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REVOLVING CREDIT AGREEMENT
between
FIRSTPLUS FINANCIAL, INC.
and
WORKING CAPITAL MANAGEMENT CO. L.P.
Dated as of June 16, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Definitions 1
SECTION 1.2. Accounting Terms 6
SECTION 1.3. Computation of Time Periods 6
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES; SECURITY INTEREST
SECTION 2.1. The Commitment 6
SECTION 2.2. The Advances 7
SECTION 2.3. Optional Prepayments 9
SECTION 2.4. The Revolving Note 9
SECTION 2.5. Facility Fee 9
SECTION 2.6. Security Interest 9
ARTICLE III
CHANGE IN CIRCUMSTANCES
SECTION 3.1. Increased Costs 10
ARTICLE IV
PAYMENTS
SECTION 4.1. Manner and Status of Payments 11
SECTION 4.2. Application of Payments 11
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.1. Conditions Precedent to Initial Advance 12
SECTION 5.2. Continuing Condition, Etc 12
SECTION 5.3. Participations 13
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of the Borrower 13
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.1. Affirmative Covenants 16
SECTION 7.2. Negative Covenants 17
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default 18
SECTION 8.2. Rights of Lender Following Event of Default 19
SECTION 8.3. Lender Appointed Borrower's Attorney-In-Fact 21
SECTION 8.4. Borrower's Liability for Consequential Damages 21
SECTION 8.5. Indemnity 21
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Successors and Assigns 21
SECTION 9.2. Amendment; Waiver 21
SECTION 9.3. Notice, Etc 22
SECTION 9.4. Counterparts 22
SECTION 9.5. Headings 22
SECTION 9.6. Governing Law 22
SECTION 9.7. Right to Examine Borrower Records 22
SECTION 9.8. Certain Matters Regarding the Issuer 23
SECTION 9.9. No Recourse - Lender 23
SECTION 9.10. No Proceedings 23
This REVOLVING CREDIT AGREEMENT is made as of the 16th day of June,
1997, between FIRSTPLUS FINANCIAL, INC., a Texas corporation (the
"BORROWER"), and Working Capital Management Co. L.P., a California limited
partnership (the "LENDER").
WITNESSETH:
WHEREAS, the Borrower has requested the Lender to extend to the
Borrower a revolving credit facility, and the Lender has agreed to do so
subject to the terms and conditions set forth herein.
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Sale and
Servicing Agreement. As used in this Agreement:
"ADDITIONAL ADVANCE INTEREST ACCRUAL PERIOD" means with respect to
a Payment Date and each Advance made on or after the second preceding
Determination Date and prior to the Payment Date immediately following such
second preceding Determination Date, the period from the date such Advance
was made to the day immediately preceding such Payment Date.
"ADDITIONAL DAILY ADVANCE INTEREST ACCRUAL AMOUNT" means with
respect to a given Payment Date and each Advance made on or after the second
preceding Determination Date and prior to the Payment Date immediately
following such second preceding Determination Date and a given day in the
related Additional Advance Interest Accrual Period, the product of (i) 1/360,
(ii) LIBOR (as determined by the Lender in the manner specified for the
Indenture Trustee in the Sale and Servicing Agreement) as of two London
Business Days prior to the date of such Advance plus the Advance Percentage
and (iii) the amount of such outstanding Advance as of the end of such day.
"ADVANCE" means each advance by the Lender to the Borrower pursuant
to Sections 2.1 and 2.2.
"ADVANCE PERCENTAGE" shall have the meaning set forth in the Side
Letter.
"AGREEMENT" means this agreement, as amended, supplemented or
otherwise modified from time to time.
"AVERAGE OUTSTANDING ADVANCES" means, for any period, the sum of
all Advances outstanding as of each day in such period divided by the number
of days in such period.
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"COLLATERAL" means (i) the Trust Share and any other securities,
obligations and other property (including cash) which are delivered to and
held by Lender hereunder, (ii) the Trust Estate Liquidation Account and all
amounts on deposit therein and (iii) all collections, income, distributions
and claims in respect of and all proceeds of (i) and (ii).
"COMMITMENT" means, as of any date of determination, the obligation
of the Lender to make Advances to the Borrower in an aggregate principal
amount at any one time outstanding not to exceed the Commitment Amount.
"COMMITMENT AMOUNT" means, at any time, an amount equal to the
lesser of (a) $20,000,000, (b) (1) the Pool Principal Balance (as increased
by the amount set forth in the following sentence) as of such date less the
Pool Reduction Amount as of the preceding Determination Date multiplied by
(2) the lesser of (i) then-applicable Overcollateralization Base Percent
Requirement and (ii) 10%, (c) (1) the Pool Principal Balance as of such date
less (2) the Pool Reduction Amount as of the preceding Determination Date
plus (3) the Reserve Fund Balance as of such date minus (4) the Adjusted
Aggregate Note Principal Balance as of such date, and (d) the Ratio Amount.
For all computations of Commitment Amount during the period from and
including a Determination Date to but excluding a Payment Date, the Pool
Principal Balance indicated in clause (b) shall be increased by the amount on
deposit in the Collection Account respect of collections of principal on the
Home Loans during the previous Due Period.
"COMMITMENT TERMINATION DATE" means the earlier of (a) the Business
Day prior to the Maturity Date and (b) the termination of the Commitment
pursuant to Section 8.2.
"CONSOLIDATED DEBT" means at any date the Debt (exclusive of
subordinated debt) of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis as of such date.
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholder's equity of the Borrower and its Consolidated Subsidiaries
determined as of such date.
"CONSOLIDATED SUBSIDIARIES" means with respect to any Person, all
Subsidiaries which are consolidated with such Person in accordance with GAAP,
exclusive of all special purpose entities formed solely to issue or
participate in the issuance of non-recourse obligations, PROVIDED THAT (i)
all such obligations are fully secured by financial assets pledged by such
entity and (ii) such pledged financial assets are currently sufficient to pay
in full the obligations secured thereby. Such entities shall include,
without limitation, FIRSTPLUS INVESTMENT CORPORATION and FIRSTPLUS FUNDING
TRUST.
"DEBT" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all obligations of such Person as
lessee which are capitalized in accordance with GAAP, (v) all indebtedness
secured by a Lien on any asset of such Person,
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other than indebtedness arising from the ordinary course of business of such
Person, whether or not such indebtedness is otherwise an obligation of such
Person, and (vi) all indebtedness of others guaranteed by such Person.
"DOLLARS" or "$" means the lawful currency of the United States of
America and, in relation to any amount to be advanced or paid hereunder,
funds having same day value.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1.
"FACILITY FEE" means with respect to any Payment Date, the amount
set forth in the Side Letter.
"FFG" means FIRSTPLUS FINANCIAL GROUP, INC., a Nevada Corporation
and the parent of the Borrower, along with its successors in interest.
"GAAP" means generally accepted accounting principles, as in effect
in the United States as of the applicable time.
"GENERAL DEFAULT RATE" means, with respect to any Payment Date, the
Default Rate as determined with respect to the General Loan Portfolio.
"GENERAL DELINQUENCY RATE (60 DAY)" means, with respect to any
Payment Date, the Delinquency Rate (60 Day) as determined with respect to the
General Loan Portfolio.
"GENERAL LOAN PORTFOLIO" means, collectively, as of any date of
determination, all loans secured by an interest in real property which loans
(i) were originated by the Borrower at any time and (ii) are serviced by the
Borrower as of such date of determination; PROVIDED, HOWEVER, that the
General Loan Portfolio shall not include any Title I Mortgage Loans.
"IBJ" means the Industrial Bank of Japan, Limited, New York Branch.
"LENDER" has the meaning assigned to such term in the Recitals
hereof.
"LIEN" means, with respect to any asset, (a) any mortgage, lien,
pledge, charge, security interest, hypothecation, option or encumbrance of
any kind in respect of such asset or (b) the interest of a vendor or lessor
under any conditional sale agreement, financing lease or other title
retention agreement relating to such asset.
"MANDATORY PREPAYMENT EVENT" means any of the following:
(a) if, as of any Business Day, the weighted average coupon on the
Home Loans minus the Weighted Average Note/Loan Rate on the outstanding
Advances is ever less than 5%;
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(b) if there occurs a Conversion Event or an event which with the
giving of notice could become a Conversion Event as defined in the Sale and
Servicing Agreement;
(c) if there occurs an "event of default" or an event which with
the giving of notice could become an "event of default" as defined in the
Sale and Servicing Agreement or the Indenture;
(d) if for any consecutive three month period the average General
Delinquency Rate (60 Day) for such period exceeds 2.50%;
(e) if for any consecutive three month period the average General
Default Rate for such period exceeds 2.50%; and
(f) if, on any day, the Consolidated Net Worth of the Borrower
fails to equal or exceed $130,000,000.
"MATURITY DATE" means the Payment Date which occurs in June 1998.
"MAXIMUM COMMITMENT AMOUNT" means $200,000,000.
"NOTE PURCHASE AGREEMENT" means that certain Note Purchase
Agreement, dated as of June 16, 1997, among FIRSTPLUS FUNDING TRUST, the
Borrower and the Lender.
"OFFERING MEMORANDUM" shall have the meaning provided in the Note
Purchase Agreement.
"PLACEMENT AGREEMENT" means that certain Placement Agreement dated
as of June 16, 1997 among FIRSTPLUS FUNDING TRUST, the Borrower and IBJ.
"POOL REDUCTION AMOUNT" means, with respect to each date of
determination, the sum of the Principal Balances of each Home Loan, which as
of the immediately preceding Determination Date (unless such date of
determination is a Determination Date, in which case such sum will be
calculated as of such Determination Date), (i) was a Defaulted Home Loan,
(ii) was 60 or more days delinquent or (iii) with respect to which all or any
portion of a Monthly Payment was 30 or more days past due (provided, however,
that (x) the component of the Pool Reduction Amount comprised of Home Loans
referenced in this clause (iii) shall not include Home Loans included in
clauses (i) and (ii) and (y) shall only be included to the extent that the
Principal Balance of such Home Loans exceed 2.00% of the Pool Principal
Balance as of such Determination Date.
"PRIOR PAYMENT DATE DAILY ADVANCE INTEREST ACCRUAL AMOUNT" means,
with respect to a given day in the related Regular Interest Accrual Period
and the related Prior Payment Date Outstanding Advance, an amount equal to
the product of (i) 1/360, (ii) LIBOR (as determined by the Lender in the
manner specified for the Indenture Trustee in the Sale and Servicing
Agreement) as of two London Business Days prior to the commencement of such
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Regular Interest Accrual Period plus the Advance Percentage and (iii) the
amount of such outstanding Advance as of the end of such day.
"PRIOR PAYMENT DATE OUTSTANDING ADVANCE" means, with respect to a
given day in a Regular Interest Accrual Period, the outstanding Advances as
of the end of such day, reduced by any additional Advances which were made
during the period from and including the Determination Date immediately
preceding the commencement of such Regular Interest Accrual Period through
the Payment Date immediately following such Determination Date.
"POTENTIAL EVENT OF DEFAULT" shall mean an event which with the
lapse of time or the giving of notice, or both, would constitute an Event of
Default.
"RATIO AMOUNT" means, as of any date of determination, the
Aggregate Note Principal Balance as of such date divided by nine.
"REVOLVING NOTE" shall have the meaning provided in Section 2.4
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of June 1, 1997 among FIRSTPLUS FUNDING TRUST, as Issuer
and FIRSTPLUS FINANCIAL, INC., as Seller and Servicer and First Bank National
Association, as Indenture Trustee, as the same may be amended, modified or
supplemented.
"SECURED OBLIGATIONS" means all amounts due or that may become due
from Borrower to Lender under this Agreement.
"SIDE LETTER" means that certain letter agreement between the
Borrower and the Lender dated as of the date hereof and which sets forth the
Advance Percentage and the Facility Fee.
"SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower.
"TITLE I MORTGAGE LOAN" means a home improvement loan originated
pursuant to the rules and regulations promulgated under the Title I Program
and insured by the Federal Housing Administration or any successor in
interest.
"TRANSACTION DOCUMENTS" means the Custodial Agreement, the
Declaration of Trust of the Issuer, the Guaranty Policy, the Indenture, the
Insurance Agreement, the Note Purchase Agreement, the Notes, the Offering
Memorandum, the Placement Agreement, the Sale and Servicing Agreement and
this Revolving Credit Agreement.
"TRUST ESTATE LIQUIDATION ACCOUNT" means that certain demand
deposit account maintained at First Bank, National Association entitled
"Trust Estate Liquidation Account,
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Working Capital Management Co. L.P.", established at the direction of the
Lender with withdrawal rights solely held by the Lender.
"TRUST SHARE" means the share representing 100% of the beneficial
interest in the Issuer owned by the Borrower to be delivered as security for it
obligations hereunder.
"UNRESTRICTED CASH" shall mean, with respect to the Borrower and its
Consolidated Subsidiaries, all cash or cash equivalents of the Borrower and its
Consolidated Subsidiaries which are included as current assets on the most
recent consolidated financial statements of the Borrower delivered to the
Lender pursuant to Section 7.1(a) hereof, and which are not subject to any
security interest or any restriction (whether by agreement, regulation or
otherwise) as to use or availability.
"WEIGHTED AVERAGE NOTE/LOAN RATE" shall mean, on each Business Day, a
rate equal to (A) the sum of (i) the product of a) the Aggregate Note Principal
Balance as of such Business Day and b) the historical closing yield set forth
on the Bloomberg Screen "GT5 Govt. HP", under "Generic Government Rate," (as
determined by the Lender and as evidenced by copies of such Bloomberg Screen)
plus the ABS Yield Spread as of such date and (ii) the product of a) the
aggregate Advances outstanding hereunder and b) LIBOR (as determined by the
Lender in the manner specified for the Indenture Trustee in the Sale and
Servicing Agreement) as of such Business Day plus the Advance Percentage,
divided by (B) the sum of the Aggregate Note Principal Balances as of such
Business Day beneficially owned by the Lender or any commercial paper issuer
sponsored by the Lender and the aggregate Advances outstanding hereunder as of
such Business Day.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms used in this
Agreement and not specifically defined herein shall be construed in accordance
with GAAP.
SECTION 1.3. COMPUTATION OF TIME PERIODS. In this Agreement, unless
otherwise specified, in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES; SECURITY INTEREST
SECTION 2.1. THE COMMITMENT. The Lender agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrower from time to
time during the period from the date hereof to and including the Commitment
Termination Date in an aggregate principal amount, when aggregated with the
aggregate principal amount of all Advances outstanding at such time, not to
exceed the Commitment Amount as in effect from time to time. At no time will
the Lender be obligated to make an Advance if after giving effect to such
Advance, the sum of (i) the Note Principal Balances beneficially owned by the
Lender and IBJ and any commercial paper issuer sponsored by the Lender or IBJ
and (ii) the
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aggregate Advances outstanding hereunder (after giving effect to such
proposed Advance) would exceed the Maximum Commitment Amount. Within the
limits of the Commitment Amount, the Borrower may borrow, repay and reborrow,
all in accordance with the terms and conditions of this Agreement.
SECTION 2.2. THE ADVANCES.
(a) THE ADVANCES. An Advance may only be made (i) on any Advance
Date, (ii) on any date on which the Issuer decreases the Minimum Spread Percent
and (iii) on any Payment Date, provided that for each Advance:
1. The Borrower shall have delivered to the Lender a written
request for such Advance no less than three Business Days prior to
the date of such requested Advance. Such request shall specify (x)
the requested date of such Advance, (y) the accounts to which the
requested Advance is to be deposited and (z) the requested amount of
such Advance;
2. For each Advance not made on a Payment Date that is an amount less
than $1,000,000, the Borrower shall pay an additional amount in
respect of interest as specified in Section 2.2(b)(2) below; and
3. The conditions set forth in Article V are fulfilled and the
obligations of the Lender shall not have been terminated pursuant to
Section 8.2.
If each of the above conditions are fulfilled, the Lender will on the
requested date make an Advance available to the Borrower no later than 3:00
p.m. (New York City time) on such requested date by depositing the Advance to
the account designated by the Borrower.
(b) PAYMENT OF INTEREST, REPAYMENT OF PRINCIPAL.
1. The Borrower shall pay interest on each Payment Date prior to
the Maturity Date and on the Maturity Date in an amount equal to the
sum of (I) for each Advance made on or after the second preceding
Determination Date and prior to the Payment Date immediately
following such second preceding Determination Date, the sum of the
related Additional Daily Advance Interest Accrual Amounts for each
day in the Additional Advance Interest Accrual Period and (II) the
sum of the related Prior Payment Date Daily Advance Interest Accrual
Amounts for each day in the related Regular Interest Accrual Period;
PROVIDED; that, with respect to Advances outstanding upon and after
the occurrence of an Event of Default, the Borrower shall pay
interest at the rates set forth above plus 2.00%. The amount of any
such interest payment shall be reduced by the portion of interest
actually remitted with respect to any payment made pursuant to
Sections 2.2(c) or 2.3(b).
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2. If the amount of any such Advance is less than $1,000,000, the
amount payable on the next Payment Date in respect to interest shall
be increased by an amount equal to the product of (I) (x) LIBOR
determined for such Advance (in the manner specified in the
definition of Additional Daily Advance Interest Accrual Amount) minus
(y) the Reinvestment Rate as of the date of such Advance (as
determined by the Lender in the manner specified for the Indenture
Trustee in the Sale and Servicing Agreement) and (II) (x) $1,000,000
less (y) the amount of such Advance and (III) (x) the number of days
in the period commencing on the date such Advance was made to and
including the next Payment Date divided by (y) 360. The amount of
such interest increase pursuant to this Section 2.2(b)(2) shall in no
event be less than $1,000.
(c) MANDATORY PRINCIPAL PAYMENTS.
The Borrower shall make principal payments at such times and in such amounts as
follows:
(i) The Borrower shall repay the principal amount of each Advance, plus any
accrued and unpaid interest, on the Maturity Date.
(ii) On any Business Day on which the sum of (i) the Note Principal Balances
beneficially owned by the Lender and IBJ and any commercial paper issuer
sponsored by the Lender or by IBJ and (ii) the aggregate Advances outstanding
hereunder as of such Business Day exceeds the Maximum Commitment Amount, the
Borrower shall pay such excess. Any such payments shall include accrued and
unpaid interest on the prepaid amount to and including the date of such
prepayment.
(iii) The Borrower shall repay the principal amount of each Advance, plus any
accrued and unpaid interest, within five Business Days after the occurrence of
a Mandatory Prepayment Event.
(iv) On any Business Day on which the amount of outstanding Advances is
greater than the Commitment Amount, the Borrower shall pay such excess to the
Lender. Any such payments shall include accrued and unpaid interest on the
prepaid amount to and including the date of such prepayment.
The amount of such principal payment required to be paid on a date
other than a Payment Date pursuant to this Section 2.2(c) shall, to the extent
permitted by law, be accompanied by a Breakage Payment Calculation Amount with
respect thereto calculated as if such principal payment was an optional
prepayment under Section 2.3.
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SECTION 2.3. OPTIONAL PREPAYMENTS.
(a) The Borrower may prepay an outstanding Advance, in whole or in part,
to the Lender on any Payment Date, PROVIDED THAT any such prepayment shall have
been preceded by written notice thereof to the Lender delivered no later than
three Business Days preceding such Payment Date.
(b) The Borrower may prepay an outstanding Advance, in whole or in part,
to the Lender on any day other than a Payment Date, PROVIDED THAT any such
prepayment shall (i) be made upon not less than three Business Day's written
notice thereof to the Lender and (ii) be accompanied by a Breakage Payment
Calculation Amount with respect thereto calculated as if such Advance was a
Note Principal Prepayment. Any such payments shall include accrued and unpaid
interest on the prepaid amount to and including the date of such prepayment.
SECTION 2.4. THE REVOLVING NOTE. The Advances shall be evidenced by
a single Note (the "REVOLVING NOTE") payable to the order of the Lender, which
Revolving Note shall be substantially in the form of Exhibit A attached hereto.
Any borrowing, repayment and reborrowing hereunder shall be recorded by the
Lender on the grid sheet attached thereto; provided, however, that any failure
to make such notation shall not in any way modify the obligation of the
Borrower to repay any of its obligations under this Agreement and the Revolving
Note.
SECTION 2.5. FACILITY FEE. On each Payment Date, the Borrower shall
pay the Lender the Facility Fee, if any, for such Payment Date.
SECTION 2.6. SECURITY INTEREST.
(a) PLEDGE. As security for the payment of the Secured Obligations,
Borrower hereby pledges, assigns, transfers and grants to Lender a first lien
on, and a security interest in, the Collateral.
(b) FORM OF COLLATERAl. With respect to any of the Collateral
available in definitive certificated form, the Borrower shall deliver to the
Lender or to such other entity as Lender shall designate, as agent for Lender,
on or prior to the date of the first Advance, the certificates for such
Collateral in suitable form for transfer accompanied by duly executed
instruments of transfer or appropriate undated powers of assignment thereof
duly executed in blank.
(c) CREATION AND MAINTENANCE OF SECURITY INTEREST. With respect to
all types of Collateral, (i) Borrower shall take all actions necessary to
create a first priority lien and perfected security interest in such Collateral
in favor of Lender and (ii) all actions required or authorized to be taken by
Lender under this Agreement may be taken by any agent or affiliate of Lender.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
SECTION 3.1. INCREASED COSTS. (a) If, after the date of this
Agreement, the introduction of, or any change in, any applicable law, rule or
regulation or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by the Lender or any
liquidity provider of the Lender with any request or directive of such
authority, central bank or comparable agency (whether or not having the force
of law):
(i) shall subject the Lender to any tax, duty or other charge or
shall change the basis of taxation of payments to the Lender of the
principal of or interest on the Revolving Note or in respect of any other
amounts due under this Agreement (except for changes in the rate of tax on
the overall net income of the Lender imposed by the jurisdiction in which
the Lender's principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, the Lender or any liquidity provider of
the Lender (including, without limitation, any imposed by, the Board of
Governors of the Federal Reserve System); or
(iii) shall impose on the Lender or any liquidity provider of the
Lender any other condition affecting the Commitment, the Advances, this
Agreement or the Revolving Note;
and the result of any of the foregoing is to increase the cost to the Lender of
making or maintaining an Advance, or to reduce the amount of any sum received
or receivable by the Lender under this Agreement or under the Revolving Note in
respect of any Advance, then the Borrower shall pay to the Lender upon its
demand such additional amount or amounts as will, on an after tax basis,
compensate the Lender for such increased cost or reduction.
(b) If, after the date of this Agreement, the Lender shall have
reasonably determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy of general applicability, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender with any
request or directive regarding capital adequacy of general applicability
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Lender's capital as a consequence of the Commitment, the Advances or the
Revolving Note to a level below that which the Lender could have achieved but
for the adoption, change or compliance (taking into consideration the Lender's
policies with respect to capital adequacy) by an amount reasonably deemed by
the Lender to be material, then from time to time, within 30 days after demand
by the Lender, the Borrower shall pay, to the Lender such additional amount or
amounts as will compensate the Lender for such reduction.
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(c) The Lender will promptly notify the Borrower of any event of
which the Lender has knowledge which will entitle it to compensation pursuant
to this Section 3.1 provided that the failure of the Lender so to notify the
Borrower will not discharge the Borrower of its obligations under this Section
3.1. A certificate of the Lender claiming compensation under this Section 3.1
and setting forth the basis for determining the additional amount or amounts to
be paid to it hereunder shall, to the extent permitted by law, be conclusive
and binding, absent manifest error.
(d) If any of the events requiring payments of additional amounts by
the Borrower under paragraphs (a) and (b) above occurs, the Lender shall
consult with the Borrower in good faith with a view to agreeing to alternative
arrangements whereby any such requirement can be avoided or mitigated.
ARTICLE IV
PAYMENTS
SECTION 4.1. MANNER AND STATUS OF PAYMENTS. (a) Each payment by the
Borrower to the Lender under this Agreement shall be made by transferring the
amount thereof by 1:00 p.m. (New York City time), PROVIDED that any payments
made pursuant to Sections 2.2(c)(ii), (iii) and (iv) and 2.3(b) shall be made
by 12:00 noon (New York City time) in same day funds to the account of the New
York Branch of the Lender at the Federal Reserve Bank of New York,
ABA 000000000, or such other account as the Lender may specify from time to
time upon prior written notification to the Borrower. Any payment received
pursuant to this Section 4.1 after 1:00 p.m. or 12:00 noon, as the case may be,
(New York City time) shall be deemed received on the next succeeding Business
Day.
(b) Each payment made under this Section 4.1 shall be made without setoff or
counterclaim and free and clear of, and without deduction for, any taxes,
duties, levies, imposts or other charges of a similar nature.
SECTION 4.2. APPLICATION OF PAYMENTS. The Lender shall apply all
payments with respect to any Advance first to the payment of accrued interest
with respect thereto and, after such interest has been paid, to the repayment
of the principal balance of such Advance. With respect to the application of
payments to the principal balances of outstanding Advances, such payments shall
be deemed to be applied to outstanding Advances as directed by the Borrower.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.1. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The
obligation of the Lender to make the initial Advance is subject to the
following conditions:
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(a) The Lender shall have received, on or before the date of this
Agreement, the following items in form and substance satisfactory to it (and,
in each case, dated the date hereof):
1. NOTE. The Revolving Note, duly executed by the Borrower,
2. SECRETARY'S CERTIFICATE. A certificate from the Secretary or an
Assistant Secretary of the Borrower certifying (i) as to the incumbency
and signature of each officer of the Borrower authorized to execute and
deliver this Agreement or any certificate to be furnished pursuant hereto
and (ii) that attached to such certificate are true and complete copies of
(A) the Articles of Incorporation and By-Laws of the Borrower and (B) the
resolutions of the Board of Directors of the Borrower authorizing the
execution, delivery and performance of this Agreement and the Revolving
Note, together with a certification by another officer of the Borrower as
to the incumbency and signature of such Secretary or Assistant Secretary
and
3. LEGAL OPINIONS. A Legal opinion in form acceptable to the Lender
from Xxxxxxx & Xxxxx L.L.P.;
(b) All conditions precedent to the purchase by the Lender of the
Notes under the Note Purchase Agreement shall have been satisfied and such
purchase shall have occurred; and
(c) The Borrower shall have established the Trust Estate Liquidation
Account and shall have provided the Lender with evidence thereof.
SECTION 5.2. CONTINUING CONDITION, ETC. The obligation of the
Lender to make each Advance, including the initial Advance, is subject to the
following conditions:
(a) on the date of such Advance no action or proceeding shall have
been instituted by or against the Borrower (i) seeking to adjudicate it
bankrupt or insolvent, or (ii) seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or (iii) seeking the entry of an order for relief or the appointment
of receiver, trustee, or other similar official for it or for any substantial
part of its property, and, in the case of any such proceeding instituted
against the Borrower, such proceeding shall not have been dismissed within 60
days;
(b) the representations and warranties of the Borrower contained in
the Transaction Documents shall be accurate and complete in all material
respects as if made on and as of the date of such Advance (except where any
such representation or warranty expressly relates to an earlier date);
(c) there shall not have occurred an Event of Default or any
Potential Event of Default;
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(d) following the making of such Advance, the sum of (i) the Note
Principal Balances beneficially owned by the Lender and IBJ and any commercial
paper issuer sponsored by the Lender or IBJ and (ii) the aggregate Advances
outstanding hereunder (after giving effect to such proposed Advance) shall not
exceed the Maximum Commitment Amount; and
(e) the aggregate principal amount of such proposed Advance, when
aggregated with the aggregate principal amount of all Advances outstanding at
such time shall not exceed the Commitment Amount.
SECTION 5.3. PARTICIPATIONS. The Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time sell to one
or more Persons (each, a "PARTICIPANT"), participating interests in all or a
portion of its rights and obligations under this Agreement. Notwithstanding
any such sale by the Lender of participating interests to a Participant, such
Lender's rights and obligations under this Agreement shall remain unchanged,
the Lender shall remain solely responsible for the performance thereof, and the
Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Agreement. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Sections 3.1 and 8.5 hereof; PROVIDED, however, that all amounts payable by the
Borrower to any such Participant shall be limited to the amounts which would
have been payable directly to the Lender with respect to such participating
interest had the Lender, rather than the participant, held such participating
interest.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as of the date hereof and as of the date of
each Advance hereunder as follows:
(a) ORGANIZATION OF BORROWER. The Borrower is a corporation duly
incorporated, validity existing and in good standing under the laws of the
State of Texas and has the corporate power and authority to own its assets
and to carry on its business as it is now being conducted or as it is
proposed to be conducted. The Borrower is duly qualified to do business
and is in good standing in all jurisdictions in which the ownership of its
property or the conduct of its business makes such qualification
necessary, except where the failure to be so qualified would not have a
material adverse effect on the business, operations, property or financial
or other condition of the Borrower, taken as a whole or on the ability of
the Borrower to perform any of its obligations under this Agreement or the
Revolving Note.
(b) AUTHORIZATION. The execution, delivery and performance of this
Agreement and the Revolving Note by the Borrower are within the corporate
power
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and corporate authority of the Borrower and have been duly authorized
by all necessary corporate action.
(c) VALIDITY. This Agreement and the Revolving Note constitute
legal, valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms, except as the
enforceability hereof and thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting creditors' rights generally.
(d) CONSENTS. All consents, licenses, authorizations, approvals,
exemptions of or registrations or filings with any commission, board,
agency, court or other governmental authority necessary in connection with
the valid execution, delivery and performance of this Agreement and the
Revolving Note by the Borrower have been obtained or effected, except for
such routine registrations and filings which will be obtained in the
ordinary course of business of the Borrower.
(e) NO CONFLICT. The execution and delivery by the Borrower of this
Agreement and the Revolving Note do not, and the performance by it of this
Agreement and the Revolving Note will not, (i) violate any provision of
the Articles of Incorporation or Bylaws of the Borrower or any material
law, rule, regulation, order, writ, judgment, decree, determination or
award applicable to it, (ii) result in a breach of or constitute a default
under any indenture, lease or loan agreement or any other material
agreement or instrument to which the Borrower is a party or by which it or
its properties may be bound or affected or (iii) except for the Lien of
the Lender created by this Agreement, 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 the Borrower.
(f) NO DEFAULT. The Borrower is not in violation of any material
law, rule, regulation, order, writ, judgment, decree, determination or
award applicable to it or any indenture, lease, loan or other material
agreement to which it is a party or by which it or its properties may be
bound or affected, the violation of which may reasonably be expected to
have a material adverse effect upon the ability of the Borrower to perform
any of its obligations under this Agreement or the Revolving Note.
(g) FINANCIAL CONDITION. The consolidated financial statements of
the Borrower for the applicable fiscal period, copies of which have been
furnished to the Lender, present fairly in all material respects, in
accordance with GAAP, the financial condition of the Borrower at such
dates and the consolidated results of its operations and cash flows, for
the fiscal period then ended.
(h) NO CHANGE. As of the date hereof there has been no material
adverse change in the business, operations, assets or financial or other
conditions of the Borrower from that shown on the financial statements as
of the statement date referred to in Section 5(a) above.
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(i) NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any court, arbitrator or Governmental Authority is
pending or, to the knowledge of the Borrower, threatened by or against the
Borrower or against any of the properties or revenues of the Borrower
which is reasonably likely to have a material adverse effect on the
business, operations, property or financial or other condition of the
Borrower, taken as a whole or on the ability of the Borrower to perform
any of its obligations under this Agreement or the Revolving Note.
(j) TAXES. All tax returns that are required to be filed by or on
behalf of the Borrower have been filed and all taxes shown to be due and
payable on said returns or on any assessments made against the Borrower or
any of its property (other than taxes which are being contested in good
faith by appropriate proceedings and as to which the Borrower has
established adequate reserves in conformity with GAAP) have been paid or
provided for.
(k) INVESTMENT COMPANY ACT. 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.
(l) FEDERAL RESERVE BOARD REGULATIONS. The Borrower is not engaged
or will engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of the Regulations of the
Board of Governors of the Federal Reserve System pertaining to the
foregoing.
(m) ASSETS. The Borrower and its Consolidated Subsidiaries are
the legal and beneficial owners of all property and assets represented as
owned by them in the financial statements delivered by the Borrower to the
Lender in accordance with Section 7.1(a), except property and assets sold
or otherwise disposed of in the ordinary course of business subsequent to
the date thereof.
(n) OWNERSHIP OF THE COLLATERAL. Borrower is and will be the legal
and beneficial owner of, and has good and marketable title to, the
Collateral.
(o) COLLATERAL FREE OF LIENS. The Collateral (and any proceeds) are
not and will not be subject to a Lien or any agreement purporting to grant
such a Lien in the Collateral or other property or assets of Borrower
which would include any Collateral, except the Lien in favor of Lender
created by this Agreement.
(p) AGREEMENT CREATES VALID FIRST LIEN. This Agreement will create
a first priority perfected security interest in the Collateral for so long
as the Lender or a successor to the Lender or an agent of the Lender or of
the Lender's successor (other than the Borrower) maintains physical
possession of the Collateral, or in the case of the Trust Estate
Liquidation Account and the contents thereof, so long as such account is
held in the name of the Lender.
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ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.1. AFFIRMATIVE COVENANTS. So long as any amount is owing
hereunder or the Lender shall have any Commitment hereunder, the Borrower will,
unless the Lender otherwise consents in writing:
(a) REPORTING REQUIREMENTS. Furnish to the Lender:
(i) QUARTERLY STATEMENTS. (A) As soon as available and in no
event later than 105 days after the end of each fiscal quarter of
FFG, a "Form 10-Q" filed by FFG with the Securities and Exchange
Commission and (B) as soon as available and in any event within 105
days after the end of each fiscal quarter of the Borrower, a
quarterly balance sheet prepared in accordance with GAAP consistently
applied, which presents the financial condition of the Borrower and
its Subsidiaries as of the end of such quarter, together with a
certificate of a Responsible Officer of the Borrower certifying the
same;
(ii) ANNUAL STATEMENTS. (A) As soon as available and in no event
later than 135 days after the end of each fiscal year of FFG, a "Form
10-K" filed by FFG with the Securities and Exchange Commission and
(B) as soon as available and in any event within 135 days after the
end of each fiscal year of the Borrower, a balance sheet prepared in
accordance with GAAP consistently applied, which presents the
financial condition of the Borrower and its Subsidiaries as of the
end of such year, together with a certificate of a Responsible
Officer of the Borrower certifying the same; and
(iii) ANNUAL REPORT TO SHAREHOLDERS. As soon as available and
in any event within 135 days after the end of each fiscal year of FFG,
the annual report that is delivered to its shareholders.
(b) COMPLIANCE WITH LAWS. Comply with all applicable laws, rules
and regulations and orders of any governmental authority, the
noncompliance with which could have a material adverse effect on the
business, financial condition or results of operations of the Borrower or
on the ability of the Borrower to repay any Advance or perform any of its
other obligations under this Agreement or the Revolving Note.
(c) NOTICES. Promptly give written notice to the Lender of:
(i) the occurrence of any Event of Default or Potential Event
of Default known to any officer of the Borrower and the proposed
method of cure thereof;
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(ii) any litigation or proceeding affecting the Borrower which
is reasonably likely to have a material adverse effect on the
business, operations, property, or financial or other condition of
the Borrower taken as a whole; and
(iii) a material adverse change known to any officer of the
Borrower in the business, operations, property or financial or other
condition of the Borrower taken as a whole; and
(iv) any changes in the following senior management positions of
FFG: Chairman, Chief Executive Officer, President and Chief
Financial Officer.
SECTION 7.2. NEGATIVE COVENANTS. So long as any amount is owing
hereunder or the Lender shall have any Commitment hereunder, the Borrower will
not, without the written consent of the Lender:
(a) NEGATIVE PLEDGE. Except for Liens created by operation of any
Transaction Document, incur, create or assume any Lien of any kind upon
any of its assets, now owned or hereafter acquired, except as may be
incidental to the conduct of the business or the ownership of the property
of the Borrower, which were not incurred in connection with the borrowing
of money or the obtaining of credit and which do not, either individually,
or in the aggregate, materially detract from the value of its assets or
materially impair the use of such assets in the operation of its business.
(b) CONSOLIDATIONS AND MERGERS. Consolidate or merge with or into
any entity.
(c) RESTRICTION ON LIENS. The Borrower will not create or incur any
Lien, other than the Lien created by this Agreement, with respect to the
Collateral.
(d) LEVERAGE RATIO. In no event will Consolidated Debt exceed 6
times Consolidated Net Worth for more than 45 consecutive days, and at no
time will Consolidated Debt exceed 8 times Consolidated Net Worth.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default":
(a) the Borrower shall fail to pay when due any principal, interest,
fees or other amount payable hereunder (except for the Facility Fee);
(b) the Borrower shall fail to pay when due any part of the Facility
Fee and such failure shall continue for three Business Days thereafter;
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(c) the Borrower shall fail to observe or perform any of the
covenants contained in Section 7.1 or 7.2 for 15 days after the earlier of
the discovery of such failure or written notice thereof has been given to
the Borrower by the Lender;
(d) the Borrower shall fail to observe or perform any material
covenant or material agreement contained in this Agreement (other than
those covered by clause (a) or (b) above) for 30 days after the earlier of
the discovery of such failure or written notice thereof has been given to
the Borrower by the Lender;
(e) any material representation, warranty, certification or
statement made (or deemed made) by the Borrower in this Agreement or in
any certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made) and such deficiency is not cured within
the earlier of 15 days after the discovery thereof by the Borrower or 15
days after written notice thereof has been given to the Borrower by the
Lender;
(f) the Borrower, FFG or a Consolidated Subsidiary of either of them
shall fail to make any payment in respect of any Debt with an outstanding
principal amount of $5,000,000 or more when due or within any applicable
grace period;
(g) any event or condition shall occur which results in the
involuntary acceleration of the maturity of any Debt with an outstanding
principal amount of $5,000,000 or more of the Borrower, FFG or a
Consolidated Subsidiary of either of them or enables (or, if such event or
condition does not otherwise give rise to such an acceleration, which with
the giving of notice or lapse of time or both would enable) the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(h) the Borrower, FFG or any of their respective Subsidiaries shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Debt under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property,
or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit
of creditors, or shall fail generally to pay its debts as they become due,
or shall take any corporate action to authorize any of the foregoing;
(i) an involuntary case or other proceeding shall be commenced
against the Borrower, FFG or any of their respective Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other reprocessing
shall remain
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undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against the Borrower, FFG or any of their respective
Subsidiaries under the federal bankruptcy laws as now or hereafter in
effect;
(j) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower, FFG or any of their
respective Subsidiaries and such judgment or order shall not have been
reversed for a period of 30 days after the entry thereof; and
(k) a judgment or order for the payment of money in excess of 20% of
the Consolidated Net Worth of the Borrower shall be rendered against the
Borrower or any of its Subsidiaries and such judgment or order shall not
have been reversed for a period of 15 days after the entry thereof.
SECTION 8.2. RIGHTS OF LENDER FOLLOWING EVENT OF DEFAULT. If any
one or more Events of Default shall occur and be continuing, the Lender may,
without prior written notice to or demand upon the Borrower, take any one or
more of the following actions:
(a) Terminate the Commitment and it shall thereupon terminate, and
declare the Revolving Note (together with accrued interest thereon) to be,
and the Revolving Note (together with accrued interest thereon) shall
thereupon become, immediately due and payable without presentment, demand
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Event of Default
specified in Section 8.1(h) or (i) with respect to the Borrower, without
any notice to the Borrower or any other act by the Lender, the Commitment
shall, to the extent permitted by law, thereupon terminate and the
Revolving Note (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are, to the extent permitted by law,
hereby waived by the Borrower;
(b) So long as any amounts are payable by the Borrower to the Lender
hereunder or the Commitment remains an obligation of the Lender, suspend
any delivery or payment or return of Collateral required to be made to the
Borrower, and otherwise not permit the Borrower to take any new action
with respect to any Collateral; and
(c) In addition, in furtherance of and not in limitation of the
foregoing, in the event that an Event of Default occurs and is continuing, the
Lender may exercise, in addition to all other rights and remedies granted in
this Agreement, the Revolving Note and any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the New York UCC. Without limiting the
generality of the foregoing, the Lender, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any person (all and each
of which demands, defenses, advertisements and notices are hereby, to the
extent permitted by law, waived), may in such
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circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Lender or elsewhere upon such terms and conditions as it may reasonably deem
advisable and at such prices as it may reasonably deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Lender, shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption of the Borrower, which right or equity is hereby waived or
released The Lender shall apply any collections on or in respect of the
Collateral from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Lender hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the
payment in whole or in part of the Secured Obligations, as the Lender may
elect, and only after such application and after the payment by the Lender of
any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Lender account
for the surplus, if any, to the Borrower. To the extent permitted by
applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Lender arising out of the exercise by the Lender of any
of its rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall, to the
extent permitted by law, be deemed reasonable and proper if given on the day
of such sale or other disposition. The Borrower shall, to the extent
permitted by law, remain liable for any deficiency if the proceeds of any
sale or other disposition of Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorneys employed by the
Lender to collect such deficiency.
SECTION 8.3. LENDER APPOINTED BORROWER'S ATTORNEY-IN-FACT. The
Lender is authorized and empowered by this Agreement to execute and deliver, on
behalf of the Borrower, as attorney-in-fact or otherwise, any and all documents
and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect its rights, powers and remedies under this
Agreement and under the Revolving Note.
SECTION 8.4. BORROWER'S LIABILITY FOR CONSEQUENTIAL DAMAGES. In
addition to any other amounts it may owe or be liable for hereunder, if an
Event of Default occurs, the Borrower shall be liable for all costs, expenses,
damages and losses incurred by the Lender in taking any of the actions
described in Section 8.2, including without limitation all costs of collection
and reasonable attorneys' fees incurred in connection therewith.
SECTION 8.5. INDEMNITY. The Borrower shall be liable as primary
obligor for and shall indemnify the Lender and its successors, assigns, agents
and servants (collectively, the "INDEMNIFIED PARTIES") from and against, any
and all liabilities, obligations, losses, damages, taxes, claims, actions and
suits, and any and all reasonable costs, expenses and
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disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Lender or any Indemnified Party arising out of or
resulting from this Agreement, except to the extent arising out of or
resulting from the gross negligence or willful misconduct or unlawful conduct
of such Indemnified Party.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and, shall inure to the benefit of the Borrower, the Lender and
their respective successors and assigns except that the Borrower may not assign
or transfer any of its rights or obligations hereunder without the prior
written consent of the Lender. The Lender may assign its obligations and
rights hereunder to (i) any entity whose long-term unsecured debt, as of the
date of the proposed assignment, is rated at least "Baa" by Xxxxx'x or "BBB" by
Standard & Poor's, (ii) any entity whose short-term debt, as of the date of the
proposed assignment, is rated at least "P-2" by Xxxxx'x or at least "A-2" by
Standard & Poor's or (iii) with the prior written consent of the Borrower, any
other entity. The Lender shall provide the Borrower with notice prior to such
an assignment. This Agreement shall remain in full force and effect until such
time as one party shall receive a notice of termination from the other party.
SECTION 9.2. AMENDMENT; WAIVER. To the extent permitted by law, no
amendment, modification or waiver of any provision of this Agreement, and no
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
In the event that either party hereto makes a written request to the other
party hereto to amend or modify this Agreement, such other party hereto shall
give or refuse its consent to such amendment or modification within five
Business Days of such request. Any waiver of any provision of this Agreement,
and any consent to any departure by the Borrower therefrom, shall be effective
only in the specific instance and for the specific purpose for which given. To
the extent permitted by law, neither failure nor delay on the part of the
Lender to exercise any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
remedy hereunder preclude any other or future exercise thereof or the exercise
of any other right, power or remedy. To the extent permitted by law, 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. The
rights herein provided are cumulative and not exclusive of any rights provided
by law.
SECTION 9.3. NOTICE, ETC. Except as otherwise provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic or telex communication) and mailed or telegraphed or
delivered, (a) if to the Borrower, at its address set forth on the signature
page hereof, and (b) if to the Lender, at its address set forth on the
signature page hereof; or, as to each party, at such other address as shall be
specified by
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such party in written notice to the other party. Any such notice, demand or
other communication shall not be effective until actually received.
SECTION 9.4. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.
SECTION 9.5. HEADINGS. The headings contained in this Agreement are
for convenience of reference only and shall not affect the construction hereof.
SECTION 9.6. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 9.7. RIGHT TO EXAMINE BORROWER RECORDS. The Lender and its
agents shall have the right upon reasonable prior notice, during normal
business hours and as often as reasonably required, to examine, audit and copy,
at the expense of the Lender, any and all of the books, records or other
information of the Borrower whether held by the Borrower or by another on
behalf of the Borrower, which may be relevant to the performance or observance
by the Borrower of the terms, covenants or conditions of this Agreement. The
Lender and the Borrower agree that any information obtained pursuant to the
terms of this Agreement shall be held confidential.
SECTION 9.8. CERTAIN MATTERS REGARDING THE ISSUER.
(a) Until the date that is one year and one day after the last day
on which any amount is outstanding under this Agreement, each of the Lender and
the Borrower hereby covenants and agrees that they will not institute against
the Issuer, or join in any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
(b) Each of the Lender and Borrower hereby recognizes and
acknowledges the separate legal existence of the Issuer from the Borrower and
the Consolidated Subsidiaries.
(c) Each of the Lender and the Borrower hereby acknowledges and
agrees that the Issuer has no obligation, liability or duty for or on behalf of
the Borrower under this Agreement, directly or indirectly, as guarantor or
otherwise, and except as specifically provided in the Transaction Documents
that the Lender's sole recourse under this Agreement is to the Borrower, the
Collateral and the other assets of the Borrower from time to time. Solely with
respect to this Section 9.8, the parties further agree that the Issuer and its
creditors are third party beneficiaries and are entitled to rely on this
Section 9.8 whether or not they are parties to this Agreement.
SECTION 9.9. NO RECOURSE - LENDER. The obligations of the Lender
under this Agreement, or any other agreement, instrument, document or
certificate executed and
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delivered by or issued by the Lender or any officer thereof are solely the
partnership or corporate obligations of the Lender, as the case may be. No
recourse shall be had for payment of any fee or other obligation or claim
arising out of or relating to this Agreement or any other agreement,
instrument, document or certificate executed and delivered or issued by the
Lender or any officer thereof in connection therewith, against any
stockholder, limited partner, employee, officer, director or incorporator of
the Lender.
SECTION 9.10. NO PROCEEDINGS. The Borrower agrees that so long as
any rated indebtedness of the Lender shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any rated
indebtedness of the Lender shall have been outstanding, it shall not file, or
join in the filing of, a petition against the Lender under the Federal
Bankruptcy Code, or join in the commencement of any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar proceeding against the
Lender
[SIGNATURE PAGE FOLLOWS]
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Revolving
Credit Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
FIRSTPLUS FINANCIAL, INC.
By:
------------------------------
Name:
Title:
Address: 1600 Viceroy
Xxxxxx, Xxxxx 00000
WORKING CAPITAL MANAGEMENT CO. L.P.
By:
------------------------------
Name:
Title:
Address:
x/x Xxx Xxxxxxxxxx Xxxx
xx Xxxxx, Xxxxxxx
Xxx Xxxx Branch
1251 Avenue of the Americas,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
-24-
EXHIBIT A
[FORM OF PROMISSORY NOTE]
June 16, 1997
FOR VALUE RECEIVED, the undersigned, FIRSTPLUS FINANCIAL, INC. (the
"BORROWER"), hereby unconditionally promises to pay to the order of WORKING
CAPITAL MANAGEMENT CO. L.P. (the "LENDER") the Payment Date that occurs in
June, 1998, (the "MATURITY DATE") the principal sum of all outstanding Advances
in lawful currency of the United States of America as the principal amount of
each such Advance made by the Lender hereunder is denoted on the Schedule
attached hereto.
1. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in that certain Revolving Credit Agreement (the
"AGREEMENT"), dated as of June 16, 1997 between the Borrower and the Lender.
2. The Borrower further promises to pay interest on the Advances as
follows:
A. The Borrower shall pay interest on each Payment Date prior to
the Maturity Date and on the Maturity Date in an amount equal to the
sum of (I) for each Advance made on or after the second preceding
Determination Date and prior to the Payment Date immediately
following such second preceding Determination Date, the sum of the
related Additional Daily Advance Interest Accrual Amounts for each
day in the Additional Advance Interest Accrual Period and (II) the
sum of the related Prior Payment Date Daily Advance Interest Accrual
Amounts for each day in the related Regular Interest Accrual Period;
PROVIDED; that, with respect to Advances outstanding upon and after
the occurrence of an Event of Default, the Borrower shall pay
interest at the rates set forth above plus 2.00%. The amount of any
such interest payment shall be reduced by the portion of interest
actually remitted with respect to any payment made pursuant to
Sections 2.2(c) or 2.3(b) of the Agreement.
B. If the amount of any such Advance is less than $1,000,000, the
amount payable on the next Payment Date in respect to interest shall
be increased by an amount equal to the product of (I) (x) LIBOR
determined for such Advance (in the manner specified in the
definition of Additional Daily Advance Interest Accrual Amount) minus
(y) the Reinvestment Rate as of the date of such Advance (as
determined by the Lender in the manner specified for the Indenture
Trustee in the Sale and Servicing Agreement) and (II) (x) $1,000,000
less (y) the amount of such Advance and (III) (x) the number of days
in the period commencing on the date of such Advance was made to and
including the next Payment Date divided by (y) 360. The amount of
such interest increase shall in no event be less than $1,000.
3. The Lender is exclusively authorized to make notations on the
schedule attached hereto to denote each Advance made by the Lender to the
Borrower pursuant to this promissory note, the maturity date of each such
Advance and all payments of the outstanding principal amount of and accrued
interest on such Advance. Such notations, if made, will be presumed correct
unless the contrary is established.
4. The Borrower shall repay in full the principal amount of each
Advance, plus any accrued and unpaid interest, on the Maturity Date or within
five Business Days of the occurrence of a Mandatory Prepayment Event.
5. The Borrower may prepay an outstanding Advance to the Lender on
any date in whole or in part, provided that certain conditions set forth in the
Agreement are fulfilled.
6. All payments of principal and of interest on this promissory note
shall be made by the Borrower by transferring the amount thereof not later than
1:00 p.m. (New York City time), PROVIDED that any payments made pursuant to
Sections 2.2(c)(ii), (iii) and (iv) and 2.3(b) of the Agreement shall be made
by 12:00 noon (New York City time) on the date when due to the Lender at the
Federal Reserve Bank of New York, ABA 000000000, or such other account as the
lender may designate upon prior written notification to the Borrower, in lawful
money of the United States of America, in same day funds without setoff,
deduction of counterclaim and free and clear of any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of a similar
nature. Any payment received pursuant to this Paragraph 6 after 1:00 p.m. or
12:00 noon, as the case may be, (New York City time) shall be deemed received
on the next succeeding Business Day.
7. Upon the occurrence of an Event of Default, the outstanding
principal amount of this promissory note and accrued interest thereon shall, at
the option of the Lender, forthwith become due and payable without presentment,
demand, protest or further notice, provided, however, that upon the occurrence
of any Event of Default consisting of certain bankruptcy events with respect to
the Borrower or any of its Subsidiaries, this promissory note and all accrued
interest thereon shall automatically become and be due and payable, without
presentment, demand, protest or notice of any kind.
8. The Borrower agrees to pay costs of collection (including
reasonable legal fees and disbursements of counsel) if default is made in the
payment of the principal of or interest on this promissory note.
9. Presentment, demand, protest and notices of any kind with respect
to this promissory note are hereby expressly waived by the Borrower.
10. This promissory note is entitled to certain security as set
forth in the Revolving Credit Agreement dated as of June 16, 1997 between the
Borrower and the Lender.
11. This promissory note shall be governed by and construed in
accordance with the laws of the State of New York.
FIRSTPLUS FINANCIAL, INC.
By:
----------------------------------
Name:
Title:
Schedule to Promissory Note of FIRSTPLUS FINANCIAL, INC.
dated June 16, 1997
Date of Amount of Amount of Outstanding
Advance Advance Payment Date Payment Advances
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