CREDIT AGREEMENT
between
CONSECO PRIVATE CAPITAL GROUP, INC.
and
NAL ACCEPTANCE CORPORATION
CREDIT AGREEMENT
NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Borrower"), and
CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Lender"),
agree as follows:
SECTION 1. RULES OF CONSTRUCTION AND DEFINITIONS.
(a) Rules of Construction.
Accounting Terms shall have the meanings given them under generally
accepted accounting principles ("GAAP"). Except as otherwise expressly provided
herein, all computations and determinations for purposes of determining
compliance with the financial requirements of this Agreement shall be made in
accordance with GAAP as in effect on the date hereof. If GAAP shall change
subsequent to the date hereof, Borrower may make such computations and
determinations for purposes of determining compliance with the financial
requirements of this Agreement in accordance with GAAP then in effect if
Borrower shall deliver to the Lender a letter from its independent certified
public accountants stating that such changes in GAAP subsequent to the date
hereof have not, in the aggregate, materially affected the computations and
determinations used in determining compliance with the financial requirements of
this Agreement.
(b) Definitions. The following terms when used herein shall have the
following meanings when used, except in the case of accounting terms, with the
initial letter capitalized:
"Adjusted LIBOR" means, for each LIBOR Loan, the rate per
annum (rounded up, if necessary, to the nearest 1/100%) determined by the Lender
to be equal to the quotient of (a) the LIBOR divided by (b) 1 minus the Reserve
Requirement.
"Advance" means a disbursement of proceeds of the Loan.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or executive officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power (whether or not
exercised) (i) to vote 10% or more of the securities having ordinary voting
power or (ii) to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" means this Credit Agreement.
"Authorized Officer" means the Chief Executive or Financial
Officer, or the President of the Borrower, or any other officer whose authority
to perform acts on behalf of the
Borrower which must be performed by an "Authorized Officer" under the terms of
this Agreement, is evidenced to the Lender by a duly certified copy of a
resolution of the Board of Directors of the Borrower.
"Autorics II" means Autorics II, Inc., a Delaware corporation
which is the wholly owned subsidiary of the Borrower and is entitled to certain
excess reserve balances and residual distributions under the Trusts.
"Banking Day" means a day on which the Lender is open for the
purpose of conducting substantially all of its business activities in the City
of Carmel, Indiana.
"Base Rate" means the per annum rate equal to the sum of (i)
the Prime Rate in effect from time to time, plus (ii) one and one-half percent
(1-1/2%) per annum; which Base Rate shall change simultaneously with any change
in such Prime Rate.
"Change in Control" means the time at which (i) any Person
(including a Person's Affiliates and associates) or group (as that term is
understood under Section 13(d) of the Exchange Act and the rules and regulations
thereunder), has become the beneficial owner of a percentage (based on voting
power, in the event different classes of stock shall have different voting
powers) of the voting stock of Parent Corporation equal to at least twenty-five
percent (25%), other than existing shareholders which currently own in excess of
twenty-five percent (25%) and existing debenture holders whether upon exercise
of conversion rights currently existing or otherwise, (ii) there shall be
consummated any consolidation or merger of Parent Corporation pursuant to which
Parent Corporation's common stock (or other capital stock) would be converted
into cash, securities or other property, other than a merger or consolidation of
Parent Corporation in which the holders of such common stock (or such other
capital stock) immediately prior to the merger have the same proportionate
ownership, directly or indirectly, of common stock of the surviving corporation
immediately after the merger as they had of Parent Corporation's common stock
immediately prior to such merger, or (iii) all or substantially all of Parent
Corporation's assets shall be sold, leased, conveyed or otherwise disposed of as
an entirety or substantially as an entirety to any Person (including an
Affiliate of Borrower) in one or a series of transactions.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to Hazardous Materials, the environment or to the release of any
materials into the environment, including, without limitation the Clean Air Act,
as amended, the Clean Water Act of 1977, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Hazardous Materials Transportation Act, as amended, and the Resource
Conservation and Recovery Act of 1976, as amended.
"Equity Infusion" means any equity funding, whether by the
sale of securities or contribution of capital in which the Borrower, the Parent
Corporation or any Subsidiary receives or has funds applied for its benefit in
an amount equal to or greater than Five Million Dollars ($5,000,000).
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Event of Default" means any event or condition identified as
such in Section 8 and the term "Default" shall mean any breach of any term,
condition, provision, covenant or representation by the Borrower or any other
event or condition which, with the lapse of time, the giving of notice, or both
would constitute an Event of Default.
"Hazardous Materials" means (i) materials the presence of
which requires investigation or remediation under any Federal, State or local
law, rule, regulation, ordinance, order, action or policy; (ii) materials listed
in 49 C.F.R. ss.172.101, materials defined as hazardous pursuant to Section
101(14) of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; (iii) any flammable, explosive, radioactive,
carcinogenic or mutagenic materials (including any biomedical materials or
wastes the use, storage, handling or disposal of which is regulated under any
Federal, State or local law, rule, regulation, ordinance, order, action or
policy); (iv) hazardous or toxic wastes or substances, petroleum or petroleum
distillates; (v) asbestos or material containing asbestos which have become
friable, or, polychlorinated biphenyls or similar materials which have been
released, in violation of any applicable Environmental Law; or (vi) infectious
or potentially infectious materials, blood and other bodily fluids in any form
(including laboratory specimens), used needles and syringes, used gloves and
other disposable protective clothing or devices, contaminated linen, uniforms or
laundry, or any other medical waste.
"Lender" and "Borrower" are used as defined in the preamble.
"LIBOR" means, as of any time the same is to be determined by
the Lender, the per annum interest rate (rounded up, if necessary, to the
nearest 1/100%) at which deposits of U.S. dollars in Permissible Increments
quoted for the offering to leading banks for the applicable LIBOR Interest
Period in the London interbank market at approximately 11:00 a.m. (London time)
on the date of commencement of each LIBOR Interest Period (or the first Banking
Day thereafter if not a Banking Day).
"LIBOR Interest Period" means each monthly period commencing
on the first day of each calendar month and ending on the last day of such
month.
"LIBOR Loans" means any Advances under the Loan when and to
the extent that the interest rate therefor is determined by reference to the
Adjusted LIBOR.
"LIBOR Rate" means a rate to be calculated by reference to the
LIBOR for the LIBOR Interest Period under Section 2(b).
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"Lien" means any lien, security interest, financing statement,
mortgage, pledge, collateral assignment, title retention lien, sale and
leaseback arrangement, or other charge, subordination or encumbrance of any kind
securing the payment or performance of any obligation, or any other type of
preferential or trust arrangement on or with respect to real or personal
property securing the payment or performance of any obligation, including,
without limitation, the lien or retained security title of a conditional vendor.
"Loan" means the Loan in the Maximum Amount not to exceed Five
Million Dollars ($5,000,000) constituting the indebtedness for borrowing money
owed by Borrower to Lender advanced pursuant to Section 2(a)(i) hereof.
"Loan Documents" mean this Agreement, the Note, the Security
Agreement, the Pledge Agreement, the Blocked Account Agreement referred to in
Section 2(a)(i)(D) and any other documents which at any time evidence or secure
the Loan.
"Maturity" means the earlier of (i) December 31, 1997, (ii)
the date of an Equity Infusion, or (iii) upon a Change in Control of the Parent
Corporation; at which time all Advances under the Loan shall be due and payable.
"Maximum Amount" means with respect to the limit on the
Loan the sum of Five Million Dollars ($5,000,000).
"Net Worth" means, as of the date of determination, that
amount determined to be the total shareholders' equity in the balance sheet of
the Parent Corporation, computed on a consolidated basis, furnished pursuant to
Section 5(b)(i) as of such date.
"Note" is the promissory note evidencing the Loan as used in
Section 2(a)(i)(C) and any other promissory note made by Borrower payable to the
Lender as may be outstanding from time to time.
"Obligations" mean:
(i) All obligations, liabilities and indebtedness,
and all renewals and extensions thereof, now or at any time hereafter owed to
the Lender by Borrower, whether such indebtedness, obligations and liabilities
are direct, indirect, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several and whether such indebtedness, obligations and
liabilities now exist or hereafter arise, arising from, under, by virtue of or
pursuant to the Loan Documents and Securities Purchase Agreement, as the same
may hereafter be modified, amended, restated and/or extended from time to time,
together with all interest accruing thereon;
(ii) All obligations, indebtedness and liabilities of
Borrower to the Lender now existing or hereafter arising, under the terms of any
and all other security
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agreements, pledge agreements, assignments of collateral, mortgages or other
security documents (as the same may be amended, restated, modified, renewed
and/or extended from time to time and at any time) now or hereafter securing all
or any part of the Loan;
(iii) All costs of collection and all costs and
reasonable attorneys' fees incurred by the Lender in the enforcement of this
Agreement; and
(iv) Any and all modifications, renewals and
extensions of one or more of the indebtedness, liabilities, obligations listed
in clauses (i), (ii) and (iii) preceding, including without limitation: (A)
modifications of the required principal payment dates or interest payment dates,
deferring or accelerating payment dates wholly or partly; and (B) modifications,
extensions or renewals at a different rate of interest whether or not, in the
case of a promissory note or contract, the modification, extension or renewal is
evidenced by a new or additional promissory notes or other contract.
"Officer's Certificate" means a certificate signed by an
Authorized Officer of the Borrower confirming that all of the representations
contained in Section 4 of this Credit Agreement and Article V of the Securities
Purchase Agreement are true and correct as of the date of such Certificate
except as specified therein, and with the further exception that the
representation contained in Section 4(d) will refer to the latest financial
statements which have been furnished to the Lender under the terms of this
Credit Agreement as of the date of any such Certificate. Such Certificate shall
further confirm that no Event of Default or Default shall have occurred and is
then continuing, or if any Default or Event of Default shall have occurred and
is continuing, such Certificate shall describe it and describe the steps being
taken or planned by the Borrower to correct such situation. The Officer's
Certificate shall be substantially in the form of Exhibit "A".
"Permissible Increment" shall mean a minimum principal amount
of Two Hundred Thousand Dollars ($200,000) and in minimum increments of Fifty
Thousand Dollars ($50,000) above such minimum principal amount.
"Parent Corporation" means NAL Financial Group Inc., a
Delaware corporation which owns all of the issued and outstanding stock of the
Borrower.
"Permitted Encumbrances" is used as defined in Section 6(b).
"Person" means an individual, partnership, corporation, joint
stock company, trust (including a business trust), unincorporated association,
joint venture or other entity, or a government or any political subdivision or
agency thereof.
"Plan" means an employee pension benefit plan as defined in
ERISA.
"Pledge Agreement" is used as defined in Section 3(b) hereof.
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"Prime Rate" means a variable per annum interest rate adjusted
daily, equal at all times to the rate established and quoted from time to time
by the Lender's bank, Nations Bank, N.A., as the Prime Rate at its principal
office and changing contemporaneously with each change in such bank's prime
rate. The Prime Rate shall not necessarily have any relation to the rate of
interest which such bank actually charges Lender on any loans or class of loans.
"Reserve Requirement" means, for any LIBOR Loan for any LIBOR
Interest Period therefor, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves, including any marginal,
supplemental, or emergency reserves, are required to be maintained during such
LIBOR Interest Period under Regulation D by member banks of the Federal Reserve
System against "Eurocurrency liabilities" (as such term is used in Regulation
D), but without benefit or credit of proration, exemptions, or offsets that
might otherwise be available from time to time under Regulation D, to the extent
applicable to Lender. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by the
Lender against any category of liabilities that includes deposits by reference
to which the Adjusted LIBOR is to be determined or any category or extension of
credit or other assets that includes LIBOR Loans.
"Security Agreement" is used as defined in Section 3(a)
hereof.
"Securities Purchase Agreement" means the Securities Purchase
Agreement dated as of April 23, 1996, by and between the Parent Corporation and
Affiliates of the Lender, Beneficial Standard Life Insurance Company and Great
American Reserve Insurance Company.
"Subsidiary" means (a) any corporation of which an aggregate
of 50 percent or more of the outstanding stock (irrespective of whether, at the
time, stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned legally or beneficially by the Parent
Corporation and/or one or more Subsidiaries of the Parent Corporation, and (b)
any partnership in which Parent Corporation and/or one or more Subsidiaries of
the Parent Corporation shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of 50 percent or more.
"Trust" means the Trusts listed on Exhibit "B" attached hereto
that have been used by Borrower for securitizations.
SECTION 2. THE LOAN.
(a) Terms of Loan.
(i) Loan Advances. From the date hereof and until the Banking
Day next preceding Maturity, the Lender will make Advances from time to time to
the Borrower, in amounts not exceeding the Maximum Amount of Five Million
Dollars ($5,000,000). Any Advance repaid by the Borrower shall not be
re-advanced by the Lender.
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The making of the Advances shall be subject to the further
provisions of this Section 2, and shall be subject to all of the conditions of
lending stated in Section 7 being fulfilled at the time of the Advance, and
provided further that each Advance shall be on the terms and subject to the
conditions hereinafter stated.
(A) Interest. The Loan shall bear interest
(calculated on the basis that an entire year's interest is earned in 360 days)
from the date of each Advance until repaid or until Maturity on any Permissible
Increment of outstanding Advances of the Loan, at the LIBOR Rate of Four and
Twenty-Five Hundredths Percent (4.25%) per annum above the Adjusted LIBOR,
compounded monthly. Adjusted LIBOR and the LIBOR Rate shall remain fixed
throughout the applicable LIBOR Period, with the same being adjusted monthly on
the first Banking Day of each month. After maturity, whether by acceleration or
scheduled Maturity, until paid in full, or when and so long as there shall exist
any uncured Default, the Loan shall bear interest at a rate equal to three
percent (3%) per annum above the otherwise applicable rate (calculated on the
basis that an entire year's interest is earned in 360 days). Interest shall be
due and payable quarterly. Any Advances or Loan balance not in a Permissible
Increment may at the option of the Lender accrue at a per annum rate equal to
the Base Rate.
(B) Use of Proceeds. The Advances may only be used by
the Borrower to initially pay the closing fees, charges and costs which are the
Borrower's expenses under the terms of this Agreement and subsequently for
working capital purposes. In addition to working capital purposes, the Advance
may be used by the Borrower for the following purposes:
(l) To fund the amounts owed in the acquisition
of motor vehicle leases with overdue
payments exceeding 90 days from General
Electric Capital Corporation in an amount
not to exceed $900,000;
(2) To fund the amounts owed in the acquisition
of motor vehicle leases without delivery of
vehicle titles within 120 days from General
Electric Capital Corporation in an amount
not to exceed $400,000;
(3) To fund repurchase obligations caused by
first payment defaults under Trust 1997 A in
an amount not to exceed One Million Three
Hundred Thousand Dollars ($1,300,000);
(4) To motor vehicle dealers which are owed
funds related to the acquisition of motor
vehicle leases in an amount not to exceed
$470,000.
The Borrower's working capital purposes shall further
include the Borrower's acquisition and financing of sub-prime motor vehicle
loans in the ordinary course of business. In no event shall the Borrower use any
Advance to fund repurchase obligations,
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reserves or losses or any other payment to any Trust, except as provided in
Sub-item (3) above, without the prior written consent of Lender.
(C) Method of Borrowing. The obligations of the
Borrower to repay the Loan shall be evidenced by a promissory note ("Note")
attached as Exhibit "C" and made a part hereof. The principal amount of the Loan
outstanding from time to time shall be determined by reference to the books and
records of the Lender on which all Advances under the Loan and all payments by
Borrower on account of the Loan shall be recorded. Such books and records shall
be deemed prima facie to be correct as to such matters absent manifest error.
Principal may be prepaid in part or in whole without premium or penalty,
provided that such prepayments shall not be re-advanced.
(D) Mandatory Principal Payments. The Borrower will
be required to make prepayments of principal of the Loan in such amounts as may
be distributed to the Borrower from Autorics II or the Trust. The Borrower shall
establish a bank account into which all such payments received from Autorics II
or the Trust shall be deposited, and the Lender shall have debit authority to
withdraw such amounts to apply towards the Loan and Borrower shall be prohibited
from making withdrawals pursuant to a Blocked Account Agreement acceptable to
Lender.
(E) Maturity of Loan. The Loan and all accrued
interest thereon shall be payable in full at Maturity.
(b) Procedures for Electing LIBOR Rates. LIBOR Rates must comply with
the following procedures and are subject to the other conditions contained in
this Agreement. In the event of noncompliance, the Lender at its option may
impose the Base Rate to accrue on the Loan in lieu of the LIBOR Rate.
(i) The Lender may elect to apply the Base Rate at any time a
Default or Event of Default exists.
(ii) Notwithstanding any other provision of this Agreement, in
the event that the Lender determines (which determination shall be conclusive
and binding upon the Borrower) that by reason of circumstances affecting the
London interbank market, adequate and reasonable means do not exist for
ascertaining the LIBOR for any LIBOR Interest Period at a time when the
outstanding balance of Advances under the Loan is being maintained at the LIBOR
Rate, the Lender shall forthwith give notice of such determination, confirmed in
writing, to the Borrower. If such notice is given, then the outstanding
principal balance of Advances under the Loan bearing interest at the LIBOR Rate
shall be converted, on the last day of the then current LIBOR Interest Period,
to a rate equal to the Base Rate.
(iii) If any law or any governmental regulation, guideline or
order or interpretation or application thereof by any governmental authority
charged with the interpretation or administration thereof or compliance with any
request or directive of any central
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bank or other governmental authority whether or not having the force of law (A)
imposes, modifies or deems applicable any reserve, special deposit or similar
requirement against assets held by, credit extended by, deposits with or for the
account of, or other acquisition of funds by, any bank (other than requirements
expressly included herein in the determination of the Adjusted LIBOR hereunder),
or (B) imposes upon any bank any other condition or expense with respect to this
Agreement, or the making, maintenance or funding of any part of the proceeds of
a LIBOR Rate Advance or any security therefor; and the result of any of the
foregoing is to increase the cost to, reduce the income receivable by, or impose
any expense upon the Lender with respect to the outstanding balance of the Loan
bearing interest at the LIBOR Rate or the making, maintenance or funding of any
part thereof by an amount which the Lender deems to be material (the Lender
being deemed for this purpose to have made, maintained or funded the proceeds of
a LIBOR Rate Advance from certificates of deposit), the Lender shall from time
to time notify the Borrower of the amount determined in good faith (using any
averaging and attribution methods employed in good faith) by the Lender (which
determination if made in good faith shall be presumed to be correct absent
manifest error) to be necessary to compensate the Lender for such increase in
cost, reduction in income or additional expense. Such amount shall be due and
payable by the Borrower to the Lender ten (10) Banking Days after such notice is
given. A certificate as to the amount of such increase in cost, reduction in
income or additional expense delivered by the Lender to the Borrower shall be
conclusive and binding for all purposes, absent manifest error.
(c) Method of Payment. All payments of principal and interest on the
Loan will be payable at the principal office of the Lender in Indianapolis,
Indiana in funds available for immediate use at that city and no such payment
will be considered to have been made until received in such funds.
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(d) Advances of the Loan. Each Advance will be conditioned upon receipt
by Lender from the Borrower of an executed closing statement or an application
for an Advance accompanied by an Officer's Certificate. The Lender shall be
entitled to rely on any oral or written request received by it in good faith
from anyone reasonably believed by the Lender to be an Authorized Officer. The
Borrower shall promptly confirm any oral communication by delivering an
Application upon request of Bank.
(e) Fees. The Borrower shall pay to the Lender at closing a commitment
fee for the Loan of One Hundred Thousand Dollars ($100,000). In addition, the
Parent Corporation shall grant Conseco, Inc. or its designee an additional
257,000 warrants with a strike price of fifteen cents ($. 15) per share with a
five (5) year maturity.
SECTION 3. COLLATERAL FOR THE OBLIGATIONS. All of the Obligations will
be secured and supporte as follows:
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(a) Security Interest. The Loan and all other Obligations are secured
by a security interest in certain payments due Borrower now existing or
hereafter acquired, which security interest will be created by a security
agreement (the "Security Agreement") in the form of Exhibit "D". The security
interest shall be a first priority security interest in the collateral stated
therein with no junior liens permitted.
(b) Pledge. The Loan and all other Obligations are secured by a pledge
by the Borrower of its stock of Autorics II, which pledge will be created by the
pledge agreement (the "Pledge Agreement") in the form of Exhibit "E". The pledge
shall be a first priority security interest and pledge in the collateral stated
therein with no junior liens permitted.
SECTION 4. REPRESENTATIONS AND WARRANTIES. To induce the Lender to
make the Loan, the Borrower represents and warrants to the Lender that:
(a) Organization of the Borrower. The Borrower is a corporation
organized, existing and in good standing under the laws of the State of Florida.
The Borrower is qualified to do business in every jurisdiction in which the
character of the properties owned or the nature of the business conducted by the
Borrower makes such licensing or qualification to do business necessary, except
where the failure to be in good standing or to be duly licensed or qualified to
do business would not have a material adverse effect on the Borrower. No
jurisdiction in which the Borrower is not qualified has asserted that the
Borrower is required to be qualified to do business therein.
(b) Authorization; No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of the other
Loan Documents required to be executed by the Borrower under the terms of this
Agreement and the performance by the Borrower of its obligations under this
Agreement, and such other Loan Documents are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do not
and will not contravene or conflict with any provision of law or of the
certificate of incorporation or by-laws of the Borrower, and do not and will not
violate in a material manner any agreement binding upon the Borrower or a
material portion of its property.
(c) Validity and Binding Nature. This Agreement and the other Loan
Documents to which the Borrower is required to be a party under the terms of
this Agreement are the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws enacted for the relief of
debtors generally, from time to time in effect.
(d) Financial Statements. The Borrower has delivered to the Lender
annual financial statements for the Borrower for the year ending December 31,
1996, and financial statements for the period ending April 30, 1997.
Such financial statements present fairly the financial position of the
Borrower as of the dates thereof and the results of the operations and changes
in financial position for the periods
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ending on the dates thereof, in accordance with GAAP consistently applied,
except as noted in the footnotes which are a part of such statements. Since the
date of the latest of such financial statements, there has been no material
adverse change in the financial condition of the Borrower or in the results of
the operations thereof. All projected operating results provided to the Lender,
or to be provided to the Lender under Section 5(b) hereof, were and shall be
prepared on the basis of assumptions, data, information, tests or other
conditions believed to be valid or accurate or to exist at the time such
estimates were prepared and furnished.
(e) Litigation and Contingent Liabilities. Except as shown in Exhibit
"F", no litigation, arbitration proceeding or governmental proceeding is pending
or is threatened against the Borrower or any Subsidiary which would, if
adversely determined, adversely affect the financial condition or continued
operations of the Borrower or any Subsidiary. The Borrower or any Subsidiary has
no material contingent liabilities not provided for or disclosed in the
financial statements referred to in Section 4(d).
(f) Ownership and Liens. The Borrower and its Subsidiaries have good
title to all of its properties and assets shown on its financial statements,
except such properties or assets as have been disposed of since the date of such
statements in the ordinary course of business or as no longer are used or useful
in the conduct of its business. None of the assets of the Borrower or any
Subsidiary is subject to any Lien.
(g) Solvency. Each of the following is true and correct for the
Borrower: (A) the fair value, the market value and the fair salable value of its
property is (i) greater than the total amount of its liabilities (including
contingent liabilities) and (ii) greater than the amount that would be required
to pay its probable aggregate liability on its existing debts as they mature;
(B) its property and capital is not unreasonable in relation to its business or
any contemplated or undertaken transaction; and (C) it does not intend to incur,
or believe that it will incur, debts beyond its ability to pay such debts as
they become due.
(h) Employee Benefit Plans. As of the date hereof the Borrower
maintains a Plan in compliance with all applicable laws and regulations, and
neither a "reportable event", nor a "prohibited transaction", has occurred
under, nor has there occurred any complete or partial withdrawal from, nor has
there occurred the appointment of a trustee to administer any Plan maintained
for employees of the Borrower or "affiliate", all within the meanings ascribed
by ERISA. The present value of all benefits under such Plan do not exceed, as of
the last annual valuation date, the value of the assets of such Plan allocable
to such vested benefits.
(i) Investment Company Act; Public Utility Holding Company. The
Borrower is not an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended. Neither the Borrower nor any Affiliate is a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
(j) Regulation U; Business Loans. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or
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carrying margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System. The Note evidences business loans
exempt from the federal Truth In Lending Act (15 USC 1601, et seq.), the Federal
Reserve Lender's Regulation Z (12 CFR 226, et seq.), and the proceeds thereof
are not being used for consumer purposes.
(k) Environmental Matters. The Borrower has duly complied in all
material respects with, and its business, operations, assets, equipment,
property, leaseholds, or other facilities are in compliance in all material
respects with, the provisions of all federal, state, and local environmental,
health, and safety laws, codes and ordinances, and all rules and regulations
promulgated thereunder, including Environmental Laws. The Borrower has been
issued and will maintain all required federal, state, and local permits,
licenses, certificates, and approvals relating to (1) air emissions, (2)
discharges to surface water or ground water, (3) noise emissions, (4) solid or
liquid waste disposal, (5) use, generation, storage, transportation, or disposal
of Hazardous Materials, or (6) other environmental, health or safety matters.
The Borrower has received no notice of, and knows of no, facts which might
constitute any violations of any federal, state, or local environmental, health
or safety laws, codes or ordinances, and any rules or regulations promulgated
thereunder with respect to its business, operations, assets, equipment,
property, leaseholds, or other facilities, materially adversely affecting the
existing or future operations or financial condition of the Borrower. To the
best of Borrower's knowledge, there has been no emission, spill, release, or
discharge by Borrower materially adversely affecting the existing or future
operations or financial condition of the Borrower into or upon (1) the air, (2)
soils or any improvements located thereon, (3) surface water or ground water, or
(4) the sewer, septic system or waste treatment, storage or disposal system
servicing owned facilities or any leased premises, of any Hazardous Materials at
or from the premises. There has been no complaint, order, directive, claim,
citation, or notice by any governmental authority or any person or entity
materially adversely affecting the existing or future operations or financial
condition of the Borrower with respect to (1) air emissions, (2) spills,
releases, or discharges to soils or improvements located thereon, surface water,
ground water or the sewer, septic or waste treatment, storage or disposal
systems servicing the premises, (3) noise emissions, (4) solid or liquid waste
disposal, (5) the use, generation, storage, transportation or disposal of
Hazardous Materials, or (6) other environmental, health, or safety matters
affecting the Borrower.
(l) Compliance with Law. The Borrower maintains such licenses, permits,
patents, copyrights, trademarks, and consents of appropriate governmental
agencies to own its properties as are necessary or useful to carry on its
business and is in compliance in all material respects with applicable laws and
regulations. All tax returns or reports of the Borrower required by law have
been filed, or will be timely filed before penalties attach, and all taxes,
assessments, contributions, fees and other governmental charges (other than
those presently payable without penalty or interest and those currently being
contested in good faith and against which adequate reserves have been
established) upon the Borrower or its assets, properties or income, which are
payable, have been paid.
(m) Casualty. Neither the business nor the properties of the Borrower
is presently affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought,
13
storm, hail, earthquake, embargo, act of God or other casualty materially
adversely affecting the existing or future operations or financial condition of
the Borrower.
(n) Trust Representations. The Borrower represents and warrants that to
the best of its knowledge, the securitization projections attached hereto as
Exhibit "H" are accurate and correct with data and assumptions based upon the
reflection of the contractual terms of the loans held by each Trust, actual
gross loss and recovery experience, prepayment experience and the capitalization
of the Trusts which the Borrower believes will be representative of future
experience. The projections accurately reflect the terms and provisions of each
Trust, and there has been no adverse change in the Trust or such securitization
projections. The Borrower is in compliance with all of its material obligations
to each Trust, including those under each sale and servicing agreement, and
there is no condition or event which, with the lapse of time, or the giving of
notice, or both, would cause a default in such agreements. The Borrower has not
engaged and will not engage in any transaction with the Trust except as
contemplated by the existing documentation with respect to the Trusts.
SECTION 5. AFFIRMATIVE COVENANTS OF THE BORROWER. Until all obligations
of the Borrower under this Agreement and under the Note are paid in full, the
Borrower agrees that it will strictly observe the following covenants, unless at
any time the Lender shall otherwise expressly consent in writing:
(a) Corporate Existence. The Borrower will preserve its corporate
existence without any material amendments to its Certificate of Incorporation
and will maintain its existing fiscal year and accounting policies in accordance
with GAAP.
(b) Reports, Certificates and Other Information. The Borrower will
furnish to the Lender:
(i) Financial Purchase Agreement Information. The Borrower
will provide all financial statements and information required to be provided by
the Borrower under Article VI of the Securities Purchase Agreement. The Borrower
shall also furnish on a monthly basis, within thirty (30) days after the end of
each month, copies of consolidated and consolidating unaudited balance sheet and
statement of income and retained earnings, for such month for the portion of the
fiscal year ended as of the end of such month for the Borrower and each
Subsidiary, setting forth, at least quarterly, in comparative form the
corresponding figures for the corresponding dates and periods of the preceding
fiscal year. Such monthly financial statements shall calculate the financial
covenants set forth in Section 5(j) hereof.
(ii) Financial Projections. The Borrower shall provide to the
Lender on a weekly basis, cash flow projections for the following four week
period showing the projected cash flow for such period on a daily basis. Such
cash flow projections shall be furnished no later than Monday of each week
beginning June 30, 1997, and shall forecast the four week consecutive period
following such week.
14
(iii) SEC and Other Reports. Promptly upon their becoming
available a copy of each registration statement or prospectus filed by the
Borrower with any state securities commission or similar authority or with the
Securities and Exchange Commission and copies of each periodic report or proxy
statement filed with the Securities and Exchange Commission pursuant to the
requirements of the Securities Exchange Act of 1934 in the event Borrower ever
makes such filings or becomes subject to such requirements.
(iv) Orders. Prompt notice of any orders in any material
proceedings to which the Borrower is a party, issued by any court or regulatory
agency, federal or state, and if the Lender should so request, copies of any
such order.
(v) Officers' Certificates. Contemporaneously with the
furnishing of each weekly financial statements provided for in Section 5(b)(ii),
a currently dated Officer's Certificate.
(vi) Notice of Default or Litigation. Immediately upon
learning of the occurrence of a Default, an Event of Default or the institution
of, or any adverse determination in, any litigation, arbitration proceeding or
governmental proceeding which is material to the Borrower or the occurrence of
any event which could have a material adverse effect upon the Borrower written
notice thereof describing the same and the steps being taken with respect
thereto.
(vii) Securitization Notices. Within five (5) Banking Days
after receipt, copies of any correspondence or other notifications from
Greenwich Capital Corporation or any rating agency that relates to the Trusts or
any contemplated securitizations by the Borrower.
(viii) Trust Information. Within thirty (30) days after the
end of each month, copies of the static pool analysis, expected loss analysis,
compliance reports and financial projections based upon actual losses,
prepayments and recoveries provided to the Trusts. Within 5 Banking Days before
funding, a summary of cash settlements expected to be received from any Trust.
(d) Books, Records, Inspections and Audits. The Borrower will maintain
complete and accurate books and records; permit the Lender to inspect and audit
said books and records at all reasonable times and permit the Lender to inspect
the properties and operations of the Borrower. Such inspection and audit shall
be made at the Borrower's expense.
(e) Taxes and Liabilities. The Borrower will pay when due all taxes,
assessments and other liabilities except such as are being contested in good
faith and by appropriate proceedings and for which appropriate reserves have
been established.
(f) Compliance with Legal and Regulatory Requirements. The Borrower
will comply in all material respects with the applicable provisions of all
federal and state statutes and regulations and any court orders or orders of
regulatory authorities issued thereunder.
15
(g) Employee Benefit Plans. The Borrower will maintain any pension or
profit sharing Plan or other employee benefit Plan, if any, in compliance in all
material respects with ERISA, the Internal Revenue Code, and all rules and
regulations of regulatory authorities pursuant thereto and file all material
reports required to be filed pursuant to ERISA, the Internal Revenue Code, and
such rules and regulations.
(h) Payment of Expenses. The Borrower shall pay all reasonable costs at
closing incidental to the preparation of this Agreement, the Loan Documents and
the Loan, including, but not limited to, attorneys' fees and other legal and
documentation expenses, appraisal fees and costs, environmental consultant
charges, insurance premiums, lien search charges, inspecting engineers' and/or
architects' fees, and any and all other incidental expenses of the Lender.
(i) Hazardous Materials. The Borrower shall keep its property and any
leased premises free of all Hazardous Materials except for the use of such
materials in the ordinary course of business in compliance with all laws and
regulations.
(j) Financial Covenants. The Borrower shall maintain the following
minimum operating levels during the time period specified, all of which shall be
calculated on a consolidated basis with the Parent Corporation:
(i) Minimum Net Worth. A minimum net worth of at least Fifty
Million Dollars ($50,000,000) shall be maintained as of the end of each
fiscal quarter.
(ii) Leverage Ratio. The ratio derived by dividing the total
liabilities exclusive of subordinated debt by Net Worth shall not
exceed 2.50 to 1.00 as of the end of each fiscal quarter. Subordinated
debt for purposes of this section shall mean debt in which the holder
thereof is subject to the subordination in payment to the Borrower's
secured lenders.
SECTION 6. NEGATIVE COVENANTS OF THE BORROWER. Until all obligations of
the Borrower under the Loan Documents are paid in full, and any obligation of
the Lender to make further Advances has expired, the Borrower agrees that it
will strictly observe the following covenants unless at any time the Lender
shall otherwise expressly consent in writing:
(a) Restricted Payments. Borrower will not purchase or redeem any
shares of the capital stock of the Borrower, declare or pay any dividends
thereon, make any distribution to shareholders, or set aside any funds for any
such purpose, or prepay, purchase or redeem any other subordinated indebtedness
of the Borrower. The Borrower will not make any advances to its officers for
salaries, fees, bonuses or similar expenses until such amounts have been earned
and become properly due and payable.
(b) Liens. The Borrower will not create or permit to exist any Liens
with respect to any property or assets, now owned or hereafter acquired, except
the following permitted encumbrances ("Permitted Encumbrances"):
16
(i) Those Liens created pursuant to any Debt incurred by the
Borrower or the Parent Corporation permitted in Section 6(h) hereof;
(ii) any Lien or deposit with any governmental agency required
to qualify the Borrower or to conduct business or exercise any privilege,
franchise or license, or to maintain self-insurance or to obtain the benefits of
or secure obligations under any law pertaining to workmen's compensation,
unemployment insurance, old age pensions, social security or similar matters, or
any similar lien or deposit arising in the ordinary course of business;
(iii) any landlord's, mechanic's, workmen's, repairmen's,
carrier's, warehousemen's or other like Liens arising in the ordinary course of
business for amounts not yet due, provided adequate provision has been made for
the payment of the same when due, or deposits to obtain the release of such
Liens have been made or if a Lien is being contested by the Borrower in good
faith and by appropriate legal proceedings, and provided the Borrower has
provided appropriate reserves for the payment of any such contested Lien;
(iv) Liens for taxes and governmental charges not yet due and
for the payment of which when due adequate provision has been, or which are
being contested in good faith by appropriate legal proceedings and for which
adequate reserves are provided;
(v) Liens created by or resulting from any litigation or legal
proceeding which is being contested in good faith by appropriate legal
proceedings and for which adequate reserves are provided;
(vi) those specific Liens now in existence and listed in
Exhibit "G";
(vii) purchase money security interest Liens incurred by the
Borrower or any Subsidiary in the ordinary course of business for the purchase
of fixed assets; and
(viii) the interest, if any, in distributions from Autorics II
to the Borrower granted to First Financial Acceptance, Inc., pursuant to the
synthetic automobile receivable participation agreement dated December 18, 1996;
provided, however, any such interest is limited to payment obligations to First
Financial Acceptance, Inc., resulting from "Joint Receivables" as defined in
such Participation Agreement and the Borrower represents and warrants that Joint
Receivables do not presently exceed Eleven Million Fifty Thousand Dollars
($11,050,000) and for future securitizations shall not exceed six percent (6%)
of the loans provided to Trusts.
(c) Guaranties, Loans or Advances; Investments. Except for debt
permitted in Section 6(h) hereof, the Borrower shall not make or permit to exist
any loans or advances, other than loans and other extensions of credit or credit
accommodations to customers or vendors other than Affiliates, made by the
Borrower in the ordinary course of its business as now conducted, for reasonable
salary advances to non-executive employees and other advances to agents and
employees for anticipated expenses to be incurred on behalf of the Borrower in
the course of discharging their assigned duties. The Borrower will not be a
guarantor or surety of, or otherwise be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or services, or to
supply or advance any funds, assets, goods or services, or otherwise) with
17
respect to any undertaking of any other Person. The Borrower or the Parent
Corporation will not purchase or acquire any securities of, or make investments
in, any Person except as permitted in Section 8.3 of the Securities Purchase
Agreement.
(d) Capitalization and Sales. The Borrower will not sell, transfer,
convey or lease all or any material part of its assets (more than 10% being
deemed material) or sell or assign with or without recourse any receivables
other than in the ordinary course of business pursuant to warehouse lines of
credit and securitizations. The Borrower will not (i) permit any change in the
Parent Corporation's ownership of the shares of any class of Borrower's stock,
(ii) incur, sell or otherwise dispose of any shares of its capital stock or
other securities, or rights, warrants or options to purchase or acquire any such
shares of securities, or (iii) sell, transfer or encumber any stock of its
Subsidiaries.
(e) Margin Stock. The Borrower will not use or cause or permit the
proceeds of the Loan to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as amended from time to time.
(f) Other Agreements. The Borrower will not enter into any agreement
containing any provision which would be violated or breached by the performance
of its obligations hereunder or under any instrument or document delivered or to
be delivered by it hereunder or in connection herewith.
(g) Judgments. The Borrower will not permit any material judgment or
monetary penalty rendered against it in any judicial or administrative
proceeding to remain unsatisfied for a period in excess of thirty (30) days
unless such judgment or penalty is being contested in good faith and by
appropriate proceedings and unless an appropriate reserve has been established
with respect thereto.
(h) Debt. The Borrower or the Parent Corporation will not incur
indebtedness for borrowed money other than indebtedness incurred pursuant to
this Agreement, whether under a loan, purchase money security interest, or sale
and lease back arrangement, or for the acquisition of fixed assets, except for
warehouse lines of credit or permanent financing with respect thereto obtained
by the Borrower in the ordinary course of business consistent with past
practice.
(i) Name Change. The Borrower shall not fail to notify the Lender of
any change in the Borrower's name or any name Borrower begins to do business
under or name it assumes within thirty (30) days after the date of such change.
(j) Agreements with Affiliates. The Borrower or the Parent Corporation
shall not enter into any other contract or transaction with any Affiliate, and,
with respect to any agreements with any Affiliate presently in existence, shall
not amend or modify such agreements without prior written consent of Lender
(which shall be given or withheld within five (5) Banking Days of written
request) which shall not be unreasonably withheld.
18
(k) Fixed Assets. The Borrower or the Parent Corporation will not make
any capital expenditures, purchase fixed assets or enter into any capital or
operating leases, except as permitted in Section 8.8 of the Securities Purchase
Agreement.
(l) Trust Payments. The Borrower shall not make any payments to fund,
secure or otherwise pay repurchase obligations, reserves or losses or any other
payment to any Trust, except as required by the terms thereof. The Borrower
shall not consent to the amendment to the terms of any agreement to which
Borrower is a party relating to any Trust or securitization, except for the
termination of Trust 1997A in connection with its transfer of assets and roll
over into a new securitization trust prior to July 1, 1997.
SECTION 7. CONDITIONS OF LENDING. The obligation of the Lender to
make each Advance under the Loan is subject to the following conditions
precedent:
(a) No Default. No Event of Default, or Default, shall have occurred
and be continuing, and the representations and warranties of the Borrower
contained in Article V of the Securities Purchase Agreement or in Section 4
hereof shall be true and correct as of the date of each Advance, except that the
representations contained in Section 4(d) will be construed so as to refer to
the latest financial statements furnished to the Lender by the Borrower pursuant
to the requirements of this Agreement.
(b) Documents to be Furnished at Initial Closing. The Lender shall have
received contemporaneously with the execution of this Agreement, the following,
each duly executed, dated the date of this Agreement and in form and substance
satisfactory to the Lender:
(i) Loan Documents. The Loan Documents.
(ii) Resolutions. A certified copy of a Resolution of the
Board of Directors of the Borrower authorizing the execution, delivery and
performance of each of the Loan Documents and any other documents provided for
in this Agreement.
(iii) Certification of Incumbency and Signatures. The
certificates of the Secretary of the Borrower certifying the names of the
officer or officers of the Borrower authorized to sign the various Loan
Documents, together with a sample of the true signature of each such person.
(iv) Corporate Documents. A certified copy of the Certificate
of Incorporation of the Borrower and Autorics II, a Certificate of Existence or
good standing
19
issued for Borrower and Autorics II in each state where qualification is
necessary and copies of the By-Laws of the Borrower certified as complete and
correct by its Secretary.
(v) Opinion of Counsel for the Parent Corporation, Borrower
and Autorics II. The opinion of counsel for the Autorics II, Borrower and the
Parent Corporation acceptable to the Lender.
(vi) Amendment to 9% Subordinated Convertible Debentures. The
First Amendment to 9% Subordinated Convertible Debenture dated April 23, 1996,
amending the 9% Subordinated Convertible Debenture issued to Beneficial Standard
Life Insurance Company in the amount of $5,000,000 and the First Amendment to 9%
Subordinated Convertible Debenture dated April 23, 1996, amending the 9%
Subordinated Convertible Debenture issued to Great American Reserve Insurance
Company in the amount of $5,000,000, both payable by the Parent Corporation.
(vii) Amendment to Warrants. The First Amendment to Warrant to
Purchase Common Stock amending the Warrant to Purchase Common Stock of NAL
Financial Group, Inc. dated April 23, 1996 issued to Conseco, Inc. for 500,000
shares, subject to adjustment, and the First Amendment to Warrant to Purchase
Common Stock amending the Warrant to Purchase Common Stock of NAL Financial
Group, Inc. dated April 23, 1996 issued to Conseco, Inc. for 15,000 shares,
subject to adjustment.
(viii) Price Protection Waiver. All other parties shall waive
their price protection rights with respect to their warrants, and their
subordinated debt (including any Affiliates of Lender), resulting from the
indebtedness and warrants provided for in this Credit Agreement.
(ix) Subordinated Debt Extension. All subordinated notes held
by the subordinated creditors listed on Exhibit "I" attached hereto which mature
prior to December 31, 1997, shall have their maturity extended until December
31, 1997.
(x) Trust Payments. Evidence acceptable to Lender that
Autorics II has transferred its rights to receive 74% of payments from the
Trusts to the Borrower and the irrevocable instructions by the Borrower to the
Trusts directing payments to the account referenced in Section 2(a)(i)(D) with
an acknowledgment by the Trusts.
SECTION 8. EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
(a) Nonpayment of the Loan. Default in the payment of principal or
interest under the terms of the Note or Loan Documents when due.
(b) Nonpayment of Other Indebtedness for Borrowed Money. Default in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other indebtedness for borrowed money of, or
guaranteed by, the Borrower, Parent Corporation or any Subsidiary whether owed
to the Lender or any other Person, or
20
default in the performance or observance of any obligation or condition with
respect to any such other indebtedness in excess of $500,000 if the effect of
such default would entitle the holder thereof to accelerate the maturity of any
such indebtedness or to permit the holder or holders thereof, or any trustee or
agent for such holders, to cause such indebtedness to become due and payable
prior to its expressed maturity.
(c) Other Material Obligations. Subject to the expiration of any
applicable grace period, default in the payment when due, or in the performance
or observance of, any material obligation of, or condition agreed to by the
Borrower, Parent Corporation or any Subsidiary with respect to any material
purchase or lease of goods or services except only to the extent that the
existence of any such default is being contested by the Borrower or any
Subsidiary in good faith and by appropriate proceedings.
(d) Bankruptcy, Insolvency, etc. The Borrower, Parent Corporation or
any Subsidiary becoming insolvent or admitting in writing its inability to pay
its debts as they mature or the adjudication of the Borrower, Parent Corporation
or any Subsidiary as a
21
bankrupt or as insolvent; or the Borrower, Parent Corporation or any Subsidiary
applying for, consenting to, or acquiescing in the appointment of, a trustee or
receiver for the Borrower, Parent Corporation or any Subsidiary or any material
amount of the property of the Borrower or any Subsidiary, or the Borrower,
Parent Corporation or any Subsidiary making a general assignment for the benefit
of creditors; or, in the absence of such application, consent or acquiescence, a
trustee or receiver being appointed for the Borrower, Parent Corporation or any
Subsidiary or for a material part of the property thereof and not being
discharged within 30 days; or any bankruptcy, reorganization, debt arrangement,
or other proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding being instituted by or against the Borrower, Parent
Corporation or any Subsidiary, and if instituted against the Borrower, Parent
Corporation or any Subsidiary, being consented to or acquiesced in by the
Borrower, Parent Corporation or any Subsidiary or remaining for 30 days
undismissed.
(e) ERISA Plan. A "reportable event" (as defined under ERISA) occurs
that would permit the Pension Benefit Guaranty Corporation to terminate any Plan
of the Borrower or Affiliate of the Borrower.
(f) Failure of the Borrower to Observe Covenants. Failure of the
Borrower to observe any of the covenants stated in Section 6 of this Agreement.
(g) Non-Compliance with other Provisions of this Agreement or Other
Loan Documents. Failure by the Borrower to comply with or to perform (i) any
other provision of this Agreement (which failure does not constitute an Event of
Default under any of the preceding provisions of this Section 8) or (ii) any
covenant or other provision of any other Loan Document, and continuance of any
such failure listed in (i) or (ii) above for ten (10) Banking Days after notice
thereof to the Borrower from the Lender.
(h) Warranties. Any warranty or representation made by the Borrower in
this Agreement or in any other Loan Document or in the Securities Purchase
Agreement proving to have been false or misleading in any material respect when
made, or any schedule, certificate, financial statement, report, notice, or
other writing furnished by the Borrower to the Lender proving to have been false
or misleading in any material respect when made or delivered.
(i) Default Under Securities Purchase Agreement. If there is any "Event
of Default" under and as defined in the Securities Purchase Agreement.
(j) Default Under Trusts. If there is any material default or
noncompliance under the Trusts, any Trust fails or is unable to meet its payment
obligations to its noteholders or certificateholders, or the transfer or
termination of any service, administrative or other agreement between the
Borrower, or its Subsidiaries, and the Trust. If Autorics II transfers, sells or
creates, incurs, assumes or permits to exist any Lien upon or with respect to
its rights to receive payment from the Trust, including the right to receive
certain excess reserve balances and dealer reserve balances and residual
distributions, or its beneficial ownership interest in the Trust, except for
dividend or other transfers to the Borrower.
22
SECTION 9. EFFECT OF EVENT OF DEFAULT. If any Event of Default
described in Section 8(d) shall occur, repayment of the Loan shall immediately
be accelerated and the Note and the Loan evidenced thereby, and all other
Obligations of the Borrower to the Lender, shall become immediately due and
payable, all without notice of any kind. In the case of any other Event of
Default described in Section 8, the Lender or any other holder of the Note may
accelerate payment of the Note and declare the Note, and all other Obligations
of the Borrower to the Lender (if the Lender is then the holder of the Note
which is accelerated), due and payable, whereupon repayment of such Note, and
all other Obligations of the Borrower to the Lender (if the Lender is then the
holder of the Note), shall become immediately due and payable, all without
further notice of any kind. The Lender or any such other holder shall promptly
advise the Borrower of any such declaration, but failure to do so shall not
impair the effect of such declaration.
SECTION 10. WAIVER; AMENDMENTS. No delay on the part of the Lender in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to any of the provisions of this Agreement or the Note
shall be effective unless in writing and signed by the Lender.
SECTION 11. NOTICES. Any notice hereunder to the Borrower or the Lender
shall be in writing (including facsimiles) and, if delivered by facsimile or
hand shall be deemed to have been given when delivered to the recipient's
facsimile number or address, respectively, listed below, and if mailed, shall be
deemed to have been given three days after the date when sent by registered or
certified mail, postage prepaid, and addressed to the Borrower or the Lender at
their respective addresses shown below. The address and facsimile numbers listed
below, for purposes of this Section, may by written notice to the other party to
this Agreement, be changed from time to time as its address or facsimile for
such purpose. If either party provides notice by facsimile, it shall promptly
supply the recipient with an original of such written notice via hand delivery
or by registered or certified mail. The addresses and facsimile numbers referred
to are as follows:
As to the Lender: Xx. Xxxxxxx Xxxxxx
Conseco, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
With a copies to: Xx. Xxxxxxxxxxx X. Xxxx
Xxxxxxxxx, Daily, Xxxxxxx & XxXxx
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
and Xx. Xxxxxxx X. Xxxxxxxx
23
Conseco, Inc.
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
As to the Borrower: Xx. Xxxxxxxx Xxxxx
General Counsel
NAL Acceptance Corporation
000 Xxxxxxx Xxxxx Xxxx, Xxxx, Xxxxx 000
Ft. Xxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
With a copy to: Xx. Xxxxxx Xxxxxx
English, XxXxxxxxx & O'Bryan, P.A.
First Fort Lauderdale Place
000 X.X. Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Fax: 000-000-0000
SECTION 12. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay or
reimburse the Lender on demand for all reasonable out-of-pocket costs and
expenses of the Lender (including reasonable attorneys' fees and legal expenses)
incurred by the Lender in connection with the enforcement of this Agreement or
any of the other Loan Documents. In addition, the Borrower agrees to pay, and to
save the Lender harmless from all liability for any stamp or similar documentary
or transaction taxes, or any intangibles tax, which may be payable in connection
with the execution or delivery of this Agreement, the borrowings hereunder, or
the issuance of the Note or of any other Loan Documents. All obligations
provided for in this Section shall survive any termination of this Agreement.
SECTION 13. CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 14. GOVERNING LAW AND VENUE. This Agreement and all of the
other Loan Documents shall be construed as contracts made under and governed by
the laws of the State of Florida. All obligations of the Borrower and the rights
of the Lender expressed herein or any of the other Loan Documents shall be in
addition to and not in limitation of those provided by applicable law. Borrower
hereby irrevocably submits to the jurisdiction of an Indiana State or Federal
court sitting in Xxxxxx County or Xxxxxxxx County, Indiana, in any action or
proceeding arising out of or relating to this Agreement or the Loan Documents,
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such Indiana State court or, to the
extent permitted by law, in such Federal court. Borrower hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. Borrower
irrevocably consents to the service of any and all process in any action or
proceeding by the delivery of copies of such process to Borrower at the address
set forth in Section 11 of this Agreement.
24
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Section shall affect the
right of any party to service legal process in any other manner permitted by law
or affect the right of any party to bring any action or proceeding against any
other party or its property in the courts of other jurisdictions.
SECTION 15. NO JOINT VENTURE. Notwithstanding anything to the contrary
herein contained or implied, the Lender, by this Agreement, or by any action
pursuant hereto, shall not be deemed to be a partner of, or a joint venturer
with, the Borrower.
SECTION 16. SEVERABILITY. In the event any provision of this Agreement
or any of the Loan Documents shall be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not affect the validity,
enforceability or legality of the remaining provisions hereof or thereof, all of
which shall continue unaffected and unimpaired thereby.
SECTION 17. INDEMNIFICATION. Borrower covenants and agrees, at it sole
cost and expense, to indemnify, protect and save the Lender harmless against and
from any and all losses, claims, costs, damages, liabilities and expenses,
including, without limitation, all expenses of litigation or preparation
therefore (a "Loss"), of any kind or of any nature whatsoever (including,
without limitation, attorneys' and experts' fees and disbursements) which may at
any time be imposed upon, incurred by or asserted or awarded against the Lender
and arising from or out of any Hazardous Materials on, in, under, released from
Borrower's property in violation of any applicable Environmental Law or
affecting all or any portion of Borrower's property, or the enforcement of this
Agreement or the assertion by the Borrower of any defense to its obligations
hereunder, whether any of such matters arise before or after the foreclosure of
any Liens or the taking of title to all or any portion of the collateral by the
Lender. The Borrower shall further pay the Lender's expenses incurred in
connection with the cost of removal of any and all Hazardous Materials from all
or any portion of Borrower's Property and the additional costs required to take
necessary precautions to protect against the release of Hazardous Materials on,
in, or under such property, and the costs incurred to comply with Environmental
Laws in connection with all or any portion of such property. The indemnity set
forth herein shall be in addition to any other obligations of the Borrower to
the Lender hereunder or at common law or otherwise, and shall survive any
termination of this Agreement, the expiration of this Agreement and the payment
of all obligations thereunder. Payments by the Borrower under this Section 17
shall not reduce any other obligations.
SECTION 18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and the Lender and their respective successors and assigns,
and shall inure to the benefit of the Borrower and the Lender and the respective
successors and assigns of the Lender. This Agreement and the Loan Documents are
assignable by the Lender at any time.
SECTION 19. JURY WAIVER. The Lender and the Borrower after consulting
or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right either of them may have to a trial by jury in
any litigation based upon or arising out of this Agreement or any other Loan
Document or any course of conduct, dealing, statements
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(whether oral or written), or actions of either of them. Neither the Lender nor
the Borrower shall seek to consolidate, by counterclaim or otherwise, any action
in which a jury trial has been waived with any other action which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by either the Lender or the
Borrower except by a written instrument executed by both of them.
SECTION 20. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may
be executed in counterparts, each of which shall be deemed an original and all
of which shall be deemed one and the same document. This Agreement
and all Loan Documents may be executed by facsimile signatures.
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Executed and delivered at ___________________________ on June 23,
1997.
CONSECO PRIVATE CAPITAL GROUP, INC. NAL ACCEPTANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------- -------------------------------
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
President Chief Executive Officer
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