AMENDMENT NO. 4 TO STOCK PURCHASE AGREEMENT
This Amendment No. 4 to the Stock Purchase Agreement
("Amendment No. 4") is made as of February 3, 1999 by and between Fidelity
Leasing, Inc., a Pennsylvania corporation ("Purchaser"), and Japan Leasing
(U.S.A.), Inc., a Delaware corporation ("Seller"), in connection with that
certain Stock Purchase Agreement, dated as of December 15, 1998, by and between
Purchaser and Seller (as previously amended, the "Stock Purchase Agreement").
RECITALS
WHEREAS, Purchaser, Seller and, for the limited purposes set
forth on the signature page of the Stock Purchase Agreement, Resource America,
Inc., a Delaware corporation, constitute all of the parties to the Stock
Purchase Agreement; and
WHEREAS, Section 11.2 of the Stock Purchase Agreement provides
that the Stock Purchase Agreement can be amended, supplemented or modified only
by a written instrument signed by each of the parties thereto making specific
reference thereto; and
WHEREAS, the parties to the Stock Purchase Agreement have
previously amended the Stock Purchase Agreement pursuant to that certain
Amendment No. 1 to Stock Purchase Agreement, dated as of December 31, 1998
("Amendment No. 1"), that certain Amendment No. 2 to Stock Purchase Agreement,
dated as of January 12, 1999 ("Amendment No. 2"), and that certain Amendment No.
3 to Stock Purchase Agreement, dated as of February 2, 1999 ("Amendment No. 3");
and
WHEREAS, the parties to the Stock Purchase Agreement desire to
amend in accordance with this written instrument certain terms of the Stock
Purchase Agreement; and
WHEREAS, each of the parties hereto has authorized the
execution of this Amendment No. 4.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements set forth herein and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to such terms in the
Stock Purchase Agreement.
2. Amendment of Section 2.3(a). The first sentence of Section
2.3(a) of the Stock Purchase Agreement is hereby amended by replacing the
expression "60 days" where it appears therein with the expression "90 days".
3. Amendment of Article II. Article II of the Stock Purchase
Agreement is hereby amended by adding to the end thereof the following sections:
"Section 2.4. Withdrawal from Escrow. On the Closing Date
Seller and Buyer shall give the Escrow Agent joint
instructions directing the Escrow Agent to pay out of escrow
the amount of $4,043,059.00 in respect of the Unsecuritized
Financing Contracts set forth on Schedule 2.4 (the "Schedule
2.4 Contracts").
"Section 2.5 Restoration of Escrow and the Promissory Note.
(a) To the extent an executed original of any Schedule 2.4
Contract is located by Purchaser or the Company on or before
the last Business Day of the calendar month that is the
fourteenth month after the month in which the Closing occurs
(the "Release Date"), Purchaser shall, on or before the third
Business Day in the calendar month immediately following the
calender month in which such contract is located (each such
date a "Restoration Date"), remit to the bank account (the
"Escrow Account") specified in writing by the Escrow Agent for
deposit in accordance with the terms of the Escrow Agreement
an amount equal to 66.15% of the net investment value of such
contract as of the time of such remittance. At the time of
such remittance, Purchaser shall increase the principal sum of
the Promissory Note by an amount equal to the amount of such
net investment value not remitted to the Escrow Account
pursuant to the foregoing sentence.
(b) To the extent an executed original of any Schedule 2.4
Contract is located by Purchaser or the Company after the
Release Date and at such time no claim for indemnification
under Section 10.1(a) of the Stock Purchase Agreement is then
in existence, Purchaser shall, on or before each Restoration
Date, remit to the bank account (the
"Seller Account") specified in writing by Seller an amount
equal to 66.15% of the net investment value of such contract
as of the time of such remittance. At the time of such
remittance, Purchaser shall increase the principal sum of the
Promissory Note by an amount equal to the amount of such net
investment value not remitted to the Seller Account pursuant
to the foregoing sentence.
(c) To the extent an executed original of any Schedule 2.4
Contract is located (a "Location") by Purchaser or the Company
after the Release Date and at such time a claim for
indemnification under Section 10.1(a) of the Stock Purchase
Agreement is then in existence, Purchaser shall, on or before
each Restoration Date, notify Seller in writing of a Location
and shall thereafter deposit an amount equal to 66.15% of the
net investment value of such contract as of the time of such
remittance into an escrow account with an escrow agent under
an escrow agreement with terms substantially identical to the
Escrow Agreement. At the time of such remittance, Purchaser
shall increase the principal sum of the Promissory Note by an
amount equal to the amount of such net investment value not
remitted to such escrow account pursuant to the foregoing
sentence.
(d) To the extent any payment is received by the Company under
a Schedule 2.4 Contract on or before the Release Date,
Purchaser shall, on or before the third Business Day in the
calendar month immediately following the calender month in
which such payment is received (the "Payment Receipt Date"),
remit to the Escrow Account for deposit in accordance with the
terms of the Escrow Agreement an amount equal to 66.15% of the
total amount of such payment. At the time of such remittance,
Purchaser shall increase the principal sum of the Promissory
Note by an amount equal to the total amount of such payment
not remitted to the Escrow Account pursuant to the foregoing
sentence.
(e) To the extent any payment is received by the Company under
a Schedule 2.4 Contract after the Release Date and at such
time no claim for indemnification under Section 10.1(a) of the
Stock Purchase Agreement is then in existence, Purchaser
shall, on or before the Payment Receipt Date, remit to the
Seller Account an amount equal to 66.15% of the total amount
of such payment. At the time of such remittance, Purchaser
shall increase the principal sum of
the Promissory Note by an amount equal to the total amount of
such payment not remitted to the Seller Account pursuant to
the foregoing sentence.
(f) To the extent any payment is received (a "Payment Event")
by the Company under a Schedule 2.4 Contract after the Release
Date and at such time a claim for indemnification under
Section 10.1(a) of the Stock Purchase Agreement is then in
existence, Purchaser shall, on or before the first Payment
Receipt Date for any Schedule 2.4 contract, notify Seller in
writing of a Payment Event and shall thereafter deposit an
amount equal to 66.15% of the amount of such payment as of the
time of such remittance into an escrow account with an escrow
agent under an escrow agreement with terms substantially
identical to the Escrow Agreement. At the time of such
remittance, Purchaser shall increase the principal sum of the
Promissory Note by an amount equal to the total amount of such
payment not remitted to such escrow account pursuant to the
foregoing sentence."
4. Amendment of Section 6.12(b). The first sentence of Section
6.12(b) of the Stock Purchase Agreement is hereby amended by (i) deleting the
period appearing at the end thereof and (ii) adding the following words to the
end thereof:
"and the amount of $2,069,247.82 in respect of the Schedule
2.4 Contracts."
5. Amendment of Exhibit 6.12(b). Exhibit 6.12(b) to the Stock
Purchase Agreement is hereby amended to read in its entirety as set forth as
Exhibit 6.12(b) hereto, and any and all references to "Exhibit 6.12(b)" in the
Stock Purchase Agreement (including all Exhibits and Schedules thereto) shall
hereafter be deemed to refer to Exhibit 6.12(b) hereto.
6. Amendment of Exhibit 7.1(h). Exhibit 7.1(h) to the Stock
Purchase Agreement is hereby amended to read in its entirety as set forth as
Exhibit 7.1(h) hereto, and any and all references to "Exhibit 7.1(h)" in the
Stock Purchase Agreement (including all Exhibits and Schedules thereto) shall
hereafter be deemed to refer to Exhibit 7.1(h) hereto.
7. Amendment of Exhibit 7.1(i). Exhibit 7.1(i) to the Stock
Purchase Agreement is hereby amended to read in its entirety as set forth as
Exhibit 7.1(i) hereto, and any and all references to "Exhibit 7.1(i)" in the
Stock Purchase Agreement (including all Exhibits and Schedules thereto) shall
hereafter be deemed to refer to Exhibit 7.1(i) hereto.
8. Effect on Stock Purchase Agreement. Except as set forth in
this Amendment No. 4, all terms and provisions of the Stock Purchase Agreement,
as previously amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3,
shall remain in full force and effect in accordance with the terms thereof.
9. Counterparts. This Amendment No. 4 may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 4 to be executed and delivered by their duly authorized
representatives as of the day and year first above written.
FIDELITY LEASING, INC.
By:
Name:
Title:
JAPAN LEASING (U.S.A.), INC.
By:
Name:
Title:
THE UNDERSIGNED ACKNOWLEDGES AND AGREES that it is bound by
and subject to the provisions of, and otherwise a party to, Article X of the
Stock Purchase Agreement, as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0,
Xxxxxxxxx Xx. 0 and this Amendment No. 4.
RESOURCE AMERICA, INC.
By:
Name:
Title:
EXHIBIT 6.12(b)
PROMISSORY NOTE
---------------
$6,672,741.58 (plus the Amounts listed February 4, 1999
on Schedule I hereto, as such
schedule is amended from time to time prior to
the Maturity Date)
FOR VALUE RECEIVED, and intending to be legally bound,
Fidelity Leasing, Inc., a Pennsylvania corporation ("Maker"), promises to pay to
Japan Leasing (U.S.A.), Inc., a Delaware corporation ("Payee"), in lawful money
of the United States of America, on or prior to February 3, 2004 (the "Maturity
Date"), the principal sum of six million six hundred seventy-two thousand seven
hundred forty-one dollars and fifty-eight cents ($6,672,741.58) plus the amounts
listed on Schedule I hereto, as such schedule is amended from time to time prior
to the Maturity Date with such amendments serving to increase the principal
amount of this Note from time to time (all such amounts, collectively, the
"Principal Amount"), which sum shall be payable quarterly in twenty-one
successive installments, (i) the first eight of which shall be in an amount such
that equal quarterly payments of interest and principal would amortize the
entire unpaid principal balance of this Note, at the time of payment of each
such installment, over the number of quarterly payments obtained by subtracting
the number of installments previously paid from the number twenty-eight (28)
(such result, the "Notional Quarterly Payments"), at the Initial Interest Rate
(as defined below), (ii) the next twelve of which shall each be in an amount
such that equal quarterly payments of interest and principal would amortize the
Principal Amount outstanding at the time of each such installment, over the
Notional Quarterly Payments, at the Repayment Incentive Interest Rate (as
defined below), such quarterly payments commencing with April 30, 1999, and
(iii) the last of which shall be in an amount equal to the unpaid Principal
Amount and shall be payable on the Maturity Date. The interest rate applicable
to each quarterly payment shall be an annual rate equal to the Treasury notes
(five year) interest rate as reported by the Federal Reserve Board on a
weekly-average basis and as published in the Wall Street Journal on the date of
this Note, plus (i) two-hundred and fifty basis points for each of the first
eight payments (the "Initial Interest Rate"), and (ii) four-hundred basis points
for each remaining payment (the "Repayment Incentive Interest Rate"), each such
installment of principal and each such payment of interest to be payable in
immediately available funds by wire transfer to such bank accounts as may be
specified in writing by Payee to Maker and otherwise as provided below.
This Note has been executed and delivered pursuant to and in
accordance with the terms and conditions of the Stock Purchase Agreement, dated
as of December 15, 1998 (as may have been amended, supplemented or otherwise
modified from time to time, the "Agreement"), by and among Payee and Maker.
1. Payments.
1.1 Interest. Interest shall be calculated on the basis of a year
of 365 days and charged for the actual number of days elapsed through and
including each relevant date of payment with respect to each portion of the
Principal Amount. In the event that, and for so long as, any Event of Default
(as hereinafter defined) shall have occurred and be continuing, the outstanding
principal amount of this Note and, to the extent permitted by law, overdue
interest in respect of this Note, shall bear interest at a rate per annum equal
to 2% above the then applicable interest rate provided above.
1.2 Manner of Payment. All payments of principal and interest on
this Note shall be made by wire transfer of immediately available funds to The
Chase Manhattan Bank, NA, New York, New York, ABA Xx. 000 000 000, X/X Xxxxx
Leasing (U.S.A.), Inc., Acct. No. 000 000 000, Contact: Xxxxxx Xxxxxx. If any
payment of principal or interest on this Note is due on a day which is not a
Business Day, such payment shall be due on the next succeeding Business Day, and
such extension of time shall be included in the period of time used for purposes
of calculating the amount of interest payable under this Note. "Business Day"
means any day other than a Saturday, Sunday or legal holiday in the State of
Delaware.
1.3 Prepayment. Maker may, without premium or penalty, at any time
and from time to time, prepay all or any portion of the outstanding principal
balance due under this Note, provided that each such prepayment is accompanied
by accrued interest on the amount of principal prepaid, calculated as of the
date of such prepayment.
1.4 Security. This Note is secured by the Collateral as defined
below.
1.5 Obligations Absolute. The obligations of Maker hereunder shall
be unconditional and irrevocable, and shall be performed in accordance with the
terms of this Note. Without limiting the generality of the foregoing, payment
hereunder shall be made by Maker notwithstanding:
(a) any lack of validity or enforceability of this Note
or the Agreement; or
(b) the existence of any claim, set-off, defense or
other right which Maker may have at any time against Payee, whether in
connection with the Agreement or the transactions contemplated therein, except
for claims arising under Sections 2.3, 4.2, 4.9, 4.14 or 6.16 of the Agreement.
2. Defaults.
2.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an event of default hereunder ("Event of
Default"):
(a) If Maker shall fail to make any payment of principal
or interest hereunder within ten (10) days after becoming due.
(b) Any representation of Maker in the Agreement or this
Note shall have been untrue in any material respect when made.
(c) Any other agreement of Maker shall not be complied
with within 30 days after receipt of notice from Payee of such failure of
compliance.
(d) If, pursuant to or within the meaning of the United
States Bankruptcy Code or any other federal or state law relating to insolvency
or relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against
Maker, in an involuntary case; (iii) consent to the appointment of a trustee,
receiver, assignee, liquidator or similar official; (iv) make an assignment for
the benefit of Maker's creditors; or (v) admit in writing Maker's inability to
pay Maker's debts as they become due;
(e) If a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or
similar official for Maker or substantially all of Maker's properties or (iii)
orders the liquidation of Maker, and in each case the order or decree is not
dismissed within 60 days.
2.2 Notice by Maker. Maker shall notify Payee in writing promptly
of the occurrence of any Event of Default of which Maker receives notice.
2.3 Remedies. Upon the occurrence of an Event of Default specified
in items (a), (d) and (e) under Section 2.1 hereof, the principal of this Note,
together with all unpaid interest and all other amounts payable hereunder, shall
become due and payable forthwith, without presentment, demand, notice, protest
or other requirement of any kind, all of which are expressly waived by Maker.
Upon the occurrence of an Event of Default specified in item (b) or (c) under
Section 2.1 hereof (unless all Events of Default have been cured or waived by
Payee), Payee may, at its option, by written notice to Maker, declare the entire
unpaid principal balance of this Note, together with all accrued interest
thereon, immediately due and payable regardless of any prior forbearance. In
either such case, subject to Section 4 hereof, Payee may exercise any and all
rights and remedies
available to it under applicable law, including, without limitation, the right
to collect from Maker all sums due under this Note. Maker shall pay all
reasonable costs and expenses of collection incurred by or on behalf of Payee as
a result of an Event of Default, including, without limitation, reasonable
attorneys' fees.
3. Representations, Warranties and Agreements of Maker.
3.1 Organization and Qualification. Maker (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation, (ii) has the power and authority to own its
properties and assets and to transact the businesses in which it presently is,
or proposes to be, engaged and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where it presently is, or
proposes to be, engaged in business.
3.2 Authority. Maker has the requisite corporate power and
authority to execute, deliver and perform this Note. All corporate action
necessary for the execution, delivery and performance of this Note has been
taken.
3.3 Enforceability. This Note is the legal, valid and binding
obligation of Maker, enforceable in accordance with its terms.
3.4 No Conflict. The execution, delivery and performance of this
Note by Maker are not in contravention of any requirement of law or any
indenture, contract, lease, agreement, instrument or other commitment to which
it is a party or by which it or any of its properties are bound and will not,
except as contemplated herein, result in the imposition of any Liens (as defined
in Section 4.8) upon any of its properties.
3.5 Consents and Filings. No consent, authorization, delivery and
performance of this Note, or the continuing operations of Maker, except those
that have been obtained or made.
3.6 Government Regulation. Maker is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940, or any other
requirement of law that limits its ability to incur indebtedness or its ability
to consummate the transactions contemplated in this Note.
3.7 No Judgments or Litigation. Except as disclosed in the
Agreement, no judgments, orders, writs or decrees are outstanding against Maker
nor is there now pending or, to the best of Maker's knowledge after diligent
inquiry, threatened, any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against Maker.
3.8 No Defaults. Maker is not in default under any term of any
indenture, contract, lease, agreement, instrument or other commitment to which
it is a party or by which it is bound. Maker knows of no dispute regarding any
such indenture, contract, lease, agreement, instrument or other commitment.
3.9 Corporate Existence. Maker shall (i) maintain its corporate
existence, (ii) maintain in full force and effect all licenses, bonds,
franchises, leases, trademarks and qualifications to do business, and all
patents, contracts and other rights necessary or advisable to the profitable
conduct of its business, (iii) continue in, and limit its operations to, the
same general lines of business as presently conducted by it and (iv) comply with
all requirements of law.
3.10. Guarantee. Maker shall deliver, prior to the execution
of this Note or concurrently herewith, the Guarantee (as defined below) whereby
the Guarantor (as defined below) as parent of Maker shall execute the Guarantee
in favor of Payee, guaranteeing payment of the outstanding principal, accrued
interest and all costs, fees and expenses arising hereunder.
3.11 Further Assurances. Maker shall take all such further
actions and execute all such further documents and instruments as Payee may at
any time reasonably determine to be necessary or desirable to further carry out
and consummate the transactions contemplated by this Note, or to cause the
execution, delivery and performance of this Note to be duly authorized.
Subordination to Senior Obligations.
4. Subordination.
4.1 (a) Agreement to Subordinate. Payee agrees, for itself
and each subsequent holder of this Note or the indebtedness evidenced hereby
(collectively, the "Debt"), that the Debt is expressly "subordinate and junior
in right of payment" (as that phrase is defined in clause (b) below) to all
Senior Obligations (as defined in Section 4.8). Payee by accepting this Note
acknowledges and agrees that these subordination provisions set forth in this
Article 4 are, and are intended to be, an inducement and a consideration to each
holder of any Senior Obligation, whether such Senior Obligation was created or
acquired before or after the issuance of this Note, to acquire and continue to
hold, or to continue to hold, such Senior Obligation and such holder of Senior
Obligations shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or continuing to hold, such
Senior Obligations.
(b) "Subordinate and junior in right of payment" means
that:
(i) no part of the Debt shall have any claim to
the assets of Maker on a parity with or prior to the claim of the Senior
Obligations;
(ii) unless and until the Senior Obligations have
been paid in full and any commitment to lend in respect thereof has been
terminated, without the express prior written consent of each holder of Senior
Obligations, Payee will not take, demand (including by means of any legal
action) or receive from Maker, and Maker will not make, give or permit, directly
or indirectly, by set-off, redemption, purchase or in any other manner, any
payment of or security for (except for such security granted herein) the whole
or any part of the Debt; provided, however, that (x) at any time, except when a
default in the performance or observance of any term or condition relating to
any Senior Obligation has occurred and is continuing or would result therefrom,
Maker may make, and Payee may receive, scheduled payments or mandatory
repayments in accordance with Section 2.3 of this Note on account of principal
of and interest on the Debt in accordance with the terms hereof and (y) upon the
acceleration of the maturity of any Senior Obligations, Payee may accelerate the
scheduled maturities of the Debt if and to the extent permitted hereby at such
time but such acceleration shall not give Payee any right to take, demand
(including by means of any legal action) or receive from Maker, or Maker the
right to make, give or permit, directly or indirectly, by set-off, redemption,
purchase or in any other manner, any payment of or security for the whole or any
part of the Debt unless and until the Senior Obligations have been paid in full;
and
(iii) without limitation on any other provision of
this Section 4, the security interest of the Payee on the Collateral will be
junior in priority to any interest of any holder of Senior Obligations therein
as defined in the Security Agreement.
(c) The expressions "prior payment in full", "payment
in full", "paid in full" and any other similar terms or phrases when used herein
with respect to the Senior Obligations shall mean the payment in full in cash,
in immediately available funds, of all of the Senior Obligations.
4.2 Additional Provisions Concerning Subordination.
(a) Payee and Maker agree that upon any payment or
distribution of the assets of Maker upon a total or partial liquidation or a
total or partial dissolution of Maker or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to Maker or its
property:
(i) all Senior Obligations shall be paid in full
before any payment or distribution is made with respect to the Debt; and
(ii) any payment or distribution of assets of Maker,
whether in cash, property or securities, to which Payee would be entitled except
for the provisions hereof, shall be paid or delivered by Maker, or any receiver,
trustee in bankruptcy, liquidating trustee, disbursing agent or other person or
entity making such payment or distribution, directly to the holders of the
Senior Obligations or their representative, ratably in accordance with the
amounts thereof, to the extent necessary to pay in full all Senior Obligations,
before any payment or distribution shall be made to Payee.
(b) If any payment or distribution from the assets of
Maker, whether consisting of money, property or securities, be collected or
received by Payee in respect of the Debt, except payments of principal or
interest permitted to be made at the time of payment as provided in Section
4.1(b) (ii)(x) above, Payee forthwith shall deliver the same to the holders of
the Senior Obligations or their representative, ratably in accordance with the
amounts thereof, if required, to be applied to the payment or prepayment of the
Senior Obligations until the Senior Obligations are paid in full. Until so
delivered, such payment or distribution shall be held in trust by Payee as the
property of such holders of the Senior Obligations, segregated from other funds
and property held by Payee.
4.3 Subrogation. Subject to the payment in full of the Senior
Obligations, Payee shall be subrogated to the rights of the holders of the
Senior Obligations to receive payments or distributions of assets of Maker in
respect of the Senior Obligations until the Senior Obligations shall be paid in
full.
4.4 Consent of Payee.
(a) Payee consents that, without the necessity of any
reservation of rights against Payee, and without notice to or further assent by
Payee:
(i) any demand for payment of any Senior Obligations
made by any holder of Senior Obligations may be rescinded in whole or in part by
or on behalf of such holder, and any Senior Obligation may be continued, and the
Senior Obligations, or the liability of Maker or any guarantor or any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, or any obligation or liability
of Maker or any other party under any agreement, may, from time to time, in
whole or in part, be renewed, extended, modified, accelerated, compromised,
waived, surrendered, or released by or on behalf of any holder of Senior
Obligations; and
(ii) the terms and conditions of any Senior
Obligation may be amended, increased, modified, supplemented or terminated, in
whole or in part, as the holders thereof may deem advisable from time to time,
and any collateral security at any time held for the payment of any of the
Senior Obligations may be sold, exchanged, waived, surrendered or released, in
each case all without notice to or further assent by Payee, which will remain
bound under this Agreement, and all without impairing, abridging, releasing of
affecting the subordination provided for herein.
(b) Payee waives any and all notice of the creation,
renewal, extension, increase or accrual of any of the Senior Obligations and
notice of or proof of reliance by the holders thereof upon this Note. The Senior
Obligations, and any of them, shall be deemed conclusively to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings between
Maker and the holders of the Senior Obligations shall be deemed to have been
consummated in reliance upon this Agreement. Payee acknowledges and agrees that
the holders of the Senior Obligations have relied upon the subordination
provided for herein in entering into any agreement with respect to the Senior
Obligations. Payee waives notice of or proof of reliance on this Agreement and
protest, demand for payment and notice of default.
4.5 Senior Obligations Unconditional. All rights and interest of the
holders of the Senior Obligations hereunder, and all agreements and obligations
of Payee and Maker hereunder, shall remain in full force and effect irrespective
of:
(a) any lack of validity or enforceability of any
document, instrument or agreement relating to any Senior Obligation;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Senior Obligations, or any amendment
or waiver or other modification, whether by course of conduct or otherwise, of
the terms of any Senior Obligations;
(c) any exchange, release or nonperfection of any security
interest in any collateral, or any release, amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Obligations or any guarantee thereof; or
(d) any other circumstances which otherwise might
constitute a defense available to, or a discharge of, Maker in respect of the
Senior Obligations or this Note.
4.6 Further Assurances. Payee and Maker at their own expense and at
any time from time to time, upon the written request of the holders of any
Senior Obligations or their representative, will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
such holders of the Senior Obligations or their representative reasonably may
request for the purposes of obtaining or preserving the full benefits hereof and
of the rights and powers herein granted.
4.7 Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Article 4 are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full and all commitments in
respect thereof are terminated.
4.8 Certain Terms Defined.
(a) "Senior Obligations" shall mean the collective
reference to the unpaid principal of and interest on all Indebtedness of Maker
(including, without limitation, interest accruing at the then applicable rate
after the maturity of any Indebtedness and interest accruing at the then
applicable rate after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
Maker, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, such Indebtedness of Maker, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise.
(b) "Indebtedness" shall mean (a) all indebtedness of
Maker for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of Maker which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of Maker under capitalized leases, (d) all
obligations of Maker in respect of acceptances issued or created for the account
of Maker, (e) all liabilities secured by any Lien on any property owned by Maker
even though Maker has not assumed or otherwise become liable for the payment
thereof and (f) all obligations of Maker in respect of interest rate or currency
exchange hedging agreements or arrangements including swaps.
(c) "Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any capitalized lease having substantially the same economic
effect as any of the foregoing).
(d) "Collateral" shall mean all property and interests in
property now owned or hereafter acquired in or upon which a Lien has been or is
purported or intended to be have been granted to the Payee under the Security
Agreement.
(e) "Security Agreement" shall mean the security agreement
executed by the Maker, Payee and Debtor (as defined in the Security Agreement)
dated as of the date hereof (as amended, modified or supplemented from time to
time).
(g) "Guarantor" shall mean Resource America, Inc., a
Delaware corporation, and parent of Maker.
(f) "Guarantee" shall mean the Guarantee dated as of the
date hereof, executed by the Guarantor for the benefit of the Payee, and
attached hereto as Exhibit A.
5. Miscellaneous.
5.1 Waiver. The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or remedy under
this Note shall be effective unless in a writing signed by Payee. No failure to
exercise, delay in exercising, or single or partial exercise of any right or
remedy by Payee, and no course of dealing between Maker and Payee, shall
constitute a waiver of, or shall preclude any other or further exercise of the
same right or remedy. Maker hereby waives presentment, demand, protest and
notice of dishonor and protest.
5.2 Notices. Any notice required or permitted to be given hereunder
shall be given in accordance with Section 11.3 of the Agreement.
5.3 Severability. If any provision in this Note is construed to be
invalid, illegal or unenforceable, then the remaining provisions shall not in
any way be affected thereby and shall be enforced without regard thereto.
5.4 Governing Law; Waiver of Trial by Jury. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
DELAWARE AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF
DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. MAKER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND
DELAWARE STATE COURTS LOCATED IN THE CITY OF WILMINGTON IN CONNECTION WITH ANY
SUIT, ACTION OR PROCEEDING RELATED TO THIS NOTE OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. MAKER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. MAKER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO MAKER AT
ITS NOTICE ADDRESS SET FORTH IN SECTION 11.3 OF THE AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF PAYEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST MAKER IN ANY OTHER
JURISDICTION.
THE RIGHT TO TRIAL BY JURY IS HEREBY WAIVED BY MAKER AND PAYEE.
5.5 Parties in Interest. This Note shall bind Maker and its
successors and assigns. This Note may be assigned or transferred by Payee
without the consent of Maker.
5.6 Section Headings. The section and subsection headings in this
Note are for convenience of reference only, do not constitute a part of this
Note, and shall not affect its interpretation.
5.7 References. All words used in this Note shall be construed to be
of such number and gender as the context requires or permits. Unless a
particular context clearly provides otherwise, the words "hereof" and
"hereunder" and similar references refer to this Note in its entirety and not to
any specific section or subsection hereof.
IN WITNESS WHEREOF, Maker has executed this Note as of the
date first stated above.
FIDELITY LEASING, INC.,
a Pennsylvania corporation
By:__________________________________
EXHIBIT A
---------
GUARANTEE
THIS GUARANTEE (this "Guarantee"), dated as of February 4,
1999, is executed by Resource America, Inc., a Delaware corporation (the
"Guarantor"), for the benefit of Japan Leasing (U.S.A.), Inc., a Delaware
corporation (the "Lender") under the Promissory Note (as defined below).
Capitalized terms used but not otherwise defined herein shall have the meanings
provided for such terms in the Promissory Note.
RECITALS:
---------
WHEREAS, it is a condition to the effectiveness of that
certain Promissory Note (as amended, supplemented or otherwise modified from
time to time, the "Promissory Note"), dated as of February 4, 1999, executed by
Fidelity Leasing, Inc., a Pennsylvania corporation (the "Borrower"), in favor of
the Lender that the Guarantor execute and deliver this Guarantee; and
WHEREAS, it is in the best interests of the Guarantor to
execute this Guarantee inasmuch as the Guarantor will derive substantial
benefits from the transactions contemplated by the Promissory Note.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Guarantor hereby agrees as follows:
1. The Guarantor hereby irrevocably and unconditionally guarantees:
(a) the full and prompt payment when due (whether
at maturity, by optional or mandatory prepayment, upon acceleration or
otherwise) of the principal and interest payable on the Promissory Note
in accordance with the terms, conditions and covenants contained
therein;
(b) the payment of all other obligations and
indebtedness (including, without limitation, indemnities, fees and
interest thereon and all obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code and the operation of
Sections 502(b) and 506(b) of the Bankruptcy Code, 11 U.S.C. ss.502(b)
and ss.506 (b), would become due) of the Borrower now existing or
hereafter incurred under, arising out of, or in connection with the
Promissory Note;
(c) the due performance and compliance by the
Borrower with all of the terms, conditions and agreements contained in
the Promissory Note;
GUARANTEE
(d) the payment of all sums advanced by the Lender
under or pursuant to the Promissory Note, with interest thereon from
the due date thereof, until paid, at the rate specified in the
Promissory Note; and
(e) all renewals, extensions, amendments and
changes of, or substitutions or replacements for, all or any part of
the foregoing (all such principal, premiums, interest, obligations,
indebtedness, performance, compliance and payments, collectively, the
"Guaranteed Obligations").
All payments by the Guarantor under this Guarantee shall be made
on the same basis as payments by the Borrower under the Promissory Note.
This guarantee is a primary obligation of the Guarantor and is
a guarantee of payment, and not merely of collection.
2. The Lender may, at any time and from time to time, without
the consent of, or notice to, the Guarantor, without incurring responsibility to
the Guarantor and without impairing or releasing the obligations of the
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability
incurred in respect thereof, and the guarantee herein made shall apply
to the Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred in respect thereof or hereof, and/or any
offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other guarantor or others, or otherwise act or refrain
from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred in respect thereof or hereof, and may subordinate the payment
of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to creditors of the Borrower other than the
Lender and the Guarantor;
GUARANTEE
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Lender regardless
of what liabilities or liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, the Promissory Note, or otherwise amend, modify or
supplement the Promissory Note; or
(g) act or fail to act in any manner referred to in this
Guarantee which may deprive the Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guarantee.
3. The liability of the Guarantor hereunder is exclusive and
independent of any security for or other guarantee of the indebtedness of the
Borrower whether executed by such Guarantor, any other guarantor or by any other
Person, and the liability of the Guarantor hereunder shall not be affected or
impaired by any circumstance or occurrence whatsoever, including, without
limitation: (a) any direction as to the application of payment by the Borrower
or any other Person; (b) any other continuing or other guarantee, undertaking or
maximum liability of the Guarantor or of any other Person as to the indebtedness
of the Borrower; (c) any payment on or in reduction of any such other guarantee
or undertaking (it being understood that the payment obligations under the
Promissary Note may be reduced by any such payment under any such other
guarantee or undertaking); (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower; (e) any payment made to the
Lender in respect of the Guaranteed Obligations which the Lender repays the
Borrower or the Guarantor pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
the Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding; (f) any action or
inaction by the Lender as contemplated by Section 2 hereof; or (g) any
invalidity, irregularity or unenforceability of all or part of the Guaranteed
Obligations or any security therefor. Notwithstanding the foregoing, the
Guarantor agrees that this Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Guaranteed Obligations is rescinded or must otherwise be restored
by the Lender, upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, as though such payment had not been made.
4. The obligations of the Guarantor hereunder are independent
of the obligations of any other guarantor or the Borrower, and a separate action
or actions may be brought and prosecuted against the Guarantor whether or not
action is brought against any other guarantor or the Borrower, and whether or
not any other guarantor or the Borrower be joined in any such action or actions.
GUARANTEE
5. In order to induce the Lender to make the loan pursuant to
the Promissory Note, the Guarantor makes the following representations,
warranties and agreements:
5.1 The Guarantor (a) is a duly organized and validly existing
corporation in good standing under the laws of the state of Delaware, (b) has
the corporate power and authority to own its property and assets and to transact
the business in which it is engaged and (c) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualification, except where failure to so qualify would not reasonably be
expected to have a material adverse effect on the performance, business,
properties, assets, nature of assets or condition (financial or otherwise) of
the Guarantor.
5.2 The Guarantor has the corporate power to execute, deliver
and perform the terms and provisions of this Guarantee and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of this Guarantee. The Guarantor has duly executed and delivered this
Guarantee, and this Guarantee constitutes the legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
5.3 Neither the execution, delivery or performance by the
Guarantor of this Guarantee, nor compliance by it with the terms and provisions
hereof, (a) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality, (b) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
the Guarantor pursuant to the terms of any material indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other agreement, contract or
instrument to which the Guarantor is a party or by which it or any of its
property or assets is bound or to which it may be subject or (c) will violate
any provision of the Certificate of Incorporation or By-Laws of the Guarantor.
5.4 No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof (except as
have been obtained or made prior to the date hereof), is required to authorize,
or is required in connection with, the execution, delivery and performance of
this Guarantee or the legality, validity, binding effect or enforceability of
this Guarantee.
GUARANTEE
5.5 There are no actions, suits or proceedings pending or, to
the best knowledge of the Guarantor, threatened, except as disclosed in
Guarantor's Form 10-K for the year ended September 30, 1998, that are reasonably
likely to have a material adverse effect on the Guarantor's performance
hereunder.
5.6 The Guarantor is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) except where such noncompliance could not reasonably be expected to
have a material adverse effect on the performance, business, properties, assets,
nature of assets or condition (financial or otherwise) of the Guarantor.
5.7 The Guarantor is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
5.8 The Guarantor is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6. The Guarantor covenants and agrees that on and after the
date hereof and until the termination of this Guarantee:
6.1 Except as otherwise permitted under the Promissory Note, it
will maintain its existence and rights as a corporation in full force and effect
so long as this Guarantee is outstanding, and will perform all of its
obligations under the terms of each indenture, mortgage, deed of trust, credit
agreement, loan agreement or any other agreement, contract or instrument by
which it is bound.
6.2 It will, at any time and from time to time, upon the request
of the Lender and at the Guarantor's expense, promptly and duly execute and
deliver or cause to be executed and delivered any and all further instruments
and documents and take such further action as the Lender may reasonably request
to effect the purposes of this Guarantee.
7. This Guarantee is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of the Lender in exercising any right, power or privilege hereunder and no
course of dealing between the Guarantor and the Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further
GUARANTEE
exercise thereof or the exercise of any other right, power or privilege. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Lender would otherwise
have. No notice to or demand on the Guarantor in any case shall entitle the
Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lender to any other or
further action in any circumstances without notice or demand.
8. This Guarantee shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Lender and its
successors and assigns.
9. This Guarantee will terminate upon the payment in full of
the principal, interest, fees, indemnities then due and payable, costs, expenses
and other amounts payable under the Promissory Note, without respect to any
termination of the Promissory Note. Neither this Guarantee nor any provision
hereof may be changed, waived, discharged or terminated except by a writing
signed by the Guarantor and the Lender. In the case of any waiver, the
Guarantor, the Borrower and the Lender shall be restored to their former
position and rights hereunder and under the Promissory Note, and any Event of
Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Event of Default, or impair any
right consequent thereon.
10. The Guarantor acknowledges that an executed (or conformed)
copy of the Promissory Note has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
11. All notices and other communications hereunder shall be made
at the addresses, in the manner and with the effect provided in Section 5.2 of
the Promissory Note, provided that, for this purpose, the address of the
Guarantor shall be in care of the Borrower or as otherwise specified in writing
by the Guarantor to the Lender.
12. If claim is ever made upon the Lender for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it, notwithstanding any revocation hereof or the
cancellation of the Promissory Note or other instrument evidencing any liability
of the Borrower, and the Guarantor shall be
GUARANTEE
and remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
13. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by the Borrower or others
(including the Guarantor), with respect to any of the Guaranteed Obligations
shall, if the statute of limitations in favor of the Guarantor against the
Lender shall have commenced to run, toll the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
14. This Guarantee and the rights and obligations of the Lender
and the Guarantor hereunder shall be construed in accordance with and governed
by the law of the State of Delaware.
14.1 Any legal action or proceeding with respect to this
Guarantee may be brought in any federal or state court located in the city of
Wilmington, Delaware, and, by execution and delivery of this Agreement, the
Guarantor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
14.2 The Guarantor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Guarantor at its address set forth opposite its signature below,
such service to become effective 5 days after such mailing. Nothing herein shall
affect the right of the Lender to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against the Guarantor
in any other jurisdiction.
14.3 The Guarantor hereby irrevocably waives any objection it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guarantee brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
15. The Guarantor hereby:
(a) waives any right to require the Lender to proceed against
the Borrower, any other guarantor or any other party, proceed against or
exhaust any security held from the Borrower, any other guarantor or any
other party or pursue any other remedy in the Lender's power whatsoever;
GUARANTEE
(b) waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment
in full of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of the Borrower,
any other guarantor or any other party, the absence of any other party
in any proceeding or the unenforceability of the Guaranteed Obligations
or any part thereof from any cause, or the cessation from any cause of
the liability of the Borrower other than payment in full of the
Guaranteed Obligations;
(c) agrees that the Lender may, at its election, foreclose on
any security held by it by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Lender may have against the Borrower or
any other party, or any security, without affecting or impairing in any
way the liability of the Guarantor hereunder, and waives any defense
arising out of any such election by the Lender, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantor against the
Borrower or any other party or any security;
(d) waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guarantee, and notices of the existence, creation or incurring of new
or additional indebtedness;
(e) assumes all responsibility for being and keeping itself
informed of the financial condition and assets of the Borrower, and of
all other circumstances bearing upon the risk of non-payment of the
Guaranteed Obligations and the nature, scope and extent of the risks
the Guarantor assumes and incurs hereunder, and agrees that the Lender
shall have no duty to advise the Guarantor of information known to it
regarding such circumstances or risks;
(f) so long as any of the Guaranteed Obligations remain unpaid,
the Guarantor hereby agrees that it will not claim and hereby
irrevocably waives for such period all rights of subrogation it may at
any time otherwise have as a result of this Guarantee (whether
contractual, under Section 509 of the United States Bankruptcy Code, or
otherwise) to the claims of the Lender against the Borrower or any
other guarantor of the Guaranteed Obligations (collectively, the "Other
Parties") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party it may at
any time otherwise have as a result of this Guarantee;
GUARANTEE
(g) waives any right to enforce any other remedy that the Lender
now has or may hereafter have against any Other Party, any endorser or
any other guarantor of all or any part of the Guaranteed Obligations
and any benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Lender to secure payment
of Guaranteed Obligations; and
(h) waives all claims (as such term is defined in the United
States Bankruptcy Code) it may at any time otherwise have against the
Borrower arising from any transaction whatsoever, including, without
limitation, its right to assert or enforce any such claims.
The Guarantor warrants and agrees that each of the waivers set forth in this
Guarantee is made with full knowledge of its significance and consequences and
that if any of such waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective only to the maximum extent
permitted by law.
GUARANTEE
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to
be executed and delivered as of the date first above written.
RESOURCE AMERICA, INC.
By:____________________________
Name:
Title:
Exhibit 7.1(h)
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (this "Agreement") is dated this 4th day of
February, 1999, by and among Fidelity Leasing, Inc., a Pennsylvania corporation
("Buyer"), Japan Leasing (U.S.A.), Inc., a Delaware corporation ("Seller"), and
Wilmington Trust Company, a Delaware banking corporation ("Escrow Agent").
WHEREAS, pursuant to a Stock Purchase Agreement (the "Purchase
Agreement") dated December 15, 1998 by and between Buyer and Seller, Seller has
agreed to deposit in escrow a total of $5,000,000 for the purpose of providing
security for the satisfaction of the obligation to make payment (a) in respect
of the Special Contingent Liabilities and (b) of Damages;
WHEREAS, the parties hereto have designated the Escrow Agent to act as
escrow agent under this Agreement; and
WHEREAS, a copy of the Purchase Agreement has been delivered to the
Escrow Agent and the Escrow Agent is willing to become the Escrow Agent in
connection therewith pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Appointment of Escrow Agent. The Escrow Agent is hereby appointed by the
other parties hereto to act as escrow agent hereunder. The Escrow Agent hereby
accepts such appointment and agrees to hold and administer the Escrow Fund (as
defined below) in accordance with the terms and subject to the conditions set
forth herein.
3. Establishment of Escrow Fund and Deposit of Cash. Upon the execution of
this Escrow Agreement, Seller shall deliver to the Escrow Agent funds in the
amount of $5,000,000 and, upon prior notice from Buyer to the Escrow Agent Buyer
may deliver to the Escrow Agent additional funds at any time prior Release Date
(all of such funds, collectively, the "Escrow Fund"). The Escrow Fund shall be
held by the Escrow Agent in accordance with the terms and conditions hereinafter
set forth.
4. Escrow and Indemnification. Upon the terms and subject to the conditions of
this Agreement, the Escrow Fund shall secure the indemnification obligations of
Seller pursuant to Sections 10.1(a) and 10.1(b) of the Purchase Agreement.
5. Investment of Escrow Fund. The Escrow Agent shall, as soon as reasonably
practical after it receives the Escrow Fund from Seller, and from time to time
during the term hereof, invest the Escrow Fund, including any interest generated
thereby and other distributions or earnings paid in respect thereof, in the U.S.
Government Portfolio of the Xxxxxx Square Fund, a registered money market mutual
fund the investment advisor of which is an affiliate of the Escrow Agent and the
fees of such interment advisor paid by the Fund are addition to the fees of the
Escrow Agent hereunder. Escrow Agent may also invest the Escrow Fund in bank
money market accounts, bank short-term certificates of deposit, short-term
United States Government securities, or other interest-bearing accounts and
funds as the Escrow Agent shall select giving due regard to the protection and
preservation of principal, provided that any such certificates of deposit and
short-term securities shall have a maturity not more than 30 days after
purchase. The Escrow Agent shall hold the Escrow Fund in escrow upon the terms
and subject to the conditions of this Agreement. The Escrow Agent shall not be
responsible for any loss suffered from any investment except loss resulting from
its gross negligence or willful misconduct.
6. Interest, Etc.
(a) All interest, distributions and other earnings generated
by or paid in respect of the Escrow Fund shall be added to the Escrow Fund after
setting aside reserves sufficient for the payment of any Federal income taxes
imposed thereon and the parties hereto agree that such interest, distributions
or other earnings shall constitute additional security for the indemnification
obligations referred to in Paragraph 4.
(b) The parties hereto agree that (i) the Escrow Fund
established by this Agreement shall be treated for Federal income tax purposes
as a trust, all of which is deemed to be owned by Seller, under subpart E of
Part I of subchapter J of the Code, and (ii) Seller shall report for Federal,
state and local income tax purposes all income or other tax items derived from
the investment of or otherwise with respect to the Escrow Fund. Prior to the
filing by Seller of any income tax return that includes income reportable
pursuant to the preceding sentence, the Escrow Agent shall pay to Seller an
amount equal to 45% of such income promptly after delivery of a request and
instructions for payment to the Escrow Agent.
7. Payments from the Escrow Fund. Payment shall be made from the Escrow Fund
promptly upon Escrow Agent's receipt of, and in accordance with, written
instructions signed jointly by Buyer and Seller and delivered in accordance with
Paragraph 19. In order to be
effectively given, any such written instructions shall refer to the particular
Section of the Purchase Agreement pursuant to which Seller is indemnifying Buyer
out of the Escrow Fund. Upon delivery of such written instructions to the Escrow
Agent, payment may be made to Buyer, Seller or any third party designated by
them therein.
8. Release to Seller from Escrow. On the last Business Day of the calendar
month that is the fourteenth month after the month in which the Closing occurs
(the "Release Date"), the Escrow Agent shall disburse to Seller all remaining
amounts, including all interest, distributions and other earnings, held in the
Escrow Fund; provided, however, that if the Escrow Agent shall have received,
prior to the Release Date, a notice from Purchaser of any claim against the
Escrow Fund that it may have under Section 10.1(a) of the Purchase Agreement,
then the Escrow Agent shall continue to hold the amount of such claim in the
Escrow Fund until such claim is finally resolved; and provided, further, that in
the event any such claim by Purchaser is determined by the party resolving such
claim to have been frivolous, then Purchaser shall be required to pay to Seller
interest on any amount held in the Escrow Fund in respect of such frivolous
claim, from and after the Release Date to the date such amount is released to
Seller, at a rate of 12.5% per annum. The Escrow Agent shall pay any and all
amounts to due to Seller in accordance with written instructions delivered to
the Escrow Agent by Seller in accordance with Paragraph 19.
9. Termination of Escrow. This Agreement shall terminate upon the later of (i)
the release by the Escrow Agent of all amounts contained in the Escrow Fund in
accordance with this Agreement, and (ii) the Release Date; provided, however,
that the provisions of Paragraphs and 10(g) and 20 shall survive such
termination or the resignation or removal of the Escrow Agent pursuant to
Paragraph 11(a).
10. Responsibilities and Liabilities of Escrow Agent. The acceptance by the
Escrow Agent of its duties hereunder is subject to the following terms and
conditions, which the parties hereto hereby agree shall govern and control with
respect to the Escrow Agent's rights, duties, liabilities and immunities.
(a) The Escrow Agent shall not have any duty or obligation hereunder other
than to take such specific actions as are required of it from time to time under
the provisions hereof.
(b) The Escrow Agent shall be protected in acting upon any written notice,
request, waiver, consent, receipt or other paper or document furnished to it
pursuant to and in accordance with the provisions of this Escrow Agreement, not
only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information
therein contained which it in good faith believes to be genuine and what it
purports to be. The Escrow Agent shall not be under any duty to accept or to act
upon any notice, request or other paper or document given, made or furnished
which is not given, made or furnished pursuant to or in accordance with the
provisions of this Escrow Agreement.
(c) The Escrow Agent shall not be liable for any error of judgment, or for
any act done or steps taken or omitted by it in good faith, or for any mistake
of fact or law, or for anything which it may do or refrain from doing in
connection herewith, except its own gross negligence or willful misconduct,
following a final order by a court of competent jurisdiction.
(d) The Escrow Agent may consult with, and obtain advice from legal counsel
in the event of any question regarding its rights, duties, liabilities and
immunities hereunder, and it shall incur no liability and shall be fully
protected in acting or refusing to act in good faith in accordance with the
opinion and instructions of such counsel.
(e) The Escrow Agent shall not be bound by any notice of a claim, or demand
with respect thereto, or any waiver, modification, amendment, termination or
rescission of this Escrow Agreement, unless received by it in writing in
accordance with the provisions of this Escrow Agreement, and, if its duties
herein are affected thereby, unless it shall have given its prior written
consent thereto.
(f) Should any controversy arise between Buyer, Seller and/or the Escrow
Agent with respect to this Agreement or any rights to delivery or payment of the
Escrow Fund or any portion thereof, the Escrow Agent shall have the right to
institute a xxxx of interpleader or other appropriate legal action in any court
of competent jurisdiction to determine the rights of the parties. The cost of
such services shall be deemed an expense of the Escrow Agent hereunder.
(g) The Escrow Agent shall be entitled to be indemnified, held harmless and
defended, jointly and severally by Buyer and Seller, from and against any and
all losses, claims, liabilities and expenses, including the reasonable fees of
its counsel, which it may suffer or incur hereunder or in connection herewith,
except such as shall result from its gross negligence or willful misconduct, as
found in a final order by a court of competent jurisdiction. If any such losses,
claims, liabilities or expenses result from any acts or omissions of Buyer or
Seller, the Escrow Agent shall have the right to recover such losses, claims,
liabilities and expenses from Buyer or Seller, as the case may be. The Escrow
Agent shall have a first lien on the Escrow Fund to secure its rights under this
subparagraph 10(g).
11. Successor Escrow Agent.
(a) In the event the Escrow Agent becomes unavailable or
unwilling to continue in its appointed capacity hereunder, the Escrow Agent may
resign and be discharged from its duties or obligations hereunder by giving
notice of resignation to each of the parties hereto, specifying a date not less
than 60 days following such notice date when such resignation will take effect;
provided, however, that such resignation shall in no event take effect before
the successor to the Escrow Agent will have been appointed pursuant to this
Paragraph 11. Buyer and Seller shall mutually agree upon the appointment of a
successor to the Escrow Agent. The Escrow Agent shall promptly transfer the
Escrow Fund to such designated successor.
(b) Any corporation into which the Escrow Agent in its
individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity will be a
party, or any corporation to which substantially all of the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Agreement without further act.
12. Assignment and Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, representatives, successors and assigns.
13. Amendments. This Agreement may be amended or modified at any time or from
time to time in a writing executed by all of the parties hereto; provided,
however, that in the event the Escrow Agent does not agree to an amendment
otherwise agreed by each of Buyer and Seller, the Escrow Agent shall resign and
a successor escrow agent shall be appointed in accordance with Paragraph 11(a).
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
15. Entire Agreement. This Agreement and the Purchase Agreement together
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, written or oral, between the parties hereto with respect to the
subject matter hereof.
16. Waivers. No waiver by any party hereto of any condition or of any breach
of any provision of this Agreement shall be effective unless in writing and
signed by a duly authorized representative of the party or parties granting such
waiver. No waiver by any party of any such condition or breach in any one
instance shall be deemed to be a further or continuing waiver of such condition
or breach or a waiver of any other condition or breach of any other provision
contained herein.
17. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
18. Consent to Jurisdiction. With respect to any dispute arising under this
Agreement relating to (i) the delivery, ownership or right of possession of the
Fund or any portion thereof, (ii) the facts forming the basis of any
determination by the Escrow Agent hereunder, (iii) the duties of the Escrow
Agent hereunder or (iv) any other question arising hereunder, each of the
parties hereto consents to submit itself to the personal jurisdiction of any
state or federal court located in Wilmington, Delaware and irrevocably agrees
that it will not bring any action or proceeding relating to this Agreement in
any court other than a state or federal court located within Wilmington,
Delaware. Each of the parties hereto furthermore consents to service of process
upon it in the manner set forth in Paragraph 19 and accepts for itself and in
connection with its respective properties, generally and unconditionally, the
exclusive jurisdiction of the aforesaid courts and waives any defense of forum
non conveniens, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
19. Notices. All notices, requests, demands, notice of claims and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand with receipt or upon
receipt when mailed by certified mail, return receipt requested, postage
prepaid, properly addressed as follows, or to such other persons or addresses as
may be specified in a notice given in accordance herewith:
If to the Escrow Agent:
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Corporate Trust Administration
If to Buyer:
Fidelity Leasing, Inc.
0 X. Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxxxxxxx
If to Seller:
Japan Leasing (U.S.A.), Inc.
1251 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Mr. Jun Ogihara
20. Escrow Agent Compensation. Escrow Agent shall be entitled to compensation
equal to (i) the sum of Five Thousand Eight Hundred Dollars ($5,800) (the
"Initial Fee") and an additional Four Hundred Sixteen Dollars ($416) per month
(the "Monthly Fee") for each month, if any, that it continues to act as Escrow
Agent hereunder after the Release Date ( the"Escrow Agent Fee") and (ii)
reimbursement for all reasonable out-of-pocket expenses incurred in performing
its duties under this Agreement, which fee and expenses shall be paid equally by
Buyer and Seller. The Initial Fee shall be payable at Closing and the Monthly
Fee shall be billed and due promptly upon receipt of an invoice. To the extent
not paid, the Escrow Agent shall be entitled to deduct amounts due from the
Escrow Fund.
21. The Escrow Agent may have other account relationships with the parties
hereto, none of which shall disqualify the Escrow Agent from serving hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
WILMINGTON TRUST COMPANY, Escrow Agent
By: _____________________________
Name:
Title:
FIDELITY LEASING, INC., Buyer
By: ______________________________
Name:
Title:
JAPAN LEASING (U.S.A.), INC., Seller
By: ______________________________
Name:
Title:
Exhibit 7.1(i)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of February 4, 1999 (as the same may from
time to time be amended, restated, supplemented or otherwise modified, this
"Security Agreement"), is entered into among Fidelity Leasing, Inc., a
Pennsylvania corporation (the "Borrower"), JLA Credit Corporation, a Delaware
Corporation (the "Debtor"), and Japan Leasing (U.S.A.), Inc., a Delaware
corporation (together with its successors and permitted assigns, the "Secured
Party").
W I T N E S S E T H:
A. Borrower has concurrently with the execution of this Security Agreement,
delivered to the Secured Party a Promissory Note dated as of the date hereof (as
amended, restated, supplemented or otherwise modified, the "Promissory Note").
B. The Debtor has and will have derived substantial direct and indirect
benefit from the Promissory Note and loans made to the Borrower thereunder.
C. It is a condition precedent to the acceptance by the Secured Party of
the Promissory Note that the Debtor execute and deliver this Security Agreement.
D. To provide assurance for the payment of the obligations of Borrower
under the Promissory Note, the Debtor hereby provides to the Secured Party a
security interest in certain tangible property now owned or hereafter acquired
by the Debtor, as more fully described herein.
NOW, THEREFORE, in consideration of the premises, the agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce the Secured Party to
accept the Promissory Note, the Debtor hereby jointly and severally agrees with
the Secured Party as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Promissory
Note.
"Account Debtor" shall mean the person who is obligated on a Receivable.
"Accounts" shall mean "accounts" as such term is defined in Section 9-106
of the UCC.
"Chattel Paper" shall mean "chattel paper" (as such term is defined in
Section 9-105(1)(b) of the UCC) related to the Collateral.
"Collateral" shall have the meaning assigned to it in Article II hereof.
"Collateral Records" shall mean books, records, computer software, computer
printouts, customer lists, blueprints, technical specifications, manuals, and
similar items which relate to any Collateral.
"Documents" shall mean "documents" as such term is defined in Section
9-105(1)(f) of the UCC.
"Indebtedness" shall mean (a) all indebtedness of the Debtor, for borrowed
money or for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other indebtedness of
the Debtor, which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of the Debtor, under capitalized leases, (d) all obligations
of the Debtor, in respect of acceptances issued or created for the account of
the Debtor, (e) all liabilities secured by any Lien on any property owned by the
Debtor, even though the Debtor has not assumed or otherwise become liable for
the payment thereof, and (f) all obligations of the Debtor, in respect of
interest rate or currency exchange hedging agreements or arrangements, including
swaps.
"Instruments" shall mean "instruments" (as such term is defined in Section
9-105(1)(i) of the UCC) related to the Collateral.
"Knowledge" shall mean, with respect to any Person, the current actual
knowledge of a natural person or the officers or similar agents of any Person
that is a corporation.
"Lease Contract" shall mean each of the lease contracts (as may be amended,
supplemented or otherwise modified from time to time), listed in the schedule
attached hereto as Schedule I, between the Debtor and its customers.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding), a materially adverse effect on:
(a) the financial condition, operations or prospects of the Debtor
taken as a whole; or
(b) the ability of the Debtor to timely and fully perform any of its
respective material payment obligations or other material obligations under this
Security Agreement or any other credit document to which it is a party.
"Money" shall mean "money" as such term is defined in Section 1-201(24) of
the UCC.
"Permitted Lien" shall mean Liens which secure Senior Obligations.
"Person" shall mean and include any natural person, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"Proceeds" shall mean "proceeds" as such term is defined in Section
9-306(1) of the UCC.
"Receivables" shall mean, with respect to the Collateral, all rights to
payment for goods sold or leased or services rendered, whether or not earned by
performance and all rights in respect of the Account Debtor, including, without
limitation, all such rights in which the Debtor has any right, title or interest
by reason of the purchase thereof by the Debtor and including, without
limitation, all such rights constituting or evidenced by any Account, Chattel
Paper, Instrument, note, contract (including any lease or rental agreement or
sales contract with respect to property or any secured or unsecured loan with
respect to which the Debtor is a lessor, seller, lender, the Secured Party, note
holder or obligee), invoice, purchase order, draft, acceptance, intercompany
account, security agreement, or other evidence of indebtedness or security,
together with (a) any collateral assigned, hypothecated or held to secure any of
the foregoing and the rights under any security agreement granting a security
interest in such collateral, (b) all goods, the sale of which gave rise to any
of the foregoing, including, without limitation, all rights in any returned or
repossessed goods and unpaid seller's rights, (c) all guarantees, endorsements
and indemnifications on, or of, any of the foregoing, and (d) all powers of
attorney for the execution of any evidence of indebtedness or security or other
writing in connection therewith.
"Receivables Records" shall mean (a) all original copies of all documents,
instruments or other writings evidencing the Receivables, (b) all books,
correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including, without
limitation, all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of the Debtor or any
computer bureau or agent from time to time acting for the Debtor or otherwise,
(c) all evidences of the filing of financing statements and the registration of
other instruments in connection therewith and amendments, supplements or other
modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgments, or other writings, including, without limitation,
lien search reports, from filing or other registration officers, (d) all credit
information, reports and memoranda relating thereto, and (e) all other written
information related in any way to the foregoing or any Receivable.
"Secured Obligations" shall mean all obligations, liabilities and
indebtedness of every nature of the Borrower or the Debtor from time to time
owing to the Secured Party now existing or hereafter incurred, arising under or
in connection with the Promissory Note or this Security Agreement.
"Senior Obligations" shall mean all Senior Obligations as defined in
Section 4.8 of the Note, all Indebtedness incurred by the Debtor, and all
ownership interests in the Collateral (through trusts or otherwise) the proceeds
of which are used (i) to fund, or to refinance, the acquisition of assets which
are subject to leases or conditional sales agreements in favor of the Debtor, or
(ii) for the working capital needs of the Debtor.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of California.
ARTICLE II
GRANT OF SECURITY INTERESTS
2.1 Grant of Security Interests. As security for the prompt and complete
payment and performance in full of all the Secured Obligations, the Debtor
hereby grants to the Secured Party a security interest in, and continuing lien
on, all of the Debtor's right, title and interest in the Lease Contract, and the
following with respect thereto (excluding any permits, licenses or leased assets
obtained in the ordinary course of business in which a Lien thereon may not be
attached or an interest therein may not be transferred by law or the terms
thereof), in each case, whether now owned or existing or hereafter acquired or
arising, and wherever located (all of which being hereinafter collectively
called the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Collateral Records;
(iv) all Documents;
(v) all Money;
(vi) all Receivables;
(vii) all Receivables Records; and
(viii) all accessions and additions to any or all of the foregoing, all
substitutions and replacements for any or all of the foregoing and all Proceeds
or products of any or all of the foregoing.
2.2 Subordination.
(a) Agreement to Subordinate. The Secured Party hereby covenants and agrees
that its rights with respect to the Collateral are expressly "subordinate and
junior in priority and in right of payment" as defined below to all Senior
Obligations, including without limitation with respect to the rights of any
holder of Senior Obligations in or to any collateral securing such obligations.
The Secured Party acknowledges and agrees that these subordination provisions
set forth herein are intended to be an inducement and a consideration to each
holder of any Senior Obligation, whether such Senior Obligation was created or
acquired, or whether the lien and security interest in any collateral securing
such obligations was created or perfected, before or after the execution of this
Security Agreement, to continue to hold, or to acquire and continue to hold,
such Senior Obligation and such holder of Senior Obligations shall be deemed
conclusively to have relied on such subordination provisions in continuing to
hold, or acquiring and continuing to hold, such Senior Obligations.
(b) "Subordinate and junior in priority and in right of payment" means
that:
(i) the Secured Party shall not have, by reason of its rights in the
Collateral, any claim to the assets of the Debtor, including without limitation
the Collateral, on parity with or prior to the claim of the Senior Obligations,
including without limitation any claim with respect to collateral securing such
obligations; and
(ii) unless and until the Senior Obligations have been paid in full and
any commitment to lend in respect thereof has been terminated, without the
express prior written consent of each holder of Senior Obligations, the Secured
Party will not exercise its rights under the Security Agreement to foreclose or
realize upon any of the Collateral.
(c) The expressions "prior payment in full", "payment in full", "paid in
full" and any other similar terms or phrases when used herein with respect to
the Senior Obligations shall mean the payment in full in cash, in immediately
available funds, of all of the Senior Obligations.
2.3 Additional Provisions concerning Subordination.
(a) The Secured Party and the Debtor agree that upon any payment or
distribution of the assets of the Debtor upon a total or partial liquidation or
a total or partial dissolution of the Debtor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Debtor or its
property:
(i) without limitation on Section 2.2(b)(ii), all Senior Obligations
shall be paid in full before any payment or distribution is made to, or any
foreclosure or realization upon the Collateral is effected by, the Secured Party
by reason of its rights under this Security Agreement; and
(ii) any payment or distribution of assets of the Debtor, whether in
cash, property or securities, to which the Secured Party would be entitled
except for the provisions hereof, shall be paid or delivered by the Debtor, or
any receiver, trustee in bankruptcy, liquidating trustee, disbursing agent or
other person or entity making such payment or distribution, directly to the
holders of the Senior Obligations or their representative, ratably in accordance
with the amounts thereof, to the extent necessary to pay in full all Senior
Obligations, before any payment or distribution shall be made to the Secured
Party.
(b) If any payment or distribution from the assets of the Debtor, whether
consisting of money, property or securities, be collected or received by the
Secured Party in respect of its rights under this Security Agreement, the
Secured Party forthwith shall deliver the same to the holders of the Senior
Obligations or their representative, ratably in accordance with the amounts
thereof, if required, to be applied to the payment or prepayment of the Senior
Obligations until the Senior Obligations are paid in full. Until so delivered,
such payment or distribution shall be held in trust by the Secured Party as the
property of such holders of the Senior Obligations, segregated from other funds
and property held by the Secured Party.
2.4 Consent of the Secured Party.
(a) The Secured Party consents that, without the necessity of any
reservation of rights against the Secured Party, and without notice to or
further assent by the Secured Party:
(i) any demand for payment of any Senior Obligations made by any holder
of Senior Obligations may be rescinded in whole or in part by or on behalf of
such holder, and any Senior Obligation may be continued, and the Senior
Obligations, or the liability of the Debtor or any guarantor or any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, or any obligation or liability of the
Debtor or any other party under any agreement, may, from time to time, in whole
or in part, be renewed, extended, modified, accelerated, compromised, waived,
surrendered or released by or on behalf of any holder of Senior Obligations; and
(ii) the terms and conditions of any Senior Obligation may be amended,
increased, modified, supplemented or terminated, in whole or in part, as the
holders thereof may deem advisable from time to time, and any Collateral may be
sold, exchanged, waived, surrendered or released, in each case all without
notice to or further assent by the Secured Party, and all without impairing,
abridging, releasing of affecting the subordination provided for herein.
(b) The Secured Party waives any and all notice of (i) the creation,
renewal, extension, increase or accrual of any of the Senior Obligations and
notice of or proof of reliance by the holders thereof. The Secured Party
acknowledges and agrees that the holders of the Senior Obligations have relied
upon the subordination provided for herein in entering into any agreement with
respect to the Senior Obligations. The Secured Party waives notice of or proof
of reliance on this Agreement and protest, demand for payment and notice of
default.
2.5 Senior Obligations Unconditional. All rights and interest hereunder of
the holders of Senior Obligations, and all agreements and obligations of the
Secured Party and the Debtor hereunder, shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any document, instrument or
agreement relating to any Senior Obligation;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Senior Obligations, or any amendment or waiver or
other modification, whether by course of conduct or otherwise, of the terms of
any Senior Obligations;
(c) any exchange, release or nonperfection of any security interest in the
Collateral, or any release, amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior
Obligations or any guarantee thereof; or
(d) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, the Debtor in respect of the Senior Obligations
or this Agreement.
2.6 Further Assurances. The Secured Party and the Debtor at their own
expense and at any time from time to time, upon the written request of the
holders of any Senior Obligations or their representatives, will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as such holders of Senior Obligations or their representatives
reasonably may request for the purposes of obtaining or preserving the full
benefits hereof and of the rights and powers herein granted.
2.7 Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this section are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full and all commitments in
respect thereof are terminated.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Debtor hereby represents and warrants to the Secured Party, which
representations and warranties shall survive execution and delivery of this
Security Agreement, as follows:
3.1 Validity, Perfection and Priority. Upon the proper filing in the
locations identified in Schedule II hereto of UCC-1 Financing Statements naming
the Debtor as debtor and the Secured Party as the Secured Party and identifying
the Collateral, the security interests in the Collateral granted to the Secured
Party hereunder will constitute valid and continuing perfected security
interests in the Collateral to the extent a security interest can be perfected
in such Collateral by filing of a UCC-1 Financing Statement in such locations,
subject to Permitted Liens.
3.2 No Liens; Other Financing Statements. (a) To the best of Debtor's
knowledge, except for the Lien granted to the Secured Party hereunder and
Permitted Liens, the Debtor own or otherwise has rights in and as to all
Collateral, whether now existing or hereafter acquired, will continue to own or
otherwise have rights in each item of the Collateral free and clear of any and
all Liens, rights or claims of all other Persons other than Permitted Liens, and
the Debtor will defend the Collateral against all other claims and demands of
all Persons at any time claiming the same or any interest therein adverse to the
Secured Party.
(b) To the best of the Debtor's knowledge, no financing statement or
other evidence of Lien covering or purporting to cover any of the Collateral is
on file in any public office other than financing statements filed or to be
filed in connection with the security interests granted to the Secured Party
hereunder or in connection with Permitted Liens.
3.3 Chief Executive Office. The chief executive offices of the Debtor is
located at the address set forth on Annex A hereto.
3.4 Receivables.
(a) To the best of the Debtor's knowledge, no Receivables which are
evidenced by Chattel Paper require the consent of the Account Debtor in respect
thereof in connection with assignment hereunder and no other Receivable purports
to prohibit assignment or require the consent of the Account Debtor thereunder
in connection with assignment.
(b) To the best of the Debtor's knowledge, no Receivables are evidenced
by any Instrument which has not been delivered to the Secured Party.
The representations and warranties contained in this Section shall be
deemed to be repeated by the Debtors as of the time when each Receivable arises.
3.5 Fair Labor Standards Act. Any goods and services now or hereafter
produced by the Debtor and included in the Collateral have been and will be
produced in compliance with the requirements of the Fair Labor Standards Act, as
amended.
ARTICLE IV
COVENANTS
The Debtor covenants and agrees with the Secured Party that from and after
the date of this Security Agreement:
4.1 Further Assurances. The Debtor will, from time to time at the expense
of the Debtor, promptly execute, deliver, file and record all further
instruments, endorsements and other documents, and take such further action as
the Secured Party may reasonably request in obtaining the full benefits of this
Security Agreement and of the rights, remedies and powers herein granted,
including, without limitation, the following:
(i) the filing of any financing statements, in form acceptable to the
Secured Party under the Uniform Commercial Code in effect in any jurisdiction
with respect to the liens and security interests granted hereby. The Debtor also
hereby authorizes the Secured Party to file any such financing statement without
the signatures of the Debtor to the extent permitted by applicable law. A
photocopy or other reproduction of this Security Agreement shall be sufficient
as a financing statement and may be filed in lieu of the original to the extent
permitted by applicable law. The Debtor will pay or reimburse the Secured Party
for all filing fees and related expenses;
(ii) upon request of the Secured Party, cause the Secured Party to be
listed as the lienholder on the certificate of title or ownership covering any
Collateral covered by such a certificate of title or ownership and to promptly
deliver evidence thereof to the Secured Party;
(iii) furnish to the Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail and in form satisfactory to the Secured Party.
4.2 Change of Name; Identity; Corporate Structure; Chief Executive Office.
The Debtor will not change its names, identities, corporate structures or the
locations of its chief executive offices without (i) giving the Secured Party at
least thirty (30) days' prior written notice clearly describing such new names,
identities, corporate structures or new locations and providing such other
information in connection therewith as the Secured Party may reasonably request,
and (ii) taking all action satisfactory to the Secured Party as the Secured
Party may reasonably request to maintain the security interest of the Secured
Party in the Collateral intended to be granted hereby at all times fully
perfected with the same or better priority and in full force and effect.
4.3 Maintain Records. The Debtor will keep and maintain at its own cost and
expense satisfactory and complete records of the Collateral. The Debtor will
permit the Secured Party to review such records at such times and locations as
the Secured Party may reasonably request.
4.4 Payment of Obligations. The Debtor will pay when due all taxes,
assessments and governmental charges or levies imposed upon the Collateral, as
well as all material claims of any kind (including, without limitation, claims
for labor, materials, supplies and services) against or with respect to the
Collateral (other than Permitted Liens), except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Debtor has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.
4.5 Performance by the Secured Party of the Debtor's Obligations;
Reimbursement. If the Debtor fails to perform or comply with any of its
undertakings contained herein and such failure to perform or comply results in
an Event of Default, or an Event of Default otherwise exists, the Secured Party,
upon prior written notice to the Debtor, may, but is not obligated to, perform
or comply or cause performance or compliance therewith and the expenses of the
Secured Party incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to the default rate
referred to in the Promissory Note, shall be payable by the Debtor to the
Secured Party on demand and such reimbursement obligation shall be secured
hereby.
4.6 Delivery of Instruments. Unless the Debtor shall have delivered the
same in connection with Permitted Liens, if any Instrument shall at any time
comprise any portion of the Collateral, the Debtor shall within 10 days notify
the Secured Party thereof and, upon request, promptly deliver such Instrument to
the Secured Party appropriately indorsed or assigned or to the order of the
Secured Party or in such other manner as shall be reasonably satisfactory to the
Secured Party.
4.7 Delivery of Chattel Paper. Unless the Debtor shall have delivered the
same in connection with Permitted Liens, if Chattel Paper shall at any time
comprise any portion of the Collateral, the Debtor shall within 10 days notify
the Secured Party thereof and, upon request, promptly deliver such Chattel Paper
to the Secured Party.
4.8 Receivables. (a) Other than (i) in the ordinary course of business as
generally conducted by them over a period of time and (ii) while no Default or
Event of Default shall have occurred and be continuing, the Debtor shall not (w)
grant any extension or renewal of the time of payment of any material
Receivable, (x) compromise or settle any dispute, claim or legal proceeding with
respect to any material Receivable for less than the total unpaid balance
thereof, (y) release, wholly or partially, any Person liable for the payment
thereof, or (z) allow any material credit or discount thereon.
(b) The Debtor shall use its reasonable efforts (including, without
limitation, prompt and diligent exercise of each material right they may have
under any Receivable) to cause to be collected from each Account Debtor, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with the Debtor's past practices and
ordinary course of business and generally accepted lawful collection procedures)
any and all amounts owing under or on account of any Receivable. The reasonable
costs of collection, whether incurred by the Debtor or the Secured Party shall
be borne by the Debtor and if incurred by the Secured Party shall be reimbursed,
together with interest thereon at a rate equal to the Default Rate, to the
Secured Party upon demand, and such reimbursement obligation shall be secured
hereby.
ARTICLE V.
POWER OF ATTORNEY
5.1 Attorney-in-Fact. The Debtor hereby irrevocably appoints the Secured
Party as the Debtor's attorney-in-fact, with full authority in the place and
stead of the Debtor and in the name of the Debtor or otherwise, from time to
time, during the continuation of an Event of Default, in the Secured Party's
reasonable discretion to take any action and to execute any instrument,
including but not limited to financing and continuation statements, which the
Secured Party may deem necessary or advisable, subject to the terms and
conditions of this Security Agreement, to accomplish the purposes of this
Security Agreement, including, without limitation, (a) to receive, endorse and
collect all instruments made payable to the Debtor representing any distribution
in respect of the Collateral or any part thereof and to give full discharge for
the same, and (b) to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral, and to file any claims or take any action or
institute any proceedings which the Secured Party may deem necessary or
desirable for the collection of any of the Collateral or to enforce the rights
of the Secured Party with respect to any of the Collateral. Secured Party hereby
acknowledges and agrees that the Power of Attorney granted herein is and shall
be subject to Section 2.2 (b)(ii) of this Agreement.
5.2 Ratification. The Debtor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. The power of attorney granted
pursuant to Section 5.1 is a power coupled with an interest and shall be
irrevocable.
ARTICLE VI
REMEDIES; RIGHTS UPON DEFAULT
6.1 Rights and Remedies Generally. If an Event of Default shall occur and
be continuing, then and in every such case, the Secured Party shall have all the
rights of a the Secured Party under the UCC or the Uniform Commercial Code in
any applicable jurisdiction, shall have all rights now or hereafter existing
under all other applicable laws, and, subject to any mandatory requirements of
applicable law then in effect, shall have all the rights set forth in this
Security Agreement and all the rights set forth with respect to the Collateral
or this Security Agreement in any other agreement between the parties, provided
that the exercise of such rights shall be subject to Section 2.2(b)(ii) of this
Agreement. Such rights shall include, without limitation, the right to:
(a) recover the reasonable fees and expenses incurred by the Secured
Party in the enforcement of the Secured Obligations and this Security Agreement,
including reasonable fees, expenses and disbursements of agents and counsel to
the Secured Party;
(b) personally, or by agents or attorneys, immediately take possession
of the Collateral or any part thereof, from the Debtor or any other Person who
then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon the Debtor's premises where any of the
Collateral is located and remove the same and use in connection with such
removal any and all services, supplies, aids and other facilities of the Debtor;
(c) sell, assign or otherwise liquidate, or direct the Debtor to sell,
assign or otherwise liquidate, any or all of the Collateral or any part thereof,
and take possession of the proceeds of any such sale or liquidation;
(d) use, manage, operate and control the Collateral and the Debtor's
businesses and properties to preserve the Collateral or its value, including,
without limitation, the rights to take possession of all of the Debtor's
premises and property, to exclude any third parties, whether or not claiming
under the Debtor, from such premises and property, to make repairs,
replacements, alterations, additions and improvements to the Collateral, and to
dispose of all or any portion of the Collateral in the ordinary course of the
Debtor's business; and
(e) instruct the obligor or obligors on any agreement, instrument or
other obligation constituting the Collateral to make any payment required by the
terms of such instrument, agreement or obligation directly to the Secured Party.
Notwithstanding the foregoing, the terms of the UCC or any other applicable law,
no such instruction or notice shall be given prior to an Event of Default under
Section 2.1 of the Promissory Note, notice thereof, and seven (7) days advance
notice to the Debtor of the proposed delivery of such instruction or notice.
6.2 Assembly of Collateral. If an Event of Default shall occur and be
continuing, upon ten (10) days' notice to the Debtor, the Debtor shall, at its
own expense, assemble the Collateral (or from time to time any portion thereof)
and make it available to the Secured Party at any place or places designated by
the Secured Party.
6.3 Disposition of Collateral. The Secured Party shall give the Debtor
reasonable notice of the time and place of any public sale of the Collateral or
any part thereof or of the time after which any private sale or any other
intended disposition thereof is to be made. The Debtor agrees that the
requirements of reasonable notice to them shall be met if such notice is mailed,
postage prepaid to the addresses specified in Section 5.2 of the Promissory Note
(or such other addresses that the Debtor may provide to the Secured Party in
writing) at least ten (10) days before the time of any public sale or after
which any private sale may be made.
6.4 Recourse. The Debtor shall remain jointly and severally liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to satisfy the Secured Obligations. The Debtor shall also be
jointly and severally liable for all expenses of the Secured Party incurred in
connection with collecting such deficiency, including, without limitation, the
reasonable fees and disbursements of any attorneys employed by the Secured Party
to collect such deficiency.
6.5 Expenses; Attorneys Fees. The Debtor shall reimburse the Secured Party
for all its expenses in connection with the exercise of its rights hereunder,
including, without limitation, all reasonable attorneys' fees and legal expenses
incurred by the Secured Party. All such expenses shall be secured hereby.
6.6 Limitation on Duties Regarding Preservation of Collateral. (a) the
Secured Party's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Secured Party
deals with similar property for its own account.
(b) The Secured Party shall have no obligation to take any steps to
preserve rights against prior parties to any Collateral.
(c) Neither the Secured Party nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Debtor or otherwise.
ARTICLE VII
SPECIAL PROVISIONS REGARDING RECEIVABLES
7.1 The Debtor Remains Liable under Receivables. Anything herein to the
contrary notwithstanding (including without limitation the grant of any rights
to the Secured Party), the Debtor shall remain liable under each of the
Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Receivable. The Secured Party shall not have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) or by reason of or arising out of this Security Agreement or the
receipt by the Secured Party of any payment relating to such Receivable pursuant
hereto, nor shall the Secured Party be obligated in any manner to perform any of
the obligations of the Debtor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
7.2 Notice to Account Debtor. Subject to the prior rights of any holder of
Senior Obligations, at any time while an Event of Default shall have occurred
and be continuing, (a) the Secured Party may, and upon request of the Secured
Party, the Debtor shall, notify each Account Debtor that the Accounts have been
assigned to the Secured Party and that payments in respect thereof shall be made
directly to the Secured Party and (b) the Secured Party may in its own name or
in the name of others communicate with each Account Debtor and parties to verify
with them to its satisfaction the existence, amount and terms of any
Receivables.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity. The Debtor agrees to indemnify, reimburse and hold the
Secured Party and its officers, directors, employees, representatives and agents
("Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs or expenses or
disbursements (including reasonable attorneys' fees and expenses) for whatsoever
kind or nature (other than those relating to or arising out of willful
misconduct or grossly negligent acts or omissions of the Secured Party or its
agents or employees) which may be imposed on, asserted against or incurred by
any of the Indemnitees in any way relating to or arising out of this Security
Agreement or the transactions contemplated hereby or the exercise of rights or
remedies hereunder. The obligations of the Debtor under this Section shall be
secured hereby and shall survive payment and performance or discharge of the
Secured Obligations and the termination of this Security Agreement.
8.2 Governing Law. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF.
8.3 Notices. Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be governed by the provisions of Section 5.2 of the Promissory Note.
8.4 Successors and Assigns. This Security Agreement shall be binding upon
and inure to the benefit of the Debtor, the Secured Party, all future holders of
the Secured Obligations and their respective successors; provided, however, that
the Debtor may not assign or transfer any of its rights or obligations under
this Security Agreement without the prior written consent of the Secured Party.
8.5 Waivers and Amendments. None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the party against whom enforcement is
sought.
8.6 No Waiver; Remedies Cumulative. No failure or delay on the part of the
Secured Party in exercising any right, power or privilege hereunder, and no
course of dealing between the Debtor and the Secured Party, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Secured Party
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Secured Party would otherwise have on any
future occasion. The rights and remedies herein expressly provided are
cumulative and may be exercised singly or concurrently and as often and in such
order as the Secured Party deems expedient and are not exclusive of any rights
or remedies which the Secured Party would otherwise have whether by security
agreement or now or hereafter existing under applicable law. No notice to or
demand on the Debtor in any case shall entitle the Debtor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Secured Party to any other or future action in any
circumstances without notice or demand.
8.7 Termination; Release. This Security Agreement shall terminate upon the
date upon which the Secured Obligations have been indefeasibly paid and
performed in full and the Promissory Note has terminated. Upon termination of
this Security Agreement, the Secured Party, at the request and sole expense of
the Debtor, shall execute and deliver to the Debtor the proper instruments,
agreements, statements and acknowledgments (including UCC termination
statements) acknowledging the termination of this Security Agreement, and shall
duly assign, transfer and deliver to the Debtor, without recourse,
representation or warranty of any kind whatsoever, such of the Collateral as may
be in possession of the Secured Party and has not theretofore been disposed of,
applied or released.
8.8 Headings Descriptive. The headings of the several Sections and
subsections of this Security Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Security Agreement.
8.9 Severability. In case any provision in or obligation under this
Security Agreement or the Secured Obligations shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
8.10 Borrower's Assurance of Performance of Secured Obligations. The
Borrower hereby covenants that it shall, or shall cause the Debtor to, perform
all Secured Obligations hereunder in accordance with their terms.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Debtor and the Secured Party have caused this
Security Agreement to be duly executed and delivered as of the date first above
written.
Fidelity Leasing, Inc., as Borrower
By: __________________________________
Name:
Title:
JLA Credit Corporation, as Debtor
By: __________________________________
Name:
Title:
Japan Leasing (U.S.A.), Inc., as the Secured Party
By: __________________________________
Name:
Title:
SCHEDULE II
to Security Agreement
UCC-1 FILING JURISDICTIONS
--------------------------
A. JLA Credit Corporation
1. California Secretary of State
