Commitment Letter
Palm
Beach Multi-Strategy Fund, L.P.
Commitment
Letter
September
28, 2006
Xx.
Xxxxx
Xxxxxx
Senior
Vice President - Finance
Manchester,
Inc.
000
Xxxxxxxx Xxxxx –
7th
floor
Dallas,
Texas 75201
Dear
Xx.
Xxxxx Xxxxxx,
Palm
Beach Multi-Strategy Fund, L.P., a Delaware limited partnership (the
“Lender”),
hereby offers Manchester, Inc., a Nevada corporation (the “Company”)
a
commitment (the
“Commitment”)
of up
to $300,000,000 (the “Maximum
Commitment Amount”)
to
provide senior secured revolving warehouse financings (“Financings”)
for a
roll up (the “Roll-Up”)
strategy to acquire captive subprime
buy-here, pay-here auto receivables origination and collection businesses
nationwide (“Targets”),
on
the terms, and subject to the conditions, set out in this letter (this
“Letter
Agreement”)
and
the attached Term Sheet (the “Term
Sheet”).
The
Company acknowledges that the Term Sheet is intended as an outline only and
does
not purport to summarize all of the conditions, covenants, representations,
warranties and other provisions that will be contained in definitive legal
documentation for any Financing. Each Financing will be subject to, among other
things, approval by the Lender of the applicable transaction (which approval
shall be given or withheld in the Lender’s sole discretion), due diligence and
the negotiation and execution of definitive loan documents (the “Loan
Documents”),
in
form and substance satisfactory to the Lender in its sole discretion. Lender’s
requirements for the Loan Documents may be different for each
Financing.
Each
borrower under a Financing will be Bankruptcy Remote Special Purpose Entity
(SPE) set up to hold the collateral pledged under a Financing (each, a
“Borrower”).
The
Company agrees to reimburse the Lender and its affiliates, including Palm Beach
Links Capital, L.P., a Delaware limited partnership (“PBLinks”),
or
pay or cause to be paid all costs and expenses of the Lender, PBLinks and their
respective affiliates (including, without limitation, the allocated costs of
in-house counsel at the Lender, PBLinks or their respective affiliates and
the
reasonable costs and expenses of outside legal counsel to PBLinks and the Lender
and their respective affiliates) incurred or sustained: (i) in the negotiation
or preparation of this Letter Agreement, the Term Sheet or any other term sheet
or proposal and any loan documents (including, without limitation, the term
sheets for the Financings and the Loan Documents) or any funding that might
follow, regardless of whether or not the funding occurs (ii) in connection
with
the administration and enforcement of the Commitment and the Financings, and
(iii) in connection with any and all due diligence. The Company shall also
be
responsible for its own expenses. The
Company shall also indemnify and hold harmless the Lender, PBLinks and of the
Lender, PBLinks and their respective affiliates and their respective
shareholders, directors, officers, employees and agents (the “Indemnified
Parties”)
against any losses, claims, damages or liabilities (collectively, “Claims”)
to
which any Indemnified Party may incur or become subject to in any way arising
out of or in connection with this Letter Agreement, the Commitment or the
Financings, provided however, no Indemnified Party shall be indemnified against
(i) such Claims which are finally judicially determined to have resulted
primarily from bad faith, intentional misconduct or gross negligence of such
Indemnified Party and (ii) losses resulting from any settlement entered into
by
an Indemnified Party without the written consent of the Company (such consent
not to be unreasonably withheld).
The
Company recognizes that the Commitment is offered (subject to the terms and
conditions of this Letter Agreement and the Term Sheet) only to the Company,
and
that this Letter Agreement is not deemed to be on behalf of and is not intended
to confer rights upon any shareholder, owner or partner of the Company or any
other person not a party hereto as against the Lender, PBLinks or any of the
Lender’s or PBLinks’ respective affiliates, the respective directors, officers,
agents and employees of the Lender, PBLinks or any of their respective
affiliates or each other person, if any, controlling the Lender, PBLinks or
any
of their respective affiliates. No one other than the Company is authorized
to
rely upon this Engagement Letter.
The
Lender's willingness to provide any Financing pursuant to this Commitment is
subject to the Lender’s satisfactory due diligence and credit review of the
Company, each Financing and Target and the Lender’s continuing satisfaction with
the results thereof.
A
Commitment Fee of $6,000,000 shall be payable by the Company. Such fee shall
be
paid pro-rata upon the initial advance under each Financing in an amount for
each Financing equal to $6,000,000 multiplied
by
a
fraction the numerator of which is the aggregate line of credit under the
Financing (the “Financing
Limit”)
and
the denominator of which is the Maximum Commitment Amount.
On
or
within fifteen (15) days after the closing date of the initial Financing, the
Company shall grant to the Lender ten (10) year warrants, entitling the holder
to acquire up to 4,000,000 shares of the Company’s common stock. The warrants
shall be issued at a strike price equal to the lesser of (i) $3.00 or (ii)
75%
of the closing stock price as of the closing date for the initial
Financing.
Terms
and
Conditions are to be determined in a Warrant Agreement between Lender and the
Company. Customary language with respect to, but not limited to, registration
rights, piggy-back rights and anti-dilution provisions (including conversion
of
preferred and other convertible securities) will be contained in the Warrant
Agreement and shall allow for dilution resulting from shares issued for
acquisitions.
There
is
no limit to the number of Financings under the Commitment up to the Maximum
Commitment Amount; provided that no Financing shall be in an amount in excess
of
$100,000,000, unless approved by the Lender.
At
the
invitation of the Company, PBLinks has agreed to act as the exclusive arranger
for any asset-backed securitization, sale or other disposition of any
Receivables undertaken by the Company, a Target or a Borrower for an arrangement
fee equal to three percent (3.0%) of the Receivables securitized, sold or
disposed of.
The
Commitment shall terminate on September 28, 2009 or such earlier date specified
by the Lender following a breach by the Company under this Letter Agreement
or
an Event of Default under any of the Financings (the “Termination
Date”).
The
Company hereby agrees that the Lender (or, at the discretion of the Lender,
any
of its affiliates) shall have, for a period beginning on the date of this Letter
Agreement and ending on the Termination Date or (if later) the date upon which
all Financings have been irrevocable paid in full, the exclusive right (but
not
the obligation) to finance the Roll-Up (including without limitation, the right
to provide Financings or other fundings in connection with the acquisition
by
the Company of Targets or assets thereof). Any such Financings shall be
substantially on the terms set forth in the Term Sheet (including, without
limitation, the provisions headed “Advance Rate” and “Interest Rate”), unless
otherwise agreed by the parties hereto in writing; provided, however, the
Advance Interest Rate, Asset Management Fee, Credit Structure, Liquidated
Damages, Collateral and Eligible Receivables set forth in the Term Sheet will
apply to each Financing unless otherwise agreed to in writing by the Lender,
in
its sole discretion. The Company agrees that monetary damages would not be
sufficient in the event of a breach by Company of this exclusive provision
and
that in the event of such breach, the Lender and PBLinks will in addition be
entitled to injunctive relief.
The
Company agrees to promptly, but in no event later than 90 days following the
date of this Letter Agreement, apply to list its Common Stock, on The
NASDAQ Global Market or The NASDAQ Capital Market and shall use its best efforts
to complete the application process and make such Common Stock eligible for
trading on the applicable NASDAQ trading system as promptly as possible after
such application but in no event later than 180 days; and at any time when
such
Common Stock is listed on The NASDAQ Capital Market, Manchester shall promptly
seek to list its Common Stock on The NASDAQ Global Market if at any time it
becomes eligible to do so.
The
contents of this Letter Agreement and the attached Term Sheet are confidential.
The Company agrees that it will not show, circulate, or otherwise disclose
this
Letter Agreement, the Term Sheet or their contents to any other person (other
than its officers, employees, directors, attorneys, affiliates and advisors,
on
a need-to-know basis).
In
the
event of any conflict between the terms of this Letter Agreement and any
provision of the Term Sheet, the terms of this Letter Agreement shall
prevail.
If
any
one or more of the provisions or subjects contained in this Letter Agreement
is
for any reason held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality or unenforceability will not affect the validity
and
enforceability of any other provisions or subjects of this Letter Agreement,
and
it is the intention of the parties that there shall be substituted for such
invalid, illegal or unenforceable provision a provision as similar to such
provision as may be possible and yet be valid, legal and
enforceable.
The
Company may not assign, transfer or otherwise dispose of any rights or
privileges provided for herein or arising hereunder, without the written consent
of Xxxxxx.
This
Letter, including the attached Term Sheet, supersedes all prior discussions,
agreements, commitments, arrangements, negotiations or understandings, whether
oral or written, of the parties with respect thereto.
GOVERNING
LAW.
THIS
LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET, SHALL BE DEEMED A CONTRACT
AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AND THE LAWS OF THE UNITED STATES OF AMERICA. EACH PARTY HERETO
HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT WITH RESPECT TO
THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET, MAY BE BROUGHT IN
THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AS LENDER MAY ELECT, AND, BY EXECUTION AND
DELIVERY HEREOF, EACH PARTY HERETO ACCEPTS AND CONSENTS FOR ITSELF AND IN
RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO AGREES THAT SECTIONS
5-1401 AND 5.1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL
APPLY TO THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET, AND WAIVES
ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID
COURTS ON THE BASIS OF FORUM NON CONVENIENS. EACH PARTY HERETO HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND AGREES THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO IT AT THE ADDRESS
SET FORTH IN THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET, AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.
CONSENT
OF JURISDICTION.
AT THE
OPTION OF LENDER, THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET,
MAY
BE ENFORCED IN ANY FEDERAL COURT OR NEW YORK STATE COURT SITTING IN NEW YORK,
NEW YORK; AND EACH PARTY HERETO CONSENTS TO THE JURISDICTION AND VENUE OF ANY
SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.
IN THE EVENT ANY RELATED PARTY COMMENCES ANY ACTION IN ANOTHER JURISDICTION
OR
VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM
THE
RELATIONSHIP CREATED BY THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM
SHEET, OR ANY TRANSACTION CONTEMPLATED THEREBY, LENDER AT ITS OPTION SHALL
BE
ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
WAIVER
OF
JURY TRIAL.
EACH
PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO
ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS LETTER AGREEMENT, INCLUDING THE
ATTACHED TERM SHEET, OR (b) ARISING FROM ANY TRANSACTION CONTEMPLATED BY
THIS LETTER AGREEMENT, INCLUDING THE ATTACHED TERM SHEET, AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
This
Letter Agreement may be executed in multiple counterparts, each of which for
all
purposes is to be deemed an original, and all of which constitute, collectively,
one agreement.
Should
the terms and conditions of the proposal contained herein meet with your
approval, please indicate your acceptance by signing and returning a copy of
this Letter Agreement and the attached Term Sheet to the
undersigned.
Very
truly yours,
Palm
Beach Multi-Strategy Fund, L.P.
| By: Palm Beach Links Capital, L.P., its general partner | |||
| By: PBL Holdings, LLC | |||
|
By:
/s/ X. Xxxxx Xxxxx
|
|||
|
|
|||
|
Name:
X. Xxxxx Xxxxx
Title:
Managing Director
|
|
By:
/s/ Xxxxxx X. Xxxxxxx
|
|||
|
|
|||
|
Name:
Xxxxxx X. Xxxxxxx
Title:
Managing Director
|
| By: Palm Beach Links Capital, L.P. | |||
| By: PBL Holdings, LLC, its general partner |
|
By:
/s/ Xxxxx Xxxxx
|
|||
|
|
|||
|
Name:
Xxxxx Xxxxx
Managing Director
|
|
By:
/s/ Xxxxxx X. Xxxxxxx
|
|||
|
|
|||
|
Name:
Xxxxxx X. Xxxxxxx
Managing Director
|
Agreed
and Accepted on this
29th
Day of September, 2006:
Manchester,
Inc.
(OTCBB:
MNCS)
|
By:
/s/ Xxxxx Xxxxxx
|
|||
|
|
|||
|
Name:
Xxxxx Xxxxxx
Title:
Senior Vice President –
Finance
|
Exhibit
A
OUTLINE
OF PROPOSED TERMS AND CONDITIONS
Agreed
and Accepted on this
29th
Day of September, 2006:
Manchester,
Inc.
(OTCBB:
MNCS)
|
By:
/s/ Xxxxx Xxxxxx
|
|||
|
|
|||
|
Name:
Xxxxx Xxxxxx
Title:
Senior Vice President - Finance
|
|
Credit
Structure:
|
Unless
otherwise approved by the Lender in its sole discretion, all collateral
of
the Borrowers will be cross collateralized, cross pledged and cross
defaulted for the benefit of the Lender.
|
|
|
Guaranty:
|
The
Company and its affiliates will execute a Guaranty of the obligations
of
the Borrowers and the Targets and each Target will execute a Guarantor
of
the Obligations of the Borrowers, in each case in a form acceptable
to the
Lender in its sole discretion. Such Guaranty may include, among other
things, a guaranty of the eligibility of the Receivables, proper
collection of the Receivables and deposit into the Lockbox and
Distribution Account (each defined below), losses on the Receivables,
repayment of the advances and interest thereon and payment of fees
and
expenses. The Guaranties shall be secured by a first priority perfected
security interest in and lien on all of the assets of the Company
and the
Targets, as applicable, including, but not limited to, all of its
stock or
other equity interests in the Borrowers, the Targets and its other
direct
and indirect subsidiaries.
|
|
|
Advance
Rate:
|
The
initial advance under each Financing will have an advance rate equal
to
the lesser of (i) the related Financing and (ii) eighty percent (80.0%)
of
the unpaid principal balance of Eligible Receivables (defined herein)
pledged by the related Borrower to the Lender at the time of such
initial
advance. Subsequent advances under a Financing will have advance
rates
equal to the lesser of (i) the related Financing Limit and (ii) sixty
percent (60.0%) of the unpaid principal balance of Eligible Receivables
pledged by the related Borrower to the Lender at the time of such
subsequent advance. The final advance rates for each Financing will
be
determined after due diligence.
|
|
|
Interest
Rate:
|
All
borrowings under the Financings will accrue interest at Wall Street
Prime
plus 8.0%, with a floor of 16.0%; provided, however, in the event
a
Financing is closed other than on the 1st
business day of a calendar month, an initial interest payment will
be due
on the closing date equal to (a) the product of (i) the amount of
the
initial advance under such Financing and (ii) the initial interest
rate,
multiplied by (b) a fraction of the numerator of which is the number
of
days from and including the first day of the month in which the closing
occurs to but excluding the date of the initial advance under such
Financing, and the denominator of which is 360. Interest will be
calculated on the basis of the actual number of days elapsed based
on a
360-day year. Upon the occurrence and during the continuance of an
Event
of Default under a Financing, the applicable interest rate will be
increased by 5.0%.
|
|
Asset
Management Fee:
|
The
Borrower under each Financing shall pay to the Lender an asset management
fee equal to $25,000 payable in advance on the first day of each
calendar
quarter (or first business day of the quarter if not a business day).
|
|
|
Custodian
Fee:
|
All
original consumer retail sales contracts and auto titles and related
files
subject to a Financing shall be held by a third-party custodian acceptable
to the Lender. All custodian fees and expenses shall be payable out
of
cash flows from the related Receivables.
|
|
|
Servicer:
|
The
Company and the Targets shall provide all servicing and collections
activities on the Receivables for a servicing fee to be determined
by the
Lender payable weekly out of cash flows from the related
Receivables.
|
|
|
Back
Up / Master Servicer:
|
A
back-up or master servicer may be selected to provide back up collection,
reporting and other services as the Lender may decide in its sole
descretion. Back-up / master servicer fees and expenses shall be
payable
out of cash flows from the related Receivables.
|
|
|
Term:
|
The
term of each Financing shall be for three (3) years from the Closing
Date
of such Financing, subject to any default or termination provisions
to be
included in the Loan Documents for the Financings.
|
|
|
Liquidation
Damages:
|
If
a Financing is repaid or terminated prior to the end of its Term,
the
Company shall pay the Lender a Liquidated Damages Fee, calculated
by
multiplying the “minimum interest charge” under the Financing by the
number of months remaining until the end of the Term of the Financing.
The
“minimum interest charge” will be calculated by using the average funds
employed under the Financing during the previous 6 months of such
Financing at the time of notice multiplied by 1.50%. The Company
or the
Borrower must provide 90 days prior written notice of a termination
and
payoff of a Financing.
|
|
Borrowing,
Collection, and Repayment Procedures:
|
Upon
closing of a Financing, the related Borrower will be able to request
advances thereunder subject to, among other things, the following:
a)
continued compliance with the Loan Documents; b) a maximum of one
funding
per week; and c) a minimum funding amount of $200,000.
The
Lender will require a three (3) day notice from the Borrower to advance
funds. The Borrower or the Company will prepare an advance request
and
borrowing base certificate which will include a reconciliation of
the then
current Collateral and loan balances with prior certificates, as
well as a
certification of the validity of the Collateral and a re-affirmation
of
the representations and warranties contained in the Loan Documents.
Advances will be made by wire transfer to the Borrower’s account as to be
agreed upon by the Xxxxxx and Xxxxxxxx.
All
Collections (defined below) on the Receivables in respect of a Financing
will be deposited into a lockbox and lockbox account (collectively,
the
“Lockbox”) for such Financing controlled under the UCC by the Lender and
then swept not less than weekly into a distribution account (the
“Distribution Account”) for such Financing controlled under the UCC by the
Lender. Amounts on deposit in the Distribution Account will be applied
in
respect of each Financing by the Lender, or the Servicer at the direction
of the Lender, on a weekly or monthly basis according to the following
priorities:
1.
To
the Custodian, the Servicer and the Back-up Servicer, their fees
and
expenses subject to an expense cap acceptable to the
Lender;
2.
To
the Lender, any unpaid Fees and Expenses due;
3.
To
the Lender, any unpaid Interest due;
4.
To
the Lender, the amount necessary to ensure the sum of the outstanding
advances does not exceed the eligible Advance Rate on the
Financing;
5.
To
the Lender, the amount necessary to ensure the sum of the outstanding
advances does not exceed the Financing Limit;
6.
Upon
the occurrence of an Event of Default, to the Lender, to reduce the
outstanding advances under the Financing to zero;
and
7.
Any
remaining balance to the Borrower.
To
the extent amounts on deposit in the Distribution Account for a Financing
are not sufficient to make the payments required under 1 through
5 above,
Collections on Receivables under other Financings and amounts on
deposit
in the related Distribution Accounts shall be used to pay such
deficiency.
|
|
All
cash, from whatever source, will be deposited in the lockbox or the
Distribution Account, as applicable, for application as described
above.
|
||
|
Although
the Lender will retain operating control of the Lockbox and Distribution
Account, the Servicer will have viewing access to these accounts
for
accounting and analysis purposes.
|
||
|
The
Company’s Operating Account:
|
The
Lender will expect the Company to enter into a tri-party control
agreement
with the Company’s bank that provides assurances to the Lender that upon
the occurrence of an Event of Default, the Lender will have control
over
the Company’s operating accounts.
|
|
|
Collections:
|
Collections
in respect of the Receivables shall consist of, but is not limited
to, all
down payments, principal and interest payments, late fees, recoveries,
insurance proceeds and other fees.
|
|
|
Collateral:
|
The
obligations owed to the Lender will be secured by a first priority
perfected security interest in and lien on all assets of the Borrowers
including, but not limited to, accounts receivable, inventory, real
estate, bank accounts and all related assets held or owned by the
Borrowers.
|
|
|
Eligible
Receivables:
|
Eligible
Receivables shall be limited to those consumer sales finance contracts
(“Receivables”) that meet the following guidelines:
· Was
originated by the related Target in its ordinary course of
business.
· Is
limited to Receivables that (i) are sixty (60) days or less contractually
past due (ii) have not been extended and (iii) are not extended to
account
debtors who are either principals, employees, in bankruptcy, or engaged
in
litigation by the Company, the Targets or their affiliates.
· The
Receivable shall meet all of the Company’s and the Target’s other
customary credit and underwriting guidelines.
· The
Receivable is secured by the automobile, with a clear title in the
related
Borrower’s name, originated in the state approved by Xxxxxx and is payable
in U.S. dollars.
· The
obligor shall be personally liable on the Receivable and not in
bankruptcy.
· The
obligor shall have no claim to any defense, set off, or counter
claim.
· The
obligor is a resident of the U.S.
· No
obligor under any Receivable shall be affiliated with or employed
by the
Company any Target or their
affiliates.
|
|
· The
obligor’s loan application, the note and all other applicable instruments
shall comply with state and federal consumer laws and be in form
and
content acceptable to the Lender;
· The
receivable shall carry a minimum interest rate to be mutually agreed
upon
by the Company and the Lender during the Lender’s due
diligence.
· The
retail sales contract shall carry a minimum down payment to be mutually
agreed upon by the Companyand the Lender during Xxxxxx’s due
diligence.
· The
maximum original term of the Receivable shall not exceed a term to
be
mutually agreed upon by the Company and Lender during Xxxxxx’s due
diligence.
· The
maximum original gross balance of any individual note shall not exceed
an
amount to be mutually agreed upon by the Company and Lender during
Xxxxxx’s due diligence
· The
maximum mileage on the underlying vehicle securing the sales finance
contract shall not be greater than an amount to be mutually agreed
upon by
the Company and Lender during Xxxxxx’s due diligence.
· Such
other criteria as the Lender deems necessary in its sole
discretion.
|
||
|
Insurance:
|
The
Company, at its expense, will agree to maintain proper business insurance
for the Company, the Targets and its other subsidiaries in form and
amounts and with coverage satisfactory to the Lender in its sole
discretion. Such insurance shall include, but is not limited to,
satisfactory Director and Officer Insurance, Errors and Omission
Insurance
and Fraud Insurance.
|
|
|
Conditions
Precedent:
|
The
following are some, but not all, of the conditions precedent to any
Financing by Xxxxxx:
1.
Each
of the Company, the related Target and the related Borrower is duly
organized and in good standing in the jurisdiction of its organization
and
qualified to do business in any other jurisdiction where it has collateral
and/or originates Receivables,
2.
The
due execution and delivery of the Loan Documents on or prior to the
Closing Date.
3.
In
addition to the Loan Documents, each of the Company, the related
Target
and the related Borrower will have executed and delivered, or caused
to be
executed and delivered, to Lender prior to the Closing Date, such
financing statements, opinions of counsel, control agreements, security
agreements, insurance certificates and endorsements, and other documents
as Lender may reasonably require,
4.
All
costs incurred by the Lender including, but not limited to, due diligence
expenses, attorneys fees, audit fees, search fees, title fees,
documentation and filing fees, will be paid by the Company or the
related
Target or Borrower,
|
|
5.
No
material pending claim, investigation or litigation with respect
to the
Company or the related Target or Borrower by any state or federal
governmental entity will exist except as disclosed prior to closing
and
acceptable to Lender,
6.
The
Lender shall have received and reviewed financial and other information
as
it may reasonably request, including annual / monthly financial
projections of the Company, the related Target and the related
Borrower,
7.
Lender
shall be satisfied with the Company’s cash management system,
8.
No
material adverse change in the business, operations, or in the condition
of the Company, the Targets or the Borrowers shall have
occurred,
9.
Completion
of Xxxxxx’s business, legal and collateral due diligence, including a
review of the Company’s and the Target’s historical performance the
results of which are satisfactory to Lender,
10.
Lender
shall be satisfied with its background investigations of key members
of
management team of the Company and the related Target and Borrower,
11.
Repayment
in full of all outstanding indebtedness secured by any Receivables
or
other collateral.
12.
Others
in the sole discretion of the Lender.
|
||
|
|
||
|
Representations
and Warranties:
|
The
Loan Documents will contain customary representations and warranties
to
the satisfaction of the Lender in its sole discretion. The Loan Documents
will also contain customary negative, affirmative and financial covenants
to the satisfaction of the Lender in its sole discretion.
|
|
|
Financial
Covenants:
|
Minimum
Profit Ratio
Interest
Coverage Ratio
Maximum
Leverage Ratio
Minimum
Tangible Net Worth
Minimum
Delinquency Ratio
Minimum
Cumulative Loss Trigger Ratios
Others
TBD by the Lender in its sole discretion
|
|
|
Financial
Reporting Requirement:
|
Company,
Target and Borrower level and consolidated with back up individual
summary:
Monthly
Financial Statements
Annual
Audited Financial Statements
Monthly
Covenant Compliance Certificate
Monthly
Borrowing Base Certificate
Weekly
Borrowing Base Certificate
Weekly
to Monthly Aging Status Report
SEC
quarter and annual reporting
Others
TBD by the Lender in its sole
discretion
|
|
Event
of Default:
|
The
Loan Documents will contain customary Events of Defaults, including
without limitation, cross defaults between the Financings and others
TBD
by the Lender in its sole discretion.
|
|
|
Assignment/
Participation:
|
The
Loan Documents will include provisions allowing the Lender to freely
assign and participate the Financings.
|
|
|
Indemnification:
|
Customary
and appropriate provisions relating to indemnification and related
matters
in a form reasonably satisfactory to the Lender.
|
|
|
Governing
Law and Jurisdiction:
|
Remainder
of Page Left Blank
