AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
------------------------------------
This Amendment to Loan and Security Agreement ("Amendment") is made as
of the 18th day of May, 1999 by and among First Union National Bank, a national
banking Association in its capacity as agent ("Agent") and as Lender, and the
financial institutions listed on Schedule A attached hereto and made part
hereof, in their capacity as lenders (singly, each as a "Lender" and
collectively, all are "Lenders") and Fidelity Leasing, Inc. and JLA Credit
Corporation (collectively, the "Borrowers"), Resource America, Inc., Resource
Leasing, Inc., FL Partnership Management, Inc. and FL Financial Services, Inc.
(singly, each is a "Guarantor"and collectively, all are "Guarantors").
BACKGROUND
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A. Borrowers, Agent and Lenders are parties to a certain Amended and Restated
Loan and Security Agreement dated September 30, 1998 (as modified and amended
from time to time, the "Loan Agreement") pursuant to which Borrowers established
certain financing arrangements with Agent and Lenders. The Loan Agreement and
all instruments, documents and agreements executed in connection therewith or
related thereto are referred to herein collectively as the "Existing Loan
Documents". All capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Loan Agreement.
B. Borrowers have requested and Agent and Lenders have consented to certain
amendment to the Loan Agreement subject to the terms and conditions hereof.
C. All obligations of Borrowers to Agent and Lenders under the Existing Loan
Documents shall continue to be guaranteed by Guarantors, on a joint and several
basis.
NOW, THEREFORE, with the foregoing Background incorporated by reference and
made a part hereof, and intending to be legally bound, the parties agree as
follows:
1. Eligible Leases. The Loan Agreement is hereby amended by deleting the
definition of "Eligible Lease(s)" contained in Section 1.1 of the Loan Agreement
and replacing it with the following:
"Eligible Lease(s) - Each Lease which meets all of the following
specifications: (1) is not subject to any Lien, security interest or
prior assignment other than Agent's security interest for the benefit
of Lenders and the rights of the Lessee's thereunder; (2) is a valid
enforceable Lease, representing the undisputed obligation of the
Lessee, with rentals due thereunder not more than sixty-one (61) days
contractually past due; (3) is not subject to any defense, setoff,
counterclaim, deduction, allowance or adjustment; (4) unless otherwise
agreed to in writing by Agent, provides for the lease of Leased
Property with an aggregate invoice price of less than $1,500,000; (5)
provides for the lease of Leased Property which has not been returned,
rejected, lost or damaged; (6) arose in the ordinary course of
Borrowers' business; (7) Borrowers have not received notice of
bankruptcy, receivership, reorganization, insolvency or material
adverse change in the financial condition of the Lessee; (8) the Lessee
has not a Subsidiary or Affiliate of Borrowers; (9) is not Defaulted
Lease and complies with all general warranties set forth in Section
5.17 hereof; (10) does not have an initial stated term in excess of
seventy-two (72) months, provided, however, that lease(s) with an
initial stated term of up to ninety-six (96) months may be considered
Eligible Leases so long as the aggregate Lease Receivable(s) of all
such Lease(s) shall, at no time, exceed Five Million Dollars
($5,000,000); (11) has not, in the case of Revolving Credit Loans, been
pledged to Agent and/or Lenders for a period of more than twelve (12)
months; (12) contains a provision whereby the Lessee agrees not to
assert any claim or reduction, counterclaim, setoff, recoupment, or any
other claim, allowance or adjustment against any assignee of Borrowers;
(13) is a Lease with a Lease Receivable, which together with all other
Lease Receivables owed by the same Lessee does not exceed One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000) in the aggregate;
(14) Borrowers are in possession of the Lessee's original signatures
pages to the Lease or are in possession of a Facsimile Lease, and (15)
the Lessee's chief executive office and the Leased Property under such
Lease is located in the continental United States."
2. Equipment Cost. The Loan Agreement is hereby amended by adding the following
definition of "Equipment Cost" to Section 1.1 of the Loan Agreement:
""Equipment Cost" - The price set forth on the manufacturer's and/or
vendor's invoice for the Equipment corresponding to the Lease excluding
any and all (a) associated soft costs, (b) in-house costs or expenses
incurred for delivery and installation of the Equipment and (c)
commissions and sales fees."
3. Leases and Leased Property. The Loan Agreement is hereby amended by deleting
Section 5.17(p) and replacing it with the following:
"(p) For each Lease, with an Equipment Cost in excess of $25,000,
Borrowers have either (i) listed Agent for the benefit of Lenders, as
assignee on a UCC-1 Financing Statement so filed, or (ii) after
Borrowers have received acknowledgment copies of the UCC-1s, deliver to
Agent executed UCC-3 Financing Statements naming Agent for the benefit
of Lenders as assignee of Borrowers' security interest. Agent agrees
not to file the UCC-3 Financing Statements until such time as an Event
of Default or Unmatured Event of Default occurs under this Agreement,
and Agent will return such UCC-3 Financing Statements to Borrowers if
such Leases are ultimately sold or refinanced on a permanent basis with
another lender;"
4. Financial Covenants. The Loan Agreement is hereby amended by deleting Section
6.8 of the Loan Agreement and replacing it with the following:
"6.8 Financial Covenants. Borrowers shall maintain and comply with the
following financial covenants as reflected on and computed from their
Financial Statements:
(a) Adjusted Debt to Tangible Net Worth Ratio: Borrowers shall have and
maintain at all times an Adjusted Debt to Tangible Net Worth Ratio on a
consolidated basis, measured quarterly as of the last day of each
fiscal quarter during each fiscal year, of not more than 5.50 to 1.
(b) Tangible Net Worth: Borrowers shall have and maintain a Tangible
Net Worth of not less than Twenty Five Million Dollars ($25,000,000) as
of March 31, 1999. As of the last day of each fiscal quarter
thereafter, Borrowers shall have a Tangible Net Worth of not less than
the amount required hereby for the immediately preceding fiscal quarter
plus an amount equal to seventy-five percent (75%) of Borrower's Net
Income for the immediately proceeding fiscal quarter (for the purposes
of such step up, Net Income shall never be less than zero). The amount
of Tangible Net Worth required to be maintained by Borrowers pursuant
to this Section 6.8(b) shall be adjusted upon receipt by Borrowers of
the net proceeds of any capital contribution by an amount to be agreed
upon by Borrowers and Agent.
(c) Fixed Charge Coverage Ratio: Borrowers shall have and maintain as
of the end of each fiscal quarter, based on financial information for
the twelve (12) month period ending as of the end of such fiscal
quarter, on a consolidated basis, a Fixed Charge Coverage Ratio of not
less than 1.25 to 1."
5. Representations and Warranties. Each Borrower and each Guarantor represents
and warrants to Agent and Lenders that:
(a) All warranties and representations made to Agent and
Lenders under the Existing Loan Documents are true and correct as of the date
hereof.
(b) The execution and delivery by each Borrower and each
Guarantor of this Amendment and the performance by each of them of the
transactions herein contemplated (i) are and will be within such Borrower's and
such Guarantor's corporate powers, (ii) have been authorized by all necessary
corporate action and (iii) are not and will not be in contravention of any law,
any order of any court or other agency of government, or any other indenture,
agreement or undertaking to which either Borrower or any Guarantor is a party or
by which the property of either Borrower or any Guarantor is bound, or be in
conflict with, result in a breach of, or constitute (with due notice and/or
lapse of time) a default under any such indenture, agreement or undertaking or
result in the imposition of any lien, charge or incumbrance of any nature on any
of the properties of either Borrower or any Guarantor.
(c) This Amendment and all allonges, assignments, instruments,
documents, and agreements executed and delivered in connection herewith, will be
valid, binding and enforceable in accordance with their respective terms.
(d) No Unmatured Event of Default or Event of Default has
occurred under any of the Existing Loan Documents.
6. Collateral. As security for the timely payment of the Obligations and
satisfaction by Borrowers of all covenants and undertakings contained in the
Existing Loan Documents, Existing Borrower reconfirms the prior security
interest and lien on, in, upon and to the Collateral, including, without
limitation, all of the following of each Borrower whether now owned or hereafter
acquired, created or arising and wherever located: Leases and Leased Property,
Books and Records and all cash and non-cash proceeds, thereof, including
insurance proceeds.
7. Effectiveness Conditions. This Amendment shall be effective upon completion
of the following conditions precedent (all documents to be in form and substance
satisfactory to Agent and Agent's counsel):
(a) Execution and delivery to Agent of this Amendment; and
(b) Execution and delivery of all other documents, agreement
and instruments required by Agent in connection herewith.
8. Ratification of Existing Loan Documents. Except as expressly set forth
herein, all of the terms and conditions of the Existing Loan Documents are
hereby ratified and confirmed and continue unchanged and in full force and
effect. All references to the Loan Agreement shall mean the Loan Agreement as
modified by this Amendment.
9. Collateral. Borrowers each hereby confirm and agree that all security
interests and Liens granted to Agent for the benefit of Lenders continue in full
force and effect and shall continue to secure the Obligations. All Collateral
remains free and clear of any Liens. Nothing herein contained is intended to in
any manner impair or limit the validity, priority and extent of Agent's existing
security interest in and Liens upon the Collateral.
10. Acknowledgment of Guarantors. By execution of this Amendment, each Guarantor
hereby acknowledges the terms and conditions of this Amendment and confirms that
each remains jointly and severally liable, as surety, for all Obligations
pursuant to the terms and conditions of that certain Surety Agreement dated as
of September 30, 1998.
11. Governing Law. This Amendment shall be governed by, construed and enforced
in accordance with the substantive laws of the Commonwealth of Pennsylvania.
12. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, and such
counterparts together shall constitute one and the same respective agreement.
Counterparts by facsimile shall bind the parties hereto.
13. Waiver of Jury Trial. EACH BORROWER, AGENT, EACH LENDER AND EACH GUARANTOR
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AMENDMENT OR THE
TRANSACTIONS DESCRIBED HEREIN.
SIGNATURES ON FOLLOWING PAGES
IN WITNESS WHEREOF, the parties have executed this Amendment to Loan
and Security Agreement the day and year first above written.
BORROWERS: FIDELITY LEASING, INC.
By:
Name:
Title:
JLA CREDIT CORPORATION
By:
Name:
Title:
GUARANTORS: RESOURCE AMERICA, INC.
By:
Name:
Title:
RESOURCE LEASING, INC.
By:
Name:
Title:
FL PARTNERSHIP MANAGEMENT, INC.
By:
Name:
Title:
FL FINANCIAL SERVICES, INC.
By:
Name:
Title:
AGENT: FIRST UNION NATIONAL BANK
By:
Name:
Title:
LENDERS: FIRST UNION NATIONAL BANK
By:
Name:
Title:
EUROPEAN AMERICAN BANK
By:
Name:
Title:
SCHEDULE A
Lender Amount
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First Union National Bank $12,500,000
European American Bank $7,500,000
