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LINE OF CREDIT,
SECURITY AND PLEDGE AGREEMENT
THIS LINE OF CREDIT, SECURITY AND PLEDGE AGREEMENT, dated as of the
1st day of January, 1997, is made by and between ALLIED CAPITAL CREDIT
CORPORATION, a Maryland corporation (the "Borrower"), and XXXXX BANK N.A., a
national banking association (the "Bank").
The Bank has agreed to extend credit to the Borrower and the Borrower
has agreed to obtain credit from the Bank on the terms and conditions set forth
in this Agreement. Accordingly, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Bank and the Borrower
agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings assigned to them below, which meanings shall be
equally applicable to the singular and plural forms of the terms defined.
"Adjusted EBITDA" means, for any period with respect to any Person,
Net Income plus Total Interest Expense, taxes, depreciation and amortization
determined in accordance with GAAP.
"Affiliate" means with respect to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through ownership of common stock, by contract or otherwise.
"Agreement" means this Line of Credit, Security and Pledge Agreement,
as the same may be amended, modified or supplemented from time to time.
"Allied" means Allied Capital Lending Corporation, a Maryland
corporation.
"Borrowing Base Application and Compliance Certificate" means a
certificate in the form of Exhibit "A" hereto, with appropriate insertions, to
be executed and delivered by the Borrower from time to time pursuant to
Sections 3.02 (c) (iii) and 6.09 (c) hereof.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized or required to close under the
laws of the District of Columbia.
"Collateral" means any Third-Party Loan for which the original
Third-Party Note evidencing such loan has been delivered to the Bank, all
accounts, chattel paper, documents, general intangibles and instruments
relating to such loan, and all proceeds of the foregoing.
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"Default" means any event which with the giving of notice, the lapse
of time, or both, would constitute an Event of Default.
"Eligible Third-Party Loan" means a Third-Party Loan (i) for which the
original Third-Party Note is in the possession of the Bank, (ii) which, if not
a construction loan, is fully funded, (iii) which is not more than 60 days past
due, (iv) for which, if a Second Mortgage 504 Loan, there is in effect an
S.B.A. Authorization and Debenture Guaranty, and (iv) which is acceptable to
the Bank in its sole discretion.
"Event of Default" means any of the events specified as an "Event of
Default" under this Agreement, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has been satisfied.
"GAAP" means generally accepted accounting principles consistently
applied.
"Guaranty" means the guaranty agreement from Allied unconditionally
guaranteeing to the Bank the full repayment of the Loans and all other
obligations of the Borrower hereunder, as the same may be amended, modified or
supplemented from time to time.
"Indebtedness" means (i) indebtedness or liability for borrowed money;
(ii) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (iii) obligations for the deferred purchase price of property or
services (including trade obligations); (iv) obligations as lessee under
capital leases; (v) current liabilities in respect of unfunded vested benefits
under Plans covered by the Employee Retirement Income Security Act of 1974 as
amended, and regulations promulgated thereunder; (vi) obligations under letters
of credit; (vii) obligations under acceptance facilities; (viii) all
guaranties, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss; and (ix) obligations secured by any Lien,
whether or not the obligations have been assumed.
"Investments" means all debt or equity securities or share,
participation, or other interest in any Person, which is, or is of a type,
dealt in or traded on financial markets, or which is recognized in any area in
which it is issued or dealt in as a medium for investment.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction to evidence any
of the foregoing).
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"Loan Documents" means this Agreement, the Note, the Guaranty and any
other document now or hereafter executed or delivered in connection with the
Obligations in evidence thereof or as security therefor, including, without
limitation, any life insurance assignment, pledge agreement, security
agreement, deed of trust, mortgage, promissory note or subordination agreement.
"Loan" or "Loans" means individually, any loan, and collectively, all
of the loans to be made to the Borrower by the Bank pursuant to this Agreement.
"Maximum Amount" means the lesser of (i) fifteen million and no/100
dollars ($15,000,000.00), or (ii) the sum of ninety percent (90%) of the
principal amount of Second Mortgage 504 Loans, plus eighty percent (80%) of the
principal amount of First Mortgage 504 Loans and Companion Loans; provided,
however, that during the time that any such loan is a construction loan, the
foregoing percentage(s) shall be reduced to fifty percent (50%) and the
aggregate principal amount at any time outstanding with respect to such
construction loans shall not exceed Seven Million Five Hundred Thousand and
no/100 dollars ($7,500,000.00). The Maximum Amount may be reduced by the
Borrower pursuant to Section 2.01 (d) hereof.
"Net Income" means income after deduction of all expenses, taxes and
other proper charges, determined in accordance with GAAP, including realized
gains and losses, and shall exclude all unrealized gains or losses on
Investments.
"Note" means a promissory note, in form and substance satisfactory to
the Bank, in the original principal amount of $15,000,000.00, and evidencing
the obligation of the Borrower to pay the principal amount of the Loans,
together with interest on the Loans, as the same may be amended, modified or
supplemented from time to time. The term "Note" also shall include any
promissory note executed and delivered by the Borrower in connection with an
extension of the Termination Date, an increase in the Maximum Amount or any
other amendment to this Agreement.
"Obligations" means the Loans, the Note, all Indebtedness and
obligations of the Borrower under this Agreement and the other Loan Documents,
as well as all other Indebtedness of the Borrower to the Bank, now existing or
hereafter arising, of every kind and description, whether or not evidenced by
notes or other instruments, and whether such Indebtedness is direct or
indirect, fixed or contingent, liquidated or unliquidated, due or to become
due, secured or unsecured, joint, several or joint and several, related or
unrelated to the Loans, similar or dissimilar to the Indebtedness arising out
of this Agreement, of the same or a different class of Indebtedness as the
Indebtedness arising out of this Agreement, including, without limitation, any
overdrafts in any deposit account maintained by the Borrower with the Bank, all
obligations of the Borrower with respect to letters of credit issued by the
Bank for the account of the Borrower, any Indebtedness of the Borrower that is
assigned to the Bank and any Indebtedness of the Borrower to any assignee of
this Agreement.
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"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Pro Forma Debt Service" means, for any period with respect to any
Person, estimated Total Interest Expense plus scheduled principal payments for
the next four calendar quarters.
"S.B.A." means the Small Business Administration.
"S.B.A. Authorization and Debenture Guaranty" means an effective, in
force, authorization and debenture guaranty issued by the S.B.A. to a certified
development company and relating to a Second Mortgage 504 Loan.
"Shareholders' Equity" means, at any date with respect to any Person,
shareholder's equity as computed in accordance with GAAP and reported in the
financial statements of such Person delivered to the Bank.
"Subsidiary" means an entity of which shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such entity are at the time owned, or
the management of which is otherwise controlled, directly or indirectly,
through one or more intermediaries, or both, by any Person.
"Termination Date" means May 31, 1998, and any extension or extensions
thereof granted by the Bank in its sole discretion.
"Third-Party Loan" means a loan made by the Borrower, evidenced by a
Third-Party Note, guaranteed by an S.B.A. Authorization and Debenture
Guaranty, if applicable, and constituting (i) an unguaranteed first mortgage
loan under the S.B.A.'s section 504 program ("First Mortgage 504 Loan"), or
(ii) a fully-guaranteed second mortgage loan under the S.B.A.'s section 504
program, ("Second Mortgage 504 Loan"), or (ii) an unguaranteed first mortgage
loan made as a companion loan senior to a second mortgage loan under the
S.B.A.'s section 7(a) program ("Companion Loan").
"Third-Party Note" means a note, bond or other evidence of a
Third-Party Loan.
"Total Interest Expense" means, for any period with respect to any
Person, the aggregate amount of interest incurred during such period on all
Indebtedness of such Person outstanding during all or any part of such period,
including any fees incurred in connection with such Indebtedness.
"Total Liabilities" means, with respect to any Person, the aggregate
amount of all liabilities of such Person (including tax and other proper
accruals), computed in accordance with GAAP.
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"UCC" means the Uniform Commercial Code as adopted in the District of
Columbia, and all amendments thereto.
SECTION 1.02. ACCOUNTING TERMS. All accounting terms used herein
which are not otherwise expressly defined in this Agreement shall have the
meanings respectively given to them in accordance with GAAP in effect on the
date of this Agreement. Except as otherwise provided herein, all financial
computations made pursuant to this Agreement shall be made in accordance with
GAAP and all balance sheets and other financial statements shall be prepared in
accordance with GAAP. Except as otherwise provided herein, whenever reference
is made in any provision of this Agreement to a "Consolidated" balance sheet or
other financial statement or financial computation with respect to Allied, such
terms shall mean a balance sheet or other financial statement or financial
computation of Allied and its Subsidiaries on a consolidated basis.
ARTICLE 2
LOANS
SECTION 2.01. AMOUNT AND BORROWING PROCEDURE.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may, from time to time, until the Termination Date, request Loans from
the Bank as provided herein (and the Bank may, in its sole discretion, and with
no obligation so to do, agree to make any such Loan) in an aggregate principal
amount not to exceed at any one time outstanding the Maximum Amount. Up to the
Maximum Amount, the Borrower may borrow, repay without penalty and re-borrow
hereunder from the date of this Agreement until the Termination Date.
(b) The obligation of the Borrower to repay the Loans, together with
interest thereon as provided in the Note, shall be evidenced by the Note and
guaranteed by the Guaranty. The unpaid principal balance of the Note shall be
payable on the Termination Date together with all interest accrued and unpaid.
(c) Each Loan shall be repaid in full within one hundred fifty (150)
days after it is advanced or, if the related Eligible Third-Party Loan is a
construction loan, within one hundred fifty (150) days following the expiration
of the construction period, which construction period shall not exceed two
hundred seventy (270) days.
(d) The Borrower may terminate or reduce the credit facility provided
for in Section 2.01(a) of this Agreement in whole or in part by giving at least
15 Business Days' prior written notice of such termination or reduction to the
Bank. The termination or reduction of the credit facility provided for in
Section 2.01(a) of this Agreement shall not affect the rights of the Bank with
respect to any Obligations arising prior or subsequent to such termination or
reduction and the provisions of this Agreement shall remain in full force and
effect until the Obligations have been fully and completely paid and
discharged.
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(e) The Borrower and the Bank from time to time may agree to extend
the Termination Date or increase the amount of credit to be provided under this
Agreement, or both. During any such periods of extension, the remaining terms
and conditions of this Agreement shall remain in full force and effect, and the
Borrower shall execute and deliver any amendments or modifications to the Loan
Documents as the Bank may require in connection with any such extension or
increase. Nothing in this Section 2.01(e) shall obligate the Bank to grant
such extensions or to increase the amount of credit provided under this
Agreement.
SECTION 2.02. FACILITY FEE. The Borrower agrees to pay to the Bank in
consideration of the Loans, on the first Business Day of January, April, July
and October of each year, commencing with the date hereof, a facility fee of
two-tenths of one percent (0.20%) per annum of the sum of the aggregate
principal amount of the committed credit facility provided for in Section
2.01(a) of this Agreement.
SECTION 2.03. PAYMENTS AND COMPUTATIONS. All payments due under this
Agreement (including any payment or prepayment of principal, interest, fees and
other charges) or with respect to the Note or the Loans shall be made in lawful
money of the United States of America, in immediately available funds, to the
Bank at its office at 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, or at such
other place as the Bank may designate, and shall be applied first to accrued
fees, next to accrued late charges, next to accrued interest and then to
principal. If any payment of principal, interest or fees is due on a day which
is not Business Day, then the due date will be extended to the next succeeding
full Business Day and interest and fees will be payable with respect to the
extension. If any payment of principal, interest or fees is not made within
ten days of its due date, the Borrower agrees to pay to the Bank a late charge
equal to 5% of the amount of the payment. Upon the occurrence of an Event of
Default and during the continuation of such Event of Default, interest shall
accrue on the Loans at a per annum rate as provided in the Note for such event.
The Bank may, but shall not be obligated to, debit the amount of any payment
due under this Agreement to any deposit account of the Borrower maintained with
the Bank.
SECTION 2.04. LOAN ADVANCE PROCEDURES. The Borrower may at any time
or from time to time request a Loan provided that after such amount is loaned
the aggregate amount of all Loans shall not exceed the Maximum Amount. Such
request shall state the date in which the Loan is to be made which shall be not
less than one (1) Business Day after the receipt of such request by Bank and
shall satisfy the requirements of Section 3.02 (c) hereof. Such request may be
made orally, but must be confirmed in writing prior to the closing of such
Loan.
SECTION 2.05. USE OF PROCEEDS. The proceeds of the Loans hereunder
shall be used by the Borrower for funding an Eligible Third-Party Loan made by
Borrower essentially contemporaneously with such Loan, and for general
corporate purposes. The Borrower will not, directly or indirectly, use any
part of such proceeds for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which
violates, or is inconsistent with, Regulation X of such Board of Governors.
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ARTICLE 3
CONDITIONS PRECEDENT
The making of the Loans shall be subject to the following conditions:
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of
the Bank to make the initial Loan to the Borrower is subject to the condition
precedent that the Bank shall have received on or before the day of such Loan
each of the following, in form and substance satisfactory to the Bank and its
counsel:
(a) NOTE. The Note duly executed by the Borrower;
(b) GUARANTY. The Guaranty duly executed by Allied;
(c) EVIDENCE OF ALL CORPORATE ACTION BY THE BORROWER. Certified
copies of all corporate action taken by the Borrower, including resolutions of
its Board of Directors, authorizing the execution, delivery, and performance of
the Loan Documents to which it is a party and each other document to be
delivered pursuant to this Agreement;
(d) INCUMBENCY AND SIGNATURE CERTIFICATE OF THE BORROWER. A
certificate (dated as of the date of this Agreement) of the Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign the Loan Documents to which it is a party and the
other documents to be delivered by the Borrower under this Agreement; and
(e) OPINION OF COUNSEL FOR THE BORROWER. A favorable opinion of
counsel for the Borrower as to such matters as the Bank may reasonably request.
SECTION 3.02. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of
the Bank to make each Loan (including the initial Loan) shall be subject to the
further conditions precedent that on the date of such Loan:
(a) STATEMENTS TRUE. The following statements shall be true and
the Borrower's request for a Loan shall be deemed a statement by such Borrower
dated the date of such Loan, that:
(i) The representations and warranties contained in
Article 4 of this Agreement are correct on and as of
the date of such Loan as though made on and as of
such date; and
(ii) No Default or Event of Default has occurred and is
continuing, or would result from such Loan; and
(b) OTHER DOCUMENTS. The Bank shall have received such other
approvals, opinions, or documents as the Bank may reasonably request.
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(c) REQUEST FOR LOAN. Bank shall have received a request for a
Loan in form acceptable to Bank and such other documents as the Banks may
reasonably request to include but not be limited to:
(i) A description of the Third-Party Loan to be funded with
the proceeds of such Loan or a description of corporate use of
proceeds;
(ii) (A) The original of each Third-Party Note which is being
pledged at the time the Loan is made, (B) a certified copy of
the S.B.A. Authorization and Debenture Guaranty related to
each such Third-Party Note, if applicable, (C) such other
documents or instruments relating to such Eligible Third-Party
Loan as the Bank may reasonably request (provided, however,
that the failure of the Bank to request any document or
instrument at the time of or prior to the delivery of a Note
to it shall not limit its right to request such document or
instrument at a later time); and
(iii) A current Borrowing Base Application and Compliance
Certificate acceptable to the Bank and demonstrating that the
Loan, when advanced, will not cause the outstanding amount of
all Loans to exceed the Maximum Amount.
ARTICLE 4
COVENANTS, REPRESENTATIONS AND OTHER TERMS REGARDING COLLATERAL
SECTION 4.01. SECURITY INTEREST, PLEDGE. The Borrower grants to the
Bank, its successors and assigns, a security interest in the Collateral, all
additions and accessions thereto and replacements thereof, all proceeds and
products thereof, all books of account and records relating to the Collateral,
including all computer software relating thereto, pledges to the Bank each
Eligible Third-Party Loan and the Third-Party Note and all other instruments
related thereto, and assigns to the Bank any rights it may have to collateral
therefor or under any guarantee or commitment related thereto, all of which
shall secure the Obligations.
SECTION 4.02. DEFENSE OF COLLATERAL. The Borrower, at its expense,
will defend the Collateral against any claims or demands adverse to the Bank's
security interest and will promptly pay, when due, all taxes or assessments
levied against the Borrower on the Collateral.
SECTION 4.03. INFORMATION REGARDING COLLATERAL. The Borrower shall
provide the Bank such information as the Bank may from time to time reasonably
request with respect to the Collateral, including, without limitation,
statements describing, designating, identifying and evaluating all Collateral.
SECTION 4.04. PERFECTION OF SECURITY INTEREST. The Borrower shall
perform any and all steps in all relevant or appropriate jurisdictions as may
be necessary or reasonably
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requested by the Bank to perfect, maintain and protect the Bank's security
interest in the Collateral or which the Bank otherwise determines to be prudent
or advisable. The Borrower shall pay the taxes and costs of, or incidental to,
any recording or filing of any financing statements concerning the Collateral.
The Borrower agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement.
SECTION 4.05. LIMITATIONS ON OBLIGATIONS. It is expressly agreed by
the Borrower that, notwithstanding any other provision of this Agreement, the
Borrower shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by the Borrower in accordance with and
pursuant to the terms and provisions of each Eligible Third-Party Loan, and
S.B.A. Authorization and Debenture Guaranty. The Bank shall not have any
obligation or liability under any Eligible Third-Party Loan, and S.B.A.
Authorization and Debenture Guaranty or any other document, instrument or
agreement related to any Eligible Third-Party Loan by reason of or arising out
of this Agreement or the assignment of such Eligible Third-Party Loan to the
Bank or the receipt by the Bank of any payment relating to such Eligible
Third-Party Loan pursuant to this Agreement, nor shall the Bank be required or
obligated in any manner to perform or fulfill any of the obligations of the
Borrower under or pursuant to any Eligible Third-Party Loan, and S.B.A.
Authorization and Debenture Guaranty or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party under any such Eligible
Third-Party Loan, and S.B.A. Authorization and Debenture Guaranty or to present
or file any claim, or to take any action to collect or enforce any performance
or the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
SECTION 4.06. INDEMNIFICATION. In any suit, proceeding or action
brought by or against the Bank relating to the Collateral, the Borrower will
save, indemnify and keep the Bank harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim, recoupment
or reduction of liability whatsoever of any obligor thereunder, arising out of
a breach by the Borrower of any obligation thereunder or arising out of any
other agreement, Indebtedness or liability at any time owing to or in favor of
such obligor or its successors from the Borrower, and all such obligations of
the Borrower shall be and remain enforceable against and only against the
Borrower and shall not be enforceable against the Bank. The foregoing
obligation of the Borrower to indemnify the Bank shall not extend to any suit,
proceeding or action arising out of the Bank's gross negligence or willful
misconduct.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 5.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Borrower has no Subsidiaries. The Borrower (a) is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (b) has the
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corporate power and authority to own its assets and to transact the business in
which it is now engaged or in which it is proposed to be engaged; and (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each other jurisdiction in which such qualification is required, except in such
instances which would not, in any one case or in the aggregate, materially and
adversely affect the financial condition, operations, properties or business of
the Borrower. Allied is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation.
SECTION 5.02. CORPORATE POWER AND AUTHORITY. The execution, delivery
and performance by the Borrower of the Loan Documents to which each is a party
have been duly authorized by all necessary corporate action and do not and will
not (a) require any consent or approval of, or filing or registration with, any
governmental agency or authority or the stockholders of such corporation; (b)
contravene such corporation's charter or bylaws; (c) result in a breach of or
constitute a default under any agreement or instrument to which such
corporation is a party or by which it or its properties may be bound or
affected; (d) result in, or require, the creation or imposition of any lien
upon or with respect to any of the properties now owned or hereafter acquired
by such corporation; or (e) cause such corporation to be in default under any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award applicable to such corporation.
SECTION 5.03. LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be,
legal, valid and binding obligations of the Borrower or Allied, as the case may
be, enforceable against the Borrower or Allied, as the case may be, in
accordance with their respective terms.
SECTION 5.04. FINANCIAL STATEMENTS. The most recent financial
statements of the Borrower which have been furnished to the Bank in connection
with this Agreement are complete and correct and fairly present the financial
condition of the Borrower as at the dates of such statements. Since the dates
of such statements, there has been no material adverse change in the condition
(financial or otherwise), business or operations of the Borrower.
SECTION 5.05. LITIGATION. There is no pending or threatened action or
proceeding against or affecting the Borrower, before any court, governmental
agency or arbitrator, which may, in any one case or in the aggregate,
materially adversely affect the financial condition, operations, properties or
business of the Borrower.
SECTION 5.06. OTHER AGREEMENTS. The Borrower is not a party to any
indenture, loan, or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporate restriction, which has a
material adverse effect on the business, properties, assets, operations, or
conditions, financial or otherwise, of the Borrower, or the ability of the
Borrower to carry out its obligations under the Loan Documents to which it is a
party. The Borrower is not in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it
is a party, except in such instances which would not, in any one case or in the
aggregate, materially and adversely affect the financial condition, operations,
properties or business of the Borrower.
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SECTION 5.07. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The
Borrower has satisfied all judgments and is not in default with respect to any
judgment, writ, injunction, decree, rule, or regulation of any court,
arbitrator, or federal, state, municipal, or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign.
SECTION 5.08. OWNERSHIP AND LIENS. The Borrower has title to, or
valid leasehold interests in, all of its properties and assets, real and
personal, including the properties and assets and leasehold interests reflected
in the financial statements referred to in Section 5.04 (other than any
properties or assets disposed of in the ordinary course of business), and none
of the properties and assets owned by the Borrower and none of its leasehold
interests is subject to any Lien, except such as may be permitted pursuant to
Section 7.01 of this Agreement.
SECTION 5.09. OPERATION OF BUSINESS. The Borrower possesses all
licenses, permits, franchises, patents, copyrights, trademarks, and trade
names, or rights thereto, to conduct its respective businesses substantially as
now conducted and as presently proposed to be conducted, and is not in
violation of any valid rights of others with respect to any of the foregoing,
except in such instances which would not, in any one case or in the aggregate,
materially and adversely affect the financial condition, operations, properties
or business of the Borrower.
SECTION 5.10. TAXES. The Borrower has filed all tax returns (federal,
state, and local) required to be filed and has paid all taxes, assessments, and
governmental charges and levies thereon to be due, including interest and
penalties.
SECTION 5.11. ENVIRONMENT. The Borrower has not received notice of,
nor knows of, or suspects 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 businesses, operations, assets, equipment, property, leaseholds, or other
facilities.
ARTICLE 6
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that:
SECTION 6.01. MAINTENANCE OF EXISTENCE. The Borrower will preserve and
maintain, its corporate existence and good standing in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign corporation in
each jurisdiction in which such qualification is required, except if the
failure to so qualify would have, in any one case or in the aggregate, a
material and adverse effect on the financial condition, operations, properties
or business of the Borrower.
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SECTION 6.02. COMPLIANCE WITH RELATED AGREEMENTS. The Borrower shall
comply with the terms of each S.B.A. Authorization and Debenture Guaranty which
relates to an Eligible Third-Party Loan.
SECTION 6.03. RIGHT OF INSPECTION. At any reasonable time and from
time to time, the Borrower will permit the Bank or any agent or representative
of the Bank to audit and verify the Collateral, examine and make copies of and
abstracts from the records and books of account of, and visit the properties
of, the Borrower, and to discuss the affairs, finances and accounts of the
Borrower with any of its officers and directors and the Borrower's independent
accountants.
SECTION 6.04. MAINTENANCE OF RECORDS. The Borrower will keep adequate
records and books of account, in which complete entries will be made in
accordance with GAAP, reflecting all financial transactions of the Borrower.
The principal records and books of account, including these concerning the
Collateral, shall be kept at the chief executive office of the Borrower's
investment advisor at 0000 X Xxxxxx, X.X., 0xx Xxxxx, Xxxxxxxxxx, X.X. 00000.
The Borrower will not move such records and books of account or change such
chief executive office or the name under which it does business without (a)
giving the Bank at least 30 days' prior written notice, and (b) executing and
delivering financing statements satisfactory to the Bank prior to such move or
change.
SECTION 6.05. MAINTENANCE OF PROPERTIES. The Borrower will maintain,
keep, and preserve all of its properties (tangible and intangible) necessary or
useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 6.06. CONDUCT OF BUSINESS. The Borrower will continue to
engage in an efficient and economical manner in a business of the same general
type as conducted by it on the date of this Agreement.
SECTION 6.07. COMPLIANCE WITH LAWS. The Borrower will comply in all
respects with all applicable laws, rules, regulations and orders (including,
without limitation, the Employee Retirement Income Security Act, as amended
from time to time), such compliance to include, without limitation, paying,
before the same become delinquent, all duly imposed taxes, assessments and
governmental charges imposed upon it or upon its property.
SECTION 6.08. MAINTENANCE OF INSURANCE. The Borrower will maintain
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in the same or a similar business and similarly situated.
SECTION 6.09. REPORTING REQUIREMENTS. The Borrower will furnish to the
Bank:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and, in any
event, within 45 days after the end of each of the quarters of each fiscal year
of the Borrower (i) unaudited consolidated financial statements consisting of a
balance sheet of the Borrower,
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as of the end of such quarter and statements of operations, changes in net
assets, and cash flows of the Borrower for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, all in
reasonable detail and stating in comparative form the respective consolidated
figures for the corresponding date and period in the previous fiscal year and
all prepared in accordance with GAAP, and (ii) a certificate detailing a
calculation of each of the ratios and amounts referred to in the financial
covenants of the Borrower set forth in Article 8 hereof. Such financial
statements and certificate shall be certified to be accurate by the chief
financial officer of the Borrower (subject to year-end adjustments);
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and, in any
event, within 120 days after the end of each fiscal year of the Borrower
audited consolidated financial statements consisting of a balance sheet of the
Borrower as of the end of such fiscal year, statements of operations, changes
in net assets, and cash flows of the Borrower for such fiscal year, all in
reasonable detail and stating in comparative form the respective consolidated
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP. The consolidated financial statements shall
be accompanied by an opinion thereon acceptable to the Bank of an independent
certified public accounting firm selected by the Borrower and acceptable to the
Bank;
(c) QUARTERLY BORROWING BASE COMPLIANCE CERTIFICATE. As soon as
available and, in any event, within 45 days after the end of each of the
quarters of each fiscal year of the Borrower, a Borrowing Base Application and
Compliance Certificate as of the end of such quarter;
(d) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower by independent certified public accountants
in connection with an audit of the financial statements of the Borrower made by
such accountants;
(e) NOTICE OF LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower, which, if determined adversely to the Borrower
could have a material adverse effect on the financial condition, properties or
operations of the Borrower;
(f) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as possible and,
in any event, within 15 days after the occurrence of each Default and Event of
Default, a written notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the Borrower with
respect thereto;
(g) PROXY STATEMENTS, ETC. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports which
the Borrower sends to its stockholders, and copies of all regular, periodic and
special reports, and all material registration statements which the Borrower
files with the Securities and Exchange Commission or any governmental authority
which may be substituted therefor, or with any national securities exchange;
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(h) GENERAL INFORMATION. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any
Affiliate as the Bank may from time to time reasonably request;
(i) OPINION ON ASSIGNMENTS. In the event that the Bank determines in
good faith that it is necessary or advisable to obtain a legal opinion on the
effectiveness or priority of any assignment or transfer of a deed of trust or
mortgage securing any Eligible Third-Party Loan or the procedures necessary or
advisable to assure the effectiveness or priority of an assignment or transfer
of deeds of trust or mortgages in jurisdictions where the collateral for an
Eligible Third-Party Loan is located, Borrower shall obtain such an opinion
addressed to the Bank from counsel acceptable to Bank within 15 days of its
receipt of a request to do so.
SECTION 6.10. ENVIRONMENT. The Borrower will be and remain in
compliance with the provisions of all federal, state, and local environmental,
health, and safety laws, codes and ordinances, and all rules and regulations
issued thereunder.
SECTION 6.11. INVESTMENT ADVISER. Allied Capital Advisers, Inc. will
remain the investment adviser for Allied.
ARTICLE 7
NEGATIVE COVENANTS
The Borrower agrees that, without first obtaining the prior written consent of
the Bank:
SECTION 7.01. LIENS. The Borrower will not create, incur, assume or
permit to exist any Lien upon or with respect to any of its properties or
assets, now owned or hereafter acquired, except: (a) Liens in favor of the
Bank; (b) Liens which are incidental to the conduct of the business of the
Borrower, are not incurred in connection with the obtaining of credit and do
not materially impair the value or use of assets of the Borrower; (c) Liens on
equipment in existence on the date of this Agreement and disclosed in writing
to the Bank, and (d) Liens on promissory notes owned by Borrower which are
pledged as collateral for loans or advance of funds to the Borrower by the
pledge of such note contemporaneously with the loan by Borrower represented by
such note.
SECTION 7.02. INDEBTEDNESS. The Borrower will not create, incur,
assume or permit to exist any Indebtedness except (a) the Obligations; (b)
Indebtedness in existence on the date of this Agreement; (c) Indebtedness of
the Borrower subordinated to the Obligations on terms satisfactory to the Bank;
(d) ordinary trade accounts payable; and (e) Indebtedness of Borrower not to
exceed $40,000,000 secured by a pledge of a Promissory Note or other Lien which
is permitted by Section 7.01 (d) of this Agreement.
SECTION 7.03. MERGERS, ETC. The Borrower will not merge or consolidate
with any Person and will not acquire or form any Subsidiary.
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SECTION 7.04. SALE AND LEASEBACK. The Borrower will not sell, transfer
or otherwise dispose of any real or personal property to any Person and
thereafter, in connection therewith, directly or indirectly, lease back the
same or similar property.
SECTION 7.05. SALE OF ASSETS. The Borrower will not sell, lease,
assign, transfer or otherwise dispose of any of its now owned or hereafter
acquired assets except: (a) for assets disposed of in the ordinary course of
business and (b) the sale or other disposition of assets no longer used or
useful in the conduct of its business; provided that nothing herein shall be
construed as prohibiting the sale or other transfer of any promissory note held
by Borrower which is not at the time of such sale included in the Collateral.
SECTION 7.06. GUARANTIES, ETC. The Borrower will not assume,
guarantee, endorse or otherwise be or become directly or contingently
responsible or liable (including, but not limited to, any liability arising out
of any agreement to purchase any obligation, stock, assets, goods or services,
or to supply or advance any funds, assets, goods or services, or to maintain or
cause any Person to maintain a minimum working capital or net worth or
otherwise to assure the creditors of any Person against loss) for obligations
of any Person, or permit any such guaranties or liabilities to exist, except
guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business.
SECTION 7.07. ACQUISITIONS. The Borrower will not purchase or acquire
(a) all or substantially all of the assets of any Person, or (b) any capital
stock of or ownership interest in any other Person.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES. The Borrower will not
enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's business and upon fair and reasonable terms no less favorable to
the Borrower than would be applicable in a comparable arm's-length transaction
with a Person not an Affiliate (provided that the investment advisory agreement
between Allied and Allied Capital Advisers, Inc. shall not be deemed to violate
this provision).
ARTICLE 8
FINANCIAL COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement:
SECTION 8.01. MAXIMUM LEVERAGE RATIOS. Borrower will cause Allied to
maintain at all times a ratio of its Consolidated Total Liabilities to its
Consolidated Shareholders' Equity of not greater than 1.75 to 1. Borrower will
maintain at all times a ratio of its Total Liabilities to its Shareholders'
Equity of not greater than 1 to 1.
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SECTION 8.02. CONSOLIDATED MINIMUM INTEREST COVERAGE RATIO. Borrower
will cause Allied to maintain at all times a ratio of its Consolidated Adjusted
EBITDA to its Consolidated Total Interest Expense of not less than 1.5 to 1 for
the previous four quarters as of the end of each calendar quarter.
SECTION 8.03. CONSOLIDATED PRO FORMA DEBT SERVICE RATIO. Borrower
will cause Allied to maintain at all times a ratio of its Consolidated Adjusted
EBITDA for the previous four quarters to its Consolidated Pro Forma Debt
Service of not less than 1.25 to 1 as of the end of each calendar quarter.
ARTICLE 9
DEFAULT
SECTION 9.01. EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default under this Agreement:
(a) Failure of the Borrower to pay any Obligation to the Bank,
including, without limitation, the principal of or interest on the Note or any
of the Loans, when the same shall become due and payable, whether at maturity,
as a result of the Bank's demand for payment or otherwise, and such failure
shall continue for a period of 5 days; or
(b) If the Borrower refuses to permit the Bank to inspect, examine,
verify or audit the Collateral in accordance with the provisions of this
Agreement; or
(c) Failure of the Borrower to perform or observe any covenant set
forth in this Agreement (except any such failure resulting in the occurrence of
another Event of Default described in this section), or to perform or observe
any other term, condition, covenant, warranty, agreement or other provision
contained in this Agreement within 30 days after receipt of notice from the
Bank specifying such failure; or
(d) Discovery that any representation or warranty by the Borrower in
this Agreement or any statement or representation made in any certificate,
report or opinion delivered pursuant to this Agreement or in connection with
any Loan under this Agreement was materially untrue in any material respect
provided, however, the Bank shall take no action based on a default under this
paragraph unless the Borrower shall have been provided a reasonable opportunity
to render such misrepresentation or untruth immaterial; or
(e) If, as a result of default, any other obligation of the Borrower
or Allied on a consolidated basis for the payment of any debt in excess of
$500,000 becomes or is declared to be due and payable prior to the expressed
maturity thereof, unless and to the extent that the declaration is being
contested in good faith in a court of appropriate jurisdiction; or
(f) The Borrower makes an assignment for the benefit of creditors,
files a petition in bankruptcy, petitions or applies to any tribunal for any
receiver or any trustee of the Borrower
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or any substantial part of its property, or commences any proceeding relating
to the Borrower under any reorganization, arrangement, readjustments of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or
(g) If, within 30 days after the filing of a bankruptcy petition or
the commencement of any proceeding against the Borrower seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the proceeding shall not have been dismissed, or, if, within 30
days after the appointment, without the consent or acquiescence of the
Borrower, of any trustee, receiver or liquidator of the Borrower or of all or
any substantial part of the properties of the Borrower, the appointment shall
not have been vacated; or
(h) Any judgment against the Borrower or Allied on a consolidated
basis in excess of $250,000 or any attachment in excess of $250,000 against any
property of the Borrower or Allied on a consolidated basis that remains unpaid,
undischarged, unbonded or undismissed for a period of 30 days, unless and to
the extent that the judgment or attachment is appealed in good faith in a court
of higher jurisdiction and the appeal remains pending; or
(i) The occurrence of an event of default (and the expiration of any
applicable cure period) under any other Loan Document.
SECTION 9.02. REMEDIES UPON DEFAULT. Upon the occurrence of an Event
of Default, the following provisions shall be applicable:
(a) The Bank may, at its option, terminate its obligation to make
Loans under this Agreement and declare all Obligations, whether incurred prior
to, contemporaneous with or subsequent to the date of this Agreement, and
whether represented in writing or otherwise, immediately due and payable and
may exercise all of it rights and remedies against the Borrower and any
Collateral.
(b) The Bank may foreclose its lien and security interest in the
Collateral in any way permitted by law, and shall have, without limitation, the
remedies of a secured party under the UCC. The Bank may enter the Borrower's
premises without legal process but upon prior notice during business hours and
without incurring liability to the Borrower and remove the Collateral to such
place or places as the Bank may deem advisable, or the Bank may require the
Borrower to assemble the collateral and make the Collateral available to the
Bank at a convenient place and, with or without having the Collateral at the
time or place of sale, the Bank may sell or otherwise dispose of all or any
part of the Collateral whether in its then condition or after further
preparation or processing, either at public or private sale or at any broker's
board, in lots or in bulk, for cash or for credit, at any time or place, in one
or more sales and upon such terms and conditions as the Bank may elect. The
Bank shall give not less than 30 Business Days' prior written notice to the
Borrower of the time and place of any public sale of the Collateral or the time
after which the Collateral may be sold in a private sale, which the Borrower
agrees constitutes commercially reasonable notice. At any such sale the Bank
may be the purchaser, subject to the applicable provisions of the UCC.
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(c) Communicate with and notify any party obligated under an Eligible
Third-Party Loan of Borrower's assignments hereunder, and note any such
assignment on Borrower's records; and
(d) Take over the exclusive right to collect the Collateral at the
sole expense of the Borrower, without any obligation to preserve rights against
prior parties. For any acts done or not done incident to such collection or
liquidation, the Bank shall not be liable in any manner. The Bank shall have
the right to settle, compromise, or adjust Collateral and the claims or rights
of Borrower thereunder and accept return of the real estate involved, and in
turn sell and dispose of all said real estate without notice to or approval of
Borrower. The Bank may employ agents and attorneys to collect or liquidate any
Collateral, and the Bank shall not be liable for such Collateral or defaults of
any such agents and attorneys; and
(e) Open any mail addressed to Borrower in connection with any
Collateral or any Loan hereunder, and as attorney in fact for Borrower, sign
the Borrower's name to any receipts, checks, notes, agreements, assignments or
other instruments or letters, in order to collect, sell or liquidate the
Collateral; and
(f) The proceeds from any sale of the Collateral by the Bank shall
first be applied to any costs and expenses in securing possession of the
Collateral and to any expenses in connection with the sale. The net proceeds
will be applied toward the payment of the Obligations. Application of the net
proceeds as to particular Obligations or as to principal or interest shall be
in the Bank's absolute discretion. Any deficiency will be paid to the Bank
forthwith upon demand, and any surplus will be paid to the Borrower if the
Borrower is not otherwise indebted to the Bank.
(g) To the extent that the Obligations are now or hereafter secured by
property other than the Collateral described herein or by the guarantee,
endorsement or property of any other Person, the Bank shall have the right to
proceed against such other property, guarantee or endorsement upon the
occurrence of an Event of Default, and the Bank shall have the right, in its
sole discretion, to determine which rights, security, liens, security interests
or remedies the Bank shall at any time pursue, relinquish, subordinate, modify
or take any other action with respect thereto, without in any way modifying or
affecting any of them or any of the Bank's rights hereunder.
(h) The Bank is hereby authorized at any time or from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower), to setoff and apply any deposit (general or special, time or demand,
provisional or final) at any time held, including any certificate of deposit,
and other indebtedness at any time owed by the Bank, whether or not any such
deposit or indebtedness is then due, to or for the credit of account of the
Borrower against any and all of the Obligations.
(i) THE BORROWER, HAVING KNOWLEDGE THAT IT MAY BE ENTITLED TO NOTICE
AND A HEARING PRIOR TO REPOSSESSION OF THE COLLATERAL, WAIVES ANY RIGHT THAT IT
MAY HAVE UNDER EXISTING OR FUTURE LAW TO ANY HEARING
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THAT MAY BE HELD RELATING TO FORECLOSURE OR ANY OTHER SUCH ACTS, AND TO ANY
NOTICE THAT MAY BE REQUIRED TO BE GIVEN BY THE Bank PRIOR TO SUCH HEARING. THE
BORROWER EXPRESSLY WAIVES ITS RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(j) The Bank may itself perform or comply, or otherwise cause
performance or compliance, with the obligations of the Borrower contained in
this Agreement, including, without limitation, the obligations of the Borrower
to defend and insure the Collateral. The reasonable expenses of the Bank
incurred in connection with such performance or compliance shall be payable by
the Borrower to the Bank on demand and shall constitute Obligations.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. COLLECTION COSTS. The Borrower shall pay all of the
reasonable costs and expenses incurred by the Bank in connection with the
enforcement of this Agreement and the other Loan Documents, including, without
limitation, reasonable attorneys' fees and expenses.
SECTION 10.02. MODIFICATION AND WAIVER. Except for the other documents
expressly referred to in this Agreement, this Agreement contains the entire
agreement between the parties and supersedes all prior agreements between the
Bank and the Borrower concerning the line of credit and the Loans hereunder.
No modification or waiver of any provision of the Note or this Agreement and no
consent by the Bank to any departure therefrom by the Borrower shall be
effective unless such modification or waiver shall be in writing and signed by
an officer of the Bank with a title of vice president or any higher office, and
the same shall then be effective only for the period and on the conditions and
for the specific instances and purposes specified in such writing. No notice
to or demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances. No
failure or delay by the Bank in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies of the Bank
contained in this Agreement are cumulative and not exclusive of any rights or
remedies otherwise provided by law.
SECTION 10.03. NOTICES. All notices, requests, demands or other
communications provided for in this Agreement shall be in writing and shall be
delivered by hand, sent prepaid by Federal Express (or a comparable overnight
delivery service) or sent by the United States mail, certified, postage
prepaid, return receipt requested, to the Bank, at 000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000 Attention: Commercial Lending, or to the Borrower at
0000 X Xxxxxx, X.X., 0xx Xxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Chief
Financial Officer. Any notice, request, demand or other communication
delivered or sent in the foregoing manner
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shall be deemed given or made (as the case may be) upon the earliest of (a) the
date it is actually received, (b) on the business day after the day on which it
is properly delivered to Federal Express (or a comparable overnight delivery
service), or (c) on the third business day after the day on which it is
deposited in the United States mail. The Borrower or the Bank may change its
address by notifying the other party of the new address in any manner permitted
by this Section.
SECTION 10.04. CAPTIONS. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
SECTION 10.05. SURVIVAL OF AGREEMENTS. All agreements, representations
and warranties made herein shall survive the delivery of this Agreement and the
making and renewal of the Loans hereunder.
SECTION 10.06. FEES AND EXPENSES. Whether or not any Loans are made
hereunder, the Borrower shall pay on demand all reasonable out-of-pocket costs
and expenses incurred by the Bank in connection with the preparation,
negotiation, execution, delivery, filing, recording and administration of any
of the documents and instruments executed or delivered in connection herewith,
including, without limitation, the reasonable fees and expenses of counsel to
the Bank (including, the reasonable fees of salaried counsel employed by the
Bank or its affiliates), and local counsel who may be retained by the Bank,
with respect to such documents and any amendments thereof or of this Agreement
and any amendment hereof and with respect to advising the Bank as to its rights
and responsibilities hereunder or thereunder, provided, however, that the Bank
shall use its reasonable efforts to notify the Borrower prior to incurring any
costs or expenses chargeable to Borrower under this section, unless the Bank
shall have determined in good faith, but at its sole and unfettered discretion,
that a delay or such notice may impair or adversely impact the rights,
remedies, claims or other interest of the Bank or the collectibility of the
Loans.
SECTION 10.07. USE OF DEFINED TERMS. All terms defined in this
Agreement shall have the defined meanings when used in certificates, reports or
other documents made or delivered pursuant to this Agreement, unless the
context shall otherwise require.
SECTION 10.08. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and bind the respective parties hereto and their successors and
assigns; provided, however, that the Borrower may not assign its rights
hereunder without the prior written consent of the Bank.
SECTION 10.09. INTERPRETATION. This Agreement and the rights and
obligations of the parties hereunder shall be construed and interpreted in
accordance with the laws of the District of Columbia, without reference to
conflicts of law principles.
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IN WITNESS WHEREOF, the Borrower and the Bank have caused this
Agreement to be signed by their duly authorized representatives all as of the
day and year first above written.
ALLIED CAPITAL CREDIT CORPORATION XXXXX BANK N.A.
a Maryland corporation a national banking association
By: /s/ Xxxxxxxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxx
----------------------------- ----------------------------------
Name: Xxxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
Title: President ----------------------------------
Title: Vice President
----------------------------------
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EXHIBIT "A"
BORROWING BASE APPLICATION AND COMPLIANCE CERTIFICATE
TO Xxxxx Bank N.A.
FROM: Allied Capital Credit Corporation ("Borrower")
DATE: , 199
-------------------------- ---
RE: Line of Credit, Security and Pledge Agreement
This is a (check one)
( ) Borrowing application delivered to you pursuant to
----- the above Agreement as a condition precedent to an
advance to Borrower under the Agreement
( ) Borrowing compliance certificate delivered to you
----- pursuant to the Agreement as a certification as of
the quarter ending _______________________________.
All capitalized terms used herein shall have the meaning as defined in the
Agreement. All Third-Party Loans referred to below are Eligible Third-Party
Loans.
1. First Mortgage 504 Loans (non-construction)
A. Aggregate principal amount $
----------------------
B. Advance rate 80%
C. Available Loan(s) against above $
----------------------
II. Second Mortgage 504 Loans (non-construction)
A. Aggregate principal amount $
----------------------
B. Advance Rate 90%
C. Available Loan(s) against above $
----------------------
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III. Companion Loans (non-construction)
A. Aggregate principal amount $
------------
B. Advance Rate 80%
C. Available Loan(s) against above $
------------
III. Construction Loans
A. Aggregate principal amount $
------------
B. Advance Rate 50%
C. Available Loan(s) against above $
(not to exceed $7,500,000) ------------
IV. Total Availability (sum of above) $
------------
Total outstanding amount of Loans $
------------
Excess availability or (overdraw) $
------------
Loan advance request (use for
Loan application only) $
------------
The undersigned hereby certifies that as of the date hereof, the
representations and warranties contained in the Agreement or in any other Loan
Document or otherwise made in writing in connection therewith or herewith are
true and correct in all material respects, and no Default or Event of Default
has occurred and is continuing. If this instrument is a Loan application, the
undersigned, further certifies that all conditions precedent to the advance
being requested hereby have been satisfied.
Allied Capital Credit Corporation, a Maryland corporation
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
23
