period, the
reserve-adjusted London interbank rate for one-month Euro-Dollar deposits
determined by Buyer for each Interest Accrual Period in accordance with the
provisions of Section 5.05.
"LIBOR Determination Date" shall mean the second Business Day
prior to the commencement of each Interest Accrual Period.
"Lien" means for any Person, any security interest, pledge,
mortgage, charge, assignment, hypothecation, encumbrance, attachment,
garnishment, execution or other voluntary or involuntary lien upon or affecting
the revenues of such Person or
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any real or personal property in which such Person has or hereafter acquires any
interest.
"Liquidated Loan" shall mean any Defaulted Loan as to which
NCB has determined that all amounts which it reasonably and in good faith
expects to recover have been recovered from or on account of such Loan;
provided, however, that a Defaulted Loan which has not been determined to have
become a Liquidated Loan within three months after becoming a Defaulted Loan
shall be deemed to be a Liquidated Loan on the third month anniversary date of
such Loan becoming a Defaulted Loan. A Loan deemed a Liquidated Loan shall be
due and payable on the date on which such Loan so deemed.
"Liquidation Losses" shall mean, with respect to any
Liquidated Loan, on any date of determination, the amount by which (A) the sum
of (i) the Principal Balance of such Loan, (ii) accrued and unpaid interest
thereon at the Applicable Rates and (iii) unreimbursed reasonable fees and
expenses incurred by NCB in servicing the liquidation of such Defaulted Loan,
exceeds (B) the Net Liquidation Proceeds and Insurance Proceeds thereon, if any.
"Liquidation Proceeds" shall mean, cash, other than Insurance
Proceeds, and any other amounts received in connection with the liquidation of
Defaulted Loans and related Collateral, whether through trustee's sale,
foreclosure sale or otherwise.
"Loan" shall mean each loan originated by Seller in the
ordinary course of its business and transferred (in its entirety or through a
participation interest therein) to Buyer pursuant to this Agreement, together
with the rights and obligations of a holder thereof, payments thereon and
proceeds therefrom, the Loans originally subject to this Agreement being
identified on the Loan Schedule. "Loan" shall include any Renewal Loan or Rays'
Loan accepted by Buyer under this Agreement. "Loan" shall also include a Loan
sold and transferred by Seller under the Original Agreement and owned by Buyer
on the Effectiveness Date.
"Loan File" means the documents pertaining to a Loan,
including the related Note and Related Documents delivered to Buyer or its agent
in accordance with Section 2.01 of this Agreement in connection with the sale of
the Loan by Seller and the Renewal Note and Related Documents delivered to Buyer
pursuant to Section 2.02 of this Agreement.
"Loan Guarantor" shall mean any Person who (i) guarantees an
Obligor's payment and/or other obligations under any Loan, (ii) co-signs, or is
a co-maker on, the related Note, or (iii) otherwise supports, either in a
primary or secondary position, an Obligor's obligations with respect to a Loan,
the related Note or other Related Documents.
"Loan Interest Rate" shall mean, with respect to any date of
determination, the then applicable annual rate of
8
interest borne by a Loan, pursuant to its terms, which, as of the applicable
Closing Date, is shown on the Loan Schedule.
"Loan Schedule" shall mean, the schedule of Loans, delivered
by Seller to Buyer at the time of each Incremental Purchase, such schedule
identifying each Loan to be purchased in such Incremental Purchase by the name
and address of the Obligor (and, if different from such address, the location of
the grocery store to which such Loan relates) and setting forth as to each Loan
the following information: (i) the Principal Balance as of the close of business
on the applicable Closing Date, (ii) if a participation interest in such Loan is
being purchased hereunder, the percentage participation interest being
purchased, (iii) the account number on Seller's records, (iv) the original
principal amount of the Loan, (v) the date the Loan was made and original number
of months to maturity and original amortization period, in months, (vi) the Loan
Interest Rate as of the applicable Cut-Off Date and whether fixed or variable,
(vii) when the first Monthly Payment was due, (viii) the Monthly Payment as of
the applicable Cut-Off Date, (ix) the remaining number of months in the
amortization period as of the applicable Cut-Off Date, (x) amortization method
and period, (xi) if the Loan has a variable Loan Interest Rate, the margin which
is added to the Prime Rate to determine the Loan Interest Rate, and the maximum
and minimum Loan Interest Rates, if applicable, (xii) whether such Loan is a
Preferred Loan, Standard Loan or Full Recourse Loan, (xiii) the Aggregate
Exposure which relates to such Loan, (xiv) with respect to the related Obligor
Group, the Cash Flow Ratio and the Collateral Coverage Ratio as of the
applicable Cut-Off Date, (xv) whether such Loan has Renewal Loan provisions, and
(xvi) whether such Loan is secured by real estate Collateral. The Loan Schedule
shall be supplemented on the date of each Incremental Purchase to include the
Loans purchased on such date and shall be amended to reflect in the pool of
Loans sold hereunder including Renewal Loans and Purchased Loans.
"MAI" shall mean Member of the American Institute of Real
Estate Appraisers.
"Minimum Documentation" means, with respect to a Loan secured
by real estate Collateral, (i) a certification of Seller as to the assessed
value of the related mortgaged property (which certification shall be based on a
tax assessment dated no later than 9 months before the Closing Date on which
such Loan first purchased by Buyer), (ii) a completed environmental
questionnaire in the form prescribed by Seller and acceptable to Buyer, and
(iii) copies of any title search or report prepared by an attorney or title
company relating to the mortgaged property.
"Maximum Purchase Amount" shall mean $28,750,000, unless
otherwise increased or reduced by the parties hereto.
"Monthly Interest Amount" shall have the meaning given in
Section 5.05.
9
"Monthly Payment" shall mean the monthly payment of principal
and/or interest required to be made by an Obligor on the related Loan pursuant
to the terms of the related Note.
"Multiemployer Plan" shall mean, for any Person, a
"multiemployer plan" as defined in Section 4001(a) (3) of ERISA which is or was
at any time during the current year or the immediately preceding five years
contributed to by such Person or any member of a Controlled Group on behalf of
its employees and which is covered by Title V of ERISA.
"Net Liquidation Proceeds" shall mean Liquidation Proceeds net
of (i) any reimbursements to Buyer made therefrom for any expenses incurred in
liquidating Loans and (ii) amounts required to be released to the related
Obligor pursuant to applicable law.
"New Origination Guaranty" shall mean the "Guaranty" provided
by Guarantor in accordance with the New Origination Guaranty Agreement.
"New Origination Guaranty Agreement" shall mean the Guaranty
Agreement (New Origination Program) dated as of January 30, 1998, by and between
Guarantor and NCB, as the same may be amended from time to time.
"New Origination Guaranty Amount" shall mean the "Guaranty
Amount" available under the New Origination Guaranty Agreement.
"New Origination Loan Agreement" shall mean the Loan
Origination and Purchase Agreement dated as of January 30, 1998, by and between
United Resources, as Seller, and NCB, as buyer, as the same may be amended and
supplemented from time to time.
"Note" shall mean any promissory note evidencing the
indebtedness of an Obligor under a Loan, and shall include a Renewal Note
accepted by Buyer under this Agreement.
"Notice of Assignment" shall mean a Notice of Assignment
executed by Seller in substantially the form of the annexed Exhibit B.
"Obligor" shall mean the Person or Persons primarily obligated
to repay the Loan and the indebtedness evidenced by the related Note including,
without limitation, all Persons executing such Note (regardless of whether they
have also executed all subsequent extension agreements relating to such Note).
"Obligor Default" shall mean (a) the failure by a Obligor to
pay when due (whether a Monthly Payment, at maturity, upon required prepayment,
acceleration, demand or otherwise) the Loan and the indebtedness evidenced by
related Note or any Related Document, or any interest or premium thereon which
failure continues after the applicable grace period, if any,
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failure continues after the applicable grace period, if any, specified in such
Note or Related Document relating to such Loan; or (b) the failure by an Obligor
to perform any term or covenant on its part to be performed under any Loan,
related Note or Related Document which failure continues after the applicable
grace period, if any, specified in the Note or Related Document, if the effect
of such failure to perform is to accelerate or to permit the acceleration of the
maturity of the indebtedness evidenced by such Note or Related Document; or (c)
the occurrence of an event or condition whereby the indebtedness related to the
Loan of any Obligor shall be declared to be due and payable or required to be
prepaid (other than by regularly scheduled required prepayment) prior to the
stated maturity thereof.
"Obligor Group" shall include an Obligor and any of its
Affiliates and Subsidiaries.
"Obligor Group Financial Statements" shall mean the balance
sheets and related statements of income and retained earnings prepared in
accordance with U.S. GAAP which shall be prepared by an accounting service and
signed by appropriate officers of the Obligor Group. For purposes of ratio
determination, the financial statements reflecting the most recent fiscal year's
results will be used, provided that if such financial statements reflect a
period ended more than nine months earlier, an interim statement covering at
least two quarters' results shall be used.
"Original Agreement" shall have the meaning given in the
Recitals hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Payaheads" shall mean, with respect to a Due Period, any
amounts received on a Loan in excess of the Monthly Payment due on the Due Date
relating to such Due Period which does not constitute either a Principal
Prepayment or payment with respect to an overdue amount. Payaheads are payments
of principal for purposes of this Agreement.
"Payment Date" shall mean the twenty second (22nd) day of each
calendar month unless such day is not a Business Day, in which event, "Payment
Date" shall mean the next succeeding Business Day.
"Pension Plan" means, for any Person, an "employee pension
benefit plan" (as such term is defined in ERISA) from time to time maintained by
such Person, any Subsidiary of such Person, or a member of the Controlled Group
of such Person.
"Permitted Lockbox" shall mean a post office box or other
mailing location identified on Exhibit J to this Agreement maintained by a
Permitted Lockbox Bank for the purpose of
11
receiving payments made by the Obligors or such other post office box or mailing
location as Buyer may designate from time to time.
"Permitted Lockbox Bank" shall mean a bank identified on
Exhibit J to this Agreement or such other bank as Buyer may designate from time
to time.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
"Plan" shall mean, for any Person, at any time, an employee
pension benefit plan, other than a Multiemployer Plan, which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by such Person, any Subsidiary of such Person,
or any member of a Controlled Group for employees of such Person or any member
of such Controlled Group or (ii) maintained pursuant to collective bargaining
agreement or other arrangement under which more than one employer makes
contributions and to which such Person or any member of a Controlled Group is
then making or accruing an obligation to make contributions or has within the
preceding five (5) plan years made contributions.
"Preferred Loan" shall mean any Loan which is an Eligible Loan
and which falls into either of the following categories: (i) the Obligor Group
related thereto has a Collateral Coverage Ratio of at least 110% and a Cash Flow
Ratio of at least 100%; or (ii) (a) the Obligor Group related thereto has a
Collateral Coverage Ratio and Cash Flow Ratio of at least 85% each and a
combined Collateral Coverage Ratio and Cash Flow Ratio of at least 240%, and (b)
the Obligor Group related thereto has a Consolidated Tangible Net Worth greater
than $0.00.
"Primary Collateral" shall mean that portion of the Collateral
in which Seller had, prior to the sale and assignment hereunder, first priority
perfected security interests.
"Prime Rate" shall mean the "Prime Rate" from time to time
published in the "Money Rates" section of the Wall Street Journal; provided,
however, that if such rate is not published in the Wall Street Journal, the
Prime Rate shall be a substantially comparable index selected by Seller and
approved by Buyer.
"Principal Balance" shall mean, with respect to any Loan, at
any date of determination, (i) the principal balance of the Loan (or if a
participation interest in such Loan is being purchased hereunder, the product of
(a) the percentage participation interest specified with respect to such Loan in
the Loan Schedule times (b) the principal balance of the Loan) outstanding as of
the applicable Cut-Off Date, after application of the principal payments
received on or before such date, minus (ii) the sum of (a) the principal portion
of the Monthly Payments received during each Due Period ending prior to the most
recent
12
Payment Date, which were distributed pursuant to Section 5.04 on any previous
Payment Date, and (b) all Principal Prepayments, Payaheads, Insurance Proceeds,
Net Liquidation Proceeds, Guaranty Payments, payments under the Holdback
Guaranty, the New Origination Guaranty and Repurchase Proceeds to the extent
applied by the Servicer as recoveries of principal in accordance with the
provisions hereof, which were distributed pursuant to Section 5.04 on any
previous Payment Date.
"Principal Prepayment" shall mean any payment or other
recovery of principal on a Loan equal to the Principal Balance thereof, received
in advance of the final scheduled Due Date which is intended to satisfy a Loan
in full. Principal Prepayment shall also include, with respect to a Loan that
has provisions for renewal, all or any portion of the Principal Balance of the
related Note that is greater than the Renewal Balance, if any.
"Private Placement Agreement" means any agreement currently
existing or hereafter entered into by Guarantor for the private placement of
debt securities issued by Guarantor.
"Prior Note" shall have the meaning given in the definition of
"Renewal Note".
"Property" shall mean the Loans, the related Notes, Related
Documents, Collateral pledged to secure the Loans, and other rights, title and
interest of Seller conveyed and sold pursuant to Section 2.01(a) or conveyed and
accepted by Buyer pursuant to Section 3.02 hereof.
"Purchase Price" shall have the meaning given in Section 3.01.
"Rating Agency" shall mean Standard & Poor's Corporation,
Xxxxx'x Investors Service, Inc., or any Successor of either, or any other
nationally-recognized rating agency.
"Rays' Loan" shall mean certain loans relating to the
Rays'/C&K Market sold by United Resources to NCB pursuant to the Holdback Loan
Purchase Agreement and repurchased by United Resources pursuant to Section 7.04
of the Holdback Loan Purchase Agreement after any such Rays' Loan satisfies the
Loan eligibility requirements set forth in Section 4.02 of this Agreement.
"Related Documents" shall mean with respect to each Loan and
related Note, a loan agreement, a security agreement, a mortgage, an assignment
of lease and all other documents, instruments or assignments (including
amendments or modifications thereof) executed by the Obligor or other Person on
Obligor's behalf in respect of such Loan and related Note, including, without
limitation, general or limited guaranties.
13
"Renewal Balance" shall mean for each Renewal Note, the
Principal Balance evidenced thereby on its Renewal Date.
"Renewal Date" shall have the meaning given in the definition
of "Renewal Note."
"Renewal Loan" shall mean a loan evidenced by a Renewal Note.
"Renewal Note" shall mean a Note accepted by Buyer (i) which
is substantially in the form of the annexed Exhibit C (ii) which is executed by
all of the Obligors and Loan Guarantors of a note related to a Loan previously
sold to Buyer ("Prior Note") which Prior Note was to be paid in full on the date
the Renewal Note first becomes effective ("Renewal Date"); (iii) which evidences
an obligation to repay a principal amount equal to or less than the principal
amount required to be paid by the Obligor under the Prior Note on the Renewal
Date; (iv) which provides for monthly principal payments in amounts not less
than the monthly principal payments required pursuant to the terms of the Prior
Note; (v) which provides that on and after the first Renewal Date after the
purchase by Buyer hereunder, the related Loan will fully amortize over the
remaining term to maturity; and (vi) which remains subject to and secured by all
of the Related Documents applicable to the Prior Note (as the same may be
amended and restated by the terms of the Renewal Note).
"Repurchase Amount" shall mean the amount set forth as such in
Section 2.01(e).
"Repurchase Guaranty" shall mean the guaranty of Seller's
repurchase obligation provided by the Guarantor pursuant to Section 7.01(b)
hereof.
"Repurchased Loans" shall mean all Loans repurchased by or on
behalf of Seller, whether through a payment of Repurchase Proceeds by Seller
pursuant to Sections 2.01(e), 2.02(c), 3.02, 4.05, 8.02, 8.03 and 9.02, or
through a payment by the Guarantor on its Repurchase Guaranty pursuant to
Section 7.01(b).
"Repurchase Proceeds" shall mean the amounts received from
Seller with respect to a Repurchased Loan.
"Responsible Officer" shall mean when used with respect to
Buyer, Guarantor or Seller, the chairman of the Board of Directors, any vice
chairman of the Board of Directors, the chairman of the executive committee, any
vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"vice president"), the secretary, the treasurer, any assistant treasurer, or any
other officer or assistant officer of Buyer, Guarantor or Seller customarily
performing functions similar to those performed by the Persons who at the time
shall be such officers, respectively.
14
"Security Documents" shall have the meaning given in the
Credit Agreement.
"Seller" shall mean United Resources, Inc., an Oregon
corporation, and its Successors and assigns.
"Senior Funded Debt" has the meaning given in Section 7.03(k)
hereof.
"Standard Loan" shall mean any Loan (i) that is an Eligible
Loan and (ii) with respect to which the product of the related Obligor Group's
Cash Flow Ratio and Collateral Coverage Ratio is at least equal to 100%.
"Standard Documentation" means, with respect to a Loan secured
by real estate Collateral, (i) an MAI appraisal dated no later than 9 months
before the Closing Date on which such Loan first purchased by Buyer, (ii) a
Phase I environmental survey (except that for real estate Collateral which is
residential property, an environmental questionnaire in the form prescribed by
Seller acceptable to Buyer is acceptable) and (iii) originals of all title
insurance policies relating to the mortgaged property.
"Subordinated Debt" means, with respect to any Person, as of
any date of determination, Total Funded Debt which by its terms provides that no
payments or distributions may be made thereon or in respect thereto at any time
when a Termination Event or default has occurred and is continuing hereunder or
under any other agreement, document or instrument providing for repayment of any
Total Funded Debt (other than such Subordinated Debt) or for the payment by such
Person of the purchase price of tangible property.
"Subsidiary" means with respect to any Person, any
corporation, limited liability company or partnership directly or indirectly
controlled by such Person. For the purposes of this definition, "controlled by"
shall mean the possession, directly or indirectly of the power to direct or
cause the direction of the management and policies of such Subsidiary, whether
through the ownership of voting securities, by contract or otherwise.
"Successor" means, for any corporation or banking association,
any successor by merger or consolidation, or by acquisition of substantially all
of the assets of the predecessor.
"Termination Date" shall mean the first date on which (i) all
Loans shall have been paid in full or, (ii) all Loans shall have been
repurchased by or on behalf of Seller pursuant to Section 2.01(e), 2.02(c),
3.02, 4.05, 7.01(b), 8.02, 8.03 or 9.02.
"Termination Event" shall have the meaning given in Section
9.01.
15
"Total Capitalization" means, for any Person, as of any date
of determination, the sum of (i) the consolidated balance sheet "members equity"
of such Person determined in accordance with U.S. GAAP and (ii) Total Funded
Debt.
"Total Funded Debt" means for any Person (i) all indebtedness
or liability of such person, without duplication, for borrowed money and all
indebtedness or liability for borrowed money secured by a Lien on the assets of
such Person, whether or not such indebtedness or liability has been assumed by
such Person, (ii) all indebtedness and liability of such Person for Capital
Leases and (iii) all indebtedness or liability for borrowed money or for Capital
Leases for which such Person is directly or contingently liable as obligor,
guarantor, or otherwise, or in respect of which such Person otherwise assures a
creditor against loss.
"Total Funded Debt Ratio" means, for any Person, at any time,
the ratio of such Person's Total Funded Debt to Total Capitalization.
"Unfunded Vested Liability" shall mean, with respect to any
Person and any Plan, at any time, the amount (if any) by which (a) the present
value of all vested nonforfeitable benefits under such Plan exceeds (b) the fair
market value of all Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of such Person, any Subsidiary or
any member of the Controlled Group to the PBGC of the Plan under Title IV of
ERISA.
"U.S. GAAP" has the meaning specified in Section 1.03.
SECTION 1.02 General Principles Applicable to Definitions.
Definitions given in Section 1.01 shall be equally applicable to both singular
and plural forms of the terms therein defined and references herein to "he" or
"it" shall be applicable to Persons whether masculine, feminine or neuter.
References herein to any document including, without limitation, this Agreement,
a Loan, a Note, an Assignment and a Related Document shall be deemed a reference
to such document as it now exists, and as, from time to time hereafter, the same
may be amended.
SECTION 1.03 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be construed, and all
accounting procedures shall be performed, in accordance with generally accepted
United States accounting principles ("U.S. GAAP") consistently applied.
[End of Article I]
16
ARTICLE II
THE COMMITMENT
--------------
SECTION 2.01 Loans Sold and Purchased as of Effectiveness
Date; Agreement to Purchase and Sell Loans. (a) Seller and buyer acknowledge
that prior to the Effectiveness Date, under the terms of the Original Agreement,
Seller did assign, sell, set-over, transfer and otherwise convey, and Buyer did
purchase Loans and that such Loans and related property identified on the Loan
Schedule are owned by Buyer as of the Effectiveness Date. At the time of each
Incremental Purchase pursuant to Section 2.01A hereof, Seller does hereby
assign, sell, set-over, transfer and otherwise convey to Buyer, without recourse
(but subject to Seller's covenants, representations, warranties and indemnities
specifically provided herein), all of Seller's right, title and interest in, to
and under (i) each Loan purchased on the date of such Incremental Purchase and
any and all monies of whatsoever nature (payable upon the occurrence of any
event) payable pursuant to each such Loan after the applicable Cut-Off Date,
including payments on the related Note, all Insurance Proceeds, any Net
Liquidation Proceeds, other Collections, and any other amounts payable in
connection with the termination of such Loan, (ii) all rights, powers, and
remedies of Seller under or in connection with each such Loan, whether arising
under the terms of such Loan, by statute, at law or in equity, or otherwise
arising out of any default by the Obligor under such Loan, including all rights
to exercise any election or option or to make any decision or determination or
to give or receive any notice, consent, approval or waiver thereunder, (iii) all
security interests and lien rights of Seller in each item of Collateral pledged
to secure any such Loan, all additions, alterations, accessions or modifications
thereto or replacement of any part thereof, and all intangibles and other rights
associated with the Collateral, (iv) all rights of Seller under each Related
Document, in each case as the same may be modified, amended, supplemented or
restated from time to time, (v) all documents of title, books and records
concerning the foregoing property (including all computer programs, tapes, disks
and related items containing any such information), and (vi) all proceeds,
products, rents or profits of the foregoing of any nature whatsoever, including
all Insurance Proceeds and Net Liquidation Proceeds (with each Renewal Loan,
related Renewal Note and Related Documents conveyed by Seller and accepted by
Buyer pursuant to Section 3.02 hereof, collectively, the "Property"). The
foregoing transfer, sale, assignment and conveyance does not constitute and is
not intended to result in the creation, or an assumption by Buyer, of any
obligation of Seller or any other Person in connection with any Loan, the
related Note, Related Documents or Collateral or under any agreement or
instrument relating thereto, including any obligation to any Obligor.
(b) In connection with each transfer, sale and assignment of
Loans, Buyer hereby directs Seller to deliver to
17
the Buyer as of the date of each Incremental Purchase the Loan Files with
respect to the Loans transferred and sold on the date of each such Incremental
Purchase, which shall include, but not be limited to, the following:
(i) the original Notes, endorsed by Seller as
follows: "Pay to the order of National Consumer Cooperative Bank,
without recourse" and signed by a Responsible Officer of Seller, with
all prior and intervening endorsements showing a complete chain of
endorsement from the originator to Seller, if Seller was not the
originator, together with all originals or copies of Renewal Notes in
Seller's possession;
(ii) executed original counterparts of the Related
Documents, together with executed originals of all modifications or
amendments thereof;
(iii) irrevocable power of attorney of Seller to
Buyer to execute, deliver, file, record or otherwise deal with the
Collateral for the Loans in accordance with this Agreement;
(iv) documents evidencing or related to any
insurance policies; and
(v) with respect to Loans secured by mortgages on
real property, Buyer shall have received (A) either: (i) the original
mortgage, with evidence of recording thereon, (ii) a copy of the
mortgage certified as a true copy by a Responsible Officer of Seller
where the original has been transmitted for recording until such time
as the original is returned by the public recording officer or duly
licensed title or escrow officer or (iii) a copy of the mortgage
certified by the public recording office in those instances where the
original recorded mortgage has been lost; (B) either: (i) the original
assignment of mortgage from Seller endorsed as follows: "National
Consumer Cooperative Bank," with evidence of recording thereon
(provided, however, that where permitted under the laws of the
jurisdiction wherein the mortgaged property is located, the assignment
of mortgage may be effected by one or more blanket assignments for
Loans secured by mortgaged properties located in the same county), or
(ii) a copy of such assignment of mortgage certified as a true copy by
a Responsible Officer of Seller where the original has been transmitted
for recording (provided, however, that where the original assignment or
mortgage is not being delivered to Buyer, each such Responsible Officer
may complete one or more blanket certificates attaching copies of one
or more assignments of mortgage relating to the mortgages originated by
Seller); and (C) either: (i) originals of all intervening assignments,
if any, showing a complete chain of title from the originator to
Seller, including warehousing assignments, with evidence of recording
thereon if such assignments were
18
recorded, (ii) copies of any assignments certified as true copies by a
Responsible Officer of Seller where the originals have been submitted
for recording until such time as the originals are returned by the
public recording officer, or (iii) copies of any assignments certified
by the public recording office in any instances where the original
recorded assignments have been lost; and (D) either: (i) with respect
to all Loans which are secured by real estate Collateral, available
Minimum Documentation or Standard Documentation.
(c) In addition, concurrently with or prior to each
Incremental Purchase, Seller agrees to cause any UCC-1 financing statements,
UCC-3 assignments or other instruments necessary to perfect the ownership or
security interests granted and assigned by Seller to Buyer in the Loans and
other Property transferred and sold on the date of each such Incremental
Purchase (other than UCC-1 financing statements naming the Obligors under the
Loans as debtors) to be filed or recorded in all such appropriate places as are
required to protect Buyer's interest in such Loans and such other Property, and
to deliver a file-stamped copy of such financing statements or other evidence of
such filings to Buyer. Seller and Buyer agree that with respect to each Loan,
Related Document and item of Primary Collateral, Seller will make all filings
and take all such other actions necessary to perfect Buyer's first priority
security interest therein, and, with respect to each item of Collateral which is
not Primary Collateral, Seller will make all filings and take all such other
actions necessary to perfect Buyer's security interest therein to the same level
of priority enjoyed by Seller at the time of the Incremental Purchase of the
related Loan.
(d) It is the intention of the parties to this Agreement that
each conveyance of Seller's right, title and interest in and to the Property
pursuant to this Agreement shall constitute a purchase and sale and not a loan.
If, notwithstanding the foregoing, the conveyance of the Property to Buyer
hereunder is characterized by any third party as a pledge, the parties intend
that Seller shall be deemed hereunder to have granted to Buyer a first priority
perfected security interest in all of Seller's right, title and interest in, to
and under the Loans, the Notes, the related Collateral and Related Documents,
and all monies due or to become due with respect thereto after the applicable
Cut-Off Date, and that this Agreement shall constitute a security agreement
under applicable law.
(e) If Buyer determines that any document or documents
constituting a part of a Loan File are missing or defective (that is, mutilated,
damaged, defaced, incomplete, improperly dated, clearly forged or otherwise
physically altered) with respect to any Loan in any respect which materially and
adversely affects the interests of Buyer, then Buyer shall promptly notify
Seller, whereupon Seller shall have a period of 30 days, within which to correct
or cure any such defect. If any such material defect has not been corrected or
cured in all material respects as described
19
below, notwithstanding any other provision of this Agreement, Seller will
repurchase the related Loan from Buyer at a price equal to the sum (without
duplication) of (i) the difference between (A) the Principal Balance of such
Loan and (B) the aggregate of the principal portion of the Monthly Payments then
received and retained by Buyer (after taking into account any payment of
principal made by the related Obligor on such day), plus (ii) an amount equal to
the interest accrued at the applicable Loan Interest Rate on such Repurchased
Loan through the last day of the Due Period during which such repurchase occurs,
to the extent such amount was not previously received during such Due Period
from the Obligor as a Monthly Payment (the "Repurchase Amount"). The Repurchase
Amount shall be paid by Seller to Buyer in immediately available funds by the
last day of the Due Period during which such repurchase obligation arises and,
upon receipt by Buyer of such deposit, Buyer shall release or cause to be
released to Seller the related Loan Files and shall execute and deliver or cause
to be executed and delivered such instruments of transfer or assignment of such
Loan, the security interest in the related Property, in each case without
recourse, representation or warranty, as Seller shall reasonably request (as
shall be prepared by and at the expense of Seller).
SECTION 2.01A Incremental Purchase. (a)Prior to the
Effectiveness Date, in accordance with the provisions of the Original Agreement,
Seller sold and Buyer purchased Loans and Property related thereto. Subject to
the terms and conditions hereof, Seller may at any time on and after the
Effectiveness Date and prior to February 28, 1998 (or such later date as is
approved by Buyer) sell to Buyer and Buyer shall purchase from Seller certain
identified Loans and Property related thereto. Each sale and purchase of Loans
under the Original Agreement and hereunder is referred to as an "Incremental
Purchase"; no Incremental Purchase shall be for a principal amount of less than
$1,000,000 (or such lesser amount as is approved by Buyer) (other than the final
Incremental Purchase which may be in such lesser amount as agreed to by Buyer)
and that Buyer shall not be obligated to make an Incremental Purchase (or any
portion thereof) to the extent such Purchase (or any portion thereof), together
with the aggregate Principal Balance of all Loans purchased in previous
Incremental Purchases, would exceed the Maximum Purchase Amount.
(b) Subject to the terms and conditions hereof (other than the
payment of any fees and expenses relating to such Incremental Purchase), Buyer
hereby agrees to make one or more Incremental Purchases of Rays' Loans having an
aggregate Principal Balance of not more than $2,000,000.
(c) Seller shall provide Buyer with written notice of its
intention to request an Incremental Purchase in the form of Exhibit G hereto no
later than ten (10) Business Days before each Incremental Purchase and shall
provide Buyer with at least five (5) Business Days to review the Loan Files
relating to each Incremental Purchase. Upon satisfaction of all terms and
20
conditions contained herein, Buyer shall pay to Seller the Purchase Price of
each Incremental Purchase on the applicable Closing Date.
SECTION 2.02 Agreement to Accept Renewal Notes. (a) Subject to
the terms and conditions of this Agreement, including delivery of the Renewal
Notes and satisfaction of the other delivery and filing requirements set forth
in Section 2.01 hereof no later than five (5) Business Days before the
applicable Renewal Date, and upon at least 30 days' written notice from Seller,
Buyer agrees to accept on any Renewal Date such Renewal Loans as Seller shall
have caused Obligors of the related Prior Notes to execute and deliver.
(b) The parties to this Agreement intend that the conveyance
of each Renewal Loan and related Property by Seller and acceptance thereof by
Buyer shall constitute a purchase and sale and not a loan.
(c) If any document or documents constituting part of a Loan
File relating to a Renewal Loan are missing or defective as described in Section
2.01(e) hereof, Buyer shall have the same rights against Seller as provided in
such Section 2.01(e).
[End of Article II]
21
ARTICLE III
CLOSING PROCEDURE; CONDITIONS TO PURCHASE
-----------------------------------------
SECTION 3.01 Payment. Buyer shall pay in immediately available
funds to Seller, on or before 12:00 noon Washington, D.C. time, on each Closing
Date, the sum of 100% of the Principal Balance of each Loan sold by Seller to
Buyer on such Closing Date (each such sum, collectively, the "Purchase Price").
SECTION 3.02 Acceptance - Renewal Loans. For each Loan with
provisions for renewal on a Renewal Date, no later than thirty (30) days before
the Renewal Date for such Loan, Seller shall provide Buyer with a notice that
(i) identifies the Loan and related Note by original dated date, face amount,
Loan Interest Rate, and name of Obligor, (ii) identifies the Renewal Date of
such Loan, and (iii) states whether all or any part of the Principal Balance of
such Loan will be renewed on the Renewal Date, and if the Loan is to be renewed,
the anticipated Renewal Balance. No later than five (5) Business Days before the
Renewal Date for any Loan to be renewed, Seller shall deliver to Buyer the
Renewal Note and other documents required by Section 2.01 hereof. On the
applicable Renewal Date for any Loan which is to be renewed, Buyer shall,
subject to satisfaction of the delivery requirements of Section 2.02 and the
conditions set out in Section 3.04, accept a Renewal Note from Seller (in lieu
of receiving the Renewal Balance) as payment in full of a portion of the
Outstanding Balance of the Prior Note equal to the Renewal Balance. In the event
that Seller has caused a Renewal Note to be executed but the conditions
precedent to acceptance thereof set out in Section 3.04 have not been satisfied
or waived by the Renewal Date, Seller shall on such Renewal Date repurchase such
Renewal Loan on the same terms as stated in Section 2.01(e).
SECTION 3.03 Effective Date for each Purchase. Each sale made
pursuant to Sections 2.01 and 2.01A of the Original Agreement was effective, and
each sale made pursuant to Sections 2.01 and 2.01A of this Agreement shall be
effective, and all right, title and interest in the Loans and the related
Property so sold passed or shall pass, as applicable, to Buyer at such time as
Buyer shall pay the Purchase Price in respect thereof due on the applicable
Closing Date.
SECTION 3.04 Buyer's Conditions Precedent to Acceptance. The
obligation of Buyer to pay the Purchase Price on each Closing Date and to accept
the Renewal Loans and Notes on any applicable Renewal Date is subject to the
fulfillment on such Closing Date or Renewal Date, as the case may be, of each of
the following conditions (relating only to the Loans purchased or renewed on
each such Date):
(a) Buyer shall have received the original Notes or Renewal
Notes, as the case may be, and such Notes shall have been
22
duly endorsed by Seller without recourse or warranty except as provided herein,
and of the Related Documents;
(b) Buyer shall have received the original executed
counterpart of the loan agreement, security agreement and other Related
Documents with respect to each Loan (or, to the extent more than one original
counterpart exists, all original executed counterparts of such agreements and
Related Documents that are in the possession of Seller or any of its
Affiliates), and each such Document shall be in a form reasonably satisfactory
to Buyer;
(c) Buyer shall have received a duly executed Notice of
Assignment in the form annexed hereto as Exhibit B addressed to each Obligor of
a Note related to a Loan;
(d) With respect to Loans secured by mortgages on real
property, Buyer shall have received (A) either: (i) the original mortgage, with
evidence of recording thereon, (ii) a copy of the mortgage certified as a true
copy by a Responsible Officer of Seller where the original has been transmitted
for recording until such time as the original is returned by the public
recording officer or duly licensed title or escrow officer or (iii) a copy of
the mortgage certified by the public recording office in those instances where
the original recorded mortgage has been lost; (B) either: (i) the original
assignment of mortgage from Seller endorsed as follows: "National Consumer
Cooperative Bank," with evidence of recording thereon (provided, however, that
where permitted under the laws of the jurisdiction wherein the mortgaged
property is located, the assignment of mortgage may be effected by one or more
blanket assignments for Loans secured by mortgaged properties located in the
same county), or (ii) a copy of such assignment of mortgage certified as a true
copy by a Responsible Officer of Seller where the original has been transmitted
for recording (provided, however, that where the original assignment of mortgage
is not being delivered to Buyer, each such Responsible Officer may complete one
or more blanket certificates attaching copies of one or more assignments of
mortgage relating to the mortgages originated by Seller); and (C) either: (i)
originals of all intervening assignments, if any, showing a complete chain of
title from the originator to Seller, including warehousing assignments, with
evidence of recording thereon if such assignments were recorded, (ii) copies of
any assignments certified as true copies by a Responsible Officer of Seller
where the originals have been submitted for recording until such time as the
originals are returned by the public recording officer, or (iii) copies of any
assignments certified by the public recording office in any instances where the
original recorded assignments have been lost; and (D) with respect to all Loans
which are secured by real estate Collateral, all available Standard
Documentation or Minimum Documentation;
(e) Seller has, or on the applicable Closing Date will have,
(1) a first priority perfected security interest in each item of Primary
Collateral, free from any Lien, security
23
interest, encumbrance or other right, title or interest of any Person, and (2) a
perfected security interest in each other item of Collateral, subject to the
prior Liens existing on, and identified to and approved by Buyer on the
applicable Closing Date. Seller shall, on the applicable Closing Date, transfer
its security interest in the Collateral subject to the rights of the holder of
title in and to the Collateral and of the Obligors in the Collateral under the
Loans, related Notes and Related Documents (and in the case of Collateral which
is not Primary Collateral, holders of prior Liens), and Seller, as agent for
Buyer, shall defend Buyer's security interest in and to the Collateral related
to any Loan against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to that of obligors or Buyer;
(f) On each applicable Closing Date, at least 90% the
Collateral securing each Loan must consist of Primary Collateral;
(g) Buyer shall have received Uniform Commercial Code
financing statements on Form UCC-3 executed by Seller as "Assignor" evidencing
the assignment to Buyer by Seller of all security interests in personal
property, arising in favor of Seller under the Related Documents, on the
Collateral relating to the Loans (other than security interests in Seller's
capital stock and patronage dividends) in form and content sufficient for filing
with the applicable location for central filing in the state where the related
form UCC-1 is filed;
(h) Buyer shall have received Assignments of Deeds of Trust
executed by Seller as "Assignor" evidencing the assignment to Buyer by Seller of
all security interests in real property arising in favor of Seller under the
Related Documents in form and content sufficient for filing in the real property
recording districts in which such real property is located;
(i) Buyer shall have received evidence reasonably satisfactory
to Buyer that the security interests arising in favor of Seller under the
Related Documents and the Collateral therein described (other than Seller's
capital stock and patronage dividends) have been duly perfected by the filing of
all such Uniform Commercial Code financing statements and the taking of all such
other or additional acts as may be necessary to create a valid and perfected
Lien enforceable against all third parties in all jurisdictions to secure each
Obligor's respective obligations to Seller under the Loans, related Notes and
Related Documents and evidence reasonably satisfactory to Buyer;
(j) Buyer shall have received evidence reasonably satisfactory
to Buyer that the security interests arising in its favor under this Agreement
in the Loans, related Notes, related Collateral, the Related Documents and the
proceeds thereof has been duly perfected by the filing of all such Uniform
Commercial Code financing statements and the taking of all such other or
24
additional acts as may be necessary to create a valid and perfected lien of
first priority enforceable against all third parties (other than prior lien
holders in the case of Collateral which is not Primary Collateral) in all
jurisdictions to secure all of Seller's obligations to Buyer;
(k) No Termination Event, and no event which with the giving
of notice or passage of time or both would constitute a Termination Event shall
have occurred and be continuing, and a Responsible Officer of Seller shall have
so certified to Buyer in writing;
(l) Each representation and warranty of Seller set forth in
Section 4.01, 4.02 or 4.03 shall be true and correct in all material respects,
and a duly Responsible Officer of Seller shall have so certified to Buyer in
writing in substantially the form of Exhibit H hereto;
(m) Each representation and warranty of Guarantor set forth in
Section 7.02 hereof shall be true and correct in all material respects, and a
duly Responsible Officer of Guarantor shall have so certified to Buyer in
writing in substantially the form of Exhibit I hereto;
(n) Buyer shall have received the revised or supplemented Loan
Schedule and other Schedules required by this Agreement and they shall be in a
form reasonably acceptable to Buyer;
(o) Buyer shall have received from Seller financial and other
documentation supporting Seller's calculation of Cash Flow Ratio and Collateral
Coverage Ratio with respect to each Obligor Group having an Aggregate Exposure
as of such Closing Date of $250,000 and greater;
(p) Seller shall have paid or provided for the payment of all
fees and expenses, including Buyer's out-of-pocket expenses and the fees of
Buyer's counsel, incurred in selling the Loans pursuant to this Agreement; and
(q) The Guaranty Amount shall not have been reduced to zero.
SECTION 3.05 Additional Delivery Requirements for
Effectiveness Date. The obligation of Buyer to perform any of its obligations
under this Agreement shall be further subject to satisfaction of each of the
following delivery requirements on the Effectiveness Date (or on the date
specified below) to the reasonable satisfaction of Buyer:
(a) Buyer shall have received amendments to the Uniform
Commercial Code financing statements filed in connection with the Original
Agreement on Form UCC-3 naming Buyer as "Secured Party" and executed by Seller
as "Debtor" covering the Loans and Related Property sold and to be sold under
this
25
Agreement (by reference to the Loan Schedules attached to this Agreement),
in form and content sufficient for filing in the appropriate offices in the
States of Oregon, Washington and California;
(b) Buyer shall have received an opinion of counsel for Seller
dated such date and in a form reasonably acceptable to Buyer;
(c) Buyer shall have received an opinion of Counsel for
Guarantor dated such date and in a form reasonably acceptable to Buyer;
(d) Buyer shall have received in form and substance reasonably
satisfactory to it a certified copy of a resolution adopted by the Board of
Directors of Seller, authorizing the execution, delivery and performance of this
Agreement, together with evidence of the authority and specimen signatures of
the persons who have signed this Agreement and such other evidence of corporate
authority as Buyer may reasonably require;
(e) Buyer shall have received in form and substance reasonably
satisfactory to it, a certified copy of a resolution adopted by the Board of
Directors of Guarantor, authorizing the execution, delivery and performance of
this Agreement;
(f) Buyer shall have received officers' certificates from
Seller and Guarantor in forms reasonably acceptable to Buyer;
(g) Buyer shall have received an executed counterpart of a
certain amended and restated Subordination Agreement in which United Grocers,
Inc. agrees to subordinate its interest in the Collateral (other than patronage
and stock) securing the Loans to the interest of Seller therein;
(h) Buyer shall have received Exhibit A containing information
relating to the corporate and "doing business" names of Seller and Guarantor in
the States of Oregon, Washington and California;
(i) Buyer shall have received duly executed counterparts of
the Holdback Loan Purchase Agreement and the Holdback Guaranty Agreement, each
dated as of the date hereof, together with opinions of counsel to United
Resources and United Grocers to the effect that such Agreements are the legal,
valid and binding obligations of United Resources and United Grocers, as
applicable enforceable against both such parties in accordance with their
respective terms;
(j) Buyer shall have received duly executed counterparts of
the New Origination Loan Agreement and the New Origination Guaranty Agreement,
each dated the date hereof, together with an opinion of counsel to United
Grocers to the effect that such Agreements are the legal, valid and binding
26
obligations of United Grocers, enforceable against United Grocers in accordance
with their respective terms;
(k) Buyer shall have received a Loan Schedule listing all of
the Loans sold by Seller and purchased by Buyer under the Original Agreement and
owned by Buyer as of the Effectiveness Date;
(l) Buyer shall have received certified copies of requests for
information or copies (Form UCC-11) (or a similar search report certified by
parties acceptable to Buyer) dated a date reasonably near the Effectiveness Date
listing all effective financing statements which name Seller or Guarantor as
debtor and which are filed in jurisdictions in which the filings were made
pursuant to item (a) above, together with copies of such financing statements
(none of which shall cover any Loans and Related Property);
(m) Buyer shall have received executed copies of the Credit
Agreement and Security Documents; and
(n) Buyer shall have received a receipt-stamped
acknowledgement copy of a Uniform Commercial Code financing statements on Form
UCC-1 naming Buyer as "Secured Party" (subordinate to Credit Providers) and
executed by Guarantor as "Debtor" covering the Guaranty Collateral, from the
appropriate offices in the State of Oregon.
SECTION 3.06. Seller's Conditions Precedent to Sale. The
obligation of Seller to sell Loans on each Closing Date shall be subject to the
fulfillment of each of the following conditions on such Closing Date to the
reasonable satisfaction of Seller:
(a) Seller shall have received the Purchase Price as provided
in Section 3.01; and
(b) Each representation and warranty of Buyer set forth in
Section 4.04 shall be true and correct in all material respects, and a duly
authorized officer of Buyer shall have so certified to Seller in writing.
[End of Article III]
27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 4.01 Seller's corporate Representations and
Warranties. Seller represents and warrants to Buyer as of the Effectiveness
Date, as of each Closing Date and as of any Renewal Date as follows:
(a) Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Oregon, is doing
business only under the corporate and "doing business as" names listed in
Exhibit A hereto, and is qualified to do business in each other jurisdiction
where the conduct of its business or the ownership of its properties requires
such qualification, and has full corporate power, authority and legal right to
carry on its business as presently conducted, to own and operate its properties
and assets, to execute, deliver and perform this Agreement and to sell the Loans
and related Property.
(b) The execution, delivery and performance by Seller of this
Agreement and any assignment, the endorsement the Notes and the sale of any
Loans, related Notes and Related Documents and the security interest in the
related Collateral hereunder have been duly authorized by all necessary
corporate action of Seller, do not require any shareholder approval or the
approval or consent of any trustee or the holders of any Debt of Seller, except
such as have been obtained (certified copies thereof having been delivered to
Buyer), do not contravene any law, regulation, rule or order binding on it or
its Articles of Incorporation or Bylaws and do not contravene the provisions of
or constitute a default under any indenture, mortgage, contract or other
agreement or instrument to which Seller is a party or by which Seller or any of
the Loans, related Notes or Related Documents may be bound or affected.
(c) No Government Approval or filing or registration with any
Governmental Authority is required for the making and performance by Seller of
this Agreement or any assignment or the endorsement of the Notes or in
connection with the sale of the Loans and related Property contemplated hereby,
except such as have been heretofore obtained and are in full force and effect
(certified copies thereof having been delivered to Buyer).
(d) This Agreement has been duly executed and delivered by
Seller and constitutes, and any assignment and any endorsement of a Note when
duly executed and delivered will constitute, the legal, valid and binding
obligation of Seller enforceable against Seller in accordance with its terms.
(e) Except as described in Exhibit F hereto, there are no
actions, proceedings, investigations, or claims against or affecting Seller now
pending before any court, arbitrator or
28
other Governmental Authority (nor to the knowledge of Seller has any thereof
been threatened nor does any basis exist therefor) which if determined adversely
to Seller would be likely to (i) have a material adverse effect on the financial
condition or operations of Seller, (ii) have a material adverse effect on
Seller's ability to perform its obligations under this Agreement, or (iii)
impair or defeat the Buyer's security interest in any of the Property conveyed
pursuant to this Agreement. With respect to the litigation described in Exhibit
F hereto, a determination in such litigation that is materially adverse to
Seller or Guarantor would not have a material adverse effect on the financial
condition or operations of Seller or on Seller's ability to perform its
obligations under this Agreement, and would not impair the Buyer's security
interest in the Property.
(f) The consolidated balance sheet of Seller and its
Affiliates and Subsidiaries as at September 27, 1996, and the related statements
of income and retained earnings of Seller and its Affiliates and Subsidiaries
for the fiscal year then ended, copies of which have been furnished to Buyer,
fairly present the financial condition of Seller and its Affiliates and
Subsidiaries as at such date and the results of operations of Seller and its
Affiliates and Subsidiaries for the period then ended, all in accordance with
U.S. GAAP consistently applied. Since that date, there has been no material
adverse change in the financial condition or operations of Seller or any of its
Subsidiaries or Affiliates.
(g) Seller has good and marketable title to each of the
properties and assets reflected in its balance sheet referred to in Section
4.01(f) except such as have been since sold or otherwise disposed of in the
ordinary course of business or in accordance with Section 6.01(i) hereof.
(h) Neither Seller nor any of its Subsidiaries or Affiliates
is in material breach of or default under any agreement or agreements to which
it is a party or which are binding on it or any of its assets and which provide
for the payment of monies, the delivery of goods or the provision of services in
amounts or with values in the aggregate in excess of One Million Dollars
($1,000,000).
(i) The present value of all benefits vested under all Pension
Plans did not, as of the most recent valuation date of such Pension Plans,
exceed the value of the assets of the Pension Plans allocable to such vested
benefits by an amount which would represent a potential material liability of
Seller and its consolidated subsidiaries or affect materially the ability of
Seller to perform this Agreement; no Plan or trust created thereunder, or any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 or Section 2003(a) of ERISA) which could
subject such Plan or any other Plan, any trust created thereunder, or any
trustee or administrator thereof, or any party dealing with any Plan or any such
trust to the tax or penalty on prohibited transactions
29
imposed by Section 502 or Section 2003(a) of ERISA; no Pension Plan or trust
created thereunder has been terminated, and there have been no "reportable
events" (as that term is defined in Section 4043 of ERISA) since the effective
date of ERISA; no Pension Plan or trust created thereunder has incurred any
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA; the required
allocations and contributions to Pension Plans will not violate Section 415 of
the Code; and Seller has no withdrawal liability to any trust created pursuant
to a multi-employer pension or benefit plan and would not be subject to any
withdrawal liability in excess of One Million Dollars ($1,000,000) if it
withdrew from any such plan or if its participation therein were otherwise
terminated.
(j) Uniform Commercial Code financing statements have been
duly filed in all places where filing is necessary and all other or additional
acts have been taken as are necessary to perfect Buyer's interests arising
hereunder and under the assignments in and to the Loans and related Property and
the lien created hereby constitutes a valid and perfected lien of first priority
in and to all of the Loans and related Property (other than in Collateral which
is not Primary Collateral, in which case Buyer has only such interest as Seller
had and disclosed to Buyer on the applicable Closing Date and other than
Seller's security interest in its capital stock and patronage dividends) and is
enforceable against all third parties (other than third parties whose interests
in Collateral which is not Primary Collateral are prior to Seller's interests
therein on the applicable Closing Date) in all jurisdictions as security for all
obligations of Seller to Buyer under this Agreement.
(k) Seller has good and marketable title to the Loans and
related Notes designated for sale to Buyer hereunder, the Related Documents and
the proceeds thereof, free and clear of all liens and encumbrances and Seller
has not transferred in any manner whatever to any Person (other than Buyer) and
has not created or permitted any lien, pledge, charge, security interest,
ownership interest, participation interest or any other interest of any nature
whatever (other than in favor of Buyer) in respect of the Loans, the related
Notes, the Related Documents or the proceeds thereof.
(l) Seller's chief executive offices and the offices where
such Seller keeps records concerning the Loans and related Property are located
at 0000 X.X. Xxxx Xxxx, Xxxxxxxx, Xxxxxx or such other location to which such
offices are moved pursuant to Section 6.01(m) hereof.
(m) This Agreement, the financial statements referred to in
Section 4.01(f) and all other instruments, documents, certificates and
statements furnished to Buyer by Seller, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained herein or therein not misleading.
30
(n) To the best of Seller's knowledge, all properties of
Seller and each Subsidiary of Seller and Seller's and such Subsidiary's use
thereof comply in all material respects with zoning and use restrictions and
with applicable laws and regulations relating to the environment including,
without limitation, the Environmental Laws. Without limiting the foregoing to
the best of Seller's knowledge, no Hazardous Substances have been generated,
manufactured, refined, transferred, stored, treated, transported, handled,
managed, discharged or disposed of, whether by Seller or, by any other Person
onto, upon, over, beneath or from any real property owned by Seller or other
premises owned, leased, operated, used or held at any time by Seller
(collectively, the "Premises") or any of the ground water beneath the Premises
which in any fashion might result in the Buyer incurring or suffering at any
time any loss, liability, damages, or obligations including liability for
cleanup and recovery costs and expenses. To the best of Seller's knowledge,
there are no past or present events, conditions, circumstances, activities,
practices, incidents or actions at or in connection with the Premises or any of
the ground water beneath the Premises which could reasonably be expected to
interfere with or prevent continued compliance with any laws or regulations
pertaining to underground storage tanks or any other Environmental Laws or give
rise to any legal liability or otherwise from the basis of any claim, action,
suit, proceedings, hearing or investigation against or affecting Seller under
the Environmental Laws. To the best of Seller's knowledge, there has been no
disposal from the Premises by Seller or any other Person directly or indirectly
of any Hazardous Substances to, on or in any site currently listed or formally
proposed to be listed on the National Priorities List under Superfund or any
site listed on any priority cleanup list compiled by any Governmental Authority.
Seller will not be (and to the best of Seller's knowledge, has not been)
involved in any operations at or near the Premises which operations when
conducted in accordance with applicable law could lead to: (a) the imposition of
liability under Environmental Laws on borrower or any subsequent owner of the
Premises or (b) the creation of a Lien on the Premises under Environmental Laws
or under any similar laws or regulations.
(o) Seller has filed all tax returns and reports required of
it, has paid all taxes which are due and payable, and has provided adequate
reserves for payment of any tax the payment of which is being contested. The
charges, accruals and reserves on the books of Seller and each Subsidiary of
Seller in respect of taxes for all fiscal periods to date are accurate. There
are no questions or disputes between Seller or any of its Subsidiaries and any
Governmental Authority with respect to any taxes except as disclosed in the
balance sheet referred to in Section 4.01(f) hereof or otherwise disclosed to
the Buyer in writing prior to the date of this Agreement.
(p) Neither Seller nor any Subsidiary of Seller is in
violation of or subject to any contingent liability on account of
31
any laws, statutes, rules, regulations and orders of any Governmental Authority.
Neither Seller nor any Subsidiary of Seller is in material breach of or default
under any agreement of which it is a party or which is binding on it or any of
its assets.
(q) Neither Seller nor any Subsidiary of Seller is engaged
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 Federal Reserve Regulation U), and no part of the proceeds of any
Purchase Price will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any other purpose that violates the applicable provisions of
an Federal Reserve Regulation. Seller will furnish to Buyer on request a
statement conforming with the requirements of Regulation U.
(r) Seller and each of its Subsidiaries owns or possesses all
the patents, mask works, trade secrets, trademarks, service marks, trade names,
copyrights, licenses, franchises, permits and rights with respect to the
foregoing necessary to own and operate its properties and to carry on its
business as presently conducted and presently planned to be conducted without
conflict with the rights of others except as disclosed in writing to Buyer prior
to the date of this Agreement.
(s) Seller is "eligible" to borrow from NCB under the
provisions of the Bank Act.
SECTION 4.02 Seller's Closing Date Representations and
Warranties with respect to Loans. Seller represents and warrants to Buyer as of
each Closing Date with respect to Loans transferred and sold on such Closing
Date as follows:
(a) The information with respect to each Loan set forth in the
Loan Schedule, together with any documentation supporting such information, is
true and correct;
(b) With respect to each Loan, there exists only one original
Note. Such original Note and all of the other original or certified
documentation set forth in Sections 2.01 and 3.03 (including all material
documents related thereto) have been or will be delivered to Buyer on the
applicable Closing Date;
(c) Each Loan was originated in the United States and Monthly
Payments on such Loan are payable in U.S. Dollars by an Obligor domiciled in the
United States;
(d) Each Note will have a Loan Interest Rate that is either
(i) a fixed rate of at least 7.5% per annum (except for those Loans listed on
Schedule II hereto (as the same may be supplemented upon subsequent Incremental
Purchases) which shall have fixed Loan Interest Rates of at least 5.99% or (ii)
a
32
variable rate based on the Prime Rate, adjusted either monthly or semi-annually,
plus at least 100 basis points;
(e) Immediately prior to the transfer and assignment herein
contemplated, Seller held good and indefeasible title to, and was the sole owner
of, each Loan conveyed by Seller, subject to no liens, charges, mortgages,
encumbrances or rights of others or other liens which will be released
simultaneously with such transfer and assignment; and immediately upon the
transfer and assignment herein contemplated, Buyer will hold good and
indefeasible title, to, and be the sole owner of, each Loan subject to no liens,
charges, mortgages, encumbrances or rights of others;
(f) Seller shall have received at least three (3) (or in the
case of a Full Recourse Loan, twelve (12)) scheduled principal payments before
the applicable Cut-Off Date;
(g) As of the applicable Cut-Off Date, no Loan is delinquent
(after giving effect to any applicable grace period) in payment and, as of the
applicable Closing Date, no Loan shall have had an individual payment delinquent
(after giving effect to any applicable grace period) for periods in excess of 31
days on 2 or more separate occasions;
(h) The Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the related Note, Related Document or any
related Collateral, or the exercise of any right thereunder, render either the
related Note, Related Document or any related Collateral unenforceable in whole
or in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, and so such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(i) Each Loan at the time it was made complied and, as of the
applicable Closing Date, complied in all material respects with applicable state
and federal laws and regulations, including, without limitation, usury, equal
credit opportunity, disclosure and recording laws;
(j) The Loans were originated by Seller in accordance with the
underwriting criteria set forth in the Credit and Collection Policy;
(k) Except as noted on Schedule II, the Notes executed by any
one Obligor (or other Person directly or indirectly controlling, controlled by
or under common control with, such Obligor), together with any other promissory
notes or evidences of indebtedness executed by such Obligors for the benefit of
Seller, shall have an aggregate outstanding balance of less than $2,000,000;
33
(l) At least one of the Obligors with respect to each Loan (i)
is a member in good standing of United Grocers and (ii) to the best of Seller's
knowledge, shall have provided to Seller complete and accurate information
relating to Obligor's financial condition and shall have suffered no material
adverse changes in its financial condition or otherwise since the date the Loan
was originated;
(m) Except for any Loan identified on Schedule II (as the same
may be supplemented upon subsequent Incremental Purchases) hereof, each Loan has
a remaining amortization period of no less than 12 months and no greater than
117 months;
(n) The Note related to each Loan provides that the principal
be amortized monthly over the term of such Note, with either (i) level monthly
payments of principal or (ii) level monthly payments of principal and interest,
provided that, in the case of a Loan with renewal provisions, a balloon payment
on such Renewal Date is permissible;
(o) Each Loan, related Note, related Collateral and Related
Documents pursuant to which Collateral is pledged to Seller is the legal, valid
and binding obligation of the Obligor thereof and is enforceable in accordance
with its terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law), none of
which will prevent the ultimate realization of the security provided by the
Collateral or Related Document, and all parties to each Loan had full legal
capacity to execute all Related Documents and convey the property therein
purported to be conveyed;
(p) The terms of the Loan, related Note and each Related
Document pursuant to which Collateral was pledged have not been impaired,
altered or modified in any respect, except by written instrument which has been
recorded, if necessary, to protect the interest of Buyer and which has been
delivered to Buyer;
(q) The proceeds of the Loan have been fully disbursed, and
there is no obligation on the part of Seller to make future advances thereunder.
Any and all requirements as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
or recording the Loans were paid;
(r) Except for any Obligor identified on Schedule II (as the
same may be supplemented upon subsequent Incremental Purchases), the Obligor
with respect to each Loan and each other member of its Obligor Group has a
positive net worth as accounted for under U.S. GAAP, consistently applied, and
has no present intention to seek relief under the federal bankruptcy laws;
34
(s) There is no default, breach, violation or event of
acceleration existing under the Loan, related Note or Related Document and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and Seller has not waived any such default, breach, violation or
event of acceleration;
(t) The Loan was not selected for inclusion under this
Agreement from Seller's portfolio of comparable loans on any basis which would
have a material adverse effect on Buyer;
(u) The Obligor and/or the Loan Guarantor with respect to each
Loan and related Property is personally liable for the payment and performance
of its obligations under such Loan. Pursuant to the terms of each Loan, each of
the Obligor and the Loan Guarantor thereunder is absolutely required to make all
payments and perform all obligations due pursuant to such Loan without
abatement, deferment or defense of any kind or for any reason (except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting creditors rights
and by general principles of equity);
(v) As of the applicable Closing Date, insofar as facts are
within Seller's actual knowledge, the Collateral covered by or securing the
obligations under each Loan is insured against loss by fire and such other
hazards as are customary for personal property of the same or similar type, such
insurance being in an amount not less than the full replacement value of such
personal property subject to customary deductibles and Buyer is designated as
loss payee under such policies;
(w) Each Loan requires each of the Obligor and Loan Guarantor
thereunder at its own costs and expense to maintain the Collateral pledged to
secure the related Loan in good repair, condition and working order, and to the
best knowledge of Seller, each Obligor and Loan Guarantor under a Loan is
currently in compliance with this requirement;
(x) As of the applicable Closing Date, at least 90% of the
value of the Collateral securing each Loan consists of Primary Collateral, and
at least a portion of the Primary Collateral consists of the inventory,
furniture, fixtures and equipment in the stores owned or leased by the related
Obligor. All Collateral securing any Loan is located in the United States;
(y) Seller has, or on the applicable Closing Date will have,
(1) a first priority perfected security interest in each item of Primary
Collateral, free from any lien, security interest, encumbrance or other right,
title or interest of any Person, and (2) a perfected security interest in each
other item of Collateral, subject to the prior liens, security interests and
encumbrances existing on, and identified to and approved by Buyer on the
applicable Closing Date. Seller shall, on the applicable
35
Closing Date, transfer its security interest in the Collateral subject however
to the rights of the holder of title in and to the Collateral and of the
Obligors in the Collateral pledged under the Related Documents (and, in the case
of Collateral which is not Primary Collateral, holders of prior liens), and
Seller, as agent for Buyer, shall defend the Buyer's security interest in and to
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to that of the Obligors or Buyer.
(z) Either (i) the Obligor and Loan Guarantor has, under the
terms of each Loan, consented to a sale and assignment of the Loan, the related
Note and Related Documents and the sale or grant of a security interest in and
to the Loan and the Collateral relating thereto, or (ii) none of the Loan, the
related Note or any Related Documents requires the consent of approval of notice
to the Obligor or Loan Guarantor with respect to the assignment and transfer by
Seller of Seller's right, title and interest in and to the Loan, the related
Note, any Related Document and Collateral;
(aa) The Notes and Related Documents delivered to Buyer on the
applicable Closing Date are true, correct, and complete original counterparts of
all instruments and documents evidencing or in any way relating to the Loan and
related indebtedness referred to therein; except as approved by Buyer, such
Notes and Related Documents are in substantially the form of the documents
previously delivered to Buyer in connection with the execution of the Original
Agreement; except as included with the instruments and documents so delivered,
such Notes and such Related Documents have not been amended; and each such Note
and Related Document to which Obligor or Loan Guarantor is a party bears the
original signature of such Obligor and Loan Guarantor;
(bb) Uniform Commercial Code financing statements have been
duly filed in all places where filing is necessary, and all other or additional
acts have been taken as are necessary to perfect Seller's security interests
arising pursuant to the Related Documents in the Collateral and such security
interests constitute a valid and perfected lien in and to all of the Collateral
of first priority (subject to no prior or equal liens or interests) in the case
of all Primary Collateral and of the same level of priority as that enjoyed by
Seller on the applicable Closing Date in the case of all other Collateral, and
will be enforceable against all third parties in all jurisdictions as security
for the respective obligations of Obligors to Seller under their respective
Notes and Related Documents;
(cc) Seller has heretofore caused all copies of the Loans,
related Notes and Related Documents in its possession to be separately
identified and distinguished from Seller's other loans, and on the applicable
Closing Date, Seller will cause each copy of each Note, related Collateral and
Related Document in its possession to be identified with an appropriate legend
clearly
36
disclosing the fact that such Loan, the related Notes, Related Documents and
Seller's security interest in the related Collateral have been sold and assigned
to Buyer and Buyer is the owner thereof, and any original copies of any Note,
related Collateral or Related Document coming into the possession of Seller will
be delivered to Buyer;
(dd) All Loans specified on Schedule III (as the same may be
supplemented upon subsequent Incremental Purchases) are secured by mortgages on
each property;
(ee) With respect to any Loan secured by a mortgage on real
property, each mortgage is a valid and subsisting lien of record on the
mortgaged property subject only to a first mortgage lien on such mortgaged
property previously disclosed to Buyer and subject in all cases to such
exceptions that are generally acceptable to prudent and experienced lenders in
connection with their regular commercial lending activities, and such other
exceptions to which similar properties are commonly subject and which do not
individually, or in the aggregate, materially and adversely affect the benefits
of the security intended to be provided by such mortgage;
(ff) With respect to each Loan secured by a mortgage on real
property, each original mortgage was recorded, and all subsequent assignments of
the original mortgage have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as against
creditors of Seller;
(gg) With respect to each Loan secured by a mortgage on real
property, any related mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the mortgaged property of the benefits of the security,
including (i) in the case of a mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure;
(hh) With respect to each Loan secured by a mortgage on real
property, (i) there are no material defaults in complying with the terms of any
applicable mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable; (ii)
there is no proceeding pending or threatened for the total or partial
condemnation of any related mortgaged property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty, so as to affect
adversely the value of such mortgaged property as security for the Loan or the
use for which the premises were intended; and (iii) at the time of origination
of Loan, and to the best of Seller's knowledge, and based
37
primarily on the related Phase I environmental survey or environmental
questionnaire, as the case may be, is, as of the applicable Cut-Off Date, free
of contamination from toxic substances or hazardous wastes;
(ii) Except for any Loan identified on Schedule II (as the
same may be supplemented upon subsequent Incremental Purchases) hereof, (i)
neither the Obligor nor any member of its Obligor Group shall have defaulted on
any obligation (including an open account) to Seller or any Affiliate or
Subsidiary of Seller and (ii) the place of business of Obligor or any member of
its Obligor Group cannot have been the location of a failed grocery store
(whether or not owned or managed by Obligor or any member of its Obligor Group);
(jj) The classification of Loans as either Preferred Loans or
Standard Loans or Full Recourse Loans (as specified in the Loan Schedule) is
true and correct and complies with the criteria stated in the definitions of
such terms herein;
(kk) As of the applicable Closing Date, the aggregate
Principal Balance of all Loans (including Loans purchased on previous Closing
Dates, if any) classified as Preferred Loans is at least equal to 51% of the
Principal Balance of all Loans as of the related Closing Date and the aggregate
Principal Balance of all Loans classified as Full Recourse Loans is less than or
equal to 25% of the Principal Balance of all Loans as of the related Closing
Date.
(ll) The Aggregate Exposure listed with respect to each Loan
in the Loan Schedule is true and correct;
(mm) Except for those Loans specified on Schedule II (as the
same may be supplemented upon subsequent Incremental Purchases) hereto, the
purpose for which the Loans were made was not to provide term financing for open
account balances that were (or would otherwise have been) delinquent, and no
Obligor or other member of its Obligor Group has ever been provided term
financing for open account balances that were (or would otherwise have been)
delinquent;
(nn) Except for those Loans specified on Schedule II (as the
same may be supplemented upon subsequent Incremental Purchases) hereto, the
Loans are cross-collateralized with other Loans and Collateral made, pledged or
guaranteed by any member of the related Obligor Group; and
(oo) With respect to each Loan secured by real estate
Collateral having a value of 100%, or more than 10%, of the Principal Balance of
such Loan on the applicable Closing Date, either (1) the Collateral Coverage
Ratio for the related Obligor Group, calculated for the purpose of making the
representation in this Section 4.02(oo) by excluding the value of the real
estate Collateral having Minimum Documentation, is at least equal to 100% or (2)
the Loan remains classified as a Preferred Loan even
38
if the Collateral Coverage Ratio for the related Obligor Group is calculated by
excluding the value of real estate Collateral having Minimum Documentation.
SECTION 4.03 Seller's Renewal Date Representations and
Warranties. Seller represents and warrants to Buyer as of each Renewal Date on
which Seller has designated any Renewal Note for acceptance as follows:
(a) As of the applicable Renewal Date, all applicable
representations and warranties in Section 4.02 hereof are confirmed as to such
Renewal Loan.
(b) As of the applicable Renewal Date, each Obligor of the
applicable Renewal Loan is not in default of its payment obligations under the
Prior Note or under the Related Documents, and is not in default of its
nonmonetary obligations under such Note or Related Documents.
(c) As of the applicable Renewal Date, no event has occurred
and is continuing which would permit Seller to accelerate the maturity of any
Obligor's obligations under the applicable Renewal Loan or under the Prior Note
or the Related Documents.
(d) The Notes and Related Documents delivered to Buyer on or
prior to the applicable Renewal Date are true, correct, and complete original
counterparts of all instruments and documents evidencing or in any way relating
to the Loan and the related Indebtedness referred to therein; except as included
with the instruments and documents so delivered, such Notes and Related
Documents have not been amended; and each such Note and each such Related
Document to which an Obligor or Loan Guarantor is a party bears the original
signature of the Obligor or Loan Guarantor.
(e) The Loans and Notes designated by Seller as Renewal Loans
and Notes together with the Related Documents to which Obligors or Loan
Guarantors are parties have been duly executed by their respective Obligors or
Loan Guarantors and constitute the legal, valid and binding obligations of their
respective Obligors and Loan Guarantors enforceable against such Obligors and
Loan Guarantors in accordance with their respective terms.
(f) Each amount identified in a notice provided pursuant to
the terms of Section 3.02 as the "anticipated Renewal Balance" correctly
identifies the amount of the outstanding Principal Balance evidenced by the Note
to be accepted as of such Renewal Date and there are no offsets or defenses to
the payment of such amount that may be asserted against Seller either by way of
defense or counterclaim.
(g) Uniform Commercial Code financing statements have been
duly filed in all places where filing is necessary, and all other or additional
acts have been taken as are necessary to
39
perfect Seller's security interests arising pursuant to the Related Documents in
the Collateral and such security interests constitute a valid and perfected lien
in and to all of the Collateral of first priority (subject to no prior or equal
liens or interests) in the case of all Primary Collateral and of the same level
of priority as that enjoyed by Seller on the Closing Date on which the Loan was
first sold and assigned hereunder in the case of all other Collateral, and will
be enforceable against all third parties in all jurisdictions as security for
the respective obligations of Obligors to Seller under their respective Notes
and Related Documents.
(h) No Renewal Loan, related Renewal Note or any Related
Document, alone or in connection with Seller's prior course of conduct,
expressly or impliedly requires Seller or any other Person to make additional
advances thereunder.
(i) The Note related to the Renewal Note provides for full
amortization over its remaining term to maturity.
SECTION 4.04 Buyer's Representations and Warranties. Buyer
represents and warrants to Seller as follows:
(a) Buyer is a financial institution duly organized, validly
existing and in good standing under the laws of the United States of America,
and has full corporate power, authority and legal right to execute, deliver and
perform this Agreement and to purchase the Loans and related Property.
(b) Execution, delivery and performance by Buyer of this
Agreement and the purchase of the Loans and related Property hereunder have been
duly authorized by all necessary corporate action of Buyer, do not require any
shareholder approval or the approval or consent of any trustee or the holders of
any Indebtedness of Buyer, do not contravene any law, regulation, rule or order
binding on it or its Articles of Association or Bylaws and do not contravene the
provisions of or constitute a default under any indenture, mortgage, contract or
other agreement or instrument to which Buyer is a party or by which Buyer or any
of its properties may be bound or affected.
(c) No Government Approval or filing or registration with any
Governmental Authority is required for the making and performance by Buyer of
this Agreement or in connection with any of the transactions contemplated
hereby.
(d) This Agreement has been duly executed and delivered by
Buyer and constitutes the legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
SECTION 4.05 Repurchase Upon Breach of Certain Representations
and Warranties. (a) The representations and warranties and agreements of Seller
set forth in Sections 4.01, 4.02 and 4.03 with respect to Seller and each Loan
and related
40
Property shall continue so long as such Loan remains outstanding. Upon discovery
by either Seller or Buyer that any of such representations or warranties was
incorrect as of the time made, the party making such discovery shall give prompt
notice to the other party. In the event any defect, misrepresentation or
omission materially and adversely affects the interest of Buyer, Seller shall
eliminate or cure the circumstance or condition causing the defect within 10
days of the discovery thereof or, repurchase such Loan and the related Property.
(b) Any such repurchase of a Loan and the related Property by
Seller shall be accomplished in the manner set forth in Section 2.01(e) and at a
price equal to the Repurchase Amount.
[End of Article IV]
41
ARTICLE V
SERVICING AND COLLECTIONS
-------------------------
SECTION 5.01 Servicing and Collections. Buyer will perform all
servicing functions with respect to the Loans purchased prior to the
Effectiveness Date from the Effectiveness Date and with respect to the Loans
purchased on and after the Effectiveness Date from their respective Closing
Dates hereunder, all in compliance with all applicable laws. Each of United
Resources and United Grocers agrees that if Buyer so requests, it will cooperate
with Buyer in communicating with Obligors and assisting Buyer in collecting on
delinquent and Defaulted Loans.
SECTION 5.02 Documentation and Servicing; Maintenance of
System and Lien Priority.
(a) Buyer shall use the same diligence and practices in
documenting, servicing and collecting the Loans, the related Collateral and the
Related Documents as it uses in documenting, servicing and collecting all other
indebtedness evidenced by notes and related documents held for its own account
and, in any event, shall endeavor to collect or cause to be collected from each
Obligor the amounts as and when due and owing under such Obligor's Note and
Related Documents. In performing its duties hereunder, Buyer shall take such
actions with respect to the Loans, Notes and Related Documents as, in its
reasonable business judgment, it may deem advisable to maintain or enhance
receipt of timely Collections thereunder. In addition, Buyer shall use its best
efforts to collect on any Defaulted Loan so as to maximize Liquidation Proceeds
and notwithstanding that a Guaranty Payment may have been received with respect
to a Defaulted Loan, shall diligently pursue all efforts to collect on such
Loan, including by liquidating Collateral and by seeking to collect any
deficiency against the related Obligor.
(b) Buyer shall arrange and maintain with respect to the
Loans, related Notes and Related Documents, data processing, accounting and
related services adequate for the effective and timely performance of its
servicing obligations hereunder in accordance with good business practices and
in compliance with all applicable federal, state and local laws and regulations.
(c) Buyer agrees to take all actions, including lien searches
and continuation statement filings, necessary or desirable to ensure that the
liens arising pursuant to the Related Documents and securing repayment of any
Obligor's indebtedness evidenced by a related Note will be maintained as
continuously perfected first priority (except in the case of Collateral which is
not Primary Collateral, in which event Buyer shall take all actions to maintain
the priority sold and assigned hereunder) security interests (except as
otherwise approved by Buyer) in all applicable jurisdictions.
42
SECTION 5.03 Lockboxes. Seller hereby agrees (i) to instruct
all Obligors to cause all Monthly Payments, Payaheads and Principal Prepayments
on account of Loans to be mailed directly to a Permitted Lockbox; and (ii) to
use its best effort not to suffer or permit any funds other than such Monthly
Payments, Payaheads and Principal Prepayments to be mailed to Permitted
Lockboxes.
SECTION 5.04 Payment of Guaranty Fees; Anticipated Payments
and Other Amounts. (a) On each Payment Date, Buyer shall remit to Guarantor the
Guaranty Fee; provided, however, that if there shall have occurred and be
continuing a Termination Event (other than a Termination Event solely under
Section 9.01(a)), Buyer shall not be required to remit the Guaranty Fee to the
Guarantor.
(b) Buyer shall be entitled to retain on each Payment Date
from amounts received as (i) Collections and other Available Funds (other than
Guaranty Payments) during the related Due Period and (ii) Guaranty Payments on
or before such Payment Date, the Anticipated Payment; provided, however, that
upon the occurrence and continuation of a Termination Event (other than a
Termination Event solely under Section 9.01(a)), Buyer shall be entitled to
retain all Collections and other Available Funds. In addition, Buyer shall at
all times be entitled to retain late fees and penalties received with respect to
Loans.
(c) Buyer shall determine the Anticipated Payment for each
Payment Date using the following methodology.
(1) As used herein "Anticipated Payment" means for
any Payment Date the sum of, for each Loan, (a) the principal portion
of the Monthly Payment actually received during the related Due Period,
other than the portion of the Principal Balance of a Prior Note which,
at the time it became due, constituted the Renewal Balance under a
Renewal Note; (b) any Principal Prepayment, Payahead, Insurance
Proceeds and Net Liquidation Proceeds actually received during the
related Due Period; (c) the principal portion of any Guaranty Payment
or Repurchase Proceeds with respect to the related Due Period; and (d)
the Monthly Interest Amount for the related Interest Accrual Period.
(2) As used herein, "Monthly Interest Amount" on any
Payment Date shall mean an amount equal to the sum of, for each Loan
the product of (i) the Principal Balance of such Loan during the
related Due Period, times (ii) the Applicable Rate times (iii) a
fraction, the denominator of which is three hundred sixty (360), and
the numerator of which is the actual number of days in the related
Interest Accrual Period.
SECTION 5.05 Applicable Rate. As used in this Agreement,
"Applicable Rate" shall be determined as follows. The Applicable Rate shall be
established as of each LIBOR
43
Determination Date and shall be applicable for the next succeeding Interest
Accrual Period without regard to changes thereafter occurring during such
Interest Accrual Period in the principal amounts outstanding under the Notes, in
the Principal Balance of Loans purchased, or in LIBOR. Buyer shall, after the
determination of the Applicable Rate on each LIBOR Determination Date, notify
Seller and Guarantor of such Applicable Rate; provided, however, that any
failure of Buyer to give such notice shall not affect Seller's or Guarantor's
obligations hereunder.
The Applicable Rate for each Loan shall be computed and
applied on the basis of a year of three hundred sixty (360) days for the actual
number of days occurring in the applicable Interest Accrual Period. For each
Interest Accrual Period, the Applicable Rate shall mean an interest rate per
annum equal to the sum of (a) 150 basis points and (b) LIBOR in effect on the
applicable LIBOR Determination Date. For purposes hereof, Buyer will determine
LIBOR by 12:00 noon, Eastern Standard Time, on each LIBOR Determination Date on
the basis of quotations provided by four Reference Banks as of 11:00 A.M.
(London time) on such LIBOR Determination Date as such quotations appear on the
display designated as page "LIBO" on the appropriate display on the Bloomberg
Financial Markets System (or such other page as may replace the LIBO page on
that service for the purpose of displaying London interbank offered rates of
major banks). LIBOR as determined by Buyer is the arithmetic mean of such
quotations (rounded, if necessary, to the nearest whole multiple of 0.0625% per
annum). If on any LIBOR Determination Date at least two but fewer than all of
the Reference Banks provide quotations, LIBOR will be determined in accordance
with the provisions set forth above on the basis of the offered quotations of
those Reference Banks providing such quotations. If on the LIBOR Determination
Date only one or none of the Reference Banks provides such offered quotations,
LIBOR will be: (i) the rate per annum (rounded, as aforesaid) that Buyer
determines to be either (x) the arithmetic mean of the offered quotations that
leading banks in the City of New York selected by Buyer are quoting at or about
11:00 A.M. London time on the relevant LIBOR Determination Date for one month
Dollar deposits to the principal London office of each of the Reference Banks or
those of them (being at least two in number) to which such offered quotations
are, in the opinion of Buyer, being so quoted or (y) in the event that Buyer can
determine no such arithmetic mean, the arithmetic mean of the offered quotations
that leading banks in the City of New York selected by Buyer are quoting at or
about 11:00 A.M. London time on such LIBOR Determination Date to leading
European banks for one month Dollar deposits; or (ii) if the banks selected as
aforesaid by Buyer are not quoting as described in clause (i) above, LIBOR for
such Interest Accrual Period will be LIBOR as determined on the previous LIBOR
Determination Date. "Reference Banks" shall mean four major banks in the London
interbank market selected by Buyer.
SECTION 5.06 Computation and Payment of Guaranty Fees. On each
Payment Date, Buyer shall remit to the Guarantor
44
as a guaranty fee (the "Guaranty Fee"), the amount, if any, by which (a) the
amount equal to the sum of total Collections and other Available Funds received
during, or attributable to, the related Due Period exceeds (b) the sum of the
Anticipated Payment. Upon the occurrence and continuation of a Termination Event
(other than a Termination Event solely under Section 9.01(a)), the Guarantor
shall no longer be entitled to receive the Guaranty Fee.
SECTION 5.07 Access to Certain Documentation and Certain
Information Regarding the Loans. Seller will provide to Buyer access to the
documentation in its possession regarding the Loans, such access being afforded
without charge but only during normal business hours at the offices of Seller or
its designee or agent, as designated by Seller.
[End of Article V]
45
ARTICLE VI
SELLER'S COVENANTS
------------------
SECTION 6.01 Covenants. At all times prior to the later of (i)
the Termination Date or (ii) the date on which all obligations of Seller and
Guarantor under this Agreement have been performed in full, Seller agrees to do
all of the following unless Buyer shall otherwise consent in writing.
(a) Preservation of Corporate Existence, Etc. To preserve and
maintain its corporate existence, rights, and privileges in the jurisdiction of
its incorporation and to qualify and remain qualified as a foreign corporation
in each jurisdiction where such qualification is necessary or advisable in view
of the business and operations of Seller or the ownership of its properties.
(b) Compliance with Laws. To comply in all material respects
with all laws, regulations, rules and orders of Governmental Authorities
applicable to Seller or to its operations or property, except any thereof whose
validity is being contested in good faith by appropriate proceedings upon stay
of execution of the enforcement thereof, with provision having been made to the
satisfaction of Buyer for the payment thereof in the event the contest is
determined adversely to the Seller.
(c) Other Obligations. To pay and discharge before the same
shall become delinquent (after giving effect to all applicable grace periods)
all Debt, taxes and other obligations for which Seller is liable or to which its
income or property is subject and all claims for labor and materials or supplies
which, if unpaid, might become by law a Lien upon the assets of Seller except
any thereof whose validity or amount is being contested in good faith by Seller
in appropriate proceedings upon stay of execution of the enforcement thereof,
with provision having been made to the satisfaction of Buyer for the payment
thereof in the event the contest is determined adversely to the Seller, and
except other Debt, taxes and other obligations which, in the aggregate do not
exceed One Million Dollars ($1,000,000); provided, however, the covenant
included in this Section 6.01(c) shall not extend to any obligation of Seller
identified in Section 6.01(k) or 9.01(f).
(d) Visitation; Records. At any reasonable time and from time
to time, to permit Buyer to examine and make copies of and abstracts from
Seller's records and books of accounts relating to the Loans, the related Notes
and Related Documents and to visit the properties of Seller and to discuss the
affairs, finances and accounts of Seller as they relate to the transactions
contemplated by this Agreement with any of its officers. Seller will keep
adequate records and books of accounts in which complete entries will be made,
in accordance
46
with U.S. GAAP, reflecting all financial transactions of Seller as they relate
to the transactions contemplated by this Agreement. Seller's records relating to
Loans will be clearly marked with a legend to the effect that such records
pertain to Loans sold to Buyer.
(e) Financial Information. To deliver to Buyer (i) as soon as
available and in any event within one hundred (100) days after the end of each
fiscal year of Seller the balance sheet of Seller as of the end of such fiscal
year (which may be on a consolidating basis with the financial statements of
United Grocers) and the related statements of income and retained earnings and
statement of changes in the financial position of Seller for such year,
accompanied by the audit report thereon by independent certified public
accountants (which report shall be prepared in accordance with U.S. GAAP and
shall not be qualified by reason of restricted or limited examination of any
material portion of Seller's records and shall contain no disclaimer of opinion
or adverse opinion); (ii) as soon as available and in any event within fifty
(50) days after the end of each fiscal quarter of Seller the unaudited balance
sheet and statement of income and retained earnings of Seller as of the end of
such fiscal quarter (including the fiscal year to the end of such fiscal
quarter), accompanied by a certificate of the chief financial officer of Seller
that such unaudited balance sheet and statement of income and retained earnings
have been prepared in accordance with U.S. GAAP and present fairly the financial
position and the results of operations of Seller as of the end of and for such
fiscal quarter and that since the fiscal year-end report referred to in clause
(i) above there has been no material adverse change in the financial condition
or operations of Seller as shown on the balance sheet as of said date; (iii) as
soon as available and in any event within three (3) days after the end of each
calendar month (other than a month that is the last month of a calendar quarter)
and within fifty (50) days after the end of each calendar quarter, the unaudited
balance sheet and statement of income and retained earnings of Seller as of the
end of such month (including the fiscal year to the end of such month)
accompanied by certificate of the chief financial officer of Seller stating that
such unaudited consolidating balance sheet and statement of income and retained
earnings have been prepared in accordance with U.S. GAAP and present fairly the
financial position and the results of operations of Seller as of the end of and
for the fiscal year to the end of such month and that since the fiscal year-end
report referred to in clause (i) above there has been no material adverse change
in the financial condition or operations of Seller as shown on the balance sheet
as of said date; (iv) within fifty (50) days after the end of each calendar
quarter, a certificate signed by the chief financial officer of Seller stating
that as of the close of such fiscal year no Termination Event or other event
which, with notice or lapse of time or both would have become a Termination
Event had occurred and was continuing; (v) within one hundred twenty (120) days
after the end of each fiscal year of Seller, a report setting forth information
relating to Seller's portfolio of loans
47
originated or acquired in the ordinary course of its business and owned by
Seller during the related fiscal year, including loan balances by types of
loans, numbers of loans by types of loans, interest rates of loans by type and
loss and delinquency experience; and (vi) such other statements, reports and
other information as Buyer may reasonably request concerning the financial
condition and the servicing and collection operations of Seller.
(f) Notification. Promptly after learning thereof, to notify
Buyer of (i) the details of any action, proceeding, investigation or claim
against or affecting Seller instituted before any court, arbitrator or
Governmental Authority or, to Seller's knowledge, threatened to be instituted,
which if determined adversely to Seller would be likely to have a material
adverse effect on the business, operations or financial condition of Borrower,
or to result in a judgment or order against Seller (in excess of insurance
coverage and when combined with all other pending or threatened claims), of more
than One Million Dollars ($1,000,000) or to impair or defeat the security
interest of the Buyer in any of the Property or the Guaranty Collateral any
rights of Seller in the Property; (ii) any substantial dispute between Seller or
any of its Subsidiaries and any Governmental Authority; (iii) any labor
controversy which has resulted in or, to Seller's knowledge, threatens to result
in a strike which would materially affect the business operations of Seller or
any of its Subsidiaries; (iv) if Seller or any member of the Controlled Group
gives or is required to give notice to the PBGC of any "reportable event" (as
defined in subsections (b) (1), (2), (5) or (6) of Section 403 of ERISA) with
respect to any Plan (or the Internal Revenue Service gives notice to the PBGC of
any "Reportable Event" as defined in subsection (c) (2) of Section 4043 of ERISA
and Seller attains knowledge thereof) which might constitute grounds for
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (v) any representation or warranty set forth
in Section 4.02 or 4.03 which proves to have been incorrect in any material
respect when made; (vi) Seller's material breach of its obligations under this
Agreement; (vii) any Obligor Default; (viii) any Loan that has become a
Defaulted Loan; (ix) any circumstance or event of which Seller has actual
knowledge which materially impairs or might reasonably be expected to impair an
Obligor's ability to repay or perform its obligations under, the related Loan;
or (x) the occurrence of any Termination Event or other event which, with notice
or lapse of time or both, would constitute a Termination Event.
(g) Additional Payments; Additional Acts. From time to time,
to (i) pay or reimburse Buyer on request for all taxes imposed on this Agreement
or the sale of any Loans hereunder (other than taxes based on Buyer's net
income, items of tax preference, or gross receipts) and for all expenses,
including reasonable legal fees, actually incurred by Buyer in connection
48
with the preparation or modification of this Agreement, or the sale of any
Loans, related Notes and Related Documents or the security interest in the
related Collateral hereunder or the enforcement by judicial proceedings or
otherwise of any rights of Buyer hereunder; (ii) obtain and promptly furnish to
Buyer evidence of all such Government Approvals as may be required to enable
Seller to comply with its obligations under this Agreement; and (iii) execute
and deliver all such other instruments and perform all such other acts as Buyer
may reasonably request to carry out the transactions contemplated by this
Agreement.
(h) Liens. Not to create, assume or suffer to exist any lien,
security interest or other encumbrance except (i) Liens granted pursuant to, or
permitted under, the Credit Agreement or the Security Documents related thereto;
(ii) Liens on Seller's properties securing mortgage indebtedness relating to
such properties, and any extensions, refinancing or renewals thereof in an
amount not exceeding the amount of such indebtedness prior to such extension,
refinancing or renewal; (iii) capital lease obligations; (iv) Liens to secure
indebtedness for the deferred price of property acquired after the date hereof,
but only if such Liens are limited to such property and its proceeds; (v) Liens
imposed by law (such as mechanic's liens) incurred in good faith in the ordinary
course of business which are not delinquent or which remain payable without
penalty or the validity or amount of which are being contested in good faith by
appropriate proceeding upon stay of execution of the enforcement thereof; or
(vi) deposits or pledges under workmen's compensation, unemployment insurance,
social security or similar laws or made to secure the performance of bids,
tenders, contracts (except for the repayment of borrowed money) or leases, or to
secure statutory obligations or surety or appeal bonds or to secure indemnity,
performance or other similar bonds given in the ordinary course of business.
(j) Liquidation, Merger, Sale of Assets, Etc. To not
liquidate, dissolve or enter into any merger, consolidation, joint venture,
partnership or other combination nor sell, lease, dispose of such portion of its
business or assets (excepting sales of goods in the ordinary course of business
and excepting sales of the Loans to Buyer) as constitutes a substantial portion
thereof; provided, however, so long as no Termination Event or event which with
the passage of time or the giving of notice or both would constitute a
Termination Event shall have occurred and be continuing or will occur as a
result of such merger or consolidation, Seller may merge or consolidate with any
Person or sell all or substantially all of its business or assets to any other
Person so long as (A) (i) Seller or United Grocers shall be the surviving or
continuing corporation or (ii) if Seller shall not be the surviving or
continuing corporation or shall sell all or substantially all of its assets to a
Person such surviving, continuing or purchasing Person shall be incorporated
under the laws of the United States or any jurisdiction thereof, shall assume in
writing all obligations of Seller under this Agreement,
49
shall be eligible to borrow from NCB pursuant to the provisions of the Bank Act,
and (B) at the time of such consolidation, merger or sale and after giving
effect thereto no Termination Event shall have occurred and be continuing.
(j) Transactions with Affiliates. To not directly or
indirectly enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property) with any of
Seller's Affiliates on terms that are less favorable to Seller than those which
might be obtained at the time from Persons who are not Affiliates.
(k) ERISA Compliance. To not and not allow any member of its
Controlled Groups or any Plan of any of them to: (i) engage in any "prohibited
transaction" as such term is defined in Section 4.06 or Section 2003(a) of
ERISA; (ii) incur any "accumulated funding deficiencies" (as such term is
defined in Section 3.02 of ERISA) whether or not waived; (iii) terminate any
Pension Plan in a manner which could result in the imposition of a Lien on any
property of Seller or any member of its respective Controlled Groups pursuant to
Section 4068 of ERISA; or (iv) violate state or federal securities laws
applicable to any Plan.
(l) No Name Change, Etc. To not change its name, identity or
corporate structure in any manner which could make any financing or continuation
statement filed hereunder seriously misleading within the meaning of Section
9-402(7) of any applicable enactment of the Uniform Commercial Code without
giving Buyer at least sixty (60) days prior written notice thereof.
(m) Relocation of Offices. To give Buyer at least sixty (60)
days prior written notice of any relocation of its chief executive offices or
the offices where records concerning the Loans and related Property are kept.
(n) Limitation on Transfers, Etc. To not transfer or attempt
to transfer in any manner whatsoever to any Person other than Buyer pursuant to
the terms of this Agreement, and except in favor of Buyer hereunder shall not
create, cause to be created or permit any lien, pledge, charge, security
interest, ownership interest, participation interest or any other interest of
any nature whatever in respect of the Loans and related Property.
(o) Bank Act Eligibility. To remain "eligible" to borrow from
NCB pursuant to the provisions of the Bank Act.
(p) No Changes. To make no change in the Credit and Collection
Policy, which change would impair the collectibility of any material amount of
the Loans; make no material change in the Credit and Collection Policy without
prior written consent of Buyer, or change its name, identity or corporate
structure in any manner which would make any financing statement or continuation
statement filed in connection with this Agreement or the transactions
contemplated hereby seriously misleading within the
50
meaning of Section 9-402(7) of the UCC of any applicable jurisdiction or other
applicable laws unless it shall have given Buyer at least 45 days' prior written
notice thereof and unless prior thereto it shall have caused such financing
statement or continuation statement to be amended or a new financing statement
to be filed such that such financing statement or continuation statement would
not be seriously misleading; to make no material change in the terms of the
Notes and Related Documents relating to the Loans without the prior written
notice to and consent of Buyer.
(q) Security Interest. To transfer to Buyer, at Buyer's
request, a security interest in all or any specified portion of that Collateral
securing any Loan which was not transferred to Buyer on the applicable Closing
Date (transferring to Buyer the same interest as Seller had and disclosed to
Buyer on the applicable Closing Date) and to provide evidence reasonably
satisfactory to Buyer that all actions as are necessary or appropriate to
perfect Buyer's security interest in such Collateral have been taken.
(r) Maintenance of Property, Etc. To maintain and preserve all
of its properties in good working order and condition, ordinary wear and tear
excepted, and from time to time to make all needed repairs, renewals or
replacements so that the efficiency of such properties shall be fully maintained
and preserved.
(s) Insurance. To keep in force upon all of its properties and
operations policies of insurance carried with responsible companies in such
amounts and covering all such risks as shall be customary in the industry and to
furnish, on request, to Buyer certificates of insurance or duplicate policies
evidencing such coverage.
(t) Investments. To not make any loan or advance to any person
or purchase or otherwise acquire the capital stock, assets or obligations of, or
any interest in, any person, or contribute any assets to any person except (i)
commercial bank time deposits maturing within one year, (ii) marketable general
obligations of the United States or a State or marketable obligations fully
guaranteed by the United States, and (iii) short-term commercial paper with the
highest rating of a generally recognized rating service.
(u) Accounting Change. To maintain a fiscal year ending on the
Friday closest to the last day in September and to not make any significant
change in accounting policies or reporting practices other than changes required
by U.S. GAAP or otherwise required by law.
SECTION 6.02 Special Covenant of Seller. At all times prior to
the later of (i) the Termination Date or (ii) the date on which all obligations
of Seller and Guarantor under this Agreement have been performed in full, Seller
agrees not to
51
(a) make or own (including a participation in) any loan to any Obligor or member
of its Obligor Group unless such Obligor's or member's obligation, as the case
may be, to repay such loan is subordinate to such Obligor's or member's
obligation, as the case may be, to repay the Loan or Loans made to such Obligor
and sold to Buyer under this Agreement and (b) own a corporation or other
business entity that makes loans to an Obligor or member of its Obligor Group if
such Obligor's or member's repayment obligation on such loan is senior to its
obligation to repay the Loan or Loans made to Obligor or its member and sold to
Buyer hereunder.
[End of Article VI]
52
ARTICLE VII
GUARANTOR AND GUARANTY
----------------------
SECTION 7.01 Guarantor's Guaranty and Repurchase Guaranty;
Security Interest. (a) Guarantor hereby agrees to provide to Buyer a Guaranty of
Liquidation Losses, equal at any time to the then current Guaranty Amount. After
a Loan has become a Liquidated Loan and the amount Liquidation Loss thereon has
been determined, Buyer shall notify Guarantor of the amount of Liquidation Loss
and, within five (5) Business Days of receipt of such notice, Guarantor shall
make a Guaranty Payment to Buyer in the amount of such Liquidation Loss;
provided, however, that Guarantor's obligation to make a Guaranty Payment shall
be limited to first, the then available Guaranty Amount, and, if the Guaranty
Amount is exhausted, the then available Holdback Guaranty Amount and/or the then
available New Origination Guaranty Amount (allocated between the Holdback
Guaranty Amount and the New Origination Guaranty Amount as Buyer determines).
(b) Guarantor hereby agrees to provide to Buyer a Repurchase
Guaranty of Seller's repurchase obligation pursuant to Section 2.01 (e), 2.02
(c), 3.02, 4.05 and 9.02. If Buyer shall not have received the Repurchase Amount
on the day on which due, Buyer shall promptly so notify Guarantor and Seller and
within two Business Days of receipt of such notice, Guarantor shall make a
Guaranty Payment to Buyer in the amount of such Repurchase Amount.
(c) The parties to this Agreement hereby expressly acknowledge
that the Guaranty Amount will be available to support the Holdback Guaranty and
the New Origination Guaranty to the extent the Holdback Guaranty Amount and/or
the New Origination Guaranty Amount have been exhausted and conversely, that the
Holdback Guaranty Amount and the New Origination Guaranty Amount will be
available to support Guarantor's Guaranty hereunder to the extent the Guaranty
Amount is exhausted.
SECTION 7.02 Guarantor Representations and Warranties.
Guarantor hereby represents and warrants to, and agrees as follows as of the
Effectiveness Date and as of each Closing Date:
(a) Guarantor is duly organized and is validly existing and in
good standing as an Oregon corporation, with corporate power and authority to
own its properties and to transact the business in which it is now engaged; the
Guarantor is duly qualified to do business and is in good standing in each State
of the United States where the nature of its business requires it to be so
qualified; and Guarantor is doing business only under the corporate and "doing
business as" names listed on Exhibit A hereto. Guarantor has full corporate
power, authority and legal right to carry on its business as presently
conducted, to own and operate its business as presently conducted, to own
53
and operate its properties and assets, and to execute, deliver and perform this
Agreement.
(b) The performance of Guarantor's obligations under this
Agreement, and the consummation of the transactions herein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of Guarantor or any of
its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement (other than this Agreement) or
instrument to which it or any of its Subsidiaries is a party or by which it or
any of its subsidiaries is bound or to which any of its property or assets is
subject, nor will such action result in any violation of the provisions of its
Certificate of Incorporation or By-Laws or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
it or any of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body is required for the consummation
of the other transactions contemplated by this Agreement.
(c) No Government Approval or filing or registration with any
Governmental Authority is required for the making and performance by Guarantor
of this Agreement, except such as have been heretofore obtained and are in full
force and effect (certified copies thereof having been delivered to Buyer).
(d) This Agreement has been duly authorized, executed and
delivered by Guarantor and this Agreement is the valid and legally binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting creditors'
rights and to general principles of equity.
(e) Guarantor is "eligible" in Section 3015 to borrow from
NCB pursuant to the provisions of the Bank Act.
(f) Except as described in Exhibit F hereto, there are no
actions, proceedings, investigations, or claims against or affecting Guarantor
or any of its Subsidiaries now pending before any court, arbitrator or other
Governmental Authority (nor to the knowledge of Guarantor has any thereof been
threatened nor does any basis exist therefor) which if determined adversely to
the Guarantor or any such Subsidiary would be likely to have a material adverse
effect on the financial condition or operations of Guarantor or on Guarantor's
ability to perform its obligations under this Agreement or under an endorsement
of any Note. With respect to the litigation described in Exhibit F hereto, a
determination in such litigation that is materially adverse to Seller or
Guarantor would not have a material adverse effect on the financial condition or
operations of Guarantor or on
54
Guarantor's ability to perform its obligations under this Agreement.
(g) The consolidated balance sheet of Guarantor and its
Subsidiaries as at September 27, 1996, and the related statements of income and
retained earnings of Guarantor and its Subsidiaries for the fiscal year then
ended, and the consolidated and consolidating balance sheet of Guarantor and its
Subsidiaries as at June 27, 1997, and the related statements of income and
retained earnings of Guarantor and its Subsidiaries for the fiscal quarter then
ended, copies of which have been furnished to Buyer, fairly present the
financial condition of Guarantor and its Subsidiaries as at such date and the
results of operations of Guarantor and its Subsidiaries for the period then
ended, all in accordance with U.S. GAAP consistently applied. Since that date,
there has been no material adverse change in the financial condition or
operations of Guarantor or any of its Subsidiaries.
(h) Guarantor has good and marketable title to each of the
properties and assets reflected in its balance sheet referred to in Section 7.02
(g) except such as have been since sold or otherwise disposed of in the ordinary
course of business or in accordance with Section 7.03 (r) hereof.
(i) Neither Guarantor nor any of its Subsidiaries or
Affiliates is in material breach of or default under any agreement or agreements
to which it is a party or which are binding on it or any of its assets and which
provide for the payment of monies, the delivery of goods or the provision of
services in amounts or with values in the aggregate in excess of One Million
Dollars ($1,000,000).
(j) The present value of all benefits vested under all Pension
Plans did not, as of the most recent valuation date of such Pension Plans,
exceed the value of the assets of the Pension Plans allocable to such vested
benefits by an amount which would represent a potential material liability of
Guarantor and its consolidated subsidiaries or affect materially the ability of
Guarantor to perform this Agreement; no Plan or trust created thereunder, or any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 or Section 2003(a) of ERISA) which could
subject such Plan or any other Plan, any trust created thereunder, or any
trustee or administrator thereof, or any party dealing with any Plan or any such
trust to the tax or penalty on prohibited transactions imposed by Section 502 or
Section 2003(a) of ERISA; no Pension Plan or trust created thereunder has been
terminated, and there have been no "reportable events" (as that term is defined
in Section 4043 of ERISA) since the effective date of ERISA; no Pension Plan or
trust created thereunder has incurred any "accumulated funding deficiency" (as
such term is defined in Section 302 of ERISA) whether or not waived, since the
effective date of ERISA; and the required allocations and contributions to
Pension Plans will not violate Section 415 of the Code; and neither Guarantor
nor any of its Subsidiaries has any withdrawal
55
liability to any trust created pursuant to a multi-employer pension or benefit
plan and neither would be subject to any withdrawal liability in excess of One
Million Dollars ($1,000,000) if it withdrew from any such plan or if its
participation therein were otherwise terminated.
(k) This Agreement, the financial statements referred to in
Section 7.02 (g) and all other instruments, documents, certificates and
statements furnished to Buyer by Guarantor, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained herein or therein not misleading.
SECTION 7.03 Covenants of Guarantor. At all times prior to the
later of (i) the Termination Date or (ii) the date on which all obligations of
Seller and Guarantor under this Agreement, the Holdback Loan Purchase Agreement,
the Holdback Guaranty Agreement, the New Origination Loan Agreement and the New
Origination Guaranty Agreement have been performed in full, Guarantor agrees to
do all of the following unless Buyer shall otherwise consent in writing.
(a) Preservation of Corporate Existence, Etc. To preserve and
maintain its corporate existence, rights, and privileges in the jurisdiction of
its incorporation and will qualify and remain qualified as a foreign corporation
in each jurisdiction where such qualification is necessary or advisable in view
of the business and operations of Guarantor or the ownership of its properties.
(b) Compliance with Laws. To comply and to cause each of its
Subsidiaries to comply in all material respects with all laws, regulations,
rules and orders of Governmental Authorities applicable to Guarantor or any
Subsidiary or to their respective operations or property, except any thereof
whose validity is being contested in good faith by appropriate proceedings upon
stay of execution of the enforcement thereof, with provision having been made to
the satisfaction of Buyer for the payment thereof in the event the contest is
determined adversely to Guarantor or such Subsidiary.
(c) Other Obligations. To pay and discharge and to cause each
of its subsidiaries to pay and discharge before the same shall become delinquent
(after giving effect to all applicable grace periods) all Debt, taxes and other
obligations for which Guarantor or such Subsidiary is liable or to which its
income or property is subject and all claims for labor and materials or supplies
which, if unpaid, might become by law a Lien upon the assets of Guarantor or any
Subsidiary, except any thereof whose validity or amount is being contested in
good faith by Guarantor in appropriate proceedings, upon stay of execution of
enforcement thereof, with provision have been made to the satisfaction of Buyer
for the payment thereof in the event the contest is determined adversely to
Guarantor or such Subsidiary
56
and except other Debt, taxes and other obligations which, in the aggregate do
not exceed One Million Dollars ($1,000,000); provided, however, that this
covenant shall not extend to any obligation of Guarantor identified in Section
7.03 (x) or 9.01 (f).
(d) Financial Information. To deliver to Buyer (i) as soon as
available and in any event within one hundred (100) days after the end of each
fiscal year of Guarantor, the consolidated balance sheet of Guarantor as of the
end of such fiscal year and the related statements of income and retained
earnings and statement of changes in the financial position of Guarantor for
such year, accompanied by the audit report thereon by independent, certified
public accountants (which report shall be prepared in accordance with U.S. GAAP
and shall not be qualified by reason of restricted or limited examination of any
material portion of Guarantor's records and shall contain no disclaimer of
opinion or adverse opinion) and an Annual Report on Form 10-K for such year
filed by the Guarantor with the Securities and Exchange Commission; (ii) as soon
as available and in any event within fifty (50) days after the end of each
fiscal quarter of Guarantor, the unaudited balance sheet and statement of income
and retained earnings of Guarantor as of the end of such fiscal quarter
(including the fiscal year to the end of such fiscal quarter), accompanied by a
certificate of the chief financial officer of Guarantor, that such unaudited
balance sheet and statement of income and retained earnings have been prepared
in accordance with U.S. GAAP and present fairly the financial position and the
results of operations of Guarantor, as of the end of and for such fiscal quarter
and setting forth calculations demonstrating that at the end of such quarter the
Guarantor was in compliance with Sections 7.03 (g) through 7.03 (i), 7.03 (k)
and 7.03 (n), inclusive and that since the fiscal year-end report referred to in
clause (i) above there has been no material adverse change in the financial
condition or operations of Guarantor as shown on the balance sheet as of said
date; (iii) as soon as available and in any event within three (3) days after
the end of each calendar month (other than a month that is the last month of a
calendar quarter) and within fifty (50) days after the end of each calendar
quarter, the unaudited balance sheet and statement of income and retained
earnings of Guarantor as of the end of such month (including the fiscal year to
the end of such month) accompanied by certificate of the chief financial officer
of Guarantor stating that such unaudited consolidated and consolidating balance
sheet and statement of income and retained earnings have been prepared in
accordance with U.S. GAAP and present fairly the financial position and the
results of operations of Guarantor as of the end of and for the fiscal year to
the end of such month and that since the fiscal year-end report referred to in
clause (i) above there has been no material adverse change in the financial
condition or operations of Guarantor as shown on the balance sheet as of said
date; (iv) within one hundred twenty (120) days after the close of each fiscal
year of Guarantor, a certificate signed by the chief financial officer of
Guarantor stating that as of the close of such fiscal year no Termination Event
or other event which, with
57
notice or lapse of time or both would have become a Termination Event had
occurred and was continuing; (v) within one hundred twenty (120) days after the
end of each fiscal year of Guarantor, a report setting forth information
relating to the portfolio of loans originated or acquired by Guarantor and each
of its Subsidiaries and Affiliates (other than United Resources) in the ordinary
course of their respective businesses and owned by Guarantor and each of its
Subsidiaries and Affiliates (other than United Resources) during the related
fiscal year, including loan balances by types of loans, numbers of loans by
types of loans, interest rates of loans by type and loss and delinquency
experience; and (vi) such other statements, reports and other information as
Buyer may reasonably request concerning the financial condition and the
servicing and collection operations of Guarantor; provided, however, that if
either Guarantor or any of its Subsidiaries or Affiliates (as specified) does
not originate and/or service loans of the kind sold and assigned by Seller
pursuant to this Agreement, the covenants in subsections (v) and (vi) of this
subsection (d) shall be satisfied by a certification of a Responsible Officer to
the effect that during the preceding fiscal year, Guarantor or the specified
Subsidiary or Affiliate did not originate or service loans.
(e) Notification. Promptly after learning thereof, to notify
Buyer of (i) the details of any action, proceeding, investigation or claim
against or affecting Guarantor or any of its Subsidiaries instituted before any
court, arbitrator or Governmental Authority or, to Guarantor's knowledge
threatened to be instituted, which, if determined adversely to Guarantor would
be likely to have a material adverse effect on the business, operations or
financial condition of the Guarantor, or to result in a judgment or order
against Guarantor (in excess of insurance coverage and when combined with all
other pending or threatened claims) of more than One Million Dollars
($1,000,000) or to impair or defeat the security interest of the Buyer in any
Property or the Guaranty Collateral; (ii) any substantial dispute between
Guarantor or any of its Subsidiaries; (iii) any substantial dispute between
Guarantor or any of its Subsidiaries and any Governmental Authority; (iv) any
labor controversy which has resulted in or, to Guarantor's knowledge, threatens
to result in a strike which would materially affect the business operations of
Guarantor or such Subsidiary; (v) if Guarantor or any member of the Controlled
Group gives or is required to give notice to the PBGC of any "reportable event"
(as defined in subsections (b) (1), (2), (5) or (6) of Section 403 of ERISA)
with respect to any Plan (or the Internal Revenue Service gives notice to the
PBGC of any "Reportable Event" as defined in subsection (c) (2) of Section 4043
of ERISA and Guarantor attains knowledge thereof) which might constitute grounds
for termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (vi) any representation or warranty set forth
in Section 7.02 which proves to have been incorrect in any material respect when
made; (vii)
58
Seller's, or Guarantor's material breach of its obligations under this
Agreement; or (viii) the occurrence of any Termination Event or other event
which, with notice or lapse of time or both, would constitute a Termination
Event.
(f) Keeping of Books and Records; Visitation Rights. To keep
and to cause each of its Subsidiaries to keep adequate records and books of
account in which complete entries will be made, in a manner which will permit
the preparation of consolidated and consolidating financial statements in
accordance with U.S. GAAP. At any reasonable time and from time to time
Guarantor shall and shall cause each of its Subsidiaries to permit Buyer to
examine and make copies of and abstracts from Guarantor's records and books, to
visit its properties and to discuss the affairs, finances and accounts of
Guarantor and any Subsidiary with any of its officers, directors or employees.
(g) Maintenance of Property, Etc. To maintain and preserve and
to cause each of its Subsidiaries to maintain and preserve all of their
respective properties in good working order and condition, ordinary wear and
tear excepted, and from time to time to make all needed repairs, renewals or
replacements so that the efficiency of such properties shall be fully maintained
and preserved.
(h) Insurance. To shall keep in force and to cause each of its
Subsidiaries to keep in force upon all of Guarantor's or such Subsidiary's
properties and operations policies of insurance carried with responsible
companies in such amounts and covering all such risks as shall be customary in
the industry and to furnish on request to Buyer certificates of insurance or
duplicate policies evidencing such coverage.
(i) Additional Acts. From time to time, to obtain and promptly
furnish to Buyer evidence of all such Government Approvals as may be required to
enable Guarantor to comply with its obligations under this Agreement and to
execute and deliver all such other instruments and perform all such other acts
as Buyer may reasonably request to carry out the transactions contemplated by
this Agreement.
(j) Funded Debt to Capitalization. To maintain as of the end
of each fiscal quarter on a consolidated basis a ratio of Total Funded Debt to
Total Capitalization of not more than the ratio set forth below:
For Fiscal
Quarters Ending Maximum Ratio
--------------- -------------
On or after
June 30, 1997
and before
April 3, 1998 0.8500 to 1
59
On or after
April 3, 1998
and before
October 2, 1998 0.8375 to 1
On or after
October 2, 1998
and before
April 2, 1999 0.8250 to 1
On or after
April 2, 1999 0.8125 to 1
(k) Senior Debt to Capitalization. To maintain as of the end
of each fiscal quarter on a consolidated basis a ratio of Senior Funded Debt to
Total Capitalization of not more than the ratio set forth below:
For Fiscal
Quarters Ending Maximum Ratio
--------------- -------------
On or after
June 30, 1997
and before
April 3, 1998 0.6750 to 1
On or after
April 3, 1998
and before
October 2, 1998 0.6625 to 1
On or after
October 2, 1998
and before
April 2, 1999 0.6500 to 1
On or after
April 2, 1999 0.6375 to 1
As used herein, "Senior Funded Debt" shall mean, as of any date of
determination, Total Funded Debt less Subordinated Debt.
(l) Fixed Charge Coverage. To maintain as of the end of each
fiscal quarter on a consolidated basis for each period of four consecutive
fiscal quarters a Fixed Charge Coverage Ratio of not less than the ratio set
forth below:
For Fiscal
Quarters Ending Maximum Ratio
--------------- -------------
On or after
June 30, 1997
and before
October 3, 1997 1.45 to 1
60
On or after
October 3, 1997
and before
April 3, 1998 1.70 to 1
On or after
April 3, 1998
and before
October 2, 1998 1.80 to 1
On or after
October 2, 1998
and before
April 2, 1999 1.90 to 1
On or after
April 2, 1999 1.95 to 1
As used herein, "Fixed Charge Coverage Ratio" shall mean, for any period, the
ratio of (a) the sum of (i) net income (or net loss), excluding (A) gains and
losses, if any, from the sale of assets and (B) for the fiscal quarter ended
June 27, 1997, extraordinary charges not to exceed Five Million One Hundred
Thousand Dollars ($5,100,000) in the aggregate, (ii) interest expense, (iii)
income taxes aid, (iv) depreciation expense, (v) amortization expense and (vi)
patronage dividends to (b) the sum of (i) interest expense and (ii) amortization
of any discount applied in advancing any Total Funded Debt to Guarantor.
(m) Adjusted Charge Coverage. To maintain as of the end of
each fiscal quarter on a consolidated basis for each period of four consecutive
fiscal quarters an Adjusted Fixed Charge Coverage Ratio of not less than the
ratio set forth below:
For Fiscal
Quarters Ending Maximum Ratio
--------------- -------------
On or after
June 30, 1997
and before
October 3, 1997 1.20 to 1
On or after
October 3, 1997
and before
April 3, 1998 1.40 to 1
On or after
April 3, 1998
and before
October 2, 1998 1.55 to 1
On or after
October 2, 1998
and before
April 2, 1999 1.75 to 1
61
On or after
April 2, 1999 1.90 to 1
As used herein, "Adjusted Fixed Charge Coverage Ratio" shall mean, for any
period, the ratio of (a) the sum of (i) net income (or net loss), excluding any
(A) gains and losses, if any, from the sale of assets and (B) for the fiscal
quarter ended June 27, 1997, extraordinary charges not to exceed Five Million
One Hundred Thousand Dollars ($5,100,000) in the aggregate, (ii) interest
expense, (iii) income taxes paid, (iv) depreciation expense and (v) amortization
expense to (b) the sum of (i) interest expense and (ii) amortization of any
discount applied in advancing any Total Funded Debt to Guarantor.
(n) Working Capital. To maintain, on a consolidated basis
(exclusive of the Guarantor's insurance subsidiaries), a ratio of current assets
to current liabilities, each determined in accordance with U.S. GAAP, of at
least 1.05 to 1.
(o) Minimum Net Worth. To maintain on a consolidated basis as
the end of the fiscal quarter a Consolidated Net Worth equal to or greater than
the sum of (a) Thirty Seven Million Dollars ($37,000,000) plus (b) sixty percent
(60%) of the sum of (i) Guarantor's net income for each fiscal quarter after the
fiscal quarter ended June 27, 1997 in which Guarantor has a positive net income,
plus (ii) income taxes and (iii) patronage dividends income for each fiscal
quarter after the fiscal quarter ended June 27, 1997, less (c) income taxes.
(p) Minimum Net Worth and Subordinated Debt. To maintain, on a
consolidated basis, the sum of Subordinated Debt plus Members' Equity in an
amount equal to or greater than the sum of (a) Eighty Million Dollars
($80,000,000) plus (b) sixty percent (60%) of the sum of (i) Guarantor net
income for each fiscal quarter after the fiscal quarter ended June 27, 1997 in
which Guarantor has a positive net income, plus (ii) income taxes and (iii)
patronage dividends income for each fiscal quarter after the fiscal quarter
ended June 27, 1997, minus (c) Two Million Five Hundred Thousand Dollars
($2,500,000) in the event Guarantor repays to the Credit Providers in the
aggregate, the principal sum of at least Five Million Dollars ($5,000,000) of
the term loans under the Credit Agreement, less (d) income taxes.
(q) Member Notes Receivable Ratio. To maintain, on a
consolidated basis, a Member Portfolio of not more than one hundred fifty
percent (150%) of Consolidated Tangible Net Worth. As used herein, "Member
Portfolio" shall mean the sum of (i) all Debt of members owning to Guarantor or
any of its Subsidiaries which have not been sold; plus (ii) all investments by
Guarantor or any of its Subsidiaries in Guarantor's members; plus (iii) Debt of
members of Guarantor or any of its Subsidiaries which have been sold with
recourse to Guarantor or any of its Subsidiaries. As used herein, "Consolidated
Tangible Net Worth" shall mean, with respect to any Person, Consolidated Net
Worth of
62
such Person less (i) all assets which should be classified as intangible assets
(such as good will, patents, trademarks, copyrights, franchises and covenants
not to compete) and (ii) to the extent not already deducted from total assets,
all reserves including those for deferred income taxes, depreciation,
obsolescence or amortization of properties and (iii) all capital stock or other
investments in any direct or indirect subsidiary other than in (x) any offshore
investment subsidiary, or (y) a subsidiary having all or substantially all of
its operations in the United States.
(r) Amendments to Private Placement; Prepayments of Private
Placement. To promptly provide to Buyer a copy of each Private Placement
Agreement now or hereafter executed by Guarantor and, as to any Private
Placement Agreement not executed as of the date hereof, shall notify Buyer at
least five (5) days in advance of the execution thereof. Guarantor will not
agree to or permit to be made any amendment to nor request any waivers of the
terms of any Private Placement Agreement if such an amendment or waiver to the
terms of repayment thereof or to the terms of any promissory notes issued
thereunder. Guarantor shall deliver to Buyer, prompt written notice and a copy
of any anticipated amendment to or requested waiver of any financial covenants
contained in or reduction in the commitment amounts under any private Placement
Agreement, and shall deliver to Buyer a substantially contemporaneous confirming
notice and a copy of any amendment or waiver actually made or granted. Guarantor
shall not make any prepayments in respect of any Private Placement Agreement or
any of the promissory notes issued pursuant thereto.
(s) Investments. To not and to cause each of its Subsidiaries
(other than Grocers Insurance Company) to not make any loan or advance to any
Person or purchase or otherwise acquire the capital stock, assets or obligations
of, or any interest in, any Person, or contribute any assets to any Person
except (a) commercial bank time deposits maturing within one year, (b)
marketable general obligations of the United States or a State or marketable
obligations fully guaranteed by the United States, and (c) short-term commercial
paper with the highest rating of a generally recognized rating service.
(t) Accounting Change. To maintain a fiscal year ending on the
Friday closest to the last day in September and shall not make any significant
change in accounting policies or reporting practices other than changes required
by U.S. GAAP or otherwise required by law.
(u) Liens and Sales. Not to and to cause each of its
Subsidiaries not to create, assume or suffer to exist any Lien, security
interest or other encumbrance except as granted in or permitted under the Credit
Agreement (or Security Documents related thereto).
(v) Liquidation, Merger, Sale of Assets, Etc. To not
liquidate, dissolve or enter into any merger, consolidation,
63
joint venture, partnership or other combination nor sell, lease, dispose of such
portion of its business or assets (excepting sales of goods in the ordinary
course of business and sales of Loans under this Agreement) as constitutes a
substantial portion thereof; provided, however, so long as no Termination Event
or event which with the passage of time or the giving of notice or both would
constitute a Termination Event shall have occurred and be continuing or will
occur as a result of such merger or consolidation, Guarantor may merge or
consolidate with any Person or sell all or substantially all of its business or
assets to any other Person so long as (A) (1) Guarantor shall be the surviving
or continuing corporation, or (2) if Guarantor shall not be the surviving or
continuing corporation or shall sell substantially all of its assets to a
Person, such surviving, continuing or purchasing Person shall be incorporated
under the laws of the United States or any jurisdiction thereof and shall assume
in writing all obligations of Guarantor under this Agreement, shall be eligible
to borrow form NCB under the provisions of the Bank Act and shall satisfy the
financial covenants set forth in Sections 7.03 (j) through (q) hereof, and (B)
at the time of such consolidation, merger or sale and after giving effect
thereto, no Termination Event shall have occurred and be continuing. Without
limitation on the foregoing, the Guarantor, and its consolidated subsidiaries,
will not during in any fiscal year consecutive calendar quarters sell in excess
of 10% of their Consolidated Tangible Net Worth unless the proceeds of such sale
or sales are reinvested within 12 months in assets to be owned and utilized by
the Guarantor in the ordinary course of its business; provided, however, in
determining compliance with the foregoing requirement, sales of the following
assets will be disregarded: (i) individual assets having a book value of less
than $250,000, not to exceed in the aggregate One Million Five Hundred Thousand
Dollars ($1,500,000) in any fiscal year, (ii) promissory notes of Guarantor's
members payable to Seller or Guarantor evidencing Debt incurred in connection
with equipment, store or inventory financing provided by Seller or Guarantor to
such members, where Guarantor or Seller, as applicable, receives from such sale
an amount equal to the then existing outstanding principal balance of and
accrued interest on such notes, and (iii) Excess Assets (as defined in the
Credit Agreement), where the proceeds of such sale are applied to repay the term
loans made pursuant to the Credit Agreement.
(w) Transactions with Affiliates. To not directly or
indirectly enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property) with any of
Guarantor's Affiliates, on terms that are less favorable to Guarantor than those
which might be obtained at the time from Persons who are not Affiliates.
(x) ERISA Compliance. To not and not allow any member of its
Controlled Groups or any Plan of any of them to: (i) engage in any "prohibited
transaction" as such term is defined in Section 4.06 or Section 2003 (a) of
ERISA; (ii) incur any "accumulated funding deficiencies" (as such term is
defined in
64
Section 3.02 of ERISA) whether or not waived; (iii) terminate any Pension Plan
in a manner which could result in the imposition of a lien on any property of
the Guarantor, or any member of its Controlled Group pursuant to Section 4068 of
ERISA; or (iv) violate state or federal securities laws applicable to any Plan.
(y) Security Interest. To take all actions necessary or
desirable, including filings of financing statements or continuation thereof, to
perfect and maintain the perfection of Buyer's security interest in the Guaranty
Collateral.
(z) Subordinate Position. To (i) make or own (including a
participation) no loan to any Obligor or member of its Obligor Group unless such
Obligor's or member's obligations, as the case may be, to repay such loan is
subordinate to such Obligor's or member's obligation, as the case may be, to
repay the Loan or Loans made to such Obligor and sold by Seller to Buyer under
this Agreement and (ii) own no corporation or other business entity that makes
loans to any Obligor or member of its Obligor Group if such Obligor's or members
repayment obligation on such loan is senior to its payment obligation to the
Loan or Loans made to Obligor or its member and sold to Buyer hereunder.
(aa) NCB Borrower Eligibility. To maintain its status as
an "eligible" borrower under the provisions of the Bank Act.
The parties hereto acknowledge that the financial covenants
set forth in Section 7.03 (j) - (q) and (u) above are intended to be
substantially the same as those contained in the Credit Agreement. In the event
that any of the related covenants in the Credit Agreement is amended, then any
such amendment shall be deemed to be made and effective in this Agreement as of
the date made and effective in the Credit Agreement. If at any time the Credit
Agreement is terminated, the Buyer reserves the right to reassess and request an
amendment to any of the above-referenced financial covenants herein (as the same
may have been amended or deemed amended) that, in the Buyer's reasonable
judgment, are necessary to protect the Buyer's interests in the Loans and under
this Agreement.
SECTION 7.04 Grant of Security Interest.
(a) In order to secure Guarantor's obligations under the
Guaranty, Guarantor hereby grants to Buyer a perfected security interest,
subordinate to the security interests of the Credit Providers granted
pursuant to and in accordance with the Credit Agreement and the Security
Documents executed by Guarantor and certain of its Subsidiaries in
connection therewith, in all of Guarantor's now owned or hereafter acquired
goods and other personal property, including all tangible and intangible
items and including without limitation the following (collectively, the
"Guaranty Collateral"):
(i) Accounts, Contract Rights, Etc. All of Guarantor's
right title and interest in (A) all accounts, (B) all
65
contract rights, (C) all chattel paper, (D) all documents, documents of
title, drafts, checks, acceptances, bonds, letters of credit, notes,
instruments or other negotiable and non-negotiable instruments, bills
of exchange, deposits, certificates of deposit, insurance policies and
any other writings evidencing a monetary obligation or security
interest in or a lease of personal property, (E) all licenses, leases,
contracts or agreements, (F) all judgments, choses in action and
general intangibles which represent the right to receive the payment of
money or other considerations; and (G) all guarantees and other
personal property securing the payment or performance of any of the
foregoing;
(ii) Inventory, Etc. All of Guarantor's right, title and
interest in inventory and stock in trade of Guarantor including
without limitation raw materials, work in progress, materials used
or consumed in Guarantor's business, finished goods, returned
goods and goods traded in;
(iii) Promissory Notes. Those certain promissory notes
and obligations to pay identified on Schedule IV hereto, together
with all other obligations, now or hereafter arising, of members
of Guarantor for the repayment of loans or advances made by
Guarantor to such members, together with all rights of Guarantor,
now or hereafter existing, in and to all security agreements,
mortgages, deeds of trust, pledge agreements and other contracts
securing or otherwise supporting the repayment of such member's
promissory notes and obligations;
(iv) Equipment, Etc. All of Guarantor's right, title and
interest in equipment, supplies, fittings, furnishings, and other
items of any kind ordered, obtained, or possessed by Guarantor or
for its account whether held by Guarantor, by sellers under any
contracts for the purchase of equipment or by others, whether
completed or under construction, together with any product into
which such equipment may be processed, manufactured or assembled
and together with all additions and substitutions for such
equipment and all parts, instruments, accessories, alterations,
modifications, replacements, additions, fitting and accessions to
said equipment, including all supplies, operating manuals, plans,
specifications, improvements and tools therefor or thereto;
(v) Fixtures. All of Guarantor's right, title and
interest in and to all fixtures affixed to or to become affixed to
any real property owned, leased or operated by Guarantor or
otherwise used in connection with the business or operations of;
(vi) General Intangibles. All of Guarantor's general
intangibles now or hereafter acquired of whatever nature and
however evidenced, including without limitation all
66
judgments, choses in action, patents, trademarks, trade names, service
marks, licenses, copyrights and other intellectual property whether
registered or not, and whether or not used or to be used by Guarantor,
including, with respect to all of said property, without limitation,
all rights corresponding thereunder throughout the world, all renewals
thereof, all license royalties with respect thereto, all claims for
damages, profits and proceeds by reason of past, present and future
infringements, and all rights to xxx therefor;
(vii) Insurance. All insurances, including without
limitation: (A) all insurances now or hereafter in effect with
respect to the equipment specified in subsection (iv) above, the
fixtures specified in subsection (v) above, the inventory
specified in subsection (ii) above, proceeds of such inventory, or
any other real or personal property, (B) all claims and all
returns of premiums, dues, calls, and assessments that are not
immediately applied to premiums, dues, calls and assessments that
accrue from time to time, and all other sums or claims for sums
due or to become due under the foregoing insurances and (C) all
right, title, and interest in, to, or under the foregoing;
(viii) Documents and Deposits. All of Guarantor's right,
title, and interest in and to books, correspondence, credit files,
records, invoices, and other documents including without
limitation all tapes, disks, cards, computer runs and other papers
or documents in the possession or control of Guarantor; and all
balances, credits, deposits, accounts or monies of or in the name
of Guarantor in the possession or control of, or in transit to,
the Buyer;
(ix) Investment Property. All of Guarantor's right, title
and interest in investment property, including without limitation,
all stocks, bonds, debentures, notes, bills, certificates,
options, rights, shares or other securities now or hereafter owned
or acquired, all dividends or distributions in respect thereof and
all brokerage or commodities accounts; and
(x) Proceeds and Products. All proceeds of any and all of
the foregoing Guaranty Collateral and, to the extent not otherwise
included, all rents, royalties and payments under insurance,
indemnity, warranty or guaranty, payable by reason of loss,
damage, or otherwise, with respect to any of the foregoing
Guaranty Collateral.
(b) The parties to this Agreement intend that this Agreement
shall constitute a security agreement under applicable law with respect to the
Guarantor's grant of a security interest in the Guaranty Collateral.
67
(c) The parties hereto further acknowledge that the security
interest granted by Guarantor pursuant to subsection (c) of this Section 7.04
will also secure Guarantor's obligations under the Holdback Guaranty and the New
Origination Guaranty.
[End of ARTICLE VII]
68
ARTICLE VIII
SELLER OBLIGATIONS AND REPURCHASE OPTIONS
-----------------------------------------
SECTION 8.01 Purchase of Interest Rate Protection. Seller
hereby agrees to provide interest rate protection for Buyer, in the form of a
swap agreement, hedge, cap, guaranteed rate contract or other similar device or
agreement (each, an "Interest Rate Agreement"), or any combination of the
foregoing, or any other plan acceptable to Buyer (an "Interest Rate Protection
Plan"), if, for any three (3) consecutive months during the term of this
Agreement, the Prime Rate in effect on the LIBOR Determination Date for each
such month is equal to or less than the sum of the LIBOR on such Date and 200
basis points. An Interest Rate Agreement, if any, must satisfy the following
requirements: (i) have a term of 36 months (or such fewer number of months as
remain in the term of this Agreement); (ii) be provided by a party or parties
who is or are either rated "A" or higher by a Rating Agency or acceptable to
Buyer; (iii) be accompanied by an opinion of counsel to provider to the effect
that the Interest Rate Agreement is a legal, valid and binding Agreement of
provider, enforceable in accordance with its terms; (iv) provide for an interest
payment during each Interest Accrual Period at least equal to the related LIBOR
plus 200 basis points; and (v) be delivered by the Payment Date in the month
immediately following the month in which the requirement of this Section 8.01
takes effect. An Interest Rate Protection Plan must be coterminous with this
Agreement.
SECTION 8.02 Optional Repurchase of Defaulted Loans and after
Obligor Default. In addition to the other repurchase obligations contained
herein, Seller will have the option to repurchase any Loan sold by Seller to
Buyer if (i) such Loan is a Defaulted Loan or (ii) an Obligor Default has
occurred and has then been continuing for at least thirty (30) days or (iii)
Buyer has received notice of any adverse event as described in Section 6.01 (f)
hereof. Such Loan shall be repurchased by Seller from Buyer by the last day of
the Due Period during which Seller receives notice of any such Defaulted Loan or
the occurrence and continuation of an Obligor Default or notice of adverse
event, as the case may be. Such repurchase shall be accomplished on the same
terms as set forth in Section 2.01 (e) and at the Repurchase Amount.
SECTION 8.03 Minimal Balances. On any Payment Date, Seller may
elect to repurchase all Loans for their aggregate Principal Balance, if as of
such Payment Date, the aggregate Principal Balance is less than five percent
(5%) of the Maximum Purchase Amount. If Seller elects to repurchase the Loans
pursuant to this Section 8.03, Seller shall provide Buyer with thirty (30) days
prior written notice. The Repurchase Amount shall be paid by Seller to Buyer in
immediately available funds prior to 12:00 noon, Washington, D.C. time. Any
resale of a Loan and related Property pursuant to this Section 8.03 shall be
69
without recourse or warranty of any kind except that Buyer shall be deemed to
have warranted that such Loans and related Property are free and clear of all
liens or claims resulting from or arising out of its acts or omissions (other
than acts of Buyer resulting from Seller's failure to perform as required by
this Agreement) or claims of Buyer's creditors.
SECTION 8.04 Retransfer of Loans. Immediately upon the payment
of the required Repurchase Amount, all right, title and interest in the Loans
being repurchased shall pass to Seller and such Loans shall cease to be "Loans"
for all purposes of this Agreement. Any resale of a Loan and related Property
pursuant to the terms of this Article VIII shall constitute the simultaneous
resale by Buyer and repurchase by Seller of all Loans and related Property.
[End of Article VIII]
70
ARTICLE IX
TERMINATION EVENTS
------------------
SECTION 9.01 Termination Events. The occurrence of any of
the following events shall constitute a "Termination Event" hereunder.
(a) Breach of Covenant. Seller shall fail to perform or
observe any covenant, obligation or term of Articles VI or X or of Section 2.01
(e), 2.02, 3.02, 4.05 or 8.01 of this Agreement and, except in the case of a
breach of Section 6.01 (c) or Section 6.01 (f) (iii), (iv) or (v), such failure
shall remain unremedied for thirty (30) days after written notice thereof shall
have been given to Seller by Buyer; or
(b) Guarantor Defaults. Guarantor shall fail (i) to make any
payments due under the Guaranty, Repurchase Guaranty, Holdback Guaranty or New
Origination Guaranty and such failure shall continue unremedied for five (5)
Business Days after written notice thereof shall have been given to Guarantor by
Buyer and (ii) to perform or observe any other obligation, covenant or term of
Article VII of this Agreement and such failure shall remain unremedied for
thirty (30) days after written notice thereof shall have been given to Guarantor
by Buyer; or
(c) Voluntary Bankruptcy, Etc. Either Seller, Guarantor or any
Subsidiary or Affiliate of Seller or Guarantor shall: (1) file a petition
seeking relief for itself under Title 11 of the United States Code, as now
constituted or hereafter amended, or file an answer consenting to, admitting the
material allegations of or otherwise not controverting, or fail timely to
controvert a petition filed against it seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended; or (2) file such
petition or answer with respect to relief under the provisions of any other now
existing or future applicable bankruptcy, insolvency, or other similar law of
the United States of America or any State thereof or of any other country or
jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or an arrangement, composition, extension or adjustment with
creditors; or
(d) Involuntary Bankruptcy, Etc. An order for relief shall be
entered against either Seller, Guarantor or any Subsidiary or Affiliate of
Seller or Guarantor under Title 11 of the United States Code, as now constituted
or hereafter amended, which order is not stayed; or upon the entry of an order,
judgment or decree by operation of law or by a court having jurisdiction in the
premises which is not stayed adjudging it a bankrupt or insolvent under, or
ordering relief against it under, or approving as properly filed a petition
seeking relief against it under the provisions of any other now existing or
future applicable bankruptcy, insolvency or other similar law of the
71
United States of America or any State thereof or of any other country or
jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or any arrangement, composition, extension or adjustment with
creditors, or appointing a receiver, liquidator, assignee, sequestrator, trustee
or custodian of Seller, Guarantor or any Affiliate or Subsidiary of Seller or
Guarantor, or of any substantial part of the property of Seller, Guarantor, or
any Affiliate or Subsidiary, as the case may be, or ordering the reorganization,
winding-up or liquidation of its affairs, or upon the expiration of one hundred
twenty (120) days after the filing of any involuntary petition against it
seeking any of the relief specified in Section 9.01 (c) or this Section 9.01 (d)
without the petition being dismissed prior to that time; or
(e) Insolvency, Etc. Either Seller, Guarantor or any Affiliate
or Subsidiary of Seller or Guarantor shall (i) make a general assignment for the
benefit of its creditors or (ii) consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, or custodian of all or
a substantial part of the property of Seller, Guarantor, or any Affiliate or
Subsidiary, as the case may be, or (iii) admit its insolvency or liability to
pay its debts generally as they become due, or (iv) fail generally to pay its
debts as they become due, or (v) take any action (or suffer any action to be
taken by its directors or shareholders) looking to the dissolution or
liquidation of Seller, Guarantor, or any Affiliate or Subsidiary, as the case
may be; or
(f) ERISA. Seller, Guarantor, any Subsidiary of Guarantor, or
any member of the Controlled Group shall fail to pay when due an amount
aggregating in excess of One Million Dollars ($1,000,000) which it shall have
become liable to pay to the PBGC or to a Plan under Section 515 of ERISA or
Title IV of ERISA; or notice of intent to terminate a Plan or Plans (other than
a multi-employer plan, as defined in Section 4001(3) or ERISA), having aggregate
Unfunded Vested Liabilities in excess of One Million Dollars ($1,000,000) shall
be filed under Title IV of ERISA by Seller, Guarantor or any Subsidiary of
Guarantor, as the case may be, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate any such Plan or Plans; or
(g) Cross-default. Seller, Guarantor or any Subsidiary of
Seller or Guarantor shall fail (i) to pay when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) any Debt in
excess of One Million Dollars ($1,000,000) or any interest or premium thereon
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt, or (ii) to
perform any term or covenant on its part to be performed under any agreement or
instrument relating to any such Debt and required to be performed and such
failure shall continue after the applicable grace period, if any, specified in
72
such agreement or instrument, if the effect of such failure to perform is to
accelerate or to legally and in accordance with the applicable documents permit
the acceleration of the maturity of such Debt; or
(h) Material Adverse Changes; Extraordinary Situation. An
event shall occur which results in a material adverse change in Seller's or
Guarantor's financial condition or operations or an extraordinary situation
shall occur which gives the Buyer reasonable grounds to believe that Seller or
Guarantor may not, or will be unable to, perform or observe in the normal course
its obligations under this Agreement; or
(i) Judgment. A final judgment or order for the payment of
money in excess of One Million Dollars ($1,000,000) or its equivalent in another
currency shall be rendered against Seller or Guarantor or any Subsidiary of
Seller or Guarantor and such judgment or order shall continue unsatisfied and in
effect for a period of thirty (30) consecutive days; or
(j) Change in Control. Except as permitted under Section 6.01
(i) or 7.03 (v) hereof, any person, or group of persons directly or indirectly
under common control, shall obtain in excess of fifty percent (50%) of the
outstanding voting stock of Seller or Guarantor.
SECTION 9.02 Consequences of Termination Event. If any
Termination Event shall occur and be continuing, then in any such case and at
any time thereafter so long as any such Termination Event shall be continuing,
Buyer may, at its option, immediately terminate Buyer's commitment to make
Incremental Purchases or to accept Renewal Notes hereunder.
In addition, upon the occurrence of any Termination Event
specified in (c), (d) or (e) of Section 9.01, subject to the provisions of
Section 10.15, this Agreement shall automatically and immediately terminate.
Thereafter, and before exercising any other remedies provided
herein or by applicable law, Buyer may, at its option, require that Seller
repurchase all Loans and related Property Notes for the Repurchase Amount within
two (2) Business Days of receipt of notice from Buyer of its election to cause
the repurchase of all Loans. In addition, Buyer may pursue all other rights and
remedies available herein and by applicable law including, without limitation,
its rights to pursue collection from Seller in an amount equal to the Repurchase
Amount.
SECTION 9.03 Remedies of a Secured Party. Following the
occurrence of a Termination Event, Buyer shall have all remedies provided by law
and without limiting the generality of the foregoing shall have the following
remedies: (a) the remedies of a secured party under the Uniform Commercial Code;
(b) the right to make notification and pursue collection or, at Buyer's option,
to sell all or any part of the Loans and related
73
Property; (c) the right to exercise all of owner's or secured party's rights
under the Loans and related Property; and (d) to the extent that notice shall be
required by law to be given, Seller agrees that a period of twenty (20) days
from the time the notice is sent shall be a reasonable period of notification of
a sale or other, disposition of the Loans and related Property.
[End of Article IX]
74
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.01 Further Assurances. Each party hereto agrees to
execute and deliver to the other party and to perform all such other acts as the
other party may reasonably request to carry out the transactions contemplated by
this Agreement without limiting the foregoing, Buyer agrees to endorse without
recourse the Note related to any Loan being resold to Seller pursuant to
Articles II, IV or VIII, and to execute assignments and related Uniform
Commercial Code financing statements to evidence the assignment of the Related
Documents to Seller.
SECTION 10.02 Indemnities. (a) Seller and Guarantor will
defend and hereby indemnify Buyer and its successors, assigns, servants and
agents (hereinafter "Indemnities") against and agree to protect, save and keep
harmless and make whole each thereof, from any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs (including any net
increase in the tax liability of an Indemnitee resulting from its receipt of
indemnity payments made under this Section 10.02), expenses and disbursements,
including reasonable attorneys' fees, of whatsoever kind and nature imposed on,
incurred by or asserted against any Indemnitee in any way relating to or arising
out of (i) this Agreement or any of the documents entered into in connection
herewith; (ii) Buyer's interest in the Loans or related Property purchased or
accepted hereunder or the enforcement of any claims thereunder; (iii) any claim
made by any Obligor, or any other party, related to the Loans or related
Property purchased or accepted hereunder, or the administration of the
transactions evidenced by such Loans and related Property or related to any
other transactions between the Obligors or their affiliates and Seller or its
affiliates; or (iv) any environmental claim or liability relating to any real
property securing any Loans.
(b) The foregoing indemnities with regard to any particular
Indemnitee shall not extend to any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement (i) that results from the
willful misconduct or gross negligence of such Indemnitee or from any breach of
any representation or warranty made by such Indemnitee herein; (ii) that
constitutes any tax based on any Indemnitee's net income, items of tax
preference or gross receipts (except with respect to indemnity payments
hereunder); or (iii) that consists of the failure of any Obligor to pay its
obligations under the Notes as they become due unless such failure results from
a claim of such Obligor against Seller, Guarantor, or any Subsidiary or
Affiliate of any of them, or Buyer otherwise indemnified against hereunder. Any
indemnity payments required under this Section 10.02 shall be paid within thirty
(30) days following notice thereof from the Indemnitee to Seller or Guarantor,
as applicable, (which notice shall describe in
75
reasonable detail the matter with respect to which indemnification is required
and shall set forth the computation used in determining the amount of the
indemnity payment). All of the rights and privileges of each Indemnitee under
this Section 10.02, and the rights, privileges and obligations of Seller or
Guarantor, as applicable hereunder, shall survive the expiration or other
termination of this Agreement.
SECTION 10.03 No Waiver: Remedies Cumulative. No failure by
Seller, Guarantor or Buyer to exercise, and no delay in exercising, any right,
power or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy. The rights and remedies provided herein are
cumulative and not exclusive of any right or remedy provided by law.
SECTION 10.04 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 10.05 Consent to Jurisdiction: Waiver of Immunities.
Buyer, Guarantor and Seller hereby irrevocably submit to the jurisdiction of any
state or federal court sitting in the District of Columbia or the State of
Oregon in any action or proceeding brought to enforce or otherwise arising out
of or relating to this Agreement or any Assignment and irrevocably waive to the
fullest extent permitted by law any objection which they may now or hereafter
have to the laying of venue in any such action or proceeding in any such forum,
and hereby further irrevocably waive any claim that any such forum is an
inconvenient forum. The parties agree that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law.
SECTION 10.06 Notices. All notices and other communications
provided for in this Agreement shall be in writing or (unless otherwise
specified) by telex, telegram or cable and shall be sent for next Business Day
delivery to each party at the address set forth under its name on the signature
page hereof, or at such other address as shall be designated by such party in a
written notice to each other party. Except as otherwise specified, all such
notices and communications if duly given or made shall be effective upon
receipt.
SECTION 10.07 Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective Successors and
assigns. Notwithstanding the foregoing, neither Seller nor Guarantor may assign
or otherwise transfer all or any part of its rights or obligations hereunder
without the prior written consent of the other parties, and any such assignment
or transfer purported to be made without such consent shall be ineffective.
Buyer may not at any time sell,
76
assign or transfer its rights hereunder or the participations therein without
the consent of Seller, except that by executing this Agreement, Seller and
Guarantor shall be deemed to have consented to the sale and assignment of the
Loans and Related Property to NCB Retail Finance Corporation or other special
purpose vehicle established by Buyer.
SECTION 10.08 Capital Markets Funding. Seller and Guarantor
hereby agree to cooperate with Buyer in making such modifications to this
Agreement and the Related Documents, in executing such other documents and
certificates, in causing to be prepared and delivered such opinions,
certificates, financial reports and letters, and in taking such other actions,
including changing accounting firms, as are reasonably necessary to achieve
capital markets funding of the Loans and Related Property or to improve the
execution of such funding.
SECTION 10.09 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
SECTION 10.10 Attorney's Fees. In the event it is necessary
for any party hereto or its Successors or assigns to institute suit in
connection with this Agreement or the breach thereof, the prevailing party in
such suit shall be entitled to reimbursement for its reasonable costs, expenses
and attorney's fees incurred including fees incurred on any appeal.
SECTION 10.11 Setoff. In addition to any rights now or
hereafter granted under applicable law, upon the occurrence of any Termination
Event, Buyer is hereby authorized by Seller and Guarantor at any time, without
notice to Seller and Guarantor, as the case may be, to set off and to
appropriate and to apply to the amounts then owed by Seller or Guarantor, as the
case may be, hereunder to Buyer any and all deposits (general or special,
including, but not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other Indebtedness at any time held or owing by Buyer to Seller or Guarantor, as
the case may be.
SECTION 10.12 Limitation on Third Party Beneficiaries. No
provision, warranty, representation, or agreement herein, whether express or
implied, is intended to or shall be construed as conferring upon any Person not
a party hereto (including, without limitation, any Obligor) any rights or
remedies whatsoever; provided, however, that in the event of a sale of Loans by
Buyer pursuant to Section 10.07 or a securitization pursuant to Section 10.08,
the purchaser or purchasers of the
77
Loans (or beneficial interests therein) are acknowledged by Seller and Guarantor
to be third party beneficiaries of this Agreement.
SECTION 10.13 Entire Agreement; Amendment. This Agreement
comprises the entire agreement of the parties and may not be amended or modified
except by written agreement of Buyer, Guarantor and Seller. No provision of this
Agreement may be waived except in writing and then only in the specific instance
and for the specific purpose for which given.
SECTION 10.14 Headings. The headings of the various provisions
of this Agreement are for convenience of reference only, do not constitute a
part hereof, and shall not affect the meaning or construction of any provision
hereof.
SECTION 10.15 Term of Agreement. This Agreement shall
terminate upon the earlier to occur of (i) the reduction of the aggregate
Principal Balance of the Loans (including Liquidated Loans as to which there
remain unpaid Liquidation Losses) to zero or (ii) the date on which this
Agreement is automatically terminated following the occurrence of any of the
specified Termination Events pursuant to Section 9.02; provided, however, that
(a) the rights accrued to Buyer prior to such termination, (b) the obligations
of the Guarantor under this Agreement, and (c) the indemnification provisions
set forth in Section 10.02 shall be continuing and shall survive any termination
of this Agreement.
SECTION 10.16 Counterparts. This Agreement may be executed in
any number of identical counterparts, any set of which signed by all parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
[End of Article X]
78
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Loan Purchase Agreement (Existing Program) to be executed by their
respective officers or agents thereunto duly authorized as of the date first
above written.
UNITED RESOURCES, INC., as Seller
By:/s/Xxxxxx x. Xxxxxxx
----------------------------
Its President
By:/s/Xxxx Xxxxxxx
----------------------------
Its Asst Secretary
Notice Address:
0000 X.X. Xxxx Xxxx
Xxxxxxxx, Xxxxxx 00000
Attention: President
UNITED GROCERS, INC., as Guarantor
By:/s/Xxxxxxx X. Xxxxxxx
----------------------------
Its President & CEO
By:/s/Xxxx Xxxxxxx
----------------------------
Its Vice President
Notice Address:
0000 X.X. Xxxx Xxxx
Xxxxxxxx, Xxxxxx 00000
Attention: President
79
NATIONAL CONSUMER COOPERATIVE BANK, as Buyer
By:/s/Xxx Xxxxxx
----------------------------
Its V.P.
By:
----------------------------
Its
Notice Address:
0000 Xxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
80
LOAN ORIGINATION AND PURCHASE AGREEMENT
DATED AS OF JANUARY 30,1998
EXHIBIT ( )
SELLER AND GUARANTOR CORPORATE NAMES
GUARANTOR
UNITED GROCERS, INC.
SELLER
UNITED RESOURCES, INC.
dba in Washington: UNITED RESOURCES OREGON, INC.
Dba in California OREGON UNITED RESOURCES, INC.
