CREDIT AGREEMENT
between
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC.,
(d/b/a UPLAND MORTGAGE)
and
AMERICAN BUSINESS LEASING, INC.,
as Co-Borrowers,
AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
as Parent,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent,
and
CERTAIN LENDERS,
as Lenders
Up to
$150,000,000
July 31, 1997
[GRAPHIC OMITTED]
PREPARED BY XXXXXX AND XXXXX, L.L.P.
2
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND REFERENCES..................................1
1.1 Definitions.................................................1
1.2 Time References............................................18
1.3 Other References...........................................18
1.4 Accounting Principles......................................18
SECTION 2. BORROWING PROVISIONS.......................................19
2.1 Commitments................................................19
2.2 Borrowing Request..........................................20
2.3 Fundings...................................................20
2.4 Wet Borrowings.............................................21
2.5 Swing Borrowing Procedures.................................22
2.6 Increases and Terminations.................................22
2.7 Multiple Borrowers.........................................23
SECTION 3. PAYMENT TERMS..............................................24
3.1 Notes......................................................24
3.2 Payment Procedures.........................................24
3.3 Scheduled Payments.........................................24
3.4 Prepayments................................................25
3.5 Order of Application.......................................25
3.6 Sharing....................................................27
3.7 Interest Rates.............................................27
3.8 Interest Periods...........................................28
3.9 Basis Unavailable or Inadequate for LIBOR..................29
3.10 Additional Costs...........................................29
3.11 Change in Governmental Requirements........................30
3.12 Funding Loss...............................................30
3.13 Foreign Lenders, Participants, and Purchasers..............31
3.14 Fees.......................................................31
SECTION 4. COLLATERAL PROCEDURES......................................32
4.1 Eligible Collateral........................................32
4.2 Borrowing Base.............................................32
4.3 Collateral Delivery........................................32
4.4 Bailee and Administrative Agent............................32
4.5 Shipment for Sale..........................................32
4.6 Shipment for Correction....................................33
4.7 Release of Collateral......................................34
SECTION 5. CONDITIONS PRECEDENT.......................................34
SECTION 6. REPRESENTATIONS AND WARRANTIES.............................35
6.1 Purpose of Credit..........................................35
6.2 About the Companies........................................35
6.3 Authorization and Contravention............................35
Credit Agreement
6.4 Binding Effect.............................................36
6.5 Fiscal Year................................................36
6.6 Current Financials.........................................36
6.7 Debt.......................................................36
6.8 Intellectual Property......................................36
6.9 Litigation.................................................36
6.10 Transactions with Affiliates...............................36
6.11 Taxes......................................................36
6.12 Employee Plans.............................................37
6.13 Property and Liens.........................................37
6.14 Environmental Matters......................................37
6.15 Government Regulations.....................................37
6.16 Insurance..................................................37
6.17 Appraisals.................................................37
6.18 Full Disclosure............................................37
SECTION 7. AFFIRMATIVE COVENANTS......................................38
7.1 Reporting Requirements.....................................38
7.2 Use of Proceeds............................................39
7.3 Books and Records..........................................39
7.4 Inspections................................................39
7.5 Taxes......................................................40
7.6 Expenses...................................................40
7.7 Maintenance of Existence, Assets, and Business.............40
7.8 Insurance..................................................41
7.9 Appraisals.................................................41
7.10 Indemnification............................................41
SECTION 8. NEGATIVE COVENANTS.........................................41
8.1 Debt.......................................................42
8.2 Liens......................................................43
8.3 Investments................................................44
8.4 Distributions..............................................46
8.5 Merger or Consolidation....................................46
8.6 Liquidations and Dispositions of Assets....................46
8.7 Use of Proceeds............................................46
8.8 Transactions with Affiliates. ............................46
8.9 Employee Plans.............................................46
8.10 Compliance with Governmental Requirements and Documents....46
8.11 Government Regulations.....................................46
8.12 Fiscal Year Accounting.....................................47
8.13 New Businesses.............................................47
8.14 Assignment.................................................47
8.15 Retention of Servicing Portfolio...........................47
8.16 Strict Compliance..........................................47
SECTION 9. FINANCIAL COVENANTS........................................47
9.1 Parent's Tangible Net Worth................................47
Credit Agreement
9.2 Parent's Leverage Ratio....................................47
SECTION 10. EVENTS OF DEFAULT AND REMEDIES.............................47
10.1 Event of Default...........................................47
10.2 Remedies...................................................49
10.3 Right of Offset............................................50
10.4 Waivers....................................................50
10.5 Performance by Administrative Agent........................50
10.6 No Responsibility..........................................51
10.7 No Waiver..................................................51
10.8 Cumulative Rights..........................................51
10.9 Rights of Individual Lenders...............................51
10.10 Notice to Administrative Agent.............................52
10.11 Costs......................................................52
SECTION 11. ADMINISTRATIVE AGENT.......................................52
11.1 Authorization and Action...................................52
11.2 Administrative Agent's Reliance, Etc.......................52
11.3 Administrative Agent and Affiliates........................53
11.4 Credit Decision............................................53
11.5 Indemnification............................................53
11.6 Successor Administrative Agent.............................54
11.7 Inspection.................................................54
SECTION 12. MISCELLANEOUS..............................................54
12.1 Nonbusiness Days...........................................54
12.2 Communications.............................................54
12.3 Form and Number of Documents...............................55
12.4 Exceptions to Covenants....................................55
12.5 Survival...................................................55
12.6 Governing Law..............................................55
12.7 Invalid Provisions.........................................55
12.8 Conflicts Between Credit Documents.........................55
12.9 Discharge and Certain Reinstatement........................55
12.10 Amendments, Consents, Conflicts, and Waivers...............55
12.11 Multiple Counterparts......................................56
12.12 Parties....................................................56
12.13 Participations.............................................57
12.14 Transfers..................................................58
12.15 Venue, Service of Process, and Jury Trial..................58
12.16 Limitation of Liability....................................59
12.17 Confidentiality............................................59
12.18 Entire Agreement...........................................60
Credit Agreement
SCHEDULES AND EXHIBITS
Schedule 1 - Seasoned Lease Exceptions
Schedule 2 - Lenders and Commitments
Schedule 4.1 - Eligibility Conditions
Schedule 4.3 - Collateral Procedures
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Exhibit A-1 - Warehouse Note
Exhibit A-2 - Swing Note
Exhibit B - Guaranty
Exhibit C-1 - Security Agreement
Exhibit C-2 - Financing Statement
Exhibit C-3 - Shipping Request
Exhibit C-4 - Bailee Letter
Exhibit C-5 - Trust Receipt and Agreement
Exhibit C-6 - Release Request
Exhibit D-1 - Borrowing Request
Exhibit D-2 - Collateral-Delivery Notice
Exhibit D-3 - Borrowing-Base Report
Exhibit D-4 - Compliance Certificate
Exhibit D-5 - Acquisition-Compliance Certificate
Exhibit E - Opinion of Counsel
Exhibit F - Assignment and Assumption Agreement
Exhibit G - Amendment to Credit Agreement
Credit Agreement
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of July 31, 1997, between AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT,
INC., a Pennsylvania corporation d/b/a Upland Mortgage ("HAC"), and AMERICAN
BUSINESS LEASING, INC., a Pennsylvania corporation ("ABL") (ABC, HAC, and ABL
are "Co-Borrowers"); AMERICAN BUSINESS FINANCIAL SERVICES, INC., a Delaware
corporation ("Parent"); the Lenders described below; and TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Administrative Agent for Lenders.
(see Section 1.1 for defined terms)
A. ABC originates, acquires, markets, sells, services, and holds loans
extended to businesses secured by residential or commercial real property. HAC
originates, acquires, markets, sells, services, and holds conforming and
nonconforming residential Mortgage Loans (including home-equity and second-Lien
loans). ABL originates, acquires, markets, sells, services, and holds Leases.
B. Co-Borrowers have requested Lenders to commit to provide Borrowings
to finance their Commercial Loans, Mortgage Loans, and Lease origination and
acquisition until those Commercial Loans, Mortgage Loans, and Leases are sold in
the secondary market.
C. Co-Borrowers have agreed to grant to Administrative Agent for
Lenders first-priority Liens upon, among other things, the Mortgage Collateral
and Lease Collateral delivered to Administrative Agent under this agreement.
D. Lenders have agreed upon the terms and applicable sublimits of this
agreement to provide those Borrowings up to the lesser of either the total
Commitments or the total Borrowing Base.
ACCORDINGLY, for adequate and sufficient consideration, Co-Borrowers,
Parent, Lenders, and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, the following
provisions apply to each Credit Document, and annexes, exhibits, and schedules
to (and certificates, reports, and other writings delivered under) the Credit
Documents.
1.1 Definitions.
"ABC" is defined in the preamble to this agreement.
"ABL" is defined in the preamble to this agreement.
Credit Agreement
"Acquisition" by any Person means any transaction or series of
transactions on or after the Closing Date pursuant to which that Person directly
or indirectly -- whether in the form of a capital expenditure, an Investment, a
merger, a consolidation, or otherwise and whether through a solicitation or
tender of equity securities, one or more negotiated block, market, private,
other transactions, or any combination of the foregoing -- purchases (a) all or
substantially all of the business or assets of any other individual or entity or
operating division or business unit of any other individual or entity, (b)
assets of an individual, entity, operating division, or business unit for a
total purchase price (including all cash or deferred payment and all Debt to be
guaranteed, assumed, or paid by any Company other than Debt owed by the acquired
Person for which no other Company has any obligation whatsoever) of $500,000 or
more, or (c) more than 50% of the equity interest in any other entity.
"Acquisition-Compliance Certificate" means a certificate that must be
signed by one or more Responsible Officers of Parent and Co-Borrowers and must
be substantially in the form of Exhibit D-5.
"Administrative Agent" means, at any time, Texas Commerce Bank National
Association (or its successor appointed under Section 11.6), acting as
administrative, collateral, managing, and syndication agent for Lenders under
the Credit Documents.
"Affiliate" of a Person means any other individual or entity who
directly or indirectly controls, is controlled by, or is under common control
with that Person. For purposes of this definition (a) "control," "controlled
by," and "under common control with" mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of voting securities or other interests, by contract, or
otherwise), and (b) the Companies are "Affiliates" of each other.
"Agent's Request" is defined in Section 2.3(f).
"Applicable-Covered Rate" means -- for each Borrowing-Purpose Category
in the table below -- the annual interest rate stated beside that category:
================================================================================
Borrowing-Purpose Category Applicable-Covered Rate
--------------------------------------------------------------------------------
Wet Borrowings 1.6250%
--------------------------------------------------------------------------------
Seasoned Borrowings and Commercial Loan Borrowings 1.7500%
--------------------------------------------------------------------------------
Lease Borrowings 2.0000%
--------------------------------------------------------------------------------
Other Borrowings 1.3875%
================================================================================
"Applicable Margin" means -- for each Borrowing-Purpose Category and
relevant Borrowing- Price Category in the table below -- the interest margin
beside those categories:
Credit Agreement
================================================================================
Borrowing-Purpose Category Borrowing-Price Category Applicable Margin
--------------------------------------------------------------------------------
Wet Borrowings Base Rate 0.2500%
--------------------------------------------------------------------------------
LIBOR 1.6250%
--------------------------------------------------------------------------------
Seasoned Borrowings and Base Rate 0.3750%
Commercial Loan Borrowings
--------------------------------------------------------------------------------
LIBOR 1.7500%
--------------------------------------------------------------------------------
Lease Borrowings Base Rate 0.6250%
--------------------------------------------------------------------------------
LIBOR 2.0000%
--------------------------------------------------------------------------------
Other Borrowings Base Rate 0.0000%
--------------------------------------------------------------------------------
LIBOR 1.3875%
================================================================================
"Appraisal" means (a) for any Mortgage Loan or Commercial Loan, a
written statement of the market value of the real property securing it, and (b)
for any Lease, a written invoice evidencing the market value of the personal
property securing or covered by it.
"Appraisal Requirement" means any Governmental Requirement that is
applicable to appraisals of mortgaged-residential real property, mortgaged
non-residential real property, or other property in connection with transactions
involving that property, including, without limitation, Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the
Federal Deposit Insurance Corporation Improvement Act of 1991, 12 C.F.R. Chapter
I, Part 34, Subpart C, 12 C.F.R. Chapter II, Subchapter A, Part 225, Subpart G,
and 12 C.F.R. Chapter III, Subchapter B, Part 323.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement executed by a selling Lender and a Purchaser under Section
12.12 and Section 12.14, and delivered to Administrative Agent in substantially
the form of Exhibit F.
"Average-Adjusted-Base Rate" means, for any period, an annual interest
rate equal to the quotient of (a) the sum of the Base Rate plus the Applicable
Margin, for each calendar day during that period, divided by (b) the number of
calendar days during that period.
"Average-Adjusted-LIBOR" means, for any period, an annual interest rate
equal to the quotient of (a) the sum of LIBOR plus the Applicable Margin, for
each calendar day during that period, divided by (b) the number of calendar days
during that period.
"Average Commitment" means, for any period and any Lender, the quotient
of the (a) the sum of that Lender's Commitment as of the close of business for
each calendar day (which for any day that is not a Business Day is deemed for
this definition to be such Lender's Commitment for the preceding Business Day)
during that period divided by (b) the number of calendar days during that
period.
Credit Agreement
"Average-Eligible Balances" means, for any period and any Lender, an
amount equal to (a) the quotient of (i) the sum of that Lender's Eligible
Balances as of the close of business for each calendar day (which for any day
that is not a Business Day are deemed for this definition to be those balances
for the preceding Business Day) during that period divided by (ii) the number of
calendar days during that period minus (b) amounts necessary to satisfy any
deposit insurance, reserve, special deposit, Taxes (other than that Lender's
general corporate income or franchise Taxes), duty, or other imposition (in each
case at the applicable rates) requirements applicable to that Lender for those
accounts, minus (c) amounts required to compensate that Lender for direct
processing and transaction costs and other services rendered in connection with
those accounts in accordance with that Lender's system of charges for similar
accounts, minus (d) unless otherwise paid directly to that Lender, any amounts
in those accounts utilized as of that day in the calculation of interest on any
other Debt payable by any Co-Borrower to that Lender.
"Average-Principal Debt" means, for any period and any Lender, the
quotient of (a) the sum of the Principal Debt owed to that Lender as of the
close of business for each calendar day (which for any day that is not a
Business Day is deemed for this definition to be the Principal Debt as of the
close of business for the preceding Business Day) during that period divided by
(b) the number of calendar days during that period.
"Bailee Letter" means a letter executed and delivered by Administrative
Agent in substantially the form of Exhibit C-4.
"Base Rate" means an annual interest rate equal from day to day to the
floating annual interest rate established by Administrative Agent from time to
time as its base-rate of interest, which may not be the lowest interest rate
charged by Administrative Agent on loans similar to Borrowings.
"Base-Rate Borrowing" means any Borrowing bearing interest at the
Average-Adjusted-Base Rate.
"Borrowing" means any amount disbursed (a) by any Lender to any
Co-Borrower under the Credit Documents as an original disbursement of funds or
(b) by Administrative Agent or any Lender in accordance with, and to satisfy a
Company's obligations under, any Credit Document.
"Borrowing Base" means, at any time, the sum of:
(a) the total collateral value of each Eligible-Mortgage Loan
and each Eligible-Commercial Loan, equal to 98% of the lowest of (i)
the unpaid principal balance of the underlying promissory note, (ii)
the actual amount funded by ABC or HAC, as the case may be, with
respect to that Eligible-Mortgage Loan or Eligible-Commercial Loan, or
(iii) the Market Value thereof, as determined by Administrative Agent;
plus
(b) the total collateral value of each Eligible-Seasoned Loan,
equal to 90% of the lowest of (i) the unpaid principal balance of the
underlying promissory note, (ii) the actual amount funded by ABC or
HAC, as the case may be, with respect to that Eligible-Seasoned Loan,
or (iii) the Market Value thereof, as determined by Administrative
Agent; plus
Credit Agreement
(c) the total collateral value of each Eligible Lease and
Eligible-Seasoned Lease, equal to 85% of the lower of (i) the actual
amount funded by ABL with respect to that Eligible Lease or
Eligible-Seasoned Lease, or (ii) the net present value of the current
lease balance determined in accordance with the discounting methods
agreed upon in writing by ABL and Administrative Agent from time to
time.
"Borrowing-Base Report" means a report executed by Administrative Agent
and delivered to Co-Borrowers and Lenders in substantially the form of Exhibit
D-3.
"Borrowing Date" means, for any Borrowing, the date it is disbursed.
"Borrowing Excess" means, at any time, the amount by which any of the
limitations of Section 2.1 is exceeded.
"Borrowing-Price Category" means any category of Borrowing determined
with respect to the applicable interest option (e.g., a Base-Rate Borrowing,
LIBOR Borrowing, or Fixed-Rate Borrowing).
"Borrowing-Purpose Category" means any category of Borrowing determined
with respect to its purpose, e.g., a Dry Borrowing, Wet Borrowing, Swing
Borrowing, Second-Lien Borrowing, Seasoned Borrowing, Commercial Loan Borrowing,
or Lease Borrowing.
"Borrowing Request" means a request executed by one or more Responsible
Officers of Co-Borrowers requesting a Borrowing and delivered to Administrative
Agent in substantially the form of Exhibit D-1.
"Business Day" means (a) for purposes of any LIBOR Borrowing or
Fixed-Rate Borrowing, a day specified in clause (b) of this definition when
commercial banks are open for international business in London, England, and (b)
for all other purposes, any day other than Saturday, Sunday, and any other day
that commercial banks are authorized by applicable Governmental Requirements to
be closed in Texas.
"Calendar Month" means that portion of a calendar month that occurs at
any time from the date of this agreement to the Termination Date.
"Calendar Quarter" means that portion of a calendar quarter that occurs
at any time from the date of this agreement to the Termination Date.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq.
"Closing Date" means July 31, 1997.
"Co-Borrowers" is defined in the preamble to this agreement.
Credit Agreement
"Collateral" means all Collateral as defined in the Security Agreement
or as otherwise delivered by any Person as security for the Obligation.
"Collateral-Delivery Notice" means a notice executed by Co-Borrowers
and delivered to Administrative Agent in substantially the form of Exhibit D-2.
"Collateral Documents" means the documents and other items described on
Schedule 4.3 and required to be delivered to Administrative Agent under Section
4.3.
"Commercial Loan" means a loan that is not a construction or
residential loan, is evidenced by a valid promissory note, and is secured by a
mortgage, deed of trust, or trust deed that grants a perfected first- or
second-priority Lien on commercial real property.
"Commercial Loan Borrowing" means a Borrowing that is subject to the
Commercial Loan Sublimit and the Commercial Loan for which meets the eligibility
requirements set forth on Schedule 4.1.
"Commercial Loan Sublimit" means, at any time, 5% of the total
Commitments.
"Commitment" means, at any time and for any Lender, the amounts stated
beside that Lender's name on the most-recently amended Schedule 2 (which amount
is subject to reduction and cancellation as provided in this agreement).
"Commitment Percentage" means, for any Lender, the proportion (stated
as a percentage) that its Commitment bears to the total Commitments of all
Lenders.
"Companies" means, at any time, Parent and each of its Subsidiaries
(including, without limitation, Co-Borrowers).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D-4 and signed by one or more Responsible Officers of Parent and each
Co-Borrower.
"Correction Period" means 14 calendar days for any Collateral Documents
shipped under Section 4.6 for correction.
"Coupon Rate" means the pre-maturity interest rate applicable to a
Mortgage Loan or Commercial Loan on any day, stated as an annual interest rate,
less 0.375% (rounded down to the nearest 0.125%), and each determination by
Administrative Agent of any Coupon Rate may be computed using any reasonable
averaging and attribution method and, absent manifest error, shall be conclusive
and binding.
"Credit Documents" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
including without limitation the Notes, the Guaranties and the Security
Agreement, (b) all agreements, documents, and instruments in favor of
Administrative Agent or Lenders (or Administrative Agent on behalf of Lenders)
ever delivered under this
Credit Agreement
agreement or otherwise delivered in connection with any of the Obligation (other
than assignments), and (c) all renewals, extensions, and restatements of, and
amendments and supplements to, any of the foregoing.
"Current Financials" means either (a) the Companies' Financials for the
year ended June 30, 1996, and for the nine months ended March 31, 1997, or (b)
at any time after the Companies' annual Financials are first delivered under
Section 7.1(a), the Companies' annual Financials then most recently delivered to
Administrative Agent, together with the Companies' interim Financials then most
recently delivered to Administrative Agent.
"Debt", for any Person and without duplication, means (a) all
obligations required by GAAP to be classified upon that Person's balance sheet
as liabilities, (b) liabilities secured (or for which the holder of the
liabilities has an existing Right, contingent or otherwise, to be so secured) by
any Lien existing on property owned or acquired by that Person, (c) obligations
that under GAAP should be capitalized for financial reporting purposes, and (d)
all guaranties, endorsements, and other contingent obligations with respect to
Debt of others or in respect of any Employee Plan.
"Debtor Laws" means the Bankruptcy Code of the United States of America
and all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar Governmental Requirements affecting creditors' Rights.
"Default Condition," in respect of any action or event, means that (a)
an Event of Default or Potential Default exists immediately before, or will
occur as a result of (or otherwise will exist immediately after), the occurrence
of that action or event or (b) the occurrence of the event or action will cause
any of the representations or warranties (unless they speak to a specific date
or are based on facts which have changed by transactions contemplated or
expressly permitted by this agreement) in the Credit Documents to be materially
incorrect.
"Default Rate" means, for any day, an annual interest rate equal to the
lesser of either (a) the Fed-Funds Rate plus 5%, or (b) the Maximum Rate.
"Distribution" means, at any time and with respect to any shares of any
capital stock or other equity securities issued by a Person, (a) the retirement,
redemption, purchase, or other acquisition for value of those securities, (b)
the declaration or payment of any dividend on or with respect to those
securities, (c) any loan or advance by that Person to, or other Investment by
that Person in, the holder of any of those securities, and (d) any other payment
by that Person with respect to those securities.
"Dry Borrowing" means a Borrowing for which all of the Collateral
Documents have been delivered to Administrative Agent in accordance with Section
4.3.
"Eligible Balances" means, for any calendar day and Lender, the sum
(which for any day that is not a Business Day is deemed for this definition to
be that sum as determined as of the close of business on the preceding Business
Day) of collected balances as of the close of business on that day in all
identified
Credit Agreement
non-interest bearing demand deposit accounts or money market zero reserve
accounts of or maintained by Co-Borrowers with such Lender.
"Eligible-Commercial Loan" means, at any time, a Commercial Loan for
which the applicable conditions for eligibility described in Schedule 4.1 are
satisfied and which may under Section 4.1 be included in the Borrowing Base.
"Eligible Lease" means, at any time, a Lease (other than a Seasoned
Lease) for which the applicable conditions for eligibility described in Schedule
4.1 are satisfied and which may under Section 4.1 be included in the Borrowing
Base.
"Eligible-Mortgage Loan" means, at any time, a Mortgage Loan (other
than a Seasoned Loan) for which the applicable conditions for eligibility
described in Schedule 4.1 are satisfied and which may under Section 4.1 be
included in the Borrowing Base.
"Eligible-Seasoned Lease" means, at any time, a Seasoned Lease for
which the applicable conditions for eligibility described in Schedule 4.1 are
satisfied and which may under Section 4.1 be included in the Borrowing Base.
"Eligible-Seasoned Loan" means, at any time, a Seasoned Loan for which
the applicable conditions for eligibility described in Schedule 4.1 are
satisfied and which may under Section 4.1 be included in the Borrowing Base.
"Employee Plan" means any employee-pension-benefit plan (a) covered by
Title IV of ERISA and established or maintained by any Company or any ERISA
Affiliate (other than a Multiemployer Plan) or (b) established or maintained by
any Company or any ERISA Affiliate, or to which any Company or any ERISA
Affiliate contributes, under the Governmental Requirements of any foreign
country.
"Environmental Governmental Requirement" means any applicable
Governmental Requirement that relates to protection of the environment or to the
regulation of any Hazardous Substances, including, without limitation, CERCLA,
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Emergency Planning and Community Right-to-Know Act (42
U.S.C. Section 11001 et seq.), the Safe Drinking Water Act (42 U.S.C. Section
201 and Section 300f et seq.), the Rivers and Harbors Act (33 U.S.C. Section 401
et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), analogous
state and local Governmental Requirements, and any analogous future enacted or
adopted Governmental Requirement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
Credit Agreement
"ERISA Affiliate" means any Person that, for purposes of Title IV of
ERISA, is a member of any Company's controlled group or is under common control
with any Company within the meaning of Section 414 of the IRC.
"Event of Default" is defined in Section 10.1.
"Fed-Funds Rate" means, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal-funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by Administrative Agent from three
federal-funds brokers of recognized standing selected by Administrative Agent.
If for any reason Administrative Agent shall determine (and its determination
shall be conclusive absent manifest error) that it is unable to ascertain for
any reason -- including Administrative Agent's inability or failure to obtain
sufficient quotations in accordance with the immediately preceding sentence --
the Fed-Funds Rate for any day, then for each such day that such circumstances
exist, the Fed-Funds Rate shall be deemed to be equal to the Base Rate for that
day minus 2.0%. Any rate of interest based on the Fed-Funds Rate shall be (a)
computed on the basis of a year consisting of 360 days applied for the actual
number of days for which the principal sum to which it applies is outstanding
and bears interest in accordance with this agreement at such rate of interest
based on the Fed-Funds Rate (i.e., on the 360-day basis) and (b) adjusted as of
the effective date of each change in the Fed-Funds Rate.
"FHA" means the Federal Housing Administration within the United States
Department of Housing and Urban Development.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"Financials" of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP (subject to year end audit adjustments with
respect to interim Financials) and (b) except as stated in Section 1.4, in
comparative form to prior year-end figures or corresponding dates or periods of
the preceding fiscal year or other relevant period, as applicable.
"Fixed Rate" means, for any Fixed-Rate Borrowing, a fixed rate of
interest equal to the sum of LIBOR on the Borrowing Date of that Fixed-Rate
Borrowing plus the Applicable Margin for LIBOR Borrowings.
"Fixed-Rate Borrowing" means any Borrowing that bears interest at a
Fixed Rate (except that Swing Borrowings and Wet Borrowings may not bear
interest at a Fixed Rate), which Borrowing shall be in an amount of at least
$5,000,000 or any higher integral multiple of $100,000.
"FNMA" means the Federal National Mortgage Association.
Credit Agreement
"Funding Loss" means any reasonable, out-of-pocket loss or expense that
any Lender incurs because any Co-Borrower (a) fails or refuses, for any reason
other than a default by the Lender claiming that loss or expense, to take any
Fixed-Rate Borrowing that it has requested under this agreement, or (b) prepays,
pays or converts any Fixed-Rate Borrowing at any time other than the last day of
the applicable Interest Period.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
"GNMA" means the Government National Mortgage Association.
"Governmental Authority" means any (a) local, state, territorial,
federal, or foreign judicial, executive, regulatory, administrative,
legislative, or governmental agency, board, bureau, commission, department, or
other instrumentality, (b) private arbitration board or panel, or (c) central
bank.
"Governmental Requirements" means all applicable statutes, laws,
treaties, ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, and interpretations of any Governmental Authority.
"Guarantor" means Parent and each other Person that has executed a
Guaranty.
"Guaranty" means a Guaranty in substantially the form of Exhibit B.
"HAC" is defined in the preamble to this agreement.
"Hazardous Substance" means any substance that is designated, defined,
classified, or regulated as a hazardous waste, hazardous material, pollutant,
contaminant, explosive, corrosive, flammable, infectious, carcinogenic,
mutagenic, radioactive, or toxic or hazardous substance under any Environmental
Governmental Requirement, including, without limitation, any hazardous substance
within the meaning of Section 101(14) of CERCLA.
"Hedge Contract" means, for any Person, any present or future, whether
master or single, agreement, document or instrument providing for, or
constituting an agreement to enter into, (a) commodity xxxxxx in the normal
course of business in accordance with prior practices of that Person before the
date of this agreement for purposes of hedging material purchases, (b)
foreign-currency purchases and swaps, and (c) interest-rate swap, cap, collar,
or similar arrangements.
"Interest Period" is determined in accordance with Section 3.8.
"Investment," in respect of any Person, means any (a) loan, advance,
extension of credit, or capital contribution to that Person, (b) investment in
that Person, (c) purchase or commitment to purchase
Credit Agreement
any equity securities or Debt issued by that Person or substantially all of the
assets or a division or other business unit of that Person, or (d) any Hedge
Contract with that Person.
"IRC" means the Internal Revenue Code of 1986.
"Lease" means an agreement evidencing the transfer of the right to
possession and use of goods for a term in return for consideration, other than
(a) a sale on approval, return, or otherwise and (b) a retention or creation of
a security interest except as a protective filing in the event the lease is
construed under the UCC or other applicable law to create a security interest.
"Lease Borrowing" means a Borrowing which is subject to the Leasing
Sublimit and the Lease for which meets the eligibility requirements set forth on
Schedule 4.1.
"Lease Collateral" means all Leases and related Collateral Documents
offered as Collateral under the Credit Documents.
"Leasing Sublimit" means, at any time, 30% of the total Commitments.
"Lender Lien" means any present or future first-priority Lien securing
the Obligation and assigned, conveyed, and granted to, or created in favor of,
Administrative Agent for the benefit of Lenders under the Credit Documents.
"Lenders" means the financial institutions (including, without
limitation, the entity which is Administrative Agent in respect of its share of
Borrowings) named on Schedule 2 or on the most-recently-amended Schedule 2, if
any, delivered by Administrative Agent under this agreement, and, subject to
this agreement, their respective successors and permitted assigns (but not any
Participant who is not otherwise a party to this agreement).
"Leverage Ratio" means, on any date of determination, the ratio of (a)
Total-Adjusted Debt to (b) the sum of Parent's Net Worth plus the outstanding
principal amount of Subordinated Debt.
"LIBOR" means, for any day, the rate of interest per annum which is
equal to the arithmetic mean of the rates appearing on the Reuters Screen LIBO
Page as of 11:00 a.m. London time for that day for the offering by such
institutions as are named therein to prime banks in the interbank dollar market
in London, England, of One Million Dollar ($1,000,000) deposits in United States
dollars for a one (1) month period. If Administrative Agent cannot determine
that rate for any day, then LIBOR for that day shall be the rate that deposits
in United States dollars in that amount and for that period are offered to the
entity which is Administrative Agent at approximately 11:00 a.m., London time,
on that day or, if that information is not reasonably available to
Administrative Agent, on the next later day for which such information is so
available. Administrative Agent's determination of LIBOR for each day shall be
conclusive and binding, absent manifest error. For purposes of this agreement
and each Note, LIBOR shall fluctuate upward and downward automatically and
concurrently with day-to-day changes in such arithmetic mean, and in the amount
of the change.
"LIBOR Borrowing" means any Borrowing that bears interest at LIBOR.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners (other than title of the lessor
under an operating lease).
"Litigation" means any action by or before any Governmental Authority.
"Market Value" means, on any day for any Mortgage Loan or Commercial
Loan at Administrative Agent's sole (but reasonably-exercised) discretion, the
market value of that Mortgage Loan or Commercial Loan as determined by
Administrative Agent based on the then-most recent posted net yield for Mortgage
Loans or Commercial Loans of the same type and Coupon Rate furnished by FNMA and
published and distributed by Telerate Mortgage Services, or, if such posted net
yield is not available from Telerate Mortgage Services, upon the posted net
yield stated by FNMA as determined by Administrative Agent or, for any Mortgage
Loan or Commercial Loan not eligible for purchase by FNMA, upon the current net
yield for Mortgage Loans or Commercial Loans of the same type and Coupon Rate as
reasonably determined by Administrative Agent.
"Material-Adverse Event" means any circumstance or event that,
individually or collectively, is reasonably expected to result (at any time
before the Commitments are fully canceled or terminated and the Obligation is
fully paid and performed) in any (a) material impairment of (i) the ability of
Parent, Co-Borrowers, or any Guarantor to perform any of its payment or other
material obligations under any Credit Document or (ii) the ability of
Administrative Agent or any Lender to enforce any of those obligations or any of
their respective Rights under the Credit Documents, (b) material and adverse
effect on the financial condition of the Companies as a whole as represented to
Lenders in the Current Financials most recently delivered before the date of
this agreement, (c) material and adverse impact on any Collateral, or (d) Event
of Default.
"Material Agreement" means, for any Person, any material written or
oral agreement, contract, commitment, or understanding to which such Person is a
party, by which such Person is directly or indirectly bound, or to which any
assets of such Person may be subject, (a) that involves revenues to, or
financial obligations of, any such Person in excess of 5% of Parent's Net Worth
from time to time in the aggregate during any 12-month period and which is not
cancelable by such Person upon 30 days or less notice without liability for
further payment other than nominal penalty.
"Maximum Amount" and "Maximum Rate" respectively mean, for any day and
for any Lender, the maximum non-usurious amount and the maximum non-usurious
rate of interest that, under applicable Governmental Requirements, such Lender
is permitted to contract for, charge, take, reserve, or receive on its portion
of the Obligation.
"Mortgage Collateral" means all Mortgage Loans and Commercial Loans and
related Collateral Documents offered as Collateral under the Credit Documents.
Credit Agreement
"Mortgage Loan" means a loan that is not a construction loan or
Commercial Loan, is evidenced by a valid promissory note, and is secured by a
mortgage, deed of trust, or trust deed that grants a perfected first-priority
Lien (or second-priority Lien with respect to Second-Lien Borrowings) on
residential-real property.
"Multiemployer Plan" means a multiemployer plan as defined in Section
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC (or any similar type
of plan established or regulated under the Governmental Requirements of any
foreign country) to which any Company or any ERISA Affiliate is making, or has
made, or is accruing, or has accrued, an obligation to make contributions.
"Net Income" means, for any period and any Person, the amount that
should, in accordance with GAAP, be reflected on that Person's income statement
as net income (reflecting that Person's profit or loss after deducting its Tax
expense).
"Net Worth" means, for any Person, the sum of its stockholder's equity
or other equity as determined under GAAP.
"Note Payment Accounts" means the following non-interest bearing
restricted checking accounts maintained with Administrative Agent separately for
each Co-Borrower:
o For ABC, Account No. 0000-000-0000, styled "American Business
Financial Services, Inc. - Note Payment Account."
o For HAC, Account No. 0000-000-0000, styled "American Business
Financial Services, Inc. - Note Payment Account."
o For ABL, Account No. 0000-000-0000, styled "American Business
Financial Services, Inc. - Note Payment Account."
which accounts are to be used for (a) Administrative Agent's deposits of
proceeds of Borrowings and payments constituting the proceeds of principal from
any Collateral (other than regular principal and interest payments on the
Mortgage Collateral and Lease Collateral) of the particular Co-Borrower; (b)
Administrative Agent's deposits of principal and interest payments for the
repayment of Borrowings received from the particular Co-Borrower or for the
particular Co-Borrower's account; and (c) only if and when no Event of Default
exists unless Administrative Agent has declared in writing that is has been
cured or waived, the particular Co-Borrower's withdrawal of proceeds of its
Borrowings for the purposes permitted under this agreement and Administrative
Agent's transfer from that Note Payment Account to that Co-Borrower's own
account (or to a controlled disbursement account maintained by that Co-Borrower
with Administrative Agent) or proceeds of sales or other dispositions of
released Collateral for that Co-Borrower in excess of its Borrowings borrowed
and then outstanding against that released Collateral. The Note Payment Accounts
are (and shall continuously be) part of the Collateral for the Obligation. The
Note Payment Accounts shall be subject to set off by Administrative Agent.
Co-Borrowers shall not have any right to directly withdraw funds from any Note
Payment Account, but instead those funds may be
Credit Agreement
withdrawn or paid out only against the order of any authorized officer of
Administrative Agent, although under the circumstances described in clause (c)
of the first sentence of this definition and subject to the conditions specified
in that clause, Administrative Agent shall use diligent and reasonable efforts
to cause Borrowings and excess Collateral proceeds that are received as therein
described and that are deposited to the Note Payment Account before 3:00 p.m. on
a Business Day to be transferred to an account on which the particular
Co-Borrower does have withdrawal order authority on that same Business Day.
"Notes" means the Warehouse Notes and the Swing Note
"Obligation" means all (a) present and future indebtedness,
obligations, and liabilities of Co-Borrowers or Parent to Administrative Agent
or any Lender and related to any Credit Document, whether principal, interest,
fees, costs, attorneys' fees, or otherwise, (b) Debts, liabilities, or
obligations owed by Parent or any Co-Borrower to any Lender or any Affiliate of
any Lender who, in either case, is also a Rate-Protection Party under any Hedge
Contract, (c) amounts that would become due but for operation of 11 U.S.C.
Sections 502 and 503 or any other provision of Title 11 of the United States
Code, and all renewals, extensions, and modifications of any of the foregoing,
and (d) pre- and post-maturity interest on any of the foregoing, including,
without limitation, all post-petition interest if Parent or any Co-Borrower
voluntarily or involuntarily files for protection under any Debtor Law.
"Organizational Documents" means, for any Person, the documents for its
formation and organization, which, for example, for a (a) corporation are its
corporate charter and bylaws, (b) for a partnership is its partnership
agreement, (c) for a limited-liability company are its certificate of
organization and regulations, and (d) for a trust is the trust agreement or
indenture under which it is created.
"Parent" means American Business Financial Services, Inc., a Delaware
corporation.
"Participant" is defined in Section 12.13.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" means any Acquisition for which all of the
following conditions are satisfied:
(a) No Default Condition will exist as a result of such
Acquisition;
(b) The Acquisition is within the Companies' lines of
business;
(c) At least 15 days before such Acquisition, subject to
prescriptions under applicable securities laws and to non-disclosure
obligations of the Administrative Agent and Lenders under Section
12.17(b), Co-Borrowers give to Administrative Agent and Lenders (A) a
written description of the target entity and of its business and
operations, (B) a written description of such Acquisition, which
includes a reasonably-detailed calculation of (and description of the
funding sources, if applicable, for) the total Investment involved,
including all Debt for which the acquired
Credit Agreement
Person is to remain obligated and what portion of it, if any, is to be
guaranteed, assumed, or paid (through merger or otherwise) by any
other Company, (C) a copy of the related purchase, merger, or other
governing agreement, and (D) an Acquisition Compliance Certificate
with respect to the Companies immediately before completion of such
Acquisition;
(d) The total of all Investments involved in all Permitted
Acquisitions (including, but without duplication, any Debt to be
guaranteed, assumed, or paid by any Company other than Debt owed by the
acquired Person for which no Company has any obligation whatsoever)
during any fiscal year of the Companies does not cause the Leverage
Ratio to exceed 4.0 to 1.0;
(e) The board of directors of the Person to be acquired has
not notified any Company or Lender that it opposes the offer by any
Company to acquire that Person and that opposition has not been
withdrawn;
(f) If structured as a merger or consolidation, Section 8.5
is complied with; and
(g) Concurrently with and as a condition precedent to the
closing of such Acquisition, Co-Borrowers shall (A) deliver to
Administrative Agent all documents necessary to be in compliance with
the applicable provisions of Section 4 (except to the extent of any
exceptions in those provisions), (B) shall deliver to Administrative
Agent and Lenders supplements or amendments to the schedules delivered
under Section 6 that are required to make the disclosures in those
schedules accurate after giving effect to such Acquisition, (C) obtain
the prior written consent of Required Lenders as to the supplements or
amendments to the schedules under clause (B) preceding, (D) deliver to
Administrative Agent and Lenders an Acquisition Compliance Certificate
with respect to the Companies immediately after giving effect to such
Acquisition, and (E) deliver to Administrative Agent such other
documents and take such action as Administrative Agent or any Lender
may reasonably request in order to effect the provisions of the Credit
Documents.
Notwithstanding the foregoing, the conditions set forth in clauses (c) and (g)
above shall not need to be satisfied for any Acquisition to be a Permitted
Acquisition provided the aggregate total purchase price for such Acquisitions in
any fiscal year is less than $2,000,000.
"Permitted Debt" is defined in Section 8.1.
"Permitted Investments" is defined in Section 8.3.
"Permitted Liens" is defined in Section 8.2.
"Person" means any individual, entity, or Governmental Authority.
"Potential Default" means any event's occurrence or any circumstance's
existence that would -- upon any required notice, time lapse, or both -- become
an Event of Default.
Credit Agreement
"Principal Debt" means, at any time, the outstanding principal balance
of all Borrowings.
"Purchaser" is defined in Section 12.14.
"Ratable Borrowing" means a Borrowing that is advanced by Lenders to a
Co-Borrower in accordance with their Commitment Percentages.
"Rate-Protection Exposure" means -- at any time and for any Hedge
Contract described in clause (c) of the definition of Hedge Contract above --
the amount, if any, that would be payable to the Rate-Protection Party in that
Hedge Contract for any "agreement value" as though that Hedge Contract were
terminated at that time, in each case (a) calculated as provided in the
International Swap Dealers Association Inc. Code of Standard Wording,
Assumptions, and Provisions for SWAPS and (b) determined by Administrative Agent
in good faith in reliance upon any information (including any information
provided by that Rate-Protection Party) that Administrative Agent believes (with
no obligation to verify accuracy) to be accurate.
"Rate-Protection Party" means, at any time, any party that has entered
into a Hedge Contract with Parent or any Co-Borrower that could give rise to
Rate-Protection Exposure.
"Regulation U" means Regulation U promulgated by the Board of Governors
of the Federal Reserve System, 12 C.F.R. Part 221.
"Release Request" means a Release Request executed and delivered by a
Responsible Officer of Co-Borrowers to Administrative Agent in substantially the
form of Exhibit C-6.
"Representatives" means representatives, officers, directors,
employees, attorneys, and agents.
"Required Lenders" means, at any time, any combination of Lenders whose
(a) Termination Percentages total at least 66 2/3% at any time on or after the
Termination Date, or (b) Commitment Percentages total at least 66 2/3% at all
other times.
"Responsible Officer" means (a) the chairman, president, chief
executive officer, any vice president, or chief financial officer of
Co-Borrowers and Parent to the extent that such officer's name, title, and
signature have been certified to Administrative Agent by the secretary or an
assistant secretary of Co-Borrowers and Parent, or (b) any other officer
designated as a "Responsible Officer" in writing to Administrative Agent by any
officer in clause (a) preceding.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Seasoned Borrowing" means a Borrowing which is subject to the Seasoned
Sublimit and the Mortgage Loan, Commercial Loan, or Lease for which meets the
eligibility requirements set forth on Schedule 4.1.
Credit Agreement
"Seasoned Lease" means, at any time, either (a) a Lease for which the
Collateral Documents have been included in the Borrowing Base for more than 270
days, or (b) except for the Leases identified on Schedule 1, any Lease which is
initially included in the Borrowing Base more than 270 days following its date
of origination.
"Seasoned Loan" means, at any time, either (a) a Mortgage Loan or
Commercial Loan for which the Collateral Documents have been included in the
Borrowing Base for more than 270 days, or (b) a Mortgage Loan or Commercial Loan
which is initially included in the Borrowing Base more than 270 days following
its date of origination.
"Seasoned Sublimit" means, at any time, 25% of the total Commitments.
"Second-Lien Borrowing" means a Borrowing which is subject to the
Second-Lien Sublimit and the Commercial Loan or Mortgage Loan for which meets
the eligibility requirements set forth on Schedule 4.1.
"Second-Lien Sublimit" means, at any time, 35% of the total
Commitments.
"Security Agreement" means the Security Agreement in substantially the
form of Exhibit C-1.
"Shipping Period" means 45 calendar days for the Collateral Documents
for any Mortgage Loan, Commercial Loan, or Lease shipped to or for an investor
under Section 4.5.
"Shipping Request" means a Shipping Request executed and delivered by a
Responsible Officer of Co-Borrowers to Administrative Agent in substantially the
form of Exhibit C-3.
"Stated-Termination Date" means July 31, 1999.
"Subordinated Debt" is defined in Section 8.1(h).
"Subsidiary" of any Person means any entity of which more than 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person. Unless otherwise specified
or the context otherwise requires, "Subsidiary" refers to a Subsidiary of
Parent.
"Swing Borrowing" means a Borrowing that is advanced by Administrative
Agent to any Co-Borrower under the Swing Sublimit.
"Swing Note" means a promissory note executed and delivered by
Co-Borrowers, payable to the order of Administrative Agent, in the stated
principal amount of the Swing Sublimit, and substantially in the form of Exhibit
A-2.
"Swing Sublimit" means $30,000,000.
"Take-Out Commitment" means a binding commitment from an investor to
purchase Mortgage Collateral or Lease Collateral, acceptable in form and
substance to Administrative Agent, in favor of a Co-Borrower, with respect to
which there is be no condition which cannot be reasonably anticipated to be
satisfied or complied with before its expiration.
"Tangible Net Worth" means, at any time, the sum (without duplication)
of (a) Parent's Net Worth, minus (b) treasury stock, minus (c) any surplus
resulting from the write-up of assets, minus (d) goodwill, including, without
limitation, any amounts representing the excess of the purchase price paid for
acquired assets, stock, or interests over the book value assigned to them, minus
(e) patents, trademarks, service marks, trade names, and copyrights, minus (f)
other intangible assets, plus (g) to the extent already deducted under clauses
(b) through (f) above, receivables or Investments consisting of the excess
spread relating to the Companies' asset securitizations, plus (h) to the extent
already deducted under clauses (b) through (f) above, mortgage servicing rights
retained or obtained in connection with the Companies' asset securitizations.
"Taxes" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon it, its income, or any of its
properties, franchises, or assets.
"Termination Date" means the earlier of either (a) the
Stated-Termination Date, or (b) the date that Lenders' commitments under this
agreement are fully canceled or terminated.
"Termination Percentage" means -- at any time for any Lender -- the
proportion (stated as a percentage) that its Principal Debt bears to the total
Principal Debt.
"Total-Adjusted Debt" means, on any date of determination, Parent's
total Debt minus the Subordinated Debt, minus (b) obligations under repurchase
agreements, minus (c) obligations under escrow-arbitrage facilities.
"Trust Receipt" means a Trust Receipt and Agreement executed and
delivered by Co-Borrowers to Administrative Agent in substantially the form of
Exhibit C-5.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
"VA" means the Department of Veteran's Affairs.
"Warehouse Note" means a promissory note executed and delivered by
Co-Borrowers, jointly and severally, payable to a Lender's order, in the stated
principal amount of that Lender's Commitment, and substantially in the form of
Exhibit A-1.
"Wet Borrowing" means a Borrowing for which all of the Collateral
Documents have not been delivered to Administrative Agent in accordance with
Section 4.3.
"Wet Period" means five Business Days.
Credit Agreement
"Wet Sublimit" means, at any time, a percentage of the total
Commitments, which percentage is (a) 25% for the first four and last three
Business Days of each Calendar Month, and (b) 15% at all other times.
"Wire Instructions" means, for any Person, the information for wire
transfers of funds to that Person, which (until changed by written notice to all
other parties to this agreement) are stated for Co-Borrowers, Administrative
Agent, and each Lender, beside their names on Schedule 2.
1.2 Time References. Unless otherwise specified, in the Credit
Documents (a) time references (e.g., 10:00 a.m.) are to time in Houston, Texas,
and (b) in calculating a period from one date to another, the word "from" means
"from and including," and the word "to" or "until" means "to but excluding."
1.3 Other References. Unless otherwise specified, in the Credit
Documents (a) where appropriate, the singular includes the plural and vice
versa, and words of any gender include each other gender, (b) heading and
caption references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Credit Document in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including, without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items as being
limited to the same type or character of those specific items is not applicable,
(h) references to any Person include that Person's heirs, personal
representatives, successors, trustees, receivers, and permitted assigns, (i)
references to any Governmental Requirement include every amendment or supplement
to it, rule and regulation adopted under it, and successor or replacement for
it, and (j) references to any Credit Document or other document include every
renewal and extension of it, amendment and supplement to it, and replacement or
substitution for it.
1.4 Accounting Principles. Unless otherwise specified, in the Credit
Documents (a) GAAP in effect on this date determines all accounting and
financial terms and compliance with financial covenants, (b) otherwise, all
accounting principles applied in a current period must be comparable in all
material respects to those applied during the preceding comparable period, and
(c) while Parent has any consolidated Subsidiaries (i) all accounting and
financial terms and compliance with reporting covenants must be on a
consolidating and consolidated basis, as applicable, and (ii) compliance with
financial covenants must be on a consolidated basis.
SECTION 2. BORROWING PROVISIONS.
2.1 Commitments. Subject to the limitations below and other provisions
of the Credit Documents and on Business Days before the Termination Date, each
Lender severally agrees to provide its Commitment Percentage of Borrowings
(except for Administrative Agent in respect of Swing Borrowings) so long as, in
each case, no Borrowing may be disbursed for less than $100,000 or that would
cause any of the following applicable limitations to be exceeded, which
limitations must be read together and are not mutually exclusive:
Credit Agreement
o The total Principal Debt may never exceed the lesser of either (a)
the total Commitments or (b) the total Borrowing Base.
o The total Principal Debt of all Swing Borrowings may never exceed the
Swing Sublimit.
o The total Principal Debt of Wet Borrowings may never exceed the Wet
Sublimit.
o The total Principal Debt of Second-Lien Borrowings may never exceed
the Second-Lien Sublimit.
o The total Principal Debt of Seasoned Borrowings may never exceed the
lesser of either (i) the Seasoned Sublimit, or (ii) the portion of the Borrowing
Base attributable to Eligible-Seasoned Loans and Eligible-Seasoned Leases.
o The total Principal Debt of Commercial Loan Borrowings may never
exceed the lesser of either (i) the Commercial Loan Sublimit, or (ii) the
portion of the Borrowing Base attributable to Eligible-Commercial Loans.
o The total Principal Debt of Lease Borrowings and Seasoned Borrowings
attributable to Seasoned Leases may never exceed the lesser of either (i) the
Lease Sublimit, or (ii) the portion of the Borrowing Base attributable to Leases
and Seasoned Leases.
o The Principal Debt of Borrowings funded to and actually received and
used by a Co-Borrower may not exceed the Borrowing Base attributable
to the Collateral owned by such Co-Borrower.
o Except for Administrative Agent in respect of Swing Borrowings, no
Lender's direct or indirect portion of the Principal Debt under this Section may
sever exceed either its Commitment or its Commitment Percentage.
2.2 Borrowing Request. Co-Borrowers may only request a Borrowing by
timely delivering to Administrative Agent a Collateral-Delivery Notice and
required Collateral Documents under Section 4.3 and by delivering to
Administrative Agent a Borrowing Request for the Borrowing before 12:00 a.m. on
the applicable Borrowing Date for a Base-Rate Borrowing or a LIBOR Borrowing or
the third Business Day before the Borrowing Date for a Fixed-Rate Borrowing.
Unless otherwise indicated on the Borrowing Request, any Borrowing will be
funded as a LIBOR Borrowing. A Borrowing Request is irrevocable and binding on
Co-Borrowers when delivered. Administrative Agent shall use its best efforts to
promptly -- but at least by 1:00 p.m. on the day it timely receives a Borrowing
Request for a Ratable Borrowing -- send a copy of it to each Lender by fax and
confirm it by telephone.
2.3 Fundings.
(a) Remittance by Lenders. Each Lender shall remit its Commitment
Percentage of any Ratable Borrowing requested in a Borrowing Request to
Administrative Agent's principal
Credit Agreement
office in Houston, Texas, by wire transfer according to Administrative
Agent's Wire Instructions, in funds that are available for immediate
use by Administrative Agent, by 2:00 p.m. on the Borrowing Date.
(b) Funding by Administrative Agent. Subject to receipt of those
funds, Administrative Agent shall (i) for a Borrowing under an Agent's
Request, treat those funds as a payment by Co-Borrowers on the
Principal Debt of Swing Borrowings, and (ii) for any other Borrowing on
the Borrowing Date -- unless to its actual knowledge any of the
applicable conditions precedent have not been satisfied by Co-Borrowers
or waived by the requisite Lenders -- either deposit those funds into
the applicable Note Payment Account for a Dry Borrowing, or wire
transfer those funds in accordance with the Borrowing Request for a Wet
Borrowing.
(c) Non-remittance under Borrowing Request. Absent contrary written
notice from a Lender received by Administrative Agent by 3:00 p.m. on
the Borrowing Date, Administrative Agent may assume that each Lender
has made its Commitment Percentage of a Ratable Borrowing under a
Borrowing Request available to Administrative Agent on the Borrowing
Date and may -- but is not obligated to -- make available to
Co-Borrowers a corresponding amount. If a Lender fails to make its
Commitment Percentage of that Borrowing available to Administrative
Agent on the Borrowing Date -- whether because of that Lender's
default, because that Lender is not open for business on that Business
Day, or otherwise -- then Administrative Agent may recover that amount
on demand (i) from that Lender, together with interest at the Fed-Funds
Rate, during the period from the Borrowing Date to the date
Administrative Agent recovers that amount from that Lender, which
payment is then deemed to be that Lender's Commitment Percentage of
that Borrowing, or (ii) if that Lender fails to pay that amount upon
demand, then from Co-Borrowers, if applicable, together with interest
at an annual interest rate equal to the rate applicable to the
requested Borrowing during the period from the Borrowing Date to the
date Administrative Agent recovers that amount from Co-Borrowers.
Notwithstanding these provisions, each Lender remains obligated to lend
its Commitment Percentage of that Borrowing, assumes the credit risk
for that amount when that Borrowing is made available to or for
Co-Borrowers, and, after Administrative Agent has recovered the amount
of interest provided for in clause (i) above, is entitled to interest
on that amount from the Borrowing Date.
(d) Non-remittance under Agent's Request. If a Lender fails to make
its Commitment Percentage of a Ratable Borrowing under an Agent's
Request available to Administrative Agent on its Borrowing Date, then
-- without acquiescing in that Lender's default or waiving any Rights
Administrative Agent has against that Lender -- by 10:00 a.m. on the
next Business Day, Administrative Agent shall notify Co-Borrowers of
the amount of Principal Debt of Swing Borrowings that remains.
(e) Other Lenders. Although no Lender is responsible for the
failure of any other Lender to make its Commitment Percentage of any
Ratable Borrowing, that failure does not excuse any other Lender from
making its Commitment Percentage of that Borrowing.
Credit Agreement
(f) Agent's Request. On any Business Day on which there are
Swing Borrowings outstanding, Administrative Agent may -- but at least
once every five Business Days when those circumstances exist,
Administrative Agent shall (without any liability for failing to) --
unilaterally request a Ratable Borrowing under this Section 2.3, that
is (i) to be made in the amount of the Principal Debt of Swing
Borrowings outstanding on the date of such request, (ii) to be advanced
on the Business Day following such request, and (iii) to be made as a
Base-Rate Borrowing. That Ratable Borrowing is for the account of
Co-Borrowers, but does not require any Co-Borrower's joinder or other
action. Administrative Agent shall fax that request (an "Agent's
Request") to each Lender and Co-Borrowers and confirm it by telephone
by 2:00 p.m. on the Borrowing Date for the requested Ratable Borrowing.
When so made, an Agent's Request irrevocably binds Co-Borrowers.
2.4 Wet Borrowings. The conditions and procedures of Section 2.2 and
Section 2.3 apply to Wet Borrowings, except as follows:
(a) Collateral Documents. A Wet Borrowing may be funded before
delivery to Administrative Agent of all of the required Collateral
Documents for the eligible Collateral supporting that Wet Borrowing.
The Collateral-Delivery Notice delivered to Administrative Agent for a
Wet Borrowing may be sent to Administrative Agent by fax but must
identify and describe each Mortgage Loan, Commercial Loan, or Lease
that supports that Wet Borrowing and the amount of the Borrowing Base
applicable to it. By delivering the Collateral-Delivery Notice, Co-
Borrowers confirm their grant under this agreement of Lender Liens --
from the Borrowing Date for each Wet Borrowing -- on each Collateral
Document offered as Collateral in that Collateral-Delivery Notice that
is perfected subject to the delivery of the related promissory notes
and lease document for those Mortgage Loans, Commercial Loans, and
Leases to Administrative Agent or its bailee.
(b) Funding by Administrative Agent. Administrative Agent
shall make the funds available to Co-Borrowers by 3:00 p.m. on the
Borrowing Date by wire transferring these funds in accordance with the
Borrowing Request or by depositing these funds into the applicable Note
Payment Account.
2.5 Swing Borrowing Procedures. The conditions and procedures of
Section 2.2, Section 2.3, and Section 2.4 apply to Swing Borrowings except as
follows:
(a) Borrowing Request. The Borrowing Request for a Swing
Borrowing must be delivered to Administrative Agent by 3:00 p.m. on the
Borrowing Date and may not request a Base-Rate Borrowing or Fixed-Rate
Borrowing.
(b) Election by Administrative Agent. Administrative Agent
shall then elect in its sole discretion whether to loan that Swing
Borrowing. If Administrative Agent elects to loan that Swing Borrowing,
then it shall follow the funding procedures that are applicable under
Sections 2.2, 2.3, and 2.4.
Credit Agreement
(c) Participations. Immediately upon Administrative Agent's
funding a Swing Borrowing, Administrative Agent is deemed to have sold
and transferred to each other Lender -- and each other Lender is deemed
irrevocably and unconditionally to have purchased and received from
Administrative Agent -- without recourse or warranty, an undivided
interest and participation in that Swing Borrowing to the extent of
that Lender's Commitment Percentage of the amount of it, which
participation must be paid for on demand by Administrative Agent.
2.6 Increases and Terminations.
(a) Increases up to $150,000,000. Co-Borrowers may from time
to time request any one or more Lenders to increase their respective
Commitments or other financial institutions first approved by
Administrative Agent to agree to a Commitment so that the total
Commitments may be increased to no more than $150,000,000. That
increase must be effected by an amendment to this agreement in the form
attached hereto as Exhibit G that is executed by the Companies,
Administrative Agent and the one or more Lenders who have agreed to
increase their Commitments or new Lenders who have agreed to new
Commitments. Co-Borrowers shall execute and deliver to each such Lender
a Warehouse Note in the stated amount of its new Commitment. No Lender
is obligated to increase its Commitment under any circumstances, and no
Lender's Commitment may be increased except by its execution of an
amendment to this agreement in the form of Exhibit G. Each new Lender
providing such additional Commitment shall be a "Lender" hereunder,
entitled to the rights and benefits, and subject to the duties, of a
Lender under the Credit Documents. All amounts advanced hereunder
pursuant to any such additional Commitment shall be secured by the
Collateral on a pari passu basis with all other amounts advanced
hereunder. In the event the total Commitments are increased,
Co-Borrowers shall execute a new Warehouse Note in favor of the Lender
extending such additional Commitment in a stated amount of its new
Commitment and shall notify each Lender in writing of such additional
Commitment. In such case, each Lender's Commitment Percentage shall be
recalculated to reflect the new proportionate share of the revised
total Commitments and the Lender responsible for the additional
Commitment shall, immediately upon receiving notice from Administrative
Agent, pay to each Lender an amount equal to its pro rata share of the
Borrowings outstanding as of such date. All such payments shall reduce
the outstanding principal balance of the Note of each Lender receiving
such payments and shall represent Borrowings to Co-Borrowers under the
purchasing Lender's Warehouse Note. The purchasing Lender shall be
entitled to share ratably in interest accruing on the balances
purchased, at the rates provided herein for such balances, from and
after the date of purchase. All new Borrowings occurring after an
increase of the total Commitments shall be funded in accordance with
each Lender's revised Commitment Percentage.
(b) Termination of a Lender. After giving written and
irrevocable notice to Agent and each Lender at least three Business
Days before the effective date of any termination, Co-Borrowers may
fully terminate any Lender's Commitment before the Stated-Termination
Date. Also, a Lender may agree to a partial termination of its
Commitment before the Stated-Termination Date by executing an
amendment under Section 12.10. A full or partial termination under this
clause (a) may occur on one or more occasions but may only occur if (i)
no Event of Default or
Credit Agreement
Potential Default exists unless otherwise consented to by Lenders
(other than the terminating Lender), whose Termination Percentages
total at least 51%, and (ii) such termination requires (A) no full or
partial termination of any other Lender's Commitment, (B) a mandatory
prepayment under Section 3.4 on the effective date of the termination,
(C) payment of any related Funding Loss, and (D) no other premium or
penalty. All fees under Sections 3.14(b) and (c) cease to accrue in
respect of the portion of the Commitment so terminated effective as of
the date the termination is effective. Notwithstanding the termination
of any Lender's Commitment, the rights of such Lender under Sections
3.10, 7.6 and 7.10 shall continue as to any portion of the Obligation
which remains owing to such Lender and for any period of time prior to
such date of termination.
(c) Terminations of all Lenders. After giving written and
irrevocable notice to Administrative Agent and each Lender at least
three Business Days before the effective date of any termination,
Co-Borrowers may fully or partially terminate the Commitments. A
termination under this clause (b) (i) if partial, (A) must be at least
$10,000,000 and an integral of $5,000,000, (B) must be ratable for each
Lender according to its Commitment Percentage, (C) requires a mandatory
prepayment under Section 3.4 on the effective date of termination, and
(D) requires no other premium or penalty, or (ii) if full, requires (A)
a mandatory prepayment under Section 3.4 on the effective date of the
termination, and (B) no other premium or penalty.
(e) Termination Date. The total Commitments automatically
terminate on the Termination Date.
(e) Reinstatement. Once terminated, no part of any commitment
or agreement to extend credit under this agreement may be reinstated
except by an amendment to this agreement under Section 12.10.
2.7 Multiple Borrowers.
(a) Co-Borrowers. Each representation and warranty in the
Credit Documents by any Co-Borrower is deemed to be its separate
representation and warranty and the joint and several representation
and warranty of each other Co-Borrower, and vice versa. Each covenant
and agreement by any Co-Borrower under the Credit Documents is deemed
to be its separate covenant and agreement and the joint and several
covenant and agreement of each other Co-Borrower, and vice versa. Any
communication under the Credit Documents to any Co-Borrower is deemed
to have been concurrently received by each other Co-Borrower, and vice
versa.
(b) Basis for Structure. Co-Borrowers desire to utilize their
borrowing potential on a combined basis to the same extent possible if
they were merged into a single-corporate entity. Each Co-Borrower has
determined that it will specifically and materially benefit from all
Borrowings. Each Co-Borrower intends, and Lenders have required, that
each Co-Borrower execute and deliver this agreement, the Notes, and
certain other Credit Documents. Each Co-Borrower has requested and
bargained for the structure and terms of, and security for, Borrowings.
Credit Agreement
(c) Joint and Several Obligation. Each Co-Borrower irrevocably
and unconditionally agrees (i) that it is jointly and severally liable
to Administrative Agent and Lenders for full payment and performance of
the Obligation and all obligations of Co-Borrowers under the Credit
Documents, (ii) to fully pay and perform the Obligation and all of
those obligations of Co-Borrowers, and (iii) to Indemnify, as a Primary
Obligor, Administrative Agent and Each Lender for and Against Any Loss
That Administrative Agent or Any Lender Incurs as a Result of Any
Obligations or Borrowings Being or Becoming Void, Voidable,
Unenforceable, or Ineffective for Any Reason Whatsoever (Whether Known
to Administrative Agent, Any Lender, or Any Other Person) the Amount of
That Loss Being the Amount Which Administrative Agent or That Lender,
as the Case May Be, Would Otherwise Have Been Entitled to Recover from
Any Co-borrower. This Indemnity Survives the Payment and Performance of
the Obligation and Termination of the Credit Documents.
(d) Contribution Rights. Each Co-Borrower intends that its
obligations under the Credit Documents are not subject to challenge on
any basis. Therefore, as of the date any transfer is deemed to occur
under the Credit Documents, each Co-Borrower's liabilities under the
Credit Documents and all other liabilities -- calculated in each case
to the full extent of their probable-net exposure when and if those
liabilities become absolute and mature (i.e., "dated liabilities") --
are intended by them to be less than the fair valuation of all of its
assets as of that date (i.e., its "dated assets"). To that end, each
Co-Borrower (i) grants to and recognizes in the others ratable Rights
of subrogation and contribution in the amount, if any, by which the
granting party's dated assets (but for the total subrogation and
contribution in its favor under this section) would exceed the granting
party's dated liabilities, and (ii) acknowledges receipt of and
recognizes its ratable Rights to subrogation and contribution from each
other Co-Borrower in the amount that the other Co-Borrower's dated
assets (but for the total subrogation and contribution in its favor
under this section) would exceed the other Co-Borrower's dated
liabilities. Each Co-Borrower will recognize Rights of subrogation and
contribution at least equal to its obligations under the Credit
Documents. It is a material objective of this section that each
Co-Borrower recognize Rights to subrogation and contribution rather
than be deemed insolvent by reason of an arbitrary interpretation of
its obligations under the Credit Documents.
SECTION 3. PAYMENT TERMS.
3.1 Notes. The Principal Debt and interest on it are evidenced by the
Notes. Notwithstanding any sale of participating interests under Section 12.13
or any contrary notice, other than an Assignment and Assumption Agreement,
Co-Borrowers and Administrative Agent may deem and treat each Lender as the
absolute owner of its respective Note or Notes for all purposes.
3.2 Payment Procedures.
(a) Payments. Co-Borrowers shall make each payment and
prepayment on the Obligation to Administrative
Credit Agreement
Agent, on behalf of Lenders, in accordance with Administrative Agent's
Wire Instructions, in funds that are available for immediate use by
Administrative Agent. Payments that are received by 1:00 p.m. on a
Business Day are deemed received on that Business Day. Payments that
are received after 1:00 p.m. on a Business Day are deemed received on
the next Business Day. Subject to Section 3.7(f), applicable interest
continues to accrue through the calendar day immediately before the
Business Day on which a payment is deemed received. No Lender directly
invoices Co-Borrowers for (and only Administrative Agent invoices
Co-Borrowers for) interest under the Credit Documents.
(b) Distributions. When received under clause (a) above,
Administrative Agent shall distribute each payment to each Lender, in
accordance with Section 3.5 and each Lender's Wire Instructions,
reasonably promptly after receipt, but by no later than 3:30 p.m. on
the Business Day that payment is deemed to be received by
Administrative Agent under clause (a) above. If Administrative Agent
fails to distribute any payment to any Lender as required by this
clause, then Administrative Agent shall pay to that Lender on demand
interest on that payment, from the date due under this clause until
paid, at an annual interest rate equal from day to day to the Fed-Funds
Rate.
3.3 Scheduled Payments. Unless otherwise provided in this agreement,
Co-Borrowers shall pay the Obligation in accordance with the following table:
================================================================================
Obligation Payable
================================================================================
Interest on each Fixed-Rate As it accrues on (a) the last
Borrowing except at the Default day of that Borrowing's Interest Period
Rate and -- if that Interest Period is
longer than three months --
90 days after its first day
and each 90 days after that,
and (b) on the Termination
Date.
--------------------------------------------------------------------------------
Interest on each Base-Rate On (a) the 15th day of each Calendar
Borrowing or LIBOR Month as it accrued on the last
Borrowing except at the Default day of the preceding Calendar
Rate Month and (b) on the Termination
Date.
--------------------------------------------------------------------------------
Interest at the Default Rate On demand as it accrues.
--------------------------------------------------------------------------------
Principal of Swing Borrowings On demand
================================================================================
3.4 Prepayments.
(a) Commitment Termination. On the effective date of any (i)
termination of a Lender's Commitment under Section 2.6(b), Co-Borrowers
shall pay to Administrative Agent for that Lender the Obligation owed
to that Lender, (ii) partial termination of the Commitments under
Section 2.6(c), Co-Borrowers shall pay to Administrative Agent for
Lenders the amount that the Principal Debt exceeds the reduced total
Commitments, together with accrued and unpaid interest on such excess,
all accrued fees, if any, and any related Funding Loss, and (iii) full
termination of the Commitments under Section 2.6(c) or Section 2.6(d),
Co-Borrowers shall prepay the full Obligation.
Credit Agreement
(b) Borrowing Excess. Co-Borrowers shall, on demand when any
Borrowing Excess exists, prepay the appropriate Principal Debt
(together with any related Funding Loss) or take any other actions in
accordance with this agreement necessary to eliminate the Borrowing
Excess and any accrued unpaid interest thereon.
(c) Voluntary Prepayments. Co-Borrowers may otherwise
voluntarily prepay any of the Obligation at any time without premium or
penalty, but with any applicable Funding Loss and accrued unpaid
interest on any such portion of the Obligation being prepaid.
3.5 Order of Application. All payments and proceeds (whether voluntary,
involuntary, through the exercise of any Right of set-off or other Right,
realization against any Collateral, or otherwise) shall be applied in the
following order:
(a) No Event of Default. While no Event of Default exists, (i)
all payments of regularly scheduled interest shall be applied to
accrued and unpaid interest on the Obligation, payable ratably to
Lenders in the proportion that the amount of interest owed to each
Lender bears to the total of all interest owed to all Lenders, (ii) all
payments and proceeds from the sale or other disposition of Collateral
shall be applied to the Principal Debt for the applicable Borrowing-
Purpose Category, applied first against the then-outstanding Swing
Borrowings (in each case payable solely to Administrative Agent, which
Administrative Agent shall distribute in accordance with the
participation interests in that Principal Debt that any one or more
Lenders may have purchased and paid for under Section 2.5(c)) and then
to non-Swing Borrowings, payable ratably to each Lender in accordance
with its Commitment Percentage, and (iii) all other payments and
proceeds shall be applied as Co-Borrowers direct, except that principal
payments must always be applied first to Swing Borrowings (in each case
payable solely to Administrative Agent, which Administrative Agent
shall distribute in accordance with the participation interests in that
Principal Debt that any one or more Lenders may have purchased and paid
for under Section 2.5(c)) before being applied to non-Swing Borrowings
(in each case payable ratably to each Lender in accordance with its
Commitment Percentage). Administrative Agent may, to the extent
possible, rearrange the order of application of payments and proceeds
against Principal Debt to avoid the application of any Funding Loss.
(b) Event of Default. While an Event of Default exists, to:
(i) all costs and expenses incurred by Administrative
Agent in connection with its duties under the Credit Documents
-- including, without limitation, reasonable fees and expenses
paid by Administrative Agent to any servicing companies
reasonably and necessarily retained by Administrative Agent to
assist it in servicing any Collateral required to be serviced,
to any attorneys, or to Administrative Agent -- that have not
been reimbursed by Lenders, together with interest at the
Default Rate, payable solely to Administrative Agent;
Credit Agreement
(ii) all costs and expenses incurred by any Lender in
connection with the Credit Documents that are reimbursable to
it under the Credit Documents, and all amounts paid by that
Lender to Administrative Agent as a reimbursement to it of
costs and expenses incurred by Administrative Agent in
connection with its duties under the Credit Documents,
together with interest at the Default Rate -- payable ratably
to Lenders in the proportion that each Lender's share of those
costs and expenses bears to the total of those costs and
expenses for all Lenders;
(iii) accrued and unpaid interest on the Obligation,
payable ratably to Lenders in the proportion that the amount
of interest owed to each Lender bears to the total of all
interest owed to all Lenders;
(iv) Principal Debt of Swing Borrowings -- in each
case payable solely to Administrative Agent, which
Administrative Agent shall distribute in accordance with the
participation interests in that Principal Debt that any one or
more Lenders may have purchased and paid for under Section
2.5(c);
(v) Principal Debt of non-Swing Borrowings, payable
ratably to each Lender in accordance with its Termination
Percentage (except as the order may be rearranged by
Administrative Agent to the extent possible to avoid the
application of any Funding Loss;
(vi) all other portions of the Obligation, payable
ratably to Lenders and their Affiliates in the proportion that
each Lender's or Lender's Affiliate's share of those amounts
bears to the total of those amounts for all Lenders and their
Affiliates; and
(vii) either (i) to Co-Borrowers or to their
successors or assigns on their behalf, to be divided between
them as they may agree, or (ii) as a court of competent
jurisdiction may direct.
3.6 Sharing. If any Lender obtains any amount (whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under Section 10.3) that exceeds the portion of that
amount to which it is otherwise entitled under the Credit Documents, then that
Lender shall purchase from the other Lenders participations that result in the
purchasing Lender's sharing the excess amount ratably with each Lender in
accordance with the portion it is entitled to receive under the Credit
Documents. If all or any of that excess amount is subsequently recovered from
that purchasing Lender, then the purchase of participations in it is
automatically rescinded and the purchase price is restored to that purchasing
Lender to the extent of the recovery. Any Lender purchasing a participation from
another Lender under this section may, to the extent lawful, exercise all of its
Rights of payment (including the Right of offset) with respect to that
participation as fully as if that Lender were the direct creditor of
Co-Borrowers in the amount of that participation.
Credit Agreement
3.7 Interest Rates.
(a) Non-Default Rate. Subject to clause (b) below, all
Principal Debt bears an annual interest rate equal to the lesser of
either the Maximum Rate or the rate applicable in the following table:
================================================================================
Principal Debt Rate
================================================================================
Average-Principal Debt of all Borrowings Applicable-Covered Rate
(other than Fixed Rate Borrowings) owed
to any Lender during any Calendar Month
that does not exceed the Average-Eligible
Balances with that Lender for that
Calendar Month
--------------------------------------------------------------------------------
Average-Principal Debt of all Borrowings For LIBOR Borrowings, Average-
owed to any Lender during any Calendar Adjusted-LIBOR for that Calendar
Month and not bearing interest under Month
the above section of this table ----------------------------------
For Base-Rate Borrowings, the
Average-Adjusted-Base Rate for
that Calendar Month
----------------------------------
For each Fixed-Rate Borrowing, the
Fixed Rate applicable to its
Interest Period
================================================================================
(b) Default Rate. All past-due Principal Debt and past-due
interest on it bears interest at the Default Rate from the date due
(stated or by acceleration) until paid, whether or not payment is
before or after entry of a judgment.
(c) Rate Changes. Each change in the Base Rate, LIBOR, the
Fed-Funds Rate, and the Maximum Rate is effective upon the effective
date of change without notice to Co-Borrowers or any other Person.
(d) Calculations. Interest is calculated on the basis of
actual days (including the first but excluding the last) over a 360-day
year, unless the calculation would result in an interest rate greater
than the Maximum Rate, in which event interest is calculated on the
basis of the actual days in that year. All interest rate determinations
and calculations by Administrative Agent are conclusive and binding
absent manifest error.
(e) Recapture. If the designated interest rate applicable to
any Borrowing exceeds the Maximum Rate, the interest rate on that
Borrowing is limited to the Maximum Rate. However, any subsequent
reductions in the designated interest rate shall not become effective
until the total amount of accrued interest equals the amount of
interest that would have accrued if that designated interest rate had
always been in effect. If at maturity (stated or by acceleration), or
at final payment of the Notes, the total interest paid or accrued is
less than the interest that would have accrued if the designated
interest rates had always been in effect, then, at that time and to the
extent permitted by Governmental Requirements, Co-Borrowers shall pay
an amount equal to the
Credit Agreement
difference of (i) the lesser of either the amount of interest that
would have accrued if the designated interest rates had always been in
effect, or the amount of interest that would have accrued if the
Maximum Rate had always been in effect, minus (ii) the amount of
interest actually paid or accrued on the Notes.
(f) Maximum Rate. Regardless of any Credit Document provision,
no Lender is entitled to contract for, charge, take, reserve, receive,
or apply, as interest on all or any of the Obligation, any amount in
excess of the Maximum Rate. If a Lender ever does so, then any excess
is treated as a partial prepayment of principal, and any remaining
excess shall be refunded to Co-Borrowers promptly after determination.
In determining if the interest paid or payable exceeds the Maximum
Rate, Co-Borrowers and Lenders shall, to the extent lawful (i) treat
all Borrowings as but a single extension of credit, (ii) characterize
any nonprincipal payment as an expense, fee, or premium rather than as
interest, (iii) exclude voluntary prepayments and their effects, and
(iv) amortize, prorate, allocate, and spread the total amount of
interest throughout the full-contemplated term of the Obligation.
However, if the Obligation is paid in full before the end of that
full-contemplated term and the interest received for the Obligation's
actual period of existence exceeds the Maximum Amount, then Lenders
shall promptly refund any excess without being subject to any penalties
provided by any Governmental Requirements. If Texas Governmental
Requirements are applicable for purposes of determining the "Maximum
Rate" or the "Maximum Amount," then those terms mean the "indicated
rate ceiling" from time to time in effect under Article 1.04, Title 79,
Texas Revised Civil Statutes, as amended. Chapter 15, Subtitle 79,
Texas Revised Civil Statutes, 1925 (which regulates certain revolving
credit loan accounts and revolving triparty accounts), does not apply
to the Obligation.
3.8 Interest Periods. When any Co-Borrower requests any Fixed-Rate
Borrowing, it may elect the applicable interest period (each an "Interest
Period") -- which may be either 7 days, 14 days, or one, two, three, or six
months at its option or such other period as it and Administrative Agent may
agree (after first obtaining approval of all Lenders) -- subject to the
following conditions: (a) the initial Interest Period commences on the
applicable Borrowing Date and each subsequent applicable Interest Period
commences on the day when the next preceding applicable Interest Period expires;
(b) if any Interest Period (other than an Interest Period consisting of either 7
or 14 days) begins on a day for which no numerically corresponding Business Day
in the Calendar Month at the end of that Interest Period exists, then that
Interest Period ends on the last Business Day of such Calendar Month; (c) if an
Interest Period would otherwise not end on a Business Day, it shall end on the
immediately succeeding Business Day unless such succeeding Business Day is in
the next Calendar Month in which case such Interest Period shall end on the
immediately preceding Business Day; (d) no Interest Period for any portion of
the Obligation may extend beyond the scheduled repayment date for that portion
of the Obligation; and (e) no more than four Interest Periods may be in effect
at any time.
3.9 Basis Unavailable or Inadequate for LIBOR. If, on or before any
date when LIBOR is to be determined for either a LIBOR Borrowing or a Fixed-Rate
Borrowing, Administrative Agent or any Lender (upon notice to Administrative
Agent) reasonably determines that the basis for determining the applicable rate
is not available or that the resulting rate does not accurately reflect the cost
any Lender of making or converting Borrowings at that rate (and, if applicable,
for the applicable Interest Period), then
Credit Agreement
Administrative Agent shall promptly notify Co-Borrowers and Lenders of that
determination (which is conclusive and binding on Co-Borrowers, absent manifest
error), and that Borrowing shall be a Base-Rate Borrowing. Until Administrative
Agent notifies Co-Borrowers and Lenders that it or the notifying Lender (upon
notice to Administrative Agent) has determined that those circumstances no
longer exist (which it shall promptly do), then Lenders' commitments under this
agreement to make LIBOR Borrowings and Fixed-Rate Borrowings are suspended.
3.10 Additional Costs. This section survives the full satisfaction of
the Obligation, termination of the Credit Documents, and release of Lender
Liens.
(a) For any LIBOR Borrowing or Fixed-Rate Borrowing, if (i)
(A) any change after the date of this agreement in any present or
future Governmental Requirement (and, for purposes of this Section
3.10, Governmental Requirement includes interpretations and guidelines
of any Governmental Authority, whether or not having the force of law)
or any future Governmental Requirement imposes, modifies, or deems
applicable (or if compliance by any Lender with any requirement of any
Governmental Authority results in) any requirement that any reserves
(including, without limitation, any marginal, emergency, supplemental,
or special reserves) be maintained, (B) those reserves reduce any sums
receivable by any Lender under this agreement or increase the costs
incurred by any Lender in advancing or maintaining any portion of any
LIBOR Borrowing or Fixed-Rate Borrowing, and (C) that Lender determines
that the reduction or increase is material (and it may, in determining
the material nature of the reduction or increase, utilize reasonable
assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method), then (ii) that Lender
(through Administrative Agent) shall deliver to Co-Borrowers a
certificate, within one (1) year of any such change, stating in
reasonable detail the calculation of the amount necessary to compensate
it for its reduction or increase (which certificate is conclusive and
binding absent manifest error), and Co-Borrowers shall pay that amount
to that Lender within ten days after demand.
(b) If (i) (A) any change after the date of this agreement in
any present or future Governmental Requirement regarding capital
adequacy or compliance by any Lender with any request, directive, or
requirement now or in the future imposed by any Governmental Authority
regarding capital adequacy or any change in the risk category of this
transaction reduces the rate of return on its capital as a consequence
of its obligations under this agreement to a level below that which it
otherwise could have achieved (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by it to be
material (and it may, in determining the material nature of the
reduction, utilize reasonable assumptions and allocations of costs and
expenses and use any reasonable averaging or attribution method), then
(ii) that Lender (through Administrative Agent) shall deliver to
Co-Borrowers a certificate, within one (1) year of any such change,
stating in reasonable detail the calculation of the amount necessary to
compensate it for its reduction (which certificate is conclusive and
binding absent manifest error), and Co-Borrowers shall pay that amount
to that Lender within ten days after demand.
Credit Agreement
(c) Any Taxes payable by Administrative Agent or any Lender or
ruled (by a Governmental Authority) payable by Administrative Agent or
any Lender in respect of any Credit Document shall -- if permitted by
Governmental Requirement and if deemed material by Administrative Agent
or that Lender (who may, in determining the material nature of the
amount payable, utilize reasonable assumptions and allocations of costs
and expenses and use any reasonable averaging or attribution method) --
be paid by Co-Borrowers, together with interest and penalties, if any
(except for Taxes payable on the overall Net Income of Administrative
Agent or that Lender and except for interest and penalties incurred as
a result of the gross negligence or willful misconduct of
Administrative Agent or any Lender). Administrative Agent or that
Lender (through Administrative Agent) shall notify Co-Borrowers and
deliver to Co-Borrowers a certificate stating in reasonable detail the
calculation of the amount of payable Taxes, which certificate is
conclusive and binding (absent manifest error), and Co-Borrowers shall
pay that amount to Administrative Agent for the account of
Administrative Agent or that Lender, as the case may be, within ten
days after demand. If Administrative Agent or that Lender subsequently
receives a refund of the Taxes paid to it by Co-Borrowers, then the
recipient shall promptly pay the refund to Co-Borrowers.
(d) Notwithstanding anything to the contrary in Section 10,
any breach of Section 9.1 or Section 9.2 arising solely as a result of
payments made to any Lender pursuant to this Section 3.10 shall not be
deemed to be an Event of Default.
3.11 Change in Governmental Requirements. If any change, after the date
of this agreement, in any present or future Governmental Requirement makes it
unlawful for any Lender to make or maintain LIBOR Borrowings or Fixed-Rate
Borrowings, then that Lender shall promptly notify Administrative Agent, who
shall promptly notify Co-Borrowers and (a) as to undisbursed funds, any
requested Borrowing shall be made as a Base-Rate Borrowing, (b) as to any
outstanding Borrowing (i) if maintaining that Borrowing as a LIBOR Borrowing or
Fixed-Rate Borrowing is unlawful, that Borrowing shall be converted to a
Base-Rate Borrowing as of the date of notice, or (ii) if maintaining that
Borrowing as a LIBOR Borrowing or Fixed-Rate Borrowing is not unlawful, that
Borrowing shall be converted to a Base-Rate Borrowing only at the option of
Co-Borrowers, or (iii) if any conversion will not resolve the unlawfulness,
Co-Borrowers shall promptly prepay that Borrowing.
3.12 Funding Loss. Subject to Section 3.11, Co-Borrowers agree to
indemnify each Lender against (and pay to it upon demand) any Funding Loss of
that Lender. When any Lender demands that Co-Borrowers pay any Funding Loss,
that Lender shall deliver to Administrative Agent, who shall promptly deliver to
Co-Borrowers, a certificate stating in reasonable detail the basis for imposing
Funding Loss and the calculation of the amount (which certificate is conclusive
and binding absent manifest error). This Section 3.12 survives the satisfaction
and payment of the Obligation and termination of the Credit Documents.
3.13 Foreign Lenders, Participants, and Purchasers. Each Lender,
Participant (by accepting a participation interest under this agreement), and
Purchaser (by executing an assignment and assumption agreement) that is not
organized under the Governmental Requirements of the United States of America
Credit Agreement
or one of its states (a) represents to Administrative Agent and Co-Borrowers
that (i) no Taxes are required to be withheld by Administrative Agent or
Co-Borrowers with respect to any payments to be made to it in respect of the
Obligation, and (ii) it has furnished to Administrative Agent and Co-Borrowers,
two duly completed copies of either U.S. Internal Revenue Service Form 4224,
Form 1001, Form W-8, or any other form acceptable to Administrative Agent that
entitles it to exemption from U.S. federal withholding Tax on all interest
payments under the Credit Documents, and (b) covenants to (i) provide
Administrative Agent and Co-Borrowers a new Form 4224, Form 1001, Form W-8, or
other form acceptable to Administrative Agent upon the expiration or
obsolescence of any previously delivered form according to applicable
Governmental Requirements, duly executed and completed by it, and (ii) comply
from time to time with all Governmental Requirements with regard to the
withholding Tax exemption. If any of the foregoing is not true or the applicable
forms are not provided, then Co-Borrowers and Administrative Agent (without
duplication) may deduct and withhold any United States federal income Tax (at
the full rate applicable under the IRC) from interest payments under the Credit
Documents.
3.14 Fees. The following fees are not compensation for the use,
detention, or forbearance of money, are in addition to, and not in lieu of,
interest and expenses otherwise described in the Credit Documents, are
non-refundable, bear interest if not paid when due at the Default Rate, and are
calculated on the basis of actual days (including the first but excluding the
last) elapsed over a year of 360 days (or actual days during that year, if the
calculation would otherwise result in exceeding the Maximum Amount and the
payment were deemed to be interest, notwithstanding the above provisions to the
contrary):
(a) Administrative Agent's Fees. Co-Borrowers shall promptly
pay to Administrative Agent (for its sole account) administration,
syndication, and custodial fees in amounts and upon such payment terms
as may be separately agreed upon by Co-Borrowers and Administrative
Agent.
(b) Facility Fee. On the Closing Date, Co-Borrowers shall pay
to Administrative Agent for the account of each initial Lender to this
agreement a facility fee equal to $21,527.78. On the first day of each
Calendar Quarter thereafter, Co-Borrowers shall pay to Administrative
Agent for the account of each Lender a facility fee equal to a
percentage per annum calculated as the product of 0.125% multiplied by
each Lender's Commitment. When received, Administrative Agent shall pay
to each Lender that Lender's Commitment Percentage of this fee.
(c) Non-use Fee. On the first day of each Calendar Quarter
(beginning with April 1, 1998), Co-Borrowers shall pay to
Administrative Agent a non-use fee for the account of all Lenders. Each
payment of that fee is calculated for the period from the first day of
the preceding Calendar Quarter to and including the last day of that
preceding Calendar Quarter except for the initial payment which shall
be calculated for the period from February 1, 1998 to and including
March 31, 1998. When received, Administrative Agent shall pay to each
Lender that Lender's Commitment Percentage of that fee less the
applicable portion of that fee accruing for any period before that
Lender became a Lender. The amount of that fee for that period is:
(i) 0.100%, multiplied by
Credit Agreement
(ii) the remainder of (A) the lesser of the Average
Commitments for all Lenders for that period or $75,000,000,
minus (B) the Average-Principal Debt for all Lenders for that
period. If the amount remaining after subtracting clause (B)
from clause (A) above is less than $0, then that remainder
shall be deemed to be zero for the subject Calendar Quarter.
SECTION 4. COLLATERAL PROCEDURES.
4.1 Eligible Collateral. The requirements for Mortgage Collateral and
Lease Collateral to be included in the Borrowing Base are listed on Schedule
4.1. If at any time any item of Mortgage Collateral ceases to meet those
requirements, then that item is automatically excluded from all calculations of
the Borrowing Base.
4.2 Borrowing Base. By 1:00 p.m. on the date of any Borrowing, any
payment of Principal Debt, or removal of any Collateral, and in any event, at
least quarterly, Administrative Agent shall deliver to Co-Borrowers and Lenders
a Borrowing-Base Report prepared on the basis of the information then available
to Administrative Agent as provided in this agreement.
4.3 Collateral Delivery. Co-Borrowers must comply with all the required
procedures in Schedule 4.3 for Mortgage Collateral and Lease Collateral offered
in connection with this agreement by no later than 11:00 a.m. on the Borrowing
Date for Collateral supporting any new Borrowing.
4.4 Bailee and Administrative Agent. Administrative Agent and Lenders
appoint Co-Borrowers, and Co-Borrowers shall act, as their (a) special agent,
for the sole and limited purpose of obtaining and maintaining Appraisals for
Mortgage Loans, Commercial Loans, and Leases as required by the Credit
Documents, and (b) bailee, until delivery of all such Collateral Documents as
required by Schedule 4.3, to (i) hold in trust for Administrative Agent for the
benefit of Lenders (A) the original recorded copy of the mortgage, deed of
trust, or trust deed securing each Mortgage Loan or Commercial Loan, (B) a
mortgagee policy of title insurance (or binding unexpired and unconditional
commitment to issue such insurance if the policy has not yet been delivered to
Co-Borrowers) insuring Co-Borrowers' perfected, first priority Lien (or
second-priority Lien with respect to Second-Lien Borrowings) created by that
mortgage, deed of trust, or trust deed, (C) the original insurance policies
referred to on Schedule 4.1, (D) original copies of all Take-Out Commitments,
and (E) all other original documents, (ii) specifically identify those items in
the appropriate Collateral-Delivery Notice, and (iii) deliver to Administrative
Agent any of the foregoing items as soon as reasonably practicable upon
Administrative Agent's request.
4.5 Shipment for Sale.
(a) Shipment of Collateral. If no Event of Default, Potential
Default, or Borrowing Excess exists, and if shipment would not result
in any investor (other than FNMA, FHLMC, and GNMA, or any other
investor that Administrative Agent has approved in writing), or its
servicers and custodians, holding Collateral Documents for Mortgage
Loans, Commercial Loans, or Leases with more than a total $1,000,000
face amount, then Co-Borrowers may, by a Shipping Request
Credit Agreement
delivered to Administrative Agent by 11:00 a.m. on the Business Day
immediately preceding the requested shipping date, request
Administrative Agent to ship Collateral Documents to an investor, or
its servicer or custodian, for purchase of the related Mortgage Loans,
Commercial Loans, or Leases. If Administrative Agent has no actual
knowledge that any of the above conditions have not been satisfied,
then Administrative Agent shall use its best efforts to ship the
Collateral Documents it holds for those Mortgage Loans, Commercial
Loans or Leases to that investor, or its servicer or custodian, under
an appropriate Bailee Letter by the end of the Business Day following
the date of receipt of the applicable Shipping Request.
(b) Ineligible Collateral. Collateral shipped under clause (a)
above, unless returned timely to Administrative Agent, ceases to be an
Eligible-Mortgage Loan, Eligible-Commercial Loan or Eligible Lease, as
applicable, (i) to the extent that Collateral Documents for Mortgage
Loans, Commercial Loans or Leases with more than a total face amount of
$1,000,000 are held by or for any investor (other than FNMA, FHLMC, and
GNMA, or any other investor that Administrative Agent has approved in
writing), and (ii) upon the earlier of either the release of the Lender
Liens in that Collateral under clause (c) below, or the expiration of
the Shipping Period for that Collateral.
(c) Release of Liens. The Lender Liens on any Collateral
shipped under clause (a) above continues on that Collateral until
Administrative Agent receives payment in the applicable Note Payment
Account in an amount at least equal to the full amount of the
Borrowings made with respect to those Eligible-Mortgage Loans,
Eligible-Commercial Loans or Leases.
(d) Certain Credits. Neither Administrative Agent nor any
Lender is obligated at any time to credit Co-Borrowers for any amounts
due from any purchase of any Mortgage Collateral or Lease Collateral
contemplated under this agreement until Administrative Agent has
actually received immediately available funds for that Mortgage
Collateral or Lease Collateral in the amount required under this
agreement. Neither Administrative Agent nor any Lender is obligated at
any time to collect any amounts or otherwise enforce any obligations
due from any purchaser in respect of any such purchase.
4.6 Shipment for Correction. If no Event of Default, Potential Default,
or Borrowing Excess exists or occurs as a result of the shipment, and if
shipment would not result in any Collateral Documents for Mortgage Loans,
Commercial Loans or Leases with more than an aggregate total face amount of
$500,000 being outstanding for correction, then Co-Borrowers may, by a Trust
Receipt delivered to Administrative Agent, request that Administrative Agent
ship to Co-Borrowers the entire file of Collateral Documents for any Mortgage
Loan, Commercial Loan or Lease so that certain of those Collateral Documents may
be corrected or replaced for clerical or other non-substantive mistakes. If
Administrative Agent has no actual knowledge that any of the above conditions
have not been satisfied, then, and subject to the limitations below,
Administrative Agent shall use its best efforts to ship to Co-Borrowers the
entire file of Collateral Documents to be corrected or replaced by the end of
the Business Day following the date of receipt of the applicable Trust Receipt.
Co-Borrowers shall re-deliver to Administrative Agent the corrected Collateral
Documents (meeting the requirements of Schedule 4.3) before the expiration of
the
Credit Agreement
Correction Period for that Collateral. Collateral shipped under this section,
unless returned to Administrative Agent, ceases to be an Eligible-Mortgage Loan,
Eligible-Commercial Loan or Eligible Lease (a) to the extent that Collateral
Documents for Mortgage Loans, Commercial Loans or Leases with more than an
aggregate total face amount of $500,000 are outstanding for correction at any
time, and (b) upon the expiration of the Correction Period for that Collateral.
The Lender Liens on any Collateral shipped under this section continue in full
force and effect.
4.7 Release of Collateral.
(a) Excess Collateral. If no Event of Default or Potential
Default exists, and no Borrowing Excess exists or would occur (after
taking into account any corresponding payment on the Obligation) as a
result of the release, Co-Borrowers may, by a Release Request delivered
to Administrative Agent by 11:00 a.m. on the Business Day of the
release, request that Administrative Agent release the Lender Liens on
any Collateral.
(b) Satisfaction of Obligation. If the Obligation is fully
paid and performed, and all commitments by each Lender to extend credit
under the Credit Documents are terminated or canceled, Co-Borrowers
may, by written request to Administrative Agent, request that
Administrative Agent release the Lender Liens on all of the Collateral,
return to Co-Borrowers or their respective designees all Collateral
Documents then held by Administrative Agent, and execute a release of
any financing statements or other documents filed or recorded to
perfect the Lender Liens.
(c) Releases. If Administrative Agent has no actual knowledge
that any of the above conditions for a release have not been satisfied,
then Administrative Agent shall effect those releases.
SECTION 5. CONDITIONS PRECEDENT.
(a) Initial Borrowing. No Lender is obligated to fund its part
of any Borrowing unless Administrative Agent has received all of the
documents and items described on Schedule 5.
(b) Each Borrowing. In addition, no Lender is obligated to
fund its part of any Borrowing unless on the applicable Borrowing Date
(and after giving effect to the requested Borrowing): (a)
Administrative Agent has timely received a Borrowing Request; (b) all
of the representations and warranties of the Companies in the Credit
Documents are true and correct in all material respects (unless they
speak to a specific date or are based on facts which have changed by
transactions contemplated or permitted by this agreement); (c) no Event
of Default or Potential Default exists; (d) the funding of the
Borrowing is permitted by all Governmental Requirements and does not
cause a Borrowing Excess; and (e) if reasonably requested by
Administrative Agent, it has received evidence substantiating any of
the matters in the Credit Documents that are necessary to enable
Co-Borrowers to qualify for that Borrowing.
(c) General. Each condition precedent in this agreement
(including, without limitation, those on Schedule 5) is material to the
transactions contemplated by this agreement, and time is of the essence
with respect to each. Subject to first obtaining the approval of all
Lenders, Administrative Agent or any Lender may fund any Borrowing
without all conditions being satisfied. However, to the extent lawful,
that funding is not a waiver of the requirement that each condition
precedent be satisfied as a prerequisite for any subsequent funding,
unless all Lenders specifically waive an item in writing.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Parent and each Co-Borrower jointly
and severally represent and warrant to Administrative Agent and Lenders as
follows:
6.1 Purpose of Credit. Borrowings are to be used as stated in the
recitals of this agreement. No Company is engaged principally (or as one of its
important activities) in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U. No
part of the proceeds of any Borrowing is to be used, directly or indirectly, for
a purpose that violates any Governmental Requirement, including, without
limitation, the provisions of Regulation U.
6.2 About the Companies.
(a) Subsidiaries and Trade Names. Except as described on
Schedule 6.2 (i) no Company has any Subsidiaries, and (ii) no
Co-Borrower has used or transacted business under any other corporate
or trade name in the six month period preceding the date of this
agreement.
(b) Existence, Qualification, and Compliance. Each of Parent
and each Co-Borrower is duly organized, validly existing, and in good
standing under the Governmental Requirements of the jurisdiction in
which it is incorporated or formed as stated on Schedule 6.2. Except
where such failure is not a Material-Adverse Event, each of Parent and
each Co-Borrower (i) is duly qualified to transact business and is in
good standing as a foreign corporation or other entity in each
jurisdiction where the nature and extent of its business and properties
require due qualification and good standing (as described on Schedule
6.2), (ii) possesses all requisite authority, permits, and power to
conduct its business as is now being, or as is contemplated by this
agreement to be, conducted, and (iii) is in compliance with all
applicable Governmental Requirements.
(c) Offices. Each Co-Borrower's chief executive office and
other principal offices are described on Schedule 6.2. The present and
foreseeable location of each Co-Borrower's books and records concerning
accounts and accounts receivable is at its chief executive office, and
all of its books and records are in its possession.
6.3 Authorization and Contravention. The execution and delivery by
Parent and each Co-Borrower of each Credit Document to which it is a party, and
the performance by it of its related obligations (a) are within its corporate
power or partnership authority, as applicable, (b) have been duly authorized by
all necessary corporate or partnership action, as applicable, (c) except for any
action or filing
Credit Agreement
that has been taken or made on or before the date of this agreement, require no
action by, or filing with, any Governmental Authority, (d) do not violate any
provision of its charter, articles of incorporation, bylaws, or partnership
agreement, as applicable, (e) except where not a Material-Adverse Event, do not
violate any provision of Governmental Requirement applicable to it, or of any
material agreements to which it is a party, and (f) except for Lender Liens, do
not result in the creation or imposition of any Lien on any asset of any
Company.
6.4 Binding Effect. Upon execution and delivery by all parties to it,
each Credit Document will constitute a legal and binding obligation of Parent
and each Co-Borrower party to it, and is enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable Debtor
Laws and general principles of equity.
6.5 Fiscal Year. The Companies' fiscal year ends each June 30.
6.6 Current Financials. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the financial
condition, results of operations, and cash flows of the Companies as of, and for
the portion of the fiscal year ending on, their date or dates (subject only to
normal year-end adjustments). All material liabilities of the Companies as of
the date or dates of the Current Financials are reflected in them or notes to
them. Except for transactions directly related to, or specifically contemplated
by, the Credit Documents, no subsequent material adverse changes have occurred
in the financial condition of the Companies from that shown in the Current
Financials in effect as of the Closing Date, nor has any Company incurred any
subsequent material liability.
6.7 Debt. Neither Parent nor any Co-Borrower has any Debt except
Permitted Debt.
6.8 Intellectual Property. Each of Parent and each Co-Borrower owns all
material licenses, patents, patent applications, copyrights, copyright
applications, service marks, service xxxx applications, trademarks, trademark
applications, and trade names necessary to continue to conduct its businesses as
presently conducted by it and proposed to be conducted by it immediately after
the date of this agreement. Each of Parent and each Co-Borrower is conducting
its business without infringement or claim of infringement of any license,
patent, copyright, service xxxx, trademark, trade name, trade secret, or other
intellectual property right of others, other than any infringements or claims
that, if successfully asserted against or determined adversely to that Company,
are not a Material-Adverse Event. To Parent's and each Co-Borrower's knowledge,
no infringement or claim of infringement by others of any material license,
patent, copyright, service xxxx, trademark, trade name, trade secret, or other
intellectual property of that Company exists.
6.9 Litigation. Except as disclosed on Schedule 6.9 (a) neither Parent
nor any Co-Borrower is subject to, or aware of the threat of, any investigation
by any Governmental Authority or Litigation that is reasonably likely to be
determined adversely to it, or, if so adversely determined, would be a Material-
Adverse Event, and (b) no outstanding or unpaid judgments against Parent or any
Co-Borrower exist.
Credit Agreement
6.10 Transactions with Affiliates. Neither Parent nor any Co-Borrower
is a party to a material transaction with any of its Affiliates, except (a)
transactions in the ordinary course of business and upon fair and reasonable
terms not materially less favorable than it could obtain or could become
entitled to in an arm's-length transaction with a Person that was not its
Affiliate, and (b) the transactions described on Schedule 6.10.
6.11 Taxes. All Tax returns of each Company required to be filed have
been filed (or extensions have been granted) before delinquency, except for
returns for which the failure to file is not a Material-Adverse Event, and all
Taxes imposed upon each Company that are due and payable have been paid before
delinquency.
6.12 Employee Plans. Except where occurrence or existence is not a
Material-Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in Section 302 of ERISA or ss. 412 of the IRC),
(b) no Company has incurred liability under ERISA to the PBGC in connection with
any Employee Plan, (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the IRC), and (e) no "reportable event" (as defined in Section 4043 of ERISA)
has occurred in respect of any Employee Plan, excluding events for which the
notice requirement is waived under applicable PBGC regulations.
6.13 Property and Liens. Each of Parent and each Co-Borrower has good
and marketable title to all its property reflected on the Current Financials,
except for property that is obsolete or that has been disposed of either in the
ordinary course of business, or, after the date of this agreement, as otherwise
permitted by this agreement. All Collateral is free and clear of any Liens and
adverse claims of any nature except Permitted Liens.
6.14 Environmental Matters. Except where not a Material-Adverse Event,
neither Parent nor any Co-Borrower (a) knows of any environmental condition or
circumstance adversely affecting any Company's properties or operations, or any
material portion of the properties subject to Mortgage Loans or Commercial
Loans, or any material portion of the assets subject to Leases, (b) has received
any report of any Company's violation of any Environmental Governmental
Requirement, or (c) knows that any Company is under any obligation to remedy any
violation of any Environmental Governmental Requirement. Each Company has taken
prudent steps to determine that its properties and operations, and substantially
all of the properties subject to Mortgage Loans or Commercial Loans and assets
subject to Leases, do not violate any Environmental Governmental Requirement,
except those that are not a Material-Adverse Event.
6.15 Government Regulations. Neither Parent nor any Co-Borrower is
subject to regulation under the Investment Company Act of 1940, as amended, or
the Public Utility Holding Company Act of 1935, as amended.
6.16 Insurance. Parent and each Co-Borrower maintains with financially
sound, responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance,
Credit Agreement
with an insurance fund or by self-insurance authorized by the jurisdictions in
which it operates) insurance concerning its properties and businesses against
casualties and contingencies, and of types and in amounts (and with co-insurance
and deductibles) as is customary in the case of similar businesses.
6.17 Appraisals. With respect to the property the subject of any
Mortgage Loan or Commercial Loan, each Co-Borrower has obtained Appraisals in
material compliance with all Appraisal Requirements.
6.18 Full Disclosure. Each material fact or condition relating to the
Credit Documents or the financial condition, business, or property of the
Companies that is a Material-Adverse Event has been disclosed in writing to
Administrative Agent and Lenders. All information previously furnished by any
Company to Administrative Agent or any Lender in connection with the Credit
Documents was (and all information furnished in the future by any Company to
Administrative Agent or any Lender will be) true and accurate in all material
respects or based on reasonable estimates on the date the information is stated
or certified.
SECTION 7. AFFIRMATIVE COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated, and the Obligation
is fully paid and performed, Parent and each Co-Borrower jointly and severally
covenant and agree with Administrative Agent and Lenders as follows:
7.1 Reporting Requirements. Parent shall furnish to Administrative
Agent the following, all in form and detail reasonably satisfactory to
Administrative Agent:
(a) Annual Financials. Promptly when available (but at least
within 90 days after the last day of each fiscal year of the Companies)
(i) audited consolidated Financials (reflecting the corresponding
figures as of the end of and for the preceding fiscal year in
comparative form) and an unaudited consolidating balance sheet and
income statement of the Companies as of that year end, (ii) audited
Financials (reflecting the corresponding figures as of the end of and
for the preceding fiscal year in comparative form) of HAC as of that
year end, (iii) audited Financials of ABL as of that year end
(reflecting the corresponding figures as of the end of and for the
preceding fiscal year in comparative form, provided that such figures
for the fiscal year ended 1996 shall be unaudited), and (iv)
unqualified opinions of a firm of independent certified public
accountants acceptable to Administrative Agent stating that those
audited Financials were prepared in accordance with GAAP applied on a
basis consistent with prior periods, except for such changes in GAAP
concurred in by the Companies' independent public accountants and
present fairly the (in the case of the Companies, consolidated)
financial condition and results of operations of the Companies, HAC, or
ABL, as the case may be, as of (and for the fiscal year ending on) that
last day, and (vi) a Compliance Certificate.
(b) Quarterly Financials. Promptly when available (but at
least within 45 days after the end of each Calendar Quarter) (i)
unaudited consolidated and consolidating Financials for the Companies,
prepared as of the last day of the Calendar Quarter just ended, and
(ii) a Compliance Certificate.
Credit Agreement
(c) Quarterly Asset Reports. Promptly when available, but at
least within 45 days after the end of each Calendar Quarter, a static
pool analysis and a report detailing delinquencies and charge-offs,
both in form and substance acceptable to Administrative Agent, prepared
as of the last day of the Calendar Quarter just ended. At any time
after an Event of Default has occurred and while that Event of Default
is continuing, the static pool analysis and the report detailing
delinquencies and charge-offs will be required to be delivered within
30 days after the end of each Calendar Quarter.
(d) Other Reports. Promptly after preparation and
distribution, accurate and complete copies of all reports and other
material communications about material financial matters or material
corporate plans or projections by or for any Company for distribution
to any Governmental Authority or any existing or potential creditor or
shareholder (i) including, without limitation, each Form 10-K (or
10-KSB), 10-Q (or 10-QSB), and S-8 filed with the Securities and
Exchange Commission but (ii) excluding (A) credit, trade, and other
reports prepared and distributed in the ordinary course of business,
and (B) information otherwise furnished to Administrative Agent and
Lenders under this agreement.
(e) Audit Reports. Promptly when available, copies of each
report prepared by any independent public accountants or other third
parties with respect to a Co-Borrower's compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of
America's Uniform Single Attestation Program for Mortgage Bankers
(USAP).
(f) Information Regarding Brokers and Correspondents. Upon
Administrative Agent's request, information regarding any brokers or
correspondents from which any Co-Borrower purchases or otherwise
acquires Mortgage Loans, Commercial Loans, or Leases.
(g) Notices. Notice, promptly after Parent or any Co-Borrower
knows or has reason to know, of (i) the existence and status of any
Litigation that, if determined adversely to any Company, would be a
Material-Adverse Event, (ii) any change in any material fact or
circumstance represented or warranted by Parent or any Co-Borrower in
any Credit Document that constitutes a Material-Adverse Event, (iii)
the receipt by any Company of notice of any violation or alleged
violation of ERISA, any Environmental Governmental Requirement, or
other Governmental Requirement, if that violation is a Material-Adverse
Event, or (iv) an Event of Default or Potential Default specifying the
nature thereof and what action the Companies have taken, are taking, or
propose to take with respect to it.
(h) Other Information. Promptly upon reasonable request by
Administrative Agent or Required Lenders (through Administrative
Agent), information (not otherwise required to be furnished under the
Credit Documents and to the extent that neither Parent nor any
Co-Borrower is prohibited by a binding confidentiality agreement with a
Person who is not an Affiliate of any Company from providing that
information) respecting the business affairs, assets, and liabilities
of any Company, and opinions, certifications, and documents in addition
to those mentioned in this agreement.
Credit Agreement
7.2 Use of Proceeds. Co-Borrowers shall use the proceeds of Borrowings
only for the purposes represented in this agreement.
7.3 Books and Records. Each Company shall maintain books, records, and
accounts necessary to prepare Financials in accordance with GAAP.
7.4 Inspections. Upon reasonable request and notice, Parent and each
Co-Borrower shall allow Administrative Agent and its Representatives and
(subject to the following sentence) any Lender and its Representatives to
inspect any of its properties, to review reports, files, and other records, to
make and take away copies, to conduct tests or investigations, and to discuss
any of its affairs, conditions, and finances with its directors, officers,
employees, or representatives from time to time during reasonable business
hours. Lenders and their Representatives shall make their requests for the
foregoing through Administrative Agent, shall endeavor to conduct the foregoing
in reasonable groups, and shall not make on-site inspections more than once each
12-month period unless an Event of Default exists. Upon reasonable request,
Parent and each Co-Borrower shall allow Administrative Agent, any Lender, or
their respective Representatives to inspect any of its properties, to review
reports, files, and other records, to make and take away copies, to conduct
tests or investigations, and to discuss any of its affairs, conditions, and
finances with its directors, officers, employees, or representatives from time
to time during reasonable business hours.
7.5 Taxes. Parent and each Co-Borrower shall promptly pay when due any
and all Taxes, other than Taxes for which the failure to pay is not a
Material-Adverse Event or which are being contested in good faith by lawful
proceedings diligently conducted, against which reserve or other provision
required by GAAP has been made, and in respect of which levy and execution of
any Lien have been and continue to be stayed.
7.6 Expenses. Parent and each Co-Borrower shall pay (a) all reasonable
legal fees and expenses incurred by Administrative Agent in connection with the
preparation, negotiation, and execution of the Credit Documents, (b) all
reasonable legal fees and expenses incurred by Administrative Agent in
connection with each separate future amendment, consent, waiver, or approval
executed in connection with any Credit Document, (c) all other reasonable legal
fees and expenses by Administrative Agent in connection with the exercise of any
right under any Credit Document on or after the Closing Date, (d) all fees,
charges, or Taxes for the recording or filing of any Credit Document to create
or perfect Lender Liens, (e) all other reasonable out-of-pocket expenses of
Administrative Agent or any Lender in connection with the preparation,
negotiation, execution, or administration of the Credit Documents -- including,
without limitation, courier expenses incurred in connection with the Mortgage
Collateral or Lease Collateral, (f) all amounts expended, advanced, or incurred
by Administrative Agent or any Lender to satisfy any obligation of any Company
under any Credit Document, to collect the Obligation, or to enforce the Rights
of Administrative Agent or any Lender under any Credit Document -- including,
without limitation, all court costs, attorneys' fees (whether for trial, appeal,
other proceedings, or otherwise), fees of auditors and accountants, and
investigation expenses reasonably incurred by Administrative Agent or any Lender
in connection with any such matters, (g) interest at an annual interest rate
equal to the Default Rate on each item specified in clause (f) above from 30
days after the date of written demand or request
Credit Agreement
for reimbursement to the date of reimbursement, and (h) any and all stamp and
other Taxes payable or determined to be payable in connection with the
execution, delivery, or recordation of any Credit Document -- IN CONNECTION WITH
WHICH PARENT AND EACH CO-BORROWER SHALL INDEMNIFY AND SAVE ADMINISTRATIVE AGENT
AND EACH LENDER HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES WITH RESPECT
TO OR RESULTING FROM ANY DELAY IN PAYING OR OMISSION TO PAY THOSE TAXES TO THE
EXTENT THOSE LIABILITIES ARISE SOLELY BECAUSE PARENT OR ANY CO-BORROWER FAILED
TO PAY THE TAXES UPON DEMAND BY ADMINISTRATIVE AGENT OR ANY LENDER, WHICH
INDEMNITY, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, SURVIVES THE PAYMENT
AND PERFORMANCE OF THE OBLIGATION AND TERMINATION OF THE CREDIT DOCUMENTS WITH
RESPECT TO AMOUNTS DUE BEFORE SUCH PAYMENT, PERFORMANCE, AND TERMINATION.
7.7 Maintenance of Existence, Assets, and Business. Each Company shall
(a) except as permitted by Section 8.5, maintain its corporate existence and
good standing in its state of incorporation and its authority to transact
business in all other states where failure to maintain its authority to transact
business is a Material-Adverse Event, and (b) maintain all licenses, permits,
and franchises necessary for its business where failure to do so is a
Material-Adverse Event.
7.8 Insurance. Each Company shall (a) maintain with financially sound
and reputable insurers, insurance with respect to its assets and business
against such liabilities, casualties, risks, and contingencies and in such types
and amounts -- including, without limitation, a fidelity bond or bonds in form
and with coverage, with a company, and with respect to such individuals or
groups of individuals -- as satisfy prevailing FHA, VA, and other requirements
applicable to a qualified mortgage institution and otherwise as is customary in
the case of Persons engaged in the same or similar businesses and similarly
situated, and (b) upon Administrative Agent's request, furnish to Administrative
Agent from time to time (i) a summary of its insurance coverage, in form and
substance satisfactory to Administrative Agent, and (ii) originals or copies of
the applicable policies.
7.9 Appraisals. Upon reasonable notice, each Co-Borrower shall promptly
(a) permit Administrative Agent's and (subject to the last sentence of this
section) any Lender's authorized Representatives to discuss with that
Co-Borrower's officers or with the appraisers furnishing Appraisals the
procedures for preparation, review, and retention of (and to review and obtain
copies of) all Appraisals pertaining to any Mortgage Collateral or Lease
Collateral, and (b) upon Administrative Agent's or (subject to the last sentence
of this section) any Lender's request, cooperate with it to ascertain that the
Appraisals comply with all Appraisal Requirements. Lenders and their
Representatives shall exercise their Rights under this section through
Administrative Agent and shall endeavor to conduct investigations in reasonable
groups.
7.10 INDEMNIFICATION. IN CONSIDERATION OF THE COMMITMENTS BY
ADMINISTRATIVE AGENT AND LENDERS UNDER THE CREDIT DOCUMENTS, EACH COMPANY SHALL
INDEMNIFY AND DEFEND ADMINISTRATIVE AGENT, EACH LENDER, AND THEIR RESPECTIVE
AFFILIATES AND REPRESENTATIVES (COLLECTIVELY, THE "INDEMNIFIED PARTIES") -- AND
DEFEND THEM AND HOLD EACH OF THEM HARMLESS -- AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, DEFICIENCIES, INTEREST, JUDGMENTS, COSTS, OR
EXPENSES (INCLUDING, WITHOUT LIMITATION,
Credit Agreement
REASONABLE ATTORNEYS' FEES) INCURRED BY ANY OF THEM ARISING FROM OR BECAUSE OF
(A) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING BROUGHT IN CONNECTION
WITH ANY CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THE CREDIT
DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY USE BY ANY COMPANY OF THE PROCEEDS
OF BORROWINGS, (B) ANY IMPOUNDMENT, ATTACHMENT, OR RETENTION OF ANY MORTGAGE
COLLATERAL OR LEASE COLLATERAL, (C) ANY VIOLATION OF ANY FEDERAL OR STATE
GOVERNMENTAL REQUIREMENT RELATING TO USURY IN CONNECTION WITH ANY MORTGAGE
COLLATERAL OR LEASE COLLATERAL ALLEGED IN WRITING, AND (D) ANY REPRESENTATION
MADE BY ANY COMPANY UNDER ANY CREDIT DOCUMENT. ALTHOUGH EACH INDEMNIFIED PARTY
IS ENTITLED TO INDEMNIFICATION FOR ANY INDEMNIFIED PARTY'S ORDINARY NEGLIGENCE,
NO INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION FOR ITS OWN GROSS
NEGLIGENCE, UNLAWFUL CONDUCT, WILLFUL MISCONDUCT, OR FRAUD. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, THIS INDEMNITY SURVIVES FOR TWO YEARS AFTER THE
PAYMENT AND PERFORMANCE OF THE OBLIGATION AND TERMINATION OF THE CREDIT
DOCUMENTS.
SECTION 8. NEGATIVE COVENANTS. Until all commitments by Lenders to extend credit
under this agreement have been canceled or terminated and the Obligation is
fully paid and performed, Parent and each Co-Borrower jointly and severally
covenant and agree with Administrative Agent and Lenders as follows, except as
provided in referenced Schedules:
8.1 Debt. Neither Parent nor any Co-Borrower may create, incur, permit
to exist, or commit to create or incur any (a) Debt used to fund wet borrowings
other than Wet Borrowings under this agreement, (b) any mortgage loan repurchase
agreements except in connection with any Permitted Debt, whose description
specifically allows for mortgage loan repurchase agreements, or (c) any other
Debt except the following (collectively, the "Permitted Debt"):
(a) The Obligation;
(b) Obligations to pay Taxes;
(c) Liabilities for accounts payable, non-capitalized
equipment or operating leases, and similar liabilities if in each case
incurred in the ordinary course of business;
(d) Accrued expenses, deferred credits, and loss contingencies
that are properly classified as liabilities under GAAP;
(e) Debt incurred by any Company under any swap, collar,
floor, cap, or other contract entered into by such Company with any
Lender or an Affiliate of any Lender or another Person under the
Governmental Requirements of a jurisdiction in which such contracts are
legal and enforceable (except as enforceability may be limited by
applicable Debtor Laws and general principles of equity), which is
intended to reduce or eliminate the risk of fluctuations in interest
rates applicable to Borrowings or any Company's portfolio and/or
pipeline of loans and leases under this or any other agreement entered
into by such Company;
(f) Liabilities for capital leases and similar liabilities of
up to $2,000,000, in each case incurred in the ordinary course of
business;
(g) Debt in an aggregate principal amount of up to $50,000,000
under one or more warehouse financing agreements so long as the lenders
or their agents under each of those arrangements enter into
intercreditor arrangements reasonably acceptable to Administrative
Agent to the extent those financing arrangements extend to
Business-Purposes Loans, Mortgage Loans, or Leases that would be deemed
supported Wet Borrowings if financed under this agreement.
(h) Subordinated Debt. For purposes of this agreement,
"Subordinated Debt" means, at any time:
(i) Debt in an original aggregate principal amount of
up to $1,200,000 (as reduced by any amounts repaid thereunder)
under certain Subordinated Debentures issued by American
Business Finance Corporation, Inc. pursuant to a prospectus
dated ___________________;
(ii) Debt in an original aggregate principal amount
of up to $10,000,000 (as reduced by any amounts repaid
thereunder) under certain Subordinated Fixed Rate Term Notes
issued by Parent pursuant to a prospectus dated June 28, 1993;
(iii) Debt in an original aggregate principal amount
of up to $25,000,000 (as reduced by any amounts repaid
thereunder) under certain Subordinated Fixed Rate Term Notes
issued by Parent pursuant to a prospectus dated April 29,
1994; as supplemented by a prospectus dated March 23, 1995;
(iv) Debt in an original aggregate principal amount
of up to $50,000,000 (as reduced by any amounts repaid
thereunder) under certain Subordinated Investment Notes issued
by Parent pursuant to a prospectus dated December 18, 1995;
and
(v) Debt in an aggregate principal amount of up to
$125,000,000 (as reduced by any amounts repaid thereunder)
under certain Unsecured Subordinated Investment Notes and
certain Unsecured Adjustable-Rate Subordinated Money Market
Notes issued pursuant to an Indenture with First Trust
National Association, as trustee, and Parent, as issuer, dated
as of May 27, 1997 (the Debt described in clauses (i)-(iv)
above being hereinafter referred to as the
"existing-Subordinated Debt"); and
(vi) Debt, so long as that Debt (A) is subject to
subordination, payment blockage, and standstill provisions at
least as favorable to Lenders as applicable to the
existing-Subordinated Debt under this agreement or otherwise,
and (B) is subject to representations, covenants, events of
default, and other provisions not significantly more onerous
to any Company than the existing-Subordinated Debt;
Credit Agreement
(i) Debt for GAAP purposes but where there is no actual
liability on the part of Parent or any Co-Borrower in respect of Lease
securitizations;
(j) Other Debt of Parent or a Co-Borrower that is acceptable
to Required Lenders;
(k) Debt incurred in connection with the collapsing and
repurchasing of securities issued in connection with a securitization
which repurchase is provided for and permitted under the applicable
securitization documentation; and
(l) Debt secured solely by the residual interests of Parent or
any Co-Borrower in the income stream to be received under any asset
securitization program.
8.2 Liens. Neither Parent nor any Co-Borrower shall (a) enter into,
permit to exist, or commit to enter into any arrangement or agreement (except
the Credit Documents) that directly or indirectly prohibits any Company from
creating or incurring any Lien on any of its assets, or (b) create, incur,
permit to exist, or commit to create or incur any Lien on any of its assets
except the following (the "Permitted Liens"):
(a) Any interest or title of a lessor in assets being leased
under any non-capitalized equipment or operating lease;
(b) Pledges or deposits that (i) do not encumber any
Collateral and (ii) are made to secure payment of workers'
compensation, unemployment insurance, or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions, or other
social security programs;
(c) Good-faith pledges or deposits that (i) do not cover any
Collateral and (ii) are either (A) not in excess of 10% of the amounts
due under, and made to secure, any Company's performance of bids,
tenders, contracts (except for the repayment of borrowed money), or
leases, or (B) made to secure statutory obligations, surety or appeal
bonds, or indemnity, performance, or other similar bonds benefitting
any Company in the ordinary course of its business;
(d) Zoning and similar restrictions on the use of real
property that do not materially impair the use of the real property and
that are not violated by existing or proposed structures or land use;
(e) The following if no Lien has been filed in any
jurisdiction or agreed to: (i) Liens for Taxes not yet due and payable
and (ii) if, to the extent they cover any Collateral, they are
subordinate to the Lender Liens in form and substance reasonably
acceptable to Administrative Agent, (iii) mechanic's Liens and
materialman's Liens for services or materials for which payment is not
yet due and payable and (iv) landlord's Liens for rent not yet due and
payable;
Credit Agreement
(f) The following if the validity or amount thereof is being
contested in good faith and by appropriate and lawful proceedings
diligently conducted, reserve or other appropriate provision (if any)
required by GAAP has been made, levy and execution continue to be
stayed, any of which covering any Collateral must be subordinate to the
Lender Liens in form and substance reasonably acceptable to
Administrative Agent, and any of which do not in the aggregate
materially detract from the value of the property of the Company in
question, or materially impair the use of that property in the
operation of its business: (i) claims and Liens for Taxes due and
payable; (ii) claims and Liens upon, and defects of title to, real or
personal property (other than any Collateral), including any attachment
of personal or real property or other legal process before adjudication
of a dispute on the merits; (iii) claims and Liens of mechanics,
materialmen, warehousemen, carriers, landlords, or other like Liens;
and (iv) adverse judgments or orders on appeal for the payment of
money;
(g) Lender Liens; and
(h) Liens disclosed in the UCC Search Reports as described on
Schedule 5 that are not by the terms of Schedule 5 required to be
terminated, partially released, or amended.
8.3 Investments. Neither Parent nor any Co-Borrower shall make or
commit to make any Investments except the following (the "Permitted
Investments"):
(a) Permitted Acquisitions;
(b) Extensions of trade credit and other payables in the
ordinary course of business;
(c) Loans and advances to officers, directors, or employees of
Parent or any Co-Borrower that are (i) in the ordinary course of
business for travel, entertainment, or relocation or (ii) not in the
ordinary course and are never more than an aggregate total outstanding
of $1,000,000 for all officers, directors or employees of Parent and
all Co-Borrowers;
(d) Loans to officers of Parent and all Co-Borrowers for the
purpose of exercising company stock options secured by the stock
purchased;
(e) Mortgage Loans, Commercial Loans, and Leases originated or
acquired by Co- Borrowers in the ordinary course of their businesses;
(f) Acquisitions of securities or evidences of Debt of others
when acquired by Parent or any Co-Borrower in settlement of accounts
receivable or other Debts arising in the ordinary course of business so
long as the total of all of those securities or evidences of Debt is
not material to the financial condition of the Companies;
(g) Investments in obligations issued or unconditionally
guaranteed by (or issued by any of its agencies and backed by the full
faith and credit of) the United States of America;
Credit Agreement
(h) Demand deposit accounts maintained in the ordinary course
of business;
(i) Certificates of deposit, bankers acceptances, and
repurchase agreements issued by (i) any Lender or (ii) any other
commercial bank organized under the Governmental Requirements of the
United States of America or one of its states that has combined
capital, surplus, and undivided profits of at least $250,000,000 and a
rating of C or better by Xxxxxxxx Bank Watch, Inc.;
(j) Repurchase agreements with Prudential Securities
Incorporated or similar investment banking firms;
(k) Eurodollar Investments with (i) any Lender or (ii) any
other financial institution that has (A) combined capital, surplus, and
undivided profits of at least $100,000,000 and (B) a commercial-paper
rating of at least P-1 or A-1 or (if it does not have a
commercial-paper rating) a bond rating of at least A-1 or A- by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Group, a division
of the XxXxxx-Xxxx Companies, Inc., respectively;
(l) Investments in commercial paper given the highest rating
by a nationally-recognized-credit-rating agency;
(m) Investments in money market funds with asset sizes of at
least $100,000,000; and
(n) Other Investments, so long as the aggregate amount
outstanding (defined as the amount of any such loans or advances plus
the cost of any such Investments) is never more than $5,000,000 at any
one time.
8.4 Distributions. Parent shall not directly or indirectly pay or
declare any Distribution except (a) Distributions payable solely in the form of
capital stock, (b) cash Distributions, so long as no Event of Default or
Potential Default exists or would be created by such Distribution, and (c)
Distributions otherwise approved in writing by Required Lenders.
8.5 Merger or Consolidation. Neither Parent nor any Co-Borrower shall
directly or indirectly merge or consolidate with or into any other Person,
except that (i) Parent and Co-Borrowers may merge into or be consolidated with
each other so long as, if Parent is involved, it is the surviving entity and
(ii) any Person may merge into Parent or any Co-Borrower, provided such Company
shall be the surviving corporation, the management of such Company shall be
substantially unchanged, and after giving effect to such merger, Parent and each
Co-Borrower shall be in full compliance with the terms of this Credit Agreement.
8.6 Liquidations and Dispositions of Assets. Neither Parent nor any
Co-Borrower shall directly or indirectly dissolve or liquidate or sell,
transfer, lease, or otherwise dispose of any material portion of its assets or
business, except for sales or other dispositions by any Company, in the ordinary
Credit Agreement
course of business, of (a) subject to Section 4, Mortgage Loans, Commercial
Loans, and Leases that are Collateral, or (b) Mortgage Loans, Commercial Loans,
and Leases that are not Collateral.
8.7 Use of Proceeds. No Co-Borrower shall directly or indirectly use
the proceeds of Borrowings (a) for any purpose other than as represented in this
agreement, (b) for the funding or acquisition of construction loans, (c) for the
funding or acquisition of Commercial Loans except to the extent permitted under
the Commercial Loan Sublimit, (d) for wages of employees, unless a timely
payment to or deposit with the United States of America of all amounts of Tax
required to be deducted and withheld with respect to such wages is also made, or
(e) in violation of Regulation U or Section 7 of the Securities Exchange Act of
1934.
8.8 Transactions with Affiliates. Neither Parent nor any Co-Borrower
shall directly or indirectly enter into any transaction with any of its
Affiliates, other than transactions in the ordinary course of its or their
business and of a character set forth on Schedule 6.10 or upon fair and
reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
8.9 Employee Plans. Neither Parent nor any Co-Borrower, except where a
Material-Adverse Event would not result, shall directly or indirectly permit any
of the events or circumstances described in Section 6.12 to exist or occur.
8.10 Compliance with Governmental Requirements and Documents. Neither
Parent nor any Co-Borrower shall directly or indirectly (a) violate the
provisions of any Governmental Requirements applicable to it or of any Material
Agreement to which it is a party if that violation alone or with all other
violations is a Material-Adverse Event, or (b) violate the provisions of its
charter, articles of incorporation, bylaws, or partnership agreement, as
applicable, or repeal, replace or amend any provision of its charter, articles
of incorporation, bylaws, or partnership agreement, as applicable, if any such
action is a Material-Adverse Event.
8.11 Government Regulations. Neither Parent nor any Co-Borrower shall
directly or indirectly conduct its business in a way that it becomes regulated
under the Investment Company Act of 1940.
8.12 Fiscal Year Accounting. Without first obtaining Administrative
Agent's written consent, neither Parent nor any Co-Borrower shall directly or
indirectly change its fiscal year or use any accounting method other than GAAP.
8.13 New Businesses. Neither Parent nor any Co-Borrower shall directly
or indirectly engage in any business, except the businesses in which it or any
of its Affiliates is presently engaged, and any other reasonably-related
business.
8.14 Assignment. Except as allowed in Section 12.12(a), neither Parent
nor any Co-Borrower shall directly or indirectly assign or transfer any of its
Rights, duties, or obligations under any of the Credit Documents.
Credit Agreement
8.15 Retention of Servicing Portfolio. Without the consent of
Administrative Agent, neither Parent nor any Co-Borrower shall directly or
indirectly assign or transfer any of its rights, duties or obligations under the
servicing agreements in which it acts as servicer.
8.16 Strict Compliance. Neither Parent nor any Co-Borrower shall
indirectly do anything that it may not directly do under any covenant in any
Credit Document.
SECTION 9. FINANCIAL COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, Parent and each Co-Borrower jointly and severally
covenant and agree with Administrative Agent and Lenders as follows:
9.1 Tangible Net Worth. Tangible Net Worth may never be less than
$25,000,000.
9.2 Leverage Ratio. The Leverage Ratio may never exceed 4.0 to 1.0.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES.
10.1 Event of Default. The term "Event of Default" means the existence
or occurrence of any one or more of the following:
(a) Obligation. Any Co-Borrower fails to pay (i) any interest
on the Obligation when due under the Credit Documents and that failure
continues for five days, or (ii) any other part of the Obligation when
due under the Credit Documents.
(b) Covenants. Any Company's failure or refusal to punctually
and properly perform, observe, and comply with any covenant (other than
in respect of payments on the Obligation) applicable to it in:
(i) Sections 7.2, 8.4, 8.5, 8.6, 8.7, 8.8, or 8.15;
(ii) Sections 7.6, 7.7, 8.1, 8.2, 8.3, 9.1 or 9.2, if
that failure or refusal was inadvertent, is susceptible of
cure, and is not cured within fifteen (15) days after the
earlier of either any Company knows of it or any Company is
notified of it by Administrative Agent or any Lender; or
(iii) Any other provision of any Credit Document, if
that failure or refusal continues for 20 days after the
earlier of either any Company knows of it or any Company is
notified of it by Administrative Agent or any Lender.
(c) Misrepresentation. Any material statement, warranty, or
representation by or on behalf of any Company in any Credit Document or
other writing authored by any Company and
Credit Agreement
furnished in connection with the Credit Documents proves to have been
incorrect or misleading in any material respect as of the date made or
deemed made.
(d) Debtor Law. Parent or any Co-Borrower (i) is insolvent,
(ii) admits in writing its inability to pay its Debts generally as they
become due, (iii) voluntarily seeks, consents to, or acquiesces in the
benefit of any Debtor Law, or (iv) becomes a party to, or is made the
subject of, any proceeding provided for by any Debtor Law (other than
as a creditor or claimant) that could suspend or otherwise adversely
affect the Rights of Administrative Agent or any Lender granted in the
Credit Documents, unless, if the proceeding is involuntary, the
applicable petition is dismissed within 90 days after its filing.
(e) Other Debt. (i) Parent or any Co-Borrower fails to make
any payment due on any Debt or security in excess of $1,000,000 (with
respect to which it has redemption, sinking fund, or other purchase
obligations) or (ii) any event occurs or any condition exists in
respect of any Debt or security of Parent or any Co-Borrower in excess
of $1,000,000, the effect of which is (A) to cause or to permit any
holder of that Debt or security or a trustee to cause (whether or not
it elects to cause) any of that Debt or security to become due before
its stated maturity or its regularly scheduled payment dates, or (B) to
permit a trustee or the holder of any security (other than common stock
of any Company) to elect (whether or not it does elect) a majority of
the directors on the board of directors of that Company.
(f) Material Agreements. Any default or event of default under
any Material Agreement to which Parent or a Co-Borrower is a party, the
effect of which is to cause, or to permit any Person (other than a
Company) to cause, an amount in excess of $1,000,000 to become due and
payable prior to the date of payment stated in that Material Agreement,
unless such default or event of default is being contested by that
Company in good faith by appropriate proceedings and adequate reserves
have been established on the books of that Company to the extent
required by GAAP.
(g) Securitizations. In connection with any asset
securitization to which Parent or any Co-Borrower is a party or for
which it has any liability, (i) event of default occurs with respect to
such asset securitization, or (ii) any "delinquency trigger" or "loss
trigger" occurs with respect to such asset securitization.
(h) Judgments. Parent or any Co-Borrower fails to pay any
money judgment in excess of the sum of $250,000 against it at least ten
days prior to the date on which any of the assets of that Company may
be lawfully sold to satisfy that judgment.
(i) Attachments. The failure to have discharged within a
period of 30 days after the commencement of any attachment,
sequestration, or similar proceeding against any material amount of the
assets of Parent or any Co-Borrower.
Credit Agreement
(j) Unenforceability. Any material provision of any Credit
Document for any reason ceases to be in full force and effect or is
fully or partially declared null and void or unenforceable or the
validity or enforceability of any Credit Document is challenged or
denied by Parent or any Co-Borrower.
(k) Change of Ownership of Co-Borrowers. Except as otherwise
approved by Required Lenders in writing prior to any such change,
Parent or ABC, as the case may be, fails to own, beneficially and of
record, with power to vote, 100% of the issued and outstanding shares
of capital stock of each Co-Borrower.
(l) Change of Management of Parent. Except as otherwise
approved by Required Lenders in writing prior to any such change, any
material change in the executive management of Parent from the
executive management of Parent as it exists on the date of this
agreement.
(m) SEC Reporting Requirements. Any Company fails to comply
with any reporting requirements of the Securities Exchange Act of 1934,
for which the failure to report would constitute a Material-Adverse
Event.
10.2 Remedies.
(a) Debtor Law. Upon the occurrence of an Event of Default
under Section 10.1(d), the commitments of Lenders to extend credit
under this agreement automatically terminate and the full Obligation is
automatically due and payable, without presentment, demand, notice of
default, notice of the intent to accelerate, notice of acceleration, or
other requirements of any kind, all of which are expressly waived by
Parent and each Co-Borrower.
(b) Other Defaults. While an Event of Default exists -- other
than those described in clause (a) above -- Administrative Agent may
(and, upon the direction of Required Lenders, shall) declare the
Obligation to be immediately due and payable, whereupon it shall be due
and payable without presentment, demand, notice of default, notice of
the intent to accelerate, notice of acceleration, or other requirements
of any kind, all of which are expressly waived by Parent and each
Co-Borrower, and the commitments of Lenders to extend credit under this
agreement are then automatically terminated.
(c) Other Remedies. Following the termination of the
commitments of Lenders to extend credit under this agreement and the
acceleration of the Obligation, Administrative Agent may (and, at the
direction of Required Lenders, shall) do any one or more of the
following: Reduce any claim to judgment; foreclose upon, or otherwise
enforce, any Lender Liens; and exercise any other Rights in the Credit
Documents, at law, in equity, or otherwise that Required Lenders may
direct. Should any Event of Default continue that, in Administrative
Agent's reasonable opinion, materially and adversely affects the
Collateral or the interests of the Lenders under this agreement,
Administrative Agent may, in a notice to the Lenders of that Event of
Default, set forth one or more actions that Administrative Agent, in
its opinion, believes should
Credit Agreement
be taken. Unless otherwise directed by Required Lenders (excluding the
Lender serving as Administrative Agent) within ten days following the
date of the notice setting forth the proposed action or actions,
Administrative Agent may, but shall not be obligated to, take the
action or actions set forth in that notice.
10.3 Right of Offset. Parent and each Co-Borrower hereby grant to
Administrative Agent and to each Lender a right of offset, to secure the
repayment of the Obligation, upon any and all monies, securities, or other
property of each such Company, and the proceeds therefrom now or hereafter held
or received by or in transit to Administrative Agent or such Lender from or for
the account of each such Company, whether for safekeeping, custody, pledge,
transmission, collection, or otherwise, and also upon any and all deposits
(general or special, time or demand, provisional or final) and credits of each
such Company, and any and all claims of any such Company against Administrative
Agent or such Lender, at any time existing. Upon the occurrence of any Event of
Default, Administrative Agent and each Lender are authorized at any time and
from time to time, without notice to any Company, to offset, appropriate, and
apply any and all of those items against the Obligation, subject to Section 3.6.
Notwithstanding anything in this section or elsewhere in this agreement to the
contrary, neither Administrative Agent nor any other Lender shall have any right
to offset, appropriate, or apply any accounts of any Company which consist of
escrowed funds (except and to the extent of any beneficial interest which any
Company has in such escrowed funds) which have been so identified by any Company
in writing at the time of deposit thereof.
10.4 Waivers. Each Company waives any right to require Administrative
Agent to (a) proceed against any Person, (b) proceed against or exhaust any of
the Collateral, or pursue its Rights and remedies as against the Collateral in
any particular order, or (c) pursue any other remedy in its power.
Administrative Agent shall not be required to take any steps necessary to
preserve any Rights of any Company against any Person from which any Company
purchased any Mortgage Loans, Commercial Loans, or Leases, or to preserve Rights
against prior parties. Each Company and each surety, endorser, guarantor,
pledgor, and other party ever liable or whose property is ever liable for
payment of any of the Obligation jointly and severally waive presentment and
demand for payment, protest, notice of intention to accelerate, notice of
acceleration, and notice of protest and nonpayment, and agree that their or
their property's liability with respect to the Obligation, or any part thereof,
shall not be affected by any renewal or extension in the time of payment of the
Obligation, by any indulgence, or by any release or change in any security for
the payment of the Obligation, and hereby consent to any and all renewals,
extensions, indulgences, releases, or changes, regardless of the number thereof.
10.5 Performance by Administrative Agent. Should any covenant, duty, or
agreement of any Company fail to be performed in accordance with the terms of
this agreement or of any document delivered under this agreement (and any
applicable grace period shall have expired), Administrative Agent may, at its
option, after notice to Parent, perform, or attempt to perform such covenant,
duty, or agreement on behalf of that Company and shall notify each Lender that
it has done so. In such event, Parent or any Co-Borrower shall jointly and
severally, at the request of Administrative Agent, promptly pay any amount
expended by Administrative Agent in such performance or attempted performance to
Administrative Agent at its principal place of business, together with interest
thereon at the Maximum Rate from the date of such
Credit Agreement
expenditure by Administrative Agent until paid. Notwithstanding the foregoing,
it is expressly understood that Administrative Agent does not assume and shall
never have, except by express written consent of Administrative Agent, any
liability or responsibility for the performance of any duties of any Company
under this agreement or under any other document delivered under this agreement.
10.6 No Responsibility. Except in the case of fraud, gross negligence,
or willful misconduct, neither Administrative Agent nor any of its officers,
directors, employees, or attorneys shall assume -- or ever have any liability or
responsibility for -- any diminution in the value of the Collateral or any part
of the Collateral.
10.7 No Waiver. The acceptance by Administrative Agent or any Lender at
any time and from time to time of partial payment or performance by any Company
of any of their respective obligations under this agreement or under any Credit
Document shall not be deemed to be a waiver of any Event of Default then
existing. No waiver by Administrative Agent or any Lender shall be deemed to be
a waiver of any other then existing or subsequent Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any right under
this agreement or under any other document required to be executed under or in
connection with this agreement shall impair such right or be construed as a
waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof, or
the exercise of any other right under this agreement or otherwise.
10.8 Cumulative Rights. All Rights available to Administrative Agent
and the Lenders under this agreement or under any other document delivered under
this agreement shall be cumulative of and in addition to all other Rights
granted to Administrative Agent and the Lenders at law or in equity, whether or
not the Notes are due and payable and whether or not Administrative Agent has
instituted any suit for collection, foreclosure, or other action in connection
with this agreement or any other document delivered under this agreement.
10.9 Rights of Individual Lenders. No Lender shall have any right by
virtue of, or by availing itself of, any provision of this agreement to
institute any actions or proceedings at law, in equity, or otherwise (excluding
any actions in bankruptcy), upon or under or with respect to this agreement, or
for the appointment of a receiver, or for any other remedy under this agreement,
unless (a) the Required Lenders previously shall have given to Administrative
Agent written notice of an Event of Default and the continuance thereof,
including a written request upon Administrative Agent to institute such action
or proceedings in its own name and offering to indemnify Administrative Agent
against the costs, expenses and liabilities to be incurred therein or thereby,
(b) Administrative Agent, for ten Business Days after its receipt of such
notice, shall have failed to institute any such action or proceeding, and (c) no
direction inconsistent with such written request shall have been given to
Administrative Agent by Required Lenders. It is understood and intended, and
expressly covenanted by the taker and holder of every Note with every other
taker and holder and Administrative Agent, that no one or more holders of Notes
shall have any right in any manner whatever by virtue, or by availing itself, of
any provision of this agreement to affect, disturb or prejudice the Rights of
any other Lenders, or to obtain or seek to obtain priority over or preference to
any other such Lender, or to enforce any right under this agreement, except in
the manner herein provided and for the equal, ratable and common benefit of all
Lenders. For the protection and enforcement of the
Credit Agreement
provisions of this Section 10.9, each and every Lender and Administrative Agent
shall be entitled to such relief as can be given either at law or in equity.
10.10 Notice to Administrative Agent. Should any Event of Default or
Potential Default occur and be continuing, any Lender having actual knowledge
thereof shall notify Administrative Agent and Co-Borrowers of the existence
thereof, but the failure of any Lender to provide that notice shall not
prejudice that Lender's Rights under this agreement.
10.11 Costs. All court costs, reasonable attorneys' fees, other costs
of collection, and other sums spent by Administrative Agent or any Lender in the
exercise of any Right provided in any Credit Document is payable to
Administrative Agent or that Lender, as the case may be, on demand, is part of
the Obligation, and bears interest at the Default Rate from the date paid by
Administrative Agent or any Lender to the date repaid by any Company.
SECTION 11. ADMINISTRATIVE AGENT.
11.1 Authorization and Action. Each Lender hereby appoints
Administrative Agent as administrative, collateral, managing, and syndication
agent under the Credit Documents and authorizes Administrative Agent to take
such action on its behalf and to exercise such powers and perform such duties as
are expressly delegated to Administrative Agent by the terms of the Credit
Documents, together with such powers as are reasonably incidental thereto. As to
any matter not expressly provided for by this agreement (including, without
limitation, enforcement or collection of the Notes), Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of Lenders, and those
instructions shall be binding upon all Lenders and all holders of the Notes.
However, Administrative Agent shall not be required to take any action that
exposes Administrative Agent to personal liability or that is contrary to this
agreement or applicable Governmental Requirements. Administrative Agent agrees
to give to each Lender prompt notice of each notice given to it by Parent or
Co-Borrowers pursuant to the terms of the Credit Documents. Administrative Agent
also agrees to promptly distribute to each Lender copies of the items required
to be delivered to Administrative Agent under Section 7.1.
11.2 Administrative Agent's Reliance, Etc. Notwithstanding anything to
the contrary in any Credit Document, neither Administrative Agent nor any of its
Representatives shall be liable for any action taken or omitted to be taken by
it or them under or in connection with the Credit Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent: (a) may treat the payee of
any Note as the holder thereof; (b) may consult with legal counsel (including
counsel for Co-Borrowers), independent public accountants and other experts
selected by it or Co-Borrowers and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties, or representations made in or in connection with the Credit
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
agreement on the part of Co-Borrowers or to inspect the property (including the
books and records)
Credit Agreement
of Co-Borrowers, except receipt of delivery of the items required under Sections
3.2, 4.1, 4.3, 5(a), 5(b), and 7.1; (e) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this agreement or any other instrument or document
furnished pursuant hereto; and (f) shall incur no liability under or in respect
of this agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy) believed by it to be genuine
and signed or sent by the proper party or parties.
11.3 Administrative Agent and Affiliates. With respect to Borrowings
made by it, and the one or more Notes issued to it, the Lender which is
Administrative Agent shall have the same rights and powers under this agreement
and the other Credit Documents as any other Lender and may exercise the same as
though it were not the Administrative Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include the Lender which is
Administrative Agent in its individual capacity. The Lender which is
Administrative Agent and the Affiliates of such Lender may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, Co-Borrowers, any of its Affiliates and any Person who
may do business with or own securities of Co-Borrowers or any of its
Affiliates, all as if such Lender were not Administrative Agent and without any
duty to account therefor to Lenders.
11.4 Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Sections 6.6 and
7.1 and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter this agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, make its own credit
decisions in taking or not taking action under this agreement.
11.5 INDEMNIFICATION. LENDERS SHALL INDEMNIFY ADMINISTRATIVE AGENT (TO
THE EXTENT NOT REIMBURSED BY PARENT OR CO-BORROWERS), RATABLY ACCORDING TO THEIR
RESPECTIVE COMMITMENT PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY ADMINISTRATIVE AGENT
UNDER THIS AGREEMENT (INCLUDING ANY OF SAME WHICH MAY RESULT FROM THE
NEGLIGENCE, BUT NOT GROSS NEGLIGENCE, OF ADMINISTRATIVE AGENT). HOWEVER, NO
LENDER SHALL BE LIABLE FOR ANY PORTION OF THOSE LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS RESULTING FROM ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER SHALL
REIMBURSE ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY
OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY ADMINISTRATIVE AGENT
IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS
Credit Agreement
AGREEMENT, TO THE EXTENT THAT ADMINISTRATIVE AGENT IS NOT REIMBURSED FOR SUCH
EXPENSES BY PARENT OR CO-BORROWERS.
11.6 Successor Administrative Agent. Administrative Agent (i) may
resign at any time by giving written notice thereof to Lenders and Co-Borrowers
and (ii) may be removed at any time with or without cause by 100% of Lenders
(other than the Lender which is Administrative Agent) and with Parent's consent,
not to be unreasonably withheld. Upon any such resignation or removal, 100% of
Lenders, with the consent of Parent not to be unreasonably withheld, shall have
the right to appoint a successor Administrative Agent in the capacity of
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by 100% of Lenders and reasonably approved by Parent, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent, which shall be a commercial
bank or savings bank organized under the laws of the United States of America or
of any state thereof which has a combined capital and surplus of at least
$200,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges, and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from any further duties, and
obligations under this agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this agreement. The
appointment of a successor Administrative Agent shall not release the retiring
Administrative Agent from any liability it may have for any actions taken or
omitted to be taken by it while it was Administrative Agent under this
agreement.
11.7 Inspection. Administrative Agent shall permit any officer,
employee, or agent of Co-Borrowers, or any Lender which may so request, to
visit and inspect the premises on which the custodial duties of Administrative
Agent hereunder are performed, examine the books and records of Administrative
Agent which pertain to such custodial duties, take copies and extracts
therefrom, and discuss the performance of such custodial duties with the
officers, accountants and auditors of Administrative Agent that are responsible
therefor, all at such reasonable times and as often as Co-Borrowers or any
Lender may desire.
SECTION 12. MISCELLANEOUS.
12.1 Nonbusiness Days. Any action that is due under any Credit Document
on a non-Business Day may be delayed until the next Business Day. However,
interest accrues on any payment until it is made.
Credit Agreement
12.2 Communications. Unless otherwise stated, a communication under any
Credit Document to a party to this agreement must be written to be effective and
is deemed given:
o For Borrowing Requests, Collateral Delivery-Notices, Shipping
Requests, and Release Requests, only when actually received by
Administrative Agent.
o Otherwise, if by fax, when transmitted to the appropriate fax
number -- but, without affecting the date deemed given, the
fax must be promptly confirmed by telephone.
o Otherwise, if by mail, on the third Business Day after
enclosed in a properly addressed, stamped, and sealed envelope
deposited in the appropriate official postal service.
o Otherwise, when actually delivered.
Until changed by written notice to each other party to this agreement, the
address and fax number are stated for (a) Co-Borrowers, Administrative Agent,
and each initial Lender beside their names on the signature pages below, and (b)
each other Lender, beside its name on Schedule 2.
12.3 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under the Credit Documents must be
satisfactory to Administrative Agent and its counsel.
12.4 Exceptions to Covenants. An exception to any Credit Document
covenant does not permit violation of any other Credit Document covenant.
12.5 Survival. All Credit Document provisions survive all closings and
are not affected by any investigation made by any party.
12.6 Governing Law. Unless otherwise stated, each Credit Document must
be construed (and its performance enforced) under the laws of the Xxxxx xx Xxxxx
xxx xxx Xxxxxx Xxxxxx of America.
12.7 Invalid Provisions. If any provision of a Credit Document is
judicially determined to be unenforceable, all other provisions of it remain
enforceable. If the provision determined to be unenforceable is a material part
of that Credit Document, then, to the extent lawful, it shall be replaced by a
judicially-construed provision that is enforceable but otherwise as similar in
substance and content to the original provision as the context of it reasonably
allows.
12.8 Conflicts Between Credit Documents. The provisions of this
agreement control if in conflict (i.e., the provisions contradict each other as
opposed to a Credit Document containing additional provisions not in conflict)
with the provisions of any other Credit Document.
12.9 Discharge and Certain Reinstatement. The Companies' obligations
under the Credit Documents remain in full force and effect until no Lender has
any commitment to extend credit under the
Credit Agreement
Credit Documents and the Obligation is fully paid (except for provisions under
the Credit Documents which by their terms expressly survive payment of the
Obligation and termination of the Credit Documents). If any payment under any
Credit Document is ever rescinded or must be restored or returned for any
reason, then all Rights and obligations under the Credit Documents in respect of
that payment are automatically reinstated as though the payment had not been
made when due.
12.10 Amendments, Consents, Conflicts, and Waivers. An amendment of --
or an approval, consent, or waiver by Administrative Agent or by one or more
Lenders under -- any Credit Document must be in writing and must be:
(a) Executed by Parent, Co-Borrowers, and Administrative Agent
if it purports to reduce or increase any fees payable to Administrative
Agent by Co-Borrowers.
(b) Executed by Parent, Co-Borrowers, Administrative Agent and
the particular existing or new Lender if it purports (subject to
Section 2.6) to increase that Lender's Commitment or add that Lender
with a new Commitment and is accompanied, as applicable, by a new
Warehouse Note for that Lender in the stated amount of its increased or
new Commitment, as the case may be.
(c) Executed by Parent, Co-Borrowers, and Administrative Agent
and executed or approved in writing by all Lenders if action of all
Lenders is specifically provided in any Credit Document or if it
purports to (i) except as otherwise stated in Section 12.10(a), extend
the due date or decrease the scheduled amount of any payment under --
or reduce the rate or amount of interest, fees, or other amounts
payable to Administrative Agent or any Lender under -- any Credit
Document, (ii) change the definition of "Borrowing Base" (or any
component of it), "Commitment", "Eligible-Mortgage Loan",
"Eligible-Commercial Loan", "Eligible Lease", "Eligible-Seasoned
Lease", "Eligible-Seasoned Loan", "Market Value", "Required Lenders",
"Stated-Termination Date", or "Termination Percentage", (iii) change
the Swing Sublimit, the Wet Sublimit, the Second-Lien Sublimit, the
Seasoned Sublimit, the Commercial Loan Sublimit or the Lease Sublimit,
(iv) amend Schedule 4.1, or (v) partially or fully release any Guaranty
or any Collateral, except releases of Collateral contemplated in this
agreement.
(d) Otherwise (i) for this agreement, executed by Parent,
Co-Borrowers, Administrative Agent, and Required Lenders, or (ii) for
other Credit Documents, approved in writing by Required Lenders and
executed by Parent, Co-Borrowers, Administrative Agent, and any other
party to that Credit Document.
No course of dealing or any failure or delay by Administrative Agent, any
Lender, or any of their respective Representatives with respect to exercising
any Right of Administrative Agent or any Lender under the Credit Documents
operates as a waiver of that Right. An approval, consent, or waiver is only
effective for the specific instance and purpose for which it is given. The
Credit Documents may only be supplemented by agreements, documents, and
instruments delivered according to their respective express terms.
Credit Agreement
12.11 Multiple Counterparts. Any Credit Document may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts shall be construed together to
constitute the same document. This agreement is effective when counterparts of
it have been executed and delivered to Administrative Agent by each Lender,
Administrative Agent, Parent, and Co-Borrowers, or, in the case only of those
Lenders, when Administrative Agent has received faxed or other evidence
satisfactory to it that each Lender has executed and is delivering to
Administrative Agent a counterpart of it.
12.12 Parties. This agreement binds and inures to Parent, Co-Borrowers,
each Lender, Administrative Agent, and their respective successors and permitted
assigns. Only those Persons may rely upon or raise any defense about this
agreement.
(a) Assignment by Companies; Assumptions by New Companies. No
Company may assign any Rights or obligations under any Credit Document
without first obtaining the written consent of Lenders.
(b) Assignment by Lender. Any Lender may assign, pledge, and
otherwise transfer all or any of its Rights and obligations under the
Credit Documents either (i) to a Federal Reserve Bank without the
consent of any party to this agreement, so long as that Lender is not
released from its obligations under the Credit Documents, or (ii) in
the ordinary course of its lending business and in accordance with all
Governmental Requirements and with Section 12.13 or 12.14, so long as
(A) except for assignments, pledges, and other transfers by a Lender to
its Affiliates, the written consent of Parent, Co-Borrowers, and
Administrative Agent, which may not be unreasonably withheld, must be
first obtained, (B) the assignment or transfer (other than a pledge)
does not involve a purchase price that directly or indirectly reflects
a discount from face value unless that Lender first offered that
assignment or transfer to the other Lenders on a ratable basis
according to their Commitment Percentages, (C) neither Parent,
Co-Borrowers, nor Administrative Agent are required to incur any cost
or expense incident to any assignment, pledge, or other transfer by any
Lender, all of which are for the account of the assigning, pledging, or
transferring Lender and its assignee, pledgee, or transferee as they
may agree, and (D) if the Participant or Purchaser is organized under
the Governmental Requirements of any jurisdiction other than the United
States of America or any of its states, it complies with Section 3.13.
(c) Otherwise Void. Any purported assignment, pledge, or other
transfer in violation of this section is void from the beginning and
not effective.
12.13 Participations. Subject to Section 12.12(b) and this section, a
Lender may at any time sell to one or more Persons (each a "Participant")
participating interests in its Commitment and its share of the Obligation.
(a) Additional Conditions. For each participation (i) the
selling Lender must remain -- and the Participant may not become -- a
"Lender" under this agreement, (ii) the selling Lender's obligations
under the Credit Documents must remain unchanged, (iii) the selling
Lender
Credit Agreement
must remain solely responsible for the performance of those
obligations, (iv) the selling Lender must remain the holder of its one
or more Notes and its share of the Obligation for all purposes under
the Credit Documents, and (v) Parent, Co-Borrowers and Administrative
Agent may continue to deal solely and directly with the selling Lender
in connection with those Rights and obligations.
(b) Participant Rights. The selling Lender may obtain for each
of its Participants the benefits of the Credit Documents related to
participations in its share of the Obligation, but Co-Borrowers are
never obligated to pay any greater amount than would be due to the
selling Lender under the Credit Documents calculated as though no
participation had been made. Otherwise, Participants have no Rights
under the Credit Documents, except certain permitted voting Rights
described below.
(c) Participation Agreements. An agreement for a participating
interest (i) may only provide to a Participant voting Rights in respect
of any amendment of or approval, consent, or waiver under any Credit
Document related to the matters in Section 12.10(c) if it also provides
for a voting mechanism that a majority of that selling Lender's
Commitment Percentage or Termination Percentage, as the case may be
(whether directly held by that selling Lender or participated),
controls the vote for that selling Lender, and (ii) may not permit a
Participant to assign, pledge, or otherwise transfer its participating
interest in the Obligation to any Person, except any Lender or its
Affiliates.
12.14 Transfers. Subject to Section 12.12(b) and this section, a Lender
may at any time sell to one or more financial institutions (each a "Purchaser")
all or part of its Rights and obligations under the Credit Documents.
(a) Additional Conditions. The sale (i) must be accomplished
by the selling Lender and Purchaser executing and delivering to
Administrative Agent and Co-Borrowers an Assignment and Assumption
Agreement, (ii) must be in an amount not less than $5,000,000 (unless
such sale is an assignment of all of a Lender's Rights and obligations
under the Credit Documents, and (iii) may not occur until the selling
Lender pays to Administrative Agent an administrative-transfer fee of
$3,500.
(b) Procedures. Upon satisfaction of the foregoing conditions
and as of the Effective Date in the Assignment and Assumption
Agreement, which may not be before delivery of that document to
Administrative Agent and Co-Borrowers, then (i) a Purchaser is for all
purposes a Lender party to -- with all the Rights and obligations of a
Lender under -- this agreement, with a Commitment as stated in the
Assignment and Assumption Agreement, (ii) the selling Lender is
released from its obligations under the Credit Documents to a
corresponding extent, (iii) Schedule 2 is automatically deemed to
reflect the name, address, and Commitment of the Purchaser and the
reduced Commitment of the selling Lender, and Administrative Agent
shall deliver to Co-Borrowers and Lenders an amended Schedule 2
reflecting those changes, (iv) Co-Borrowers shall execute and deliver
to each of the selling Lender and the Purchaser a Warehouse
Credit Agreement
Note, each based upon their respective Commitments following the
transfer, (v) upon delivery of the one or more Warehouse Notes under
clause (iv) above, the selling Lender shall return to Co-Borrowers all
Warehouse Notes previously delivered to it under this agreement, and
(vi) the Purchaser is subject to all the provisions in the Credit
Documents, the same as if it were a Lender that executed this agreement
on its original date.
12.15 VENUE, SERVICE OF PROCESS, AND JURY TRIAL. PARENT AND
CO-BORROWERS, FOR THEMSELVES AND THEIR SUCCESSORS AND ASSIGNS, IRREVOCABLY (A)
SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN
TEXAS, (B) WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
THEY MAY NOW OR IN THE FUTURE HAVE TO THE LAYING OF VENUE OF ANY LITIGATION
ARISING OUT OF OR IN CONNECTION WITH ANY CREDIT DOCUMENT AND THE OBLIGATION
BROUGHT IN THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, (C) WAIVE
ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE FOREGOING COURTS HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM OR ANY OBJECTION TO VENUE, (D) CONSENT TO THE
SERVICE OF PROCESS OF ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF
COPIES OF THAT PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, BY HAND DELIVERY, OR BY DELIVERY BY A NATIONALLY-RECOGNIZED COURIER
SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL PROCESS
AT ITS ADDRESS FOR PURPOSES OF THIS AGREEMENT, (E) AGREE THAT ANY LEGAL
PROCEEDING AGAINST ANY PARTY TO ANY CREDIT DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE CREDIT DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF
THE FOREGOING COURTS, AND (F) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW,
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY CREDIT DOCUMENT. The scope of each of the foregoing
waivers is intended to be all encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. PARENT AND CO-BORROWERS
ACKNOWLEDGE THAT THESE WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE
AGENT'S AND EACH LENDER'S AGREEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
ADMINISTRATIVE AGENT AND EACH LENDER HAVE ALREADY RELIED ON THESE WAIVERS IN
ENTERING INTO THIS AGREEMENT, AND THAT ADMINISTRATIVE AGENT AND EACH LENDER WILL
CONTINUE TO RELY ON EACH OF THESE WAIVERS IN RELATED FUTURE DEALINGS. PARENT AND
CO-BORROWERS FURTHER WARRANT AND REPRESENT THAT THEY HAVE REVIEWED THESE WAIVERS
WITH THEIR LEGAL COUNSEL, AND THAT THEY KNOWINGLY AND VOLUNTARILY AGREE TO EACH
WAIVER FOLLOWING CONSULTATION WITH LEGAL COUNSEL. The waivers in this section
are irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions, amendments,
modifications, or replacements in respect of the applicable Credit Document. In
connection with any Litigation, this agreement may be filed as a written consent
to a trial by the court.
12.16 Limitation of Liability. Neither Administrative Agent nor any
Lender shall be liable to any Company for any amounts representing indirect,
special, or consequential damages suffered by any Company, except where such
amounts are based substantially on gross negligence or willful or unlawful
misconduct by Administrative Agent or any Lender, but then only to the extent
any damages resulting from
Credit Agreement
such willful misconduct are covered by Administrative Agent's and the other
Lenders' fidelity bond or other insurance.
12.17 Confidentiality.
(a) Confidential Information. As used in this section, the
term "confidential information" (i) includes all written, verbal, and
electronic information provided by Parent or any Co-Borrower to
Administrative Agent or any Lender pertaining to Parent's or any
Co-Borrower's business plans and practices, financial condition,
operations, trade secrets, customer lists, studies, analyses,
compilations, or operations, but (ii) excludes (A) information that at
the time of disclosure has been published or otherwise in the general
public domain through no breach of this section by the applicable
party, (B) information that is independently developed by or for
Administrative Agent or any Lender without the use of any Confidential
Information provided by Parent or a Co-Borrower, (C) information
required to be disclosed pursuant to a valid and proper requirement of
a Governmental Authority so long as, if not prohibited, Parent or a
Co-Borrower is notified before disclosure.
(b) Permitted Disclosures. Notwithstanding anything to the
contrary in this Section 12.17, Confidential Information may be
disclosed (i) to regulators or pursuant to subpoena or other legal
process, (ii) as may be required under applicable law, (iii) to a
Lender's counsel, auditors, accountants and affiliates and (iv) to
transferees who agree to maintain confidentiality with respect to such
Confidential Information to the same extent provided for in this
Section 12.17. Any such disclosure shall not require any investigation
or examination by any Lender as to whether that disclosure is pursuant
to a valid and proper requirement and a Lender shall not be in breach
of this Section 12.17 if any such disclosure should be determined to
not be pursuant to a valid and proper requirement. Notwithstanding the
notification requirements contained in this Section 12.17, notification
of any disclosure of Confidential Information shall not be required if
such disclosure is to a regulator or in the event such notification is
prohibited.
(c) Non-Disclosure. Administrative Agent and each Lender shall
hold the Confidential Information in accordance with its customary
procedures for holding confidential information of this nature and in
accordance with safe and sound banking practices and, except as
described below or above, shall not disclose, publish or disseminate
the Confidential Information to any third party without prior written
consent of an officer of Parent. Administrative Agent and each Lender
may disclose the Confidential Information to any of its Representatives
or Affiliates with a need to know that Confidential Information.
(d) Use of Information. Administrative Agent and each Lender
shall use Confidential Information solely in connection with the Credit
Documents and all transactions related to them.
12.18 ENTIRE AGREEMENT. THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THE CREDIT
DOCUMENTS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL
Credit Agreement
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK
SIGNATURE PAGE FOLLOWS
Credit Agreement
EXECUTED as of the date first stated in this agreement.
(address)
American Business Credit, Inc. AMERICAN BUSINESS CREDIT, INC., as
BalaPointe Office Centre a Co-Borrower
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx By _______________________________
Chief Financial Officer Name: _________________________
Tel: 610/000-0000 Title: ________________________
Fax: 610/000-0000
(address)
HomeAmerican Credit, Inc. HOMEAMERICAN CREDIT, INC., as a
BalaPointe Office Centre Co-Borrower
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Chief Financial Officer By _______________________________
Tel: 610/000-0000 Name: _________________________
Fax: 610/000-0000 Title: ________________________
Signature Page 1 of 3 Credit Agreement
Signature Pages
(address)
American Business Leasing, Inc. AMERICAN BUSINESS LEASING, INC.,
BalaPointe Office Centre as a Co-Borrower
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx By _________________________________
Chief Financial Officer Name: ___________________________
Tel: 610/000-0000 Title: __________________________
Fax: 610/000-0000
(address)
American Business Financial Services, Inc. AMERICAN BUSINESS FINANCIAL
BalaPointe Office Centre SERVICES, INC., as Parent
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx By _________________________________
Chief Financial Officer Name: ___________________________
Tel: 610/000-0000 Title: __________________________
Fax: 610/000-0000
(address)
Texas Commerce Bank National Association TEXAS COMMERCE BANK NATIONAL
X.X. Xxx 000 ASSOCIATION, as Administrative Agent
Xxxxx, Xxxxx 00000-0000 and a Lender
Attn: Xxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000 By: _________________________________
Xxxxxx X. Xxxxxxx, Vice President
(address)
The Bank of New York THE BANK OF NEW YORK
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Dominus By _________________________________
Tel: (000) 000-0000 Name: ___________________________
Fax: (000) 000-0000 Title: __________________________
Signature Page 2 of 3 Credit Agreement
Signature Pages
(address)
CoreStates Bank, N.A. CORESTATES BANK, N.A.
1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 By _________________________________
Attn: Xxxxx D'Antonio Name: ___________________________
Tel: (000) 000-0000 Title: __________________________
Fax: (000) 000-0000
(address)
Firstrust Bank FIRSTRUST BANK
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxxxxx By _________________________________
Tel: (000) 000-0000 Name: ___________________________
Fax: (000) 000-0000 Title: __________________________
(address)
National City Bank NATIONAL CITY BANK
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx By _________________________________
Tel: (000) 000-0000 Name: ___________________________
Fax: (000) 000-0000 Title: __________________________
Signature Page 3 of 3 Credit Agreement
Signature Pages
EXHIBIT A-1
WAREHOUSE NOTE
$________________ July 31, 1997
FOR VALUE RECEIVED, AMERICAN BUSINESS CREDIT, INC., a Pennsylvania
corporation, HOMEAMERICAN CREDIT, INC., a Pennsylvania corporation d/b/a Upland
Mortgage, and AMERICAN BUSINESS LEASING, INC., a Pennsylvania corporation
(collectively, "Makers"), jointly and severally promise to pay to the order of
________________________________ ("Payee") that portion of the principal amount
of $__________ that may from time to time be disbursed and outstanding under
this note together with interest.
This note is a "Warehouse Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of the date of
this note, between Makers, American Business Financial Services, Inc., a
Delaware corporation, Lenders, and Texas Commerce Bank National Association as
Administrative Agent for Lenders. All of the defined terms in the Credit
Agreement have the same meanings when used (unless otherwise defined) in this
note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation, the
final maturity, which is the Termination Date. Principal and interest are
payable to the holder of this note through Administrative Agent at either (a)
its offices at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or (b) at any other
address so designated by Administrative Agent in written notice to Makers.
This note incorporates by reference all other provisions in the Credit
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after an Event of Default,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorneys' fees, court costs, and other costs of collection,
certain waivers by Makers and other obligors, assurances and security, choice of
Texas and United States federal laws, usury savings, and other matters
applicable to Credit Documents under the Credit Agreement.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.,
as Makers
By _______________________________________
Name: _________________________________
Title:_________________________________
Exhibit A-1
1
EXHIBIT A-2
SWING NOTE
$30,000,000 July 31, 1997
FOR VALUE RECEIVED, AMERICAN BUSINESS CREDIT, INC., a Pennsylvania
corporation, HOMEAMERICAN CREDIT, INC., a Pennsylvania corporation d/b/a Upland
Mortgage, and AMERICAN BUSINESS LEASING, INC., a Pennsylvania corporation
(collectively, "Makers"), jointly and severally promise to pay to the order of
TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("Payee") that portion of the principal
amount of $30,000,000 that may from time to time be disbursed and outstanding
under this note together with interest.
This note is the "Swing Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of the date of
this note, between Makers, American Business Financial Services, Inc., a
Delaware corporation, Lenders, and Texas Commerce Bank National Association as
Administrative Agent for Lenders. All of the defined terms in the Credit
Agreement have the same meanings when used (unless otherwise defined) in this
note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation, the
final maturity, which is the Termination Date. Principal and interest are
payable to the holder at either (a) its offices at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, or (b) at any other address so designated by the holder of this
note in written notice to Makers.
This note incorporates by reference all other provisions in the Credit
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after an Event of Default,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorneys' fees, court costs, and other costs of collection,
certain waivers by Makers and other obligors, assurances and security, choice of
Texas and United States federal laws, usury savings, and other matters
applicable to Credit Documents under the Credit Agreement.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.,
as Makers
By _______________________________________
Name: _________________________________
Title:_________________________________
Exhibit A-2
EXHIBIT B
GUARANTY
THIS GUARANTY is executed as of July 31, 1997, by AMERICAN BUSINESS
FINANCIAL SERVICES, INC., a Delaware corporation ("Guarantor"), for the benefit
of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association in
its capacity as Administrative Agent for the Lenders now or in the future party
to the Credit Agreement described below ("Administrative Agent").
AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation,
HOMEAMERICAN CREDIT, INC., a Pennsylvania corporation d/b/a Upland Mortgage, and
AMERICAN BUSINESS LEASING, INC.,, a Pennsylvania corporation ("Co-Borrowers"),
American Business Financial Services, Inc., Administrative Agent, and Lenders
have executed the Credit Agreement (as renewed, extended, amended, or restated,
the "Credit Agreement") dated as of the date of this guaranty. The execution and
delivery of this guaranty are requirements to Administrative Agent's and
Lenders' execution of the Credit Agreement, are integral to the transactions
contemplated by the Credit Documents, and are conditions precedent to Lenders'
obligations to extend credit under the Credit Agreement.
ACCORDINGLY, for adequate and sufficient consideration, Guarantor
agrees with Administrative Agent and Lenders as follows:
1. Definitions. Terms defined in the Credit Agreement have the same
meanings when used (unless otherwise defined) in this guaranty. As used in this
guaranty:
Administrative Agent is defined in the preamble to this guaranty and
includes its successor appointed under the Credit Documents and acting as
Administrative Agent for Lenders under the Credit Documents.
Co-Borrowers is defined in the recitals to this guaranty and includes,
without limitation, each Co-Borrower, each Co-Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party appointed for any Co-Borrower or for all or
substantially all of any Co-Borrower's assets under any Debtor Law.
Credit Agreement is defined in the recitals to this guaranty.
Guaranteed Debt means the Obligation and all present and future costs,
attorneys' fees, and expenses incurred by Administrative Agent or any Lender to
enforce any Co-Borrower's, Guarantor's, or any other obligor's payment of any of
the Obligation, including, without limitation, all present and future amounts
that would become due but for the operation of ss. 502 or ss. 506 or any other
provision of Title 11 of the United States Code and all present and future
accrued and unpaid interest (including, without limitation, all post-petition
interest if any Company voluntarily or involuntarily becomes subject to any
Debtor Law).
Guarantor is defined in the preamble to this guaranty.
Exhibit B
Subordinated Debt means all present and future obligations of any
Co-Borrower to Guarantor, whether those obligations are (a) direct, indirect,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, (b) due or to become due to Guarantor, (c) held by or are to be held by
Guarantor, (d) created directly or acquired by assignment or otherwise, or (e)
evidenced in writing.
2. Guaranty. Guarantor guarantees to Administrative Agent and Lenders
the prompt payment of the Guaranteed Debt when due and at (and at all times
after) maturity (by acceleration or otherwise). This is an absolute,
irrevocable, and continuing guaranty, and the circumstance that at any time or
from time to time the Guaranteed Debt may be paid in full does not affect the
obligation of Guarantor with respect to the Guaranteed Debt incurred after that
time except as provided in the next sentence. This guaranty remains in effect
until the Guaranteed Debt is fully paid and performed and all commitments to
extend any credit under the Credit Agreement have terminated, subject to
reinstatement as provided for in Section 8. Guarantor may not rescind or revoke
its obligations with respect to the Guaranteed Debt.
3. Representations and Warranties. Guarantor represents and warrants to
Administrative Agent and Lenders that (a) Guarantor has the corporate power and
authority to execute, deliver, and perform this guaranty, which execution,
delivery, and performance has been authorized by all necessary corporate action,
does not violate any provision of its charter, articles of incorporation or
bylaws, any Governmental Requirement or any agreement by which Guarantor or any
of its assets is bound and does not result in the creation or imposition of any
Lien on any asset of Guarantor, except for any Lender Liens, (b) the value of
the consideration received and to be received by Guarantor is reasonably worth
at least as much as Guarantor's liability under this guaranty, and that
liability may reasonably be expected to directly or indirectly benefit
Guarantor, (c) this guaranty constitutes a legal and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms, except as
enforceability may be limited by applicable Debtor Laws and general principles
of equity, (d) all financial statements and other information about Guarantor's
financial condition and cash flow are true and correct in all material respects
and fairly present Guarantor's financial condition, cash flows and material
liabilities, and (e) the aggregate fair market value of Guarantor's assets
exceeds its liabilities, Guarantor has sufficient cash flow to enable it to pay
its Debts as they mature, and Guarantor does not have unreasonably small capital
to conduct its businesses.
4. Cumulative Rights. If Guarantor becomes liable for any indebtedness
owing by any Co-Borrower to Administrative Agent or any Lender, other than
under this guaranty, that liability may not be in any manner impaired or
affected by this guaranty. The Rights of Administrative Agent or Lenders under
this guaranty are cumulative of any and all other Rights that Administrative
Agent or Lenders may ever have against Guarantor. The exercise by Administrative
Agent or Lenders of any Right under this guaranty or otherwise does not preclude
the concurrent or subsequent exercise of any other Right.
5. Payment Upon Demand. If an Event of Default exists, Guarantor shall
-- on demand and without further notice of dishonor and without any notice
having been given to Guarantor previous to that demand of either the acceptance
by Administrative Agent or Lenders of this guaranty or the creation or
incurrence of any Guaranteed Debt -- pay the amount of the Guaranteed Debt then
due and payable to Administrative Agent and Lenders. It is not necessary for
Administrative Agent or Lenders, in order to enforce that payment by Guarantor,
first or contemporaneously to institute suit or exhaust remedies against any
Co-Borrower or others liable on that indebtedness or to enforce Rights against
any collateral securing that indebtedness.
Exhibit B
6. Subordination. The Subordinated Debt is expressly subordinated to
the full and final payment of the Guaranteed Debt. Guarantor agrees not to
accept any payment of any Subordinated Debt from any Company if an Event of
Default exists until this guaranty terminates as provided in Paragraph 2. If
Guarantor receives any payment of any Subordinated Debt in violation of the
foregoing at a time when any Guaranteed Debt is outstanding, then Guarantor
shall hold that payment in trust for Administrative Agent and Lenders and
promptly turn it over to Administrative Agent, in the form received (with any
necessary endorsements), to be applied to the Guaranteed Debt.
7. Subrogation and Contribution. Guarantor may not assert, enforce, or
otherwise exercise any Right of subrogation to any of the Rights or Liens of
Administrative Agent or Lenders or any other beneficiary against any Co-Borrower
or any other obligor on the Guaranteed Debt or any collateral or other security
or any Right of recourse, reimbursement, subrogation, contribution,
indemnification, or similar Right against any Co-Borrower or any other obligor
on any Guaranteed Debt or guarantor of it until the Guaranteed Debt is paid and
performed in full and all commitments to extend any credit under the Credit
Agreement have terminated. Subject to the foregoing, Guarantor irrevocably
waives all of the foregoing Rights (whether they arise in equity, under
contract, by statute, under common law, or otherwise) and waives the benefit of,
and any Right to participate in, any collateral or other security given to
Administrative Agent or Lenders or any other beneficiary to secure payment of
any Guaranteed Debt. Upon payment and performance by Guarantor of the Guaranteed
Debt in full and termination of all commitments to extend credit under the
Credit Agreement, any waivers in this Section 7 shall become void and
Administrative Agent shall assign to Guarantor its rights to any collateral or
security for the Guaranteed Debt.
8. No Release. Guarantor's obligations under this guaranty may not be
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) any taking or accepting of any other security or assurance
for any Guaranteed Debt; (b) any release, surrender, exchange, subordination,
impairment, or loss of any collateral securing any Guaranteed Debt; (c) any full
or partial release of the liability of any other obligor on the Obligation
except upon payment and performance of the Guaranteed Debt in full and
termination of all commitments to extend credit under the Credit Agreement; (d)
the modification of, or waiver of compliance with, any terms of any other Credit
Document; (e) the insolvency, bankruptcy, or lack of corporate or partnership
power of any party at any time liable for any Guaranteed Debt, whether now
existing or occurring in the future; (f) any renewal, extension, or
rearrangement of any Guaranteed Debt or any adjustment, indulgence, forbearance,
or com promise that may be granted or given by Administrative Agent or any
Lender to any other obligor on the Obligation; (g) any neglect, delay, omission,
failure, or refusal of Administrative Agent or any Lender to take or prosecute
any action in connection with the Guaranteed Debt; (h) any failure of
Administrative Agent or any Lender to notify Guarantor of any renewal,
extension, or assignment of any Guaranteed Debt, or the release of any security
or of any other action taken or refrained from being taken by Administrative
Agent or any Lender against any Co-Borrower or any new agreement between
Administrative Agent, any Lender, and any Co-Borrower, it being understood that
neither Administrative Agent nor any Lender is required to give Guarantor any
notice of any kind under any circumstances whatsoever with respect to or in
connection with any Guaranteed Debt, other than any notice required to be given
to Guarantor elsewhere in this guaranty or the Credit Agreement; (i) the
unenforceability of any Guaranteed Debt against any party because it exceeds the
amount permitted by any Governmental Requirement, the act of creating it is
ultra xxxxx, the officers creating it exceeded their authority or violated their
fiduciary duties in connection with it, or otherwise; or (j) any payment of the
Obligation to Administrative Agent or Lenders is held to
Exhibit B
constitute a preference under any Debtor Law or for any other reason
Administrative Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this guaranty will be
reinstated in an amount equal to that payment).
9. Waivers. To the extent permitted by law, Guarantor waives all Rights
by which it might be entitled to require suit on an accrued Right of action in
respect of any Guaranteed Debt or require suit against any Co-Borrower or
others, whether arising under ss. 34.02 of the Texas Business and Commerce Code,
as amended (regarding its Right to require Administrative Agent or Lenders to
xxx any Co-Borrower on any accrued Right of action following its written notice
to Administrative Agent or Lenders), ss. 17.001 of the Texas Civil Practice and
Remedies Code, as amended (allowing suit against it without suit against any
Co-Borrower, but precluding entry of judgment against it before entry of
judgment against any Company), Rule 31 of the Texas Rules of Civil Procedure, as
amended (requiring Administrative Agent or Lenders to join any Co-Borrower in
any suit against it unless judgment has been previously entered against any
Co-Borrower), or otherwise.
10. Credit Agreement Provisions. Guarantor acknowledges that certain
(a) representations and warranties in Section 6 the Credit Agreement are
applicable to Guarantor and confirms that each such representation and warranty
is true and correct, and (b) covenants and other provisions in Sections 7, 8, 9,
and 10 and elsewhere in the Credit Agreement are applicable to Guarantor or are
imposed upon Guarantor and agrees to promptly and properly comply with or be
bound by each of them.
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this guaranty after reviewing the terms and
conditions of the Credit Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Co-Borrowers' creditworthiness and is not
executing and delivering this guaranty in reliance on any representation or
warranty by Administrative Agent or any Lender as to that creditworthiness.
Guarantor expressly assumes all responsibilities to remain informed of the
financial condition of Co-Borrowers and any circumstances affecting any
Co-Borrower's ability to perform under the Credit Documents to which it is a
party or any collateral securing any Guaranteed Debt.
12. No Reduction. The Guaranteed Debt may not be reduced, discharged,
or released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of any Co-Borrower, Guarantor or any other party against Administrative
Agent or Lenders or against payment of the Guaranteed Debt, whether that offset,
claim, or defense arises in connection with the Guaranteed Debt or otherwise.
Those claims and defenses include, without limitation, failure of consideration,
breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of
limitations, lender liability, accord and satisfaction, usury, forged
signatures, mistake, impossibility, frustration of purpose, and
unconscionability.
13. Bankruptcy or Death. If Guarantor becomes insolvent, fails to pay
Guarantor's debts generally as they become due, voluntarily seeks (or consents
to or acquiesces in) any benefits of any Debtor Law, or becomes a party to (or
is made the subject of) any proceeding under any Debtor Law (other than as a
creditor or claimant) that could reasonably likely suspend or otherwise
adversely affect the Rights of Administrative Agent or any Lender under this
guaranty, then, in any such event, the Guaranteed Debt is automatically (as
between Guarantor, Administrative Agent, and Lenders), a fully matured, due, and
Exhibit B
payable obligation of Guarantor to Administrative Agent and Lenders (without
regard to whether any Co-Borrower is then in default under the Credit Agreement
or whether any of the Obligation is then due and owing by any Co-Borrower),
payable in full (i.e., the estimated amount owing in respect of the contingent
claim created under this guaranty) by Guarantor to Administrative Agent and
Lenders upon demand.
14. Credit Document. This guaranty is a Credit Document and is subject
to the applicable provisions of Sections 1 and 12 of the Credit Agreement, all
of which are incorporated into this guaranty by reference the same as if set
forth in this guaranty verbatim.
15. Communications. For purposes of Section 12.2 of the Credit
Agreement, Guarantor's address and telecopy number is set forth beside its
signature on the signature page of this guaranty.
16. Amendments, Etc. No amendment, waiver, or discharge to or under
this guaranty is valid unless it is in writing and is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with the
requirements of Section 12.10 of the Credit Agreement.
17. ENTIRETY. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
18. Administrative Agent and Lenders. Administrative Agent is the agent
for each Lender under the Credit Agreement. All Rights granted to Administrative
Agent under or in connection with this guaranty are for each Lender's ratable
benefit. Administrative Agent may, without the joinder of any Lender, exercise
any Rights in Administrative Agent's or Lenders' favor under or in connection
with this guaranty. Administrative Agent's and each Lender's Rights and
obligations vis-a-vis each other may be subject to one or more separate
agreements between those parties. However, Guarantor is not required to inquire
about any such agreement or be subject to any terms of it unless Guarantor
specifically joins it. Therefore, neither Guarantor nor its heirs, personal
representatives, successors, or assigns is entitled to any benefits or
provisions of any such separate agreement or is entitled to rely upon or raise
as a defense any party's failure or refusal to comply with the provisions of it.
19. Parties. This guaranty benefits Administrative Agent, Lenders, and
their respective successors and assigns and binds Guarantor and its successors
and assigns. Upon appointment of any successor Administrative Agent under the
Credit Agreement, all of the Rights of Administrative Agent under this guaranty
automatically vest in that new Administrative Agent as successor Administrative
Agent on behalf of Lenders without any further act, deed, conveyance, or other
formality other than that appointment. The Rights of Administrative Agent and
Lenders under this guaranty may be transferred with any assignment of the
Guaranteed Debt. The Credit Agreement contains provisions governing assignments
of the Guaranteed Debt and of Rights and obligations under this guaranty.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
Exhibit B
EXECUTED as of the date first stated in this guaranty.
(address and telecopy number) AMERICAN BUSINESS FINANCIAL SERVICES,
INC., as Guarantor
XxxxXxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Bala Cynwyd, Pennsylvania 19004
Attn: Xxxxx X. Xxxxx By _________________________________
Chief Financial Officer Name: ___________________________
Tel: 610/000-0000 Title:___________________________
Fax: 610/000-0000
Administrative Agent executes this guaranty in acknowledgment of
Paragraph 17 above.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent
By _________________________________
Xxxxxx X. Xxxxxxx, Vice President
Signature Page Guaranty
EXHIBIT C-1
SECURITY AGREEMENT
THIS AGREEMENT is entered into as of July 31, 1997, between AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation, HOMEAMERICAN CREDIT, INC., a
Pennsylvania corporation d/b/a Upland Mortgage, and AMERICAN BUSINESS LEASING,
INC., a Pennsylvania corporation (whether one or more, "Debtor"), and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as Administrative Agent (in that capacity,
"Secured Party") for Lenders.
Debtor, Parent, Lenders, and Administrative Agent have entered into
the Credit Agreement (as renewed, extended, amended, or restated, the "Credit
Agreement") dated as of the date of this security agreement. As a continuing
inducement to the Lenders to extend credit to Debtor under the Credit Agreement
(and as a condition precedent to that credit) Debtor is executing and delivering
this agreement for the benefit of Lenders and Secured Party.
ACCORDINGLY, for adequate and sufficient consideration, Debtor and
Secured Party agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, (a) terms
defined in the Credit Agreement or the UCC have the same meanings when used in
this agreement, and (b) to the extent permitted by any Governmental Requirement,
if in conflict (i) the definition of a term in the Credit Agreement controls
over the definition of that term in the UCC, and (ii) the definition of a term
in Article 9 of the UCC controls over the definition of that term elsewhere in
the UCC.
Collateral is defined in Section 2.2 of this agreement.
Debtor is defined in the preamble to this agreement and includes,
without limitation, Debtor, Debtor as a debtor-in-possession, and any receiver,
trustee, liquidator, conservator, custodian, or similar party appointed for
Debtor or for substantially all of Debtor's assets under any Debtor Law.
Obligor means any Person obligated with respect to any Collateral
(whether as an account debtor, obligor on an instrument, lease, issuer of
securities, or otherwise).
Secured Party is defined in the preamble to this agreement and includes
its successor appointed and acting as Administrative Agent for Lenders under the
Credit Documents.
Security Interest means the security interest granted and the pledge
and assignment made under Section 2.1 of this agreement, which is a Lender Lien
under the Credit Agreement.
SECTION 2. SECURITY INTEREST AND COLLATERAL.
2.1 Security Interest. To secure the full payment and performance of
the Obligation, Debtor grants to Secured Party for the benefit of Lenders a
security interest in the Collateral and pledges and assigns the Collateral to
the Secured Party for the benefit of Lenders, all upon and subject to the terms
and
Exhibit C-1
conditions of this agreement. The grant of the Security Interest does not
subject the Secured Party or any Lender to the terms of any Collateral Document
or in any way transfer, modify, or otherwise affect (a) any of Debtor's
obligations with respect to any Collateral or (b) the Lender Liens.
2.2 Collateral. As used in this agreement, the term "Collateral" means
the present and future items and types of property described below, whether now
owned or acquired in the future by Debtor. This description of Collateral does
not permit any action prohibited by any Credit Document.
o Mortgage Loans, Commercial Loans, and Leases (collectively,
the "Pledged Assets") from time to time identified by Debtor
to Secured Party as Collateral.
o All Collateral Documents in any way related to any Pledged
Asset identified as Collateral -- including, without
limitation, all promissory notes evidencing and all mortgages,
deeds of trust, trust deeds, or security agreements securing
those Pledged Assets -- whether deposited with or held by or
for Secured Party under this agreement, identified by Debtor
as Collateral for a Wet Borrowing, or otherwise.
o Take-Out Commitments, if any, held by Debtor for any Pledged
Assets identified as Collateral, Rights to deliver those
Pledged Assets to the investors or other purchasers under
those Take-Out Commitments, and all proceeds resulting from
the sale of any of those Pledged Assets under those Take-Out
Commitments.
o Private-mortgage insurance (including, without limitation, all
commitments to issue any such insurance) covering -- and all
commitments issued by FHA to insure or issued by VA to
guarantee -- any Pledged Assets identified as Collateral.
o Security of any kind pledged by a mortgagor or debtor for any
Pledged Asset identified as Collateral.
o Casualty insurance assigned to Debtor in connection with any
Pledged Asset identified as Collateral.
o Any Collateral otherwise described in this agreement that may
from time to time be delivered (a) to an investor under
Section 4.5 of the Credit Agreement until purchased and paid
for by that investor or (b) for correction under Section 4.6
of the Credit Agreement.
o The Note Payment Accounts and all amounts deposited in them or
represented by them.
o Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any Collateral
including without limitation all equipment and other property
covered by any Lease Collateral.
o Pledged deposits or securities pledged to Administrative Agent
for Lenders as additional security for repayment of the
Obligation.
Exhibit C-1
o All files, surveys, certificates, correspondence, appraisals,
tapes, discs, cards, accounting records, and other information
and data of Debtor relating to any other Collateral --
including, without limitation, all information, data, tapes,
discs, and cards necessary to administer and service any
Pledged Asset identified as Collateral.
o Cash and noncash proceeds of any Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES. By entering into this agreement, and
by each subsequent delivery of additional Collateral under this agreement,
Debtor reaffirms the representations and warranties contained in the Credit
Agreement. Debtor further represents and warrants to Secured Party for Lenders
as follows:
3.1 Concerning the Collateral. All Collateral (a) is genuine and in all
respects what it purports to be, (b) is, to Debtor's best knowledge, the legal,
valid, and binding obligation of each Obligor (except as enforceability may be
limited by Debtor Laws), (c) is, to Debtor's best knowledge, free from any claim
for credit, deduction, or allowance of any Obligor and free from any defense,
dispute, setoff, or counterclaim (other than for payments made in respect of
it), (d) if a Mortgage Loan or a Commercial Loan, was originated and is in
compliance with all Governmental Requirements (including, without limitation,
all Governmental Requirements relating to usury, the Real Estate Settlement
Procedures Act of 1974, the Equal Credit Opportunity Act, the Federal Truth in
Lending Act, Regulation Z promulgated by the Board of Governors of the Federal
Reserve System, and all applicable federal and state consumer protection
Governmental Requirements, (e) if a Take-Out Commitment or other contract, is in
full force and effect without any material default having occurred by any party
to it, and (f) conforms to the applicable requirements of eligibility under
Schedule 4.1 to the Credit Agreement.
3.2 Ownership and Priority. Debtor has full legal and beneficial
ownership of all Collateral, free and clear of all Liens except Permitted Liens.
3.3 Creation and Perfection. The Security Interest is created and
perfected on (a) each promissory note that evidences a Mortgage Loan or
Commercial Loan identified as Collateral and that is delivered to Secured Party,
(b) each promissory note that evidences a Mortgage Loan or Commercial Loan
identified by Debtor to Secured Party as supporting a Wet Borrowing for 21 days
after the Borrowing Date for that Borrowing, (c) each Lease delivered to Secured
Party, (d) all Collateral shipped to any Approved Investor under Section 4.5 of
the Credit Agreement (and the Security Interest continues to be perfected until
Secured Party receives payment under that section), (e) all Collateral shipped
to Debtor for correction under Section 4.6 of the Credit Agreement (and the
Security Interest continues to be perfected for 21 days after that shipment),
(f) the Note Payment Account immediately upon establishment of that account with
Secured Party, and (g) all other Collateral upon the filing of the financing
statements provided for in the Credit Documents.
SECTION 4. COVENANTS. Until all commitments by Secured Party and Lenders to
extend credit under the Credit Agreement have been canceled or terminated and
the Obligation is fully paid and performed, Debtor covenants and agrees with
Secured Party for Lenders as follows:
Exhibit C-1
4.1 Concerning the Collateral. Debtor (a) shall fully perform all of
its duties under and in connection with each transaction to which any Collateral
relates, (b) shall promptly notify Secured Party about any change in any fact or
circumstances represented or warranted by Debtor about any Collateral, (c) shall
promptly notify Secured Party of any claim, action, or proceeding affecting
title to any Collateral or the Security Interest and, at Secured Party's request
and Debtor's expense, appear in and defend that action or proceeding, (d) shall
hold in trust for Secured Party for the benefit of Lenders all Collateral not
delivered to Secured Party (without excusing any failure to deliver Collateral
Documents to Secured Party as required by this agreement) and xxxx that
Collateral on Debtor's records that it is subject to the Security Interest (but
the failure to do so does not impair the Security Interest or its priority), (e)
other than collections under Section 4.3 below, Debtor shall pay and deliver to
Secured Party all items and types of property into which any Collateral may be
converted (all of which is subject to the Security Interest) and properly
endorse, assign, or take such other action as Secured Party may request in order
to maintain and continue the Security Interest in that property, (f) shall not,
except in the ordinary course of business, compromise, extend, release, or
adjust payments on any Collateral, accept a conveyance of mortgaged or leased
property in full or partial satisfaction of any Collateral, or release any
mortgage, deed of trust, trust deed, security agreement, or lease securing or
underlying any Collateral, and (g) shall not agree to the amendment,
termination, or substitution of a Take-Out Commitment, if any, covered by the
Security Interest if that amendment, termination, or substitution would be a
Material-Adverse Event.
4.2 Insurance. Debtor shall keep the Collateral fully insured in the
amounts, against the risks, and with insurers as may be approved by Secured
Party, with loss payable to Secured Party as its interest (on behalf of Lenders)
may appear.
4.3 Collections. Debtor shall, at its sole cost and expense, whether
requested to by Secured Party or in the absence of such a request, take all
actions reasonably necessary to obtain payment, when due and payable, of all
amounts due or to become due from Obligors with respect to any Collateral.
Debtor may not agree to any rebate, refund, compromise, or extension with
respect to any Collateral or accept any prepayment on account of any Collateral
other than in the ordinary course of business.
(a) No Event of Default. While no Event of Default exists,
Debtor shall make all of those collections, shall maintain such escrow
accounts and otherwise comply with the servicing agreements to which it
is a party or subject, and may otherwise retain and use the proceeds of
those collections in the ordinary course of its business.
(b) Event of Default. While an Event of Default exists, and
upon the request of Secured Party, Debtor shall (i) notify and direct
each Obligor to make payments on the Collateral to Secured Party for
deposit into such accounts as it may designate so as to be held as
Collateral under this agreement and (ii) otherwise turn over to Secured
Party, in the form received and with any necessary endorsements, all
payments it receives in respect of any Collateral for deposit into such
accounts as Secured Party may designate to be held as Collateral under
this agreement. Secured Party may at any time apply any amounts in
those accounts as a payment of the Obligation, other than mortgage
escrow payments that are deposited into escrow accounts in accordance
with the applicable guide or servicing contract.
Exhibit C-1
4.4 Concerning Debtor. Without first giving Secured Party 30 days
notice (or fewer if agreed to in writing by Secured Party) of the intention to
do any of the following and performing such acts and executing and delivering to
Secured Party such additional documents as Secured Party requests in order to
continue or maintain the existence and priority of the Security Interest, Debtor
may not (a) use or transact business under any corporate, assumed, or trade
name, except as represented in the Credit Agreement, (b) relocate its chief
executive offices or principal place of business, or (c) move or surrender
possession of its books and records regarding the Collateral. Debtor may not
directly or indirectly dissolve or liquidate or sell, transfer, lease, or
otherwise dispose of any material portion of the Collateral, except for sales or
other dispositions of Collateral by Debtor in the ordinary course of business
and subject to Section 4 of the Credit Agreement.
SECTION 5. EVENTS OF DEFAULT AND REMEDIES. If an Event of Default exists, then
Secured Party may, at its election (but subject to the terms and conditions of
the Credit Agreement), exercise any and all Rights available to a secured party
under the UCC, in addition to any and all other Rights afforded by the Credit
Documents, at law, in equity, or otherwise, including, without limitation (a)
requiring Debtor to assemble all or part of the Collateral and make it available
to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to Debtor and Secured Party, (b) surrendering any policies
of insurance on all or part of the Collateral and receiving and applying the
unearned premiums as a credit on the Obligation, (c) applying by appropriate
judicial proceedings for appointment of a receiver for all or part of the
Collateral (and Debtor hereby consents to any such appointment), and (d)
applying to the Obligation any cash held by Secured Party or any Lender under
the Credit Documents.
5.1 Notice. Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Debtor and to any other Person entitled to notice under the
UCC. If any Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or otherwise
dispose of the Collateral without notification, advertisement, or other notice
of any kind. Notice sent or given not less than five calendar days before the
taking of the action to which the notice relates is reasonable notification and
notice for the purposes of this section.
5.2 Application of Proceeds. Secured Party shall apply the proceeds of
any sale or other disposition of the Collateral under this Section 5 in the
order and manner specified in Section 3.5 of the Credit Agreement. Any surplus
remaining shall be delivered to Debtor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Debtor remains liable for any deficiency.
SECTION 6. OTHER RIGHTS.
6.1 Performance. If Debtor fails to pay when due all Taxes on any of
the Collateral, or to preserve the priority of the Security Interest in any of
the Collateral, or to keep the Collateral insured as required by this agreement,
or otherwise fails to perform any of its obligations under any Credit Documents
or Collateral Documents with respect to the Collateral, then Secured Party may,
at its option, but without being required to do so, pay such Taxes, prosecute or
defend any suits in relation to the Collateral, or insure and keep insured the
Collateral in any amount deemed appropriate by Secured Party, or take all other
action which Debtor is required, but has failed or refused, to take under the
Credit Documents or
Exhibit C-1
Collateral Documents. Any sum which may be expended or paid by Secured Party
under this section (including, without limitation, court costs and attorneys'
fees) shall bear interest from the dates of expenditure or payment at the
Default Rate until paid and, together with such interest, shall be payable by
Debtor to Secured Party upon demand and is part of the Obligation.
6.2 Collection.
(a) Actions. When Secured Party is entitled under Section 4.3
above to make collection on any Collateral, it may in its own name or
in the name of Debtor (i) compromise or extend the time of payment with
respect to any Collateral for such amounts and upon such terms as
Secured Party may determine, (ii) demand, collect, receive, receipt
for, xxx for, compound (to the extent lawful), and give acquittance for
any and all amounts due or to become due with respect to Collateral,
(iii) take control of cash and other proceeds of any Collateral, (iv)
endorse Debtor's name on any notes, acceptances, checks, drafts, money
orders, or other evidences of payment on Collateral that may come into
Secured Party's possession, (v) sign Debtor's name on any invoice or
xxxx of lading relating to any Collateral, on any drafts against
Obligors or other Persons making payment with respect to Collateral, on
assignments and verifications of accounts or other Collateral and on
notices to Obligors making payment with respect to Collateral, (vi)
send requests for verification of obligations to any Obligor, (vii) do
all other acts and things necessary to carry out the intent of this
agreement, and (viii) authorize any servicer in respect of any
Collateral to any one or more of the foregoing on Secured Party's
behalf.
(b) Other Matters. Only when Secured Party is entitled under
Section 4.3 above to make collection on any Collateral, if any Obligor
fails or refuses to make payment on any Collateral when due, Secured
Party is authorized, in its sole discretion, either in its name or in
Debtor's name, to take such action as Secured Party deems appropriate
for the collection of any amounts owed with respect to Collateral or
upon which a delinquency exists. Regardless of any other provision,
however, to the extent permitted by law, Secured Party is never liable
for its failure to collect, or for its failure to exercise diligence in
the collection of, any amounts owed with respect to Collateral and is
not under any duty whatever to anyone except Debtor to account for
funds that it actually receives. Without limiting the generality of the
foregoing, Secured Party has no responsibility for ascertaining any
maturities, calls, conversions, exchanges, offers, tenders, or similar
matters relating to any Collateral, or for informing Debtor with
respect to any of such matters (irrespective of whether Secured Party
actually has, or may be deemed to have, knowledge thereof). Secured
Party's receipt to any Obligor is a full and complete release,
discharge, and acquittance to that Obligor, to the extent of any amount
so paid to Secured Party.
6.3 Power of Attorney. Subject to the qualifications below, Debtor
irrevocably appoints Secured Party -- acting on behalf of Lenders -- as its
attorney-in-fact (with full power of substitution) for, on behalf of, and in the
name of Debtor to (a) endorse and deliver to any Person any check, instrument,
or other document received by Secured Party or any Lender that represents
payment in respect of any Collateral, (b) prepare, complete, execute, deliver,
and record any assignment of any mortgage, deed of trust, or trust deed securing
any Mortgage Loan or Commercial Loan, (c) endorse and deliver or otherwise
transfer any promissory note evidencing any Mortgage Collateral and do every
other thing necessary or desirable to effect transfer of all or any Collateral,
(d) take all necessary and appropriate action with respect
Exhibit C-1
to any Obligation or any Collateral, (e) commence, prosecute, settle,
discontinue, defend, or otherwise dispose of any claim relating to any
Collateral, and (f) sign Debtor's name wherever appropriate to effect the
performance of this agreement and the Credit Agreement. This section shall be
construed to give the greatest latitude permitted by law to Secured Party's
power as the Debtor's attorney-in-fact to collect, sell, and deliver any
Collateral and all other documents relating to it. The powers and authorities
conferred on Secured Party in this section (w) are discretionary and not
obligatory on the part of Secured Party, (x) may be exercised by Secured Party
through any Person who, at the time of the execution of a particular document,
is an officer of Secured Party, (y) may not be exercised by Secured Party unless
an Event of Default exists and only throughout the duration and continuation
thereof, and (z) is granted for a valuable consideration, coupled with an
interest, and irrevocable until -- and all Persons dealing with Secured Party,
any of its officers acting under this section, or any substitute are fully
protected in treating the powers and authorities conferred by this section as
existing and continuing in full force and effect until advised by Secured Party
that -- all commitments under the Credit Agreement to extend credit under the
Credit Agreement have been terminated or canceled and the Obligation is fully
paid and performed.
SECTION 7. MISCELLANEOUS.
7.1 Miscellaneous. Because this agreement is a "Credit Document"
referred to in the Credit Agreement, the provisions relating to Credit Documents
in Sections 1 and 12 of the Credit Agreement are incorporated into this
agreement by reference the same as if included in this agreement verbatim.
7.2 Term. This agreement terminates upon full payment and performance
of the Obligation. No Obligor is ever obligated to make inquiry of the
termination of this agreement but is fully protected in making any payments on
the Collateral directly to Secured Party.
7.3 Matters Not Relevant. The Security Interest, Debtor's obligations,
and Secured Party's and Lenders' Rights under this agreement are not released,
diminished, impaired, or adversely affected by any one or more of the following:
(a) Secured Party's or any Lender taking or accepting any additional -- or any
release, surrender, exchange, subordination, or loss of any other -- guaranty,
assurance, or security for any of the Obligation; (b) any full or partial
release of any other Person obligated on any of the Obligation; (c) the
modification or assignment of -- or waiver of compliance with -- any other
Credit Document; (d) any present or future insolvency, bankruptcy, or lack of
corporate, partnership, or trust power of any other Person obligated on any of
the Obligation; (e) any renewal, extension, or rearrangement of any of the
Obligation, or any adjustment, indulgence, forbearance, or compromise granted to
any Person obligated on any of the Obligation; (f) any Person's neglect, delay,
omission, failure, or refusal to take or prosecute any action in connection with
any of the Obligation; (g) any existing or future affect, claim, or defense
(other than the defense of full and final payment and performance of the
Obligation) of Debtor or any other Person against Secured Party or any Lender;
(h) the unenforceability of any of the Obligation against any Person obligated
or any of the Obligation because it exceeds the amount permitted by any
Governmental Requirement, the act of creating it is ultra xxxxx, or the
officers, partners, or trustees creating it exceeded their authority or violated
their fiduciary duties, or otherwise; (i) any payment of the Obligation is held
to constitute a preference under any Debtor Law or for any other reason Secured
Party or any Lender is required to refund any payment or make payment to another
Person; or (j) any Person's failure to notify Debtor, Secured Party, or any
Lender of their acceptance of this agreement or any Person's failure to notify
Debtor about the foregoing events or occurrences, and Debtor
Exhibit C-1
waives any notice of any kind under any circumstances whatsoever with respect to
this agreement or any of the Obligation other than as specifically provided in
this agreement.
7.4 Waivers. Except to the extent expressly otherwise provided in the
Credit Documents, Debtor waives (a) any Right to require Secured Party or any
Lender to proceed against any other Person, to exhaust its Rights in the
Collateral, or to pursue any other Right which Secured Party or any Lender may
have, and (b) all Rights of marshaling in respect of the Collateral.
7.5 Financing Statement. Secured Party may, at any time, file this
agreement or a carbon, photographic, or other reproduction of this agreement as
a financing statement, but Secured Party's failure to do so does not impair the
validity or enforceability of this agreement.
7.6 Parties. This agreement binds and inures to Debtor, Secured Party,
and each Lender, and their respective successors and permitted assigns. Only
those Persons may rely or raise any defense about this agreement.
(a) Assignments. Debtor may not assign any Rights or
obligations under this agreement without first obtaining the written
consent of Secured Party and all Lenders. Secured Party's Rights under
this agreement may be assigned to any successor agent appointed under
the Credit Agreement. Any Lender may assign, pledge, and otherwise
transfer all or any of its Rights under this agreement to any
participant or transferee permitted by the Credit Agreement.
(b) Secured Party. Secured Party is the agent for each Lender.
Secured Party may, without the joinder of any Lender, exercise any
Rights in favor of any of them under this agreement. The Rights of
Secured Party and Lenders vis-a-vis each other may be subject to other
agreements between them. Neither Debtor nor its successors or permitted
assigns need to inquire about any such agreement or be subject to the
terms of it unless they join in it and, therefore, are not entitled to
the benefits of any such agreement or entitled to rely upon or raise as
a defense the failure of any party to comply with it.
7.7 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
Exhibit C-1
EXECUTED as of the date first stated above.
AMERICAN BUSINESS CREDIT, INC., TEXAS COMMERCE BANK NATIONAL
HOMEAMERICAN CREDIT, INC., and ASSOCIATION, as Administrative Agent and
AMERICAN BUSINESS LEASING, INC., as Secured Party
as a Debtor
By __________________________________ By __________________________________
Name: ____________________________ Xxxxxx X. Xxxxxxx, Vice President
Title:____________________________
Signature Page Security Agreement
THIS DOCUMENT Xxxxxx and Xxxxx, L.L.P.
PREPARED BY AND WHEN 000 Xxxx Xxxxxx, Xxxxx 0000
FILED RETURN TO: Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Zipper, Legal Assistant
EXHIBIT C-2
FINANCING STATEMENT
THIS FINANCING STATEMENT IS PRESENTED TO A FILING OFFICER
FOR FILING UNDER THE UNIFORM COMMERCIAL CODE.
================================================================================
DEBTOR'S NAME AND MAILING ADDRESS: American Business Leasing, Inc.
XxxxXxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx XxxXxx, Xxxxxxxxxxxx 00000
Fed Tax ID #:____________________
________________________________________________________________________________
SECURED PARTY'S NAME AND MAILING Texas Commerce Bank National Association,
ADDRESS: Administrative Agent(1)
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
________________________________________________________________________________
FOR FILING OFFICER:
================================================================================
THIS FINANCING STATEMENT COVERS THE FOLLOWING PRESENT AND FUTURE TYPES AND
ITEMS OF PROPERTY AND INTERESTS, WHETHER NOW OWNED OR ACQUIRED IN THE FUTURE BY
DEBTOR
(THE "COLLATERAL"):
Terms defined on Schedule 1 attached to this financing statement have the same
meanings when used below:
o Mortgage Loans, Commercial Loans, and Leases (collectively,
the "Pledged Assets") identified from time to time to Secured
Party as Collateral.
o All Collateral Documents in any way related to any Pledged
Asset identified as Collateral -- including, without
limitation, all promissory notes evidencing and all mortgages,
deeds of trust, trust deeds or security agreements securing
those Pledged Assets -- whether deposited with or held by or
for Secured Party under the Credit Documents, identified by
Debtor as Collateral for a Wet Borrowing, or otherwise.
o Private-mortgage insurance (including, without limitation, all
commitments to issue any such insurance) covering -- and all
commitments issued by FHA to insure or issued by VA to
guarantee -- any Pledged Assets identified as Collateral.
o Security of any kind pledged by a mortgagor or debtor for any
Pledged Asset identified as Collateral.
o Casualty insurance assigned to Debtor in connection with any
Pledged Asset identified as Collateral.
_____________________
(1) Secured Party is serving as Administrative Agent under the Credit Agreement,
and the security interest evidenced by this financing statement, as amended
from time to time, is granted to Secured Party in that capacity on behalf of
Lenders.
Exhibit C-2
o Take-Out Commitments held by Debtor for any Pledged Assets
identified as Collateral, Rights to deliver those Pledged
Assets to the investors or other purchasers under those
Take-Out Commitments, and all proceeds resulting from the sale
of any of those Pledged Assets under those Take-Out
Commitments.
o Any Collateral otherwise described in this financing statement
that may from time to time be shipped (a) to an investor under
Section 4.5 of the Credit Agreement until purchased and paid
for by that investor or (b) to Debtor for correction under
Section 4.6 of the Credit Agreement.
o The Note Payment Accounts and all amounts deposited in them or
represented by them.
o Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any Collateral
including without limitation all equipment and other property
covered by any Lease Collateral.
o Pledged deposits or securities pledged to Administrative Agent
for Lenders as additional security for repayment of the
indebtedness under the Credit Agreement.
o All files, surveys, certificates, correspondence, appraisals,
tapes, discs, cards, accounting records, and other information
and data of Debtor relating to any other Collateral --
including, without limitation, all information, data, tapes,
discs, and cards necessary to administer and service any
Pledged Asset identified as Collateral.
o Cash and noncash proceeds of any Collateral.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES TO FOLLOW.]
Exhibit C-2
DEBTOR:
AMERICAN BUSINESS LEASING, INC.
By ____________________________________
Name: ______________________________
Title:______________________________
Signature Page Financing Statement
SCHEDULE I
Definitions Attached to Financing Statement
from _________________, as Debtor, to
Texas Commerce Bank National Association, Administrative Agent, as Secured Party
"Administrative Agent" means, at any time, Texas Commerce Bank National
Association (or its successor appointed under Section 11.6), acting as
administrative, collateral, managing, and syndication agent for Lenders under
the Credit Documents.
"Collateral Documents" means the documents and other items described on
Schedule 4.3 of the Credit Agreement and required to be delivered to
Administrative Agent under Section 4.3 of the Credit Agreement.
"Credit Documents" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
including without limitation the Notes, the Guaranties and the Security
Agreement, (b) all agreements, documents, and instruments in favor of
Administrative Agent or Lenders (or Administrative Agent on behalf of Lenders)
ever delivered under this agreement or otherwise delivered in connection with
any of the Obligation (other than assignments), and (c) all renewals,
extensions, and restatements of, and amendments and supplements to, any of the
foregoing.
"Event of Default" is defined in Section 10.1 of the Credit Agreement.
"FHA" means the Federal Housing Administration within the United States
Department of Housing and Urban Development.
"Lease" means an agreement evidencing the transfer of the right to
possession and use of goods for a term in return for consideration, other than
(a) a sale on approval, return, or otherwise and (b) a retention or creation of
a security interest except as a protective filing in the event the lease is
construed under the UCC or other applicable law to create a security interest.
"Lease Collateral" means all Leases and related Collateral Documents
offered as Collateral under the Credit Documents.
"Lenders" means the financial institutions (including, without
limitation, the entity which is Administrative Agent in respect of its share of
Borrowings) named on Schedule 2 of the Credit Agreement or on the
most-recently-amended Schedule 2 of the Credit Agreement, if any, delivered by
Administrative Agent under this agreement, and, subject to this agreement, their
respective successors and permitted assigns (but not any Participant who is not
otherwise a party to this agreement).
"Mortgage Loan" means a loan that is not a construction loan or
Commercial Loan, is evidenced by a valid promissory note, and is secured by a
mortgage, deed of trust, or trust deed that grants a perfected first-priority
Lien (or second-priority Lien with respect to Second-Lien Borrowings) on
residential-real property.
"Note Payment Accounts" means the following non-interest bearing
restricted checking accounts maintained with Administrative Agent separately for
each Co-Borrower:
o For ABC, Account No. ________________, styled "__________________."
o For HAC, Account No. ________________, styled "__________________."
o For ABL, Account No. ________________, styled "__________________."
which accounts are to be used for (a) Administrative Agent's deposits of
proceeds of Borrowings and payments constituting the proceeds of principal from
any Collateral (other than regular principal and interest payments on the
Mortgage Collateral and Lease Collateral) of the particular Co-Borrower; (b)
Administrative Agent's deposits of principal and interest payments for the
repayment of Borrowings received from the particular Co-Borrower or for the
particular Co-Borrower's account; and (c) only if and when no Event of Default
exists unless Administrative Agent has declared in writing that is has been
cured or waived, the particular Co-Borrower's withdrawal of proceeds of its
Borrowings for the purposes permitted under this agreement and Administrative
Agent's transfer from that Note Payment Account to that Co-Borrower's own
account (or to a controlled disbursement account maintained by that Co-Borrower
with Administrative Agent) or proceeds of sales or other dispositions of
released Collateral for that Co-Borrower in excess of its Borrowings borrowed
and then outstanding against that released Collateral. The Note Payment Accounts
Exhibit C-2
are (and shall continuously be) part of the Collateral for the Obligation. The
Note Payment Accounts shall be subject to set off by Administrative Agent.
Co-Borrowers shall not have any right to directly withdraw funds from any Note
Payment Account, but instead those funds may be withdrawn or paid out only
against the order of any authorized officer of Administrative Agent, although
under the circumstances described in clause (c) of the first sentence of this
definition and subject to the conditions specified in that clause,
Administrative Agent shall use diligent and reasonable efforts to cause
Borrowings and excess Collateral proceeds that are received as therein described
and that are deposited to the Note Payment Account before 3:00 p.m. on a
Business Day to be transferred to an account on which the particular Co-Borrower
does have withdrawal order authority on that same Business Day.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Take-Out Commitment" means a binding commitment from an investor to
purchase Mortgage Collateral or Lease Collateral, acceptable in form and
substance to Administrative Agent, in favor of a Co-Borrower, with respect to
which there is be no condition which cannot be reasonably anticipated to be
satisfied or complied with before its expiration.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
"VA" means the Department of Veteran's Affairs.
"Wet Borrowing" means a Borrowing for which all of the Collateral
Documents have not been delivered to Administrative Agent in accordance with
Section 4.3.
Exhibit C-2
EXHIBIT C-3
SHIPPING REQUEST
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:______, 199__
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
SHIPMENT #________________ SHIPMENT $_____________________
POOL #____________________ # OF LOANS ____________________
================================================================================
This request is delivered under the Credit Agreement (as renewed,
extended, or amended the "Credit Agreement") dated as of July __, 1997, between
Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms defined
in the Credit Agreement have the same meanings when used (unless otherwise
defined) in this request.
1. Co-Borrowers request Administrative Agent to (a) forward the
shiplist and collateral files for the Mortgage Loans, Commercial Loans, or
Leases identified on it to the following investor or its custodian or servicer;
(b) complete the endorsement of the promissory notes for those Mortgage Loans or
Commercial Loans from Co-Borrowers to that investor or its servicer or custodian
as follows:______________________________________________________________; and
(c) place them along with the blank assignments furnished to Administrative
Agent in the appropriate collateral files:
________________________________
________________________________
________________________________
________________________________
Administrative Agent should ship all of the files of Collateral Documents in
Administrative Agent's possession for those Mortgage Loans, Commercial Loans, or
Leases by either Federal Express or such other courier service as Co-Borrowers
have designated to Administrative Agent as "approved" for that purpose. The
courier used must be acting as an independent-contractor bailee solely on behalf
of Administrative Agent and Lenders for the benefit of Administrative Agent and
Lenders, but Administrative Agent and Lenders are not responsible for any delays
in shipment caused by any actions or inactions by that courier. A completed air
xxxx for shipment accompanies this request.
2. On and as of the date of this request, Co-Borrowers certify,
represent and warrant to Administrative Agent for Lenders that (a) Parent's and
Co-Borrowers' representations and warranties in the Credit Documents are true
and correct in all material respects except to the extent that (i) a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have changed by transactions or conditions
contemplated or permitted by the Credit Documents, and (b) no Event of Default,
Potential Default, or Borrowing Excess exists.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and AMERICAN
BUSINESS LEASING, INC.
By
Name:__________________________________
(1)Title:______________________________
__________________
(1) Must be a Responsible Officer of Co-Borrowers.
Exhibit C-3
EXHIBIT C-4
BAILEE LETTER FOR INVESTORS
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
X.X. Xxx 000
__________________________ Xxxxx, Xxxxx 00000-0000
__________________________ Telephone (000) 000-0000
__________________________ Telecopy (000) 000-0000
The enclosed mortgage notes and other documents ("Collateral"), as more
particularly described on the attached schedule, have been assigned and pledged
to Texas Commerce Bank National Association, as Administrative Agent
("Administrative Agent") for itself and certain other Lenders ("Lenders"), as
collateral under the Credit Agreement (as renewed, extended, amended, or
restated, the "Credit Agreement") dated as of July __, 1997, between America
Business Credit, Inc., HomeAmerican Credit, Inc. (d/b/a Upland Mortgage), and
American Business Leases, Inc. ("Co-Borrowers"), Parent (as defined therein),
Administrative Agent, and certain Lenders.
The Collateral is being delivered to you for purchase under an existing Take-Out
Commitment (as defined in the Credit Agreement). Either payment in full for the
Collateral or the Collateral itself must be received by Administrative Agent
within 45 days after the date of this letter. Until that time, you are deemed to
be holding the Collateral in trust, subject to the security interest granted to
Administrative Agent for Lenders and as Administrative Agent's and Lenders'
bailee in accordance with the applicable provisions of the Uniform Commercial
Code. No property interest in the Collateral is transferred to you until
Administrative Agent receives the greater of either (i) the agreed purchase
price of the Collateral, or (ii) $____________, which is the full amount of the
advances under the Credit Agreement in respect of the Collateral. If you receive
conflicting instructions regarding the Collateral from Co-Borrowers, or
Administrative Agent, you agree to act in accordance with Administrative Agent's
instructions. ADMINISTRATIVE AGENT RESERVES THE RIGHT, AT ANY TIME BEFORE IT
RECEIVES FULL PAYMENT, TO NOTIFY YOU AND REQUIRE THAT YOU RETURN THE COLLATERAL
TO ADMINISTRATIVE AGENT.
Payment for the Collateral must be made by wire transfer of immediately
available funds to:
Texas Commerce Bank National
Association, Administrative Agent
ABA Number __________
Further Credit -
------------------
Account Number ____________
Attn: Xxx Xxxxxxx
TEL (000) 000-0000
FAX (000) 000-0000
Member FDIC Exhibit C-4
BY ACCEPTING THE COLLATERAL DELIVERED TO YOU WITH THIS LETTER, YOU CONSENT TO BE
ADMINISTRATIVE AGENT'S BAILEE ON THE TERMS DESCRIBED IN THIS LETTER.
ADMINISTRATIVE AGENT REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED
COLLATERAL AND THIS LETTER BY SIGNING AND RETURNING TO ADMINISTRATIVE AGENT THE
ENCLOSED COPY OF THIS LETTER, BUT YOUR FAILURE TO DO SO DOES NOT NULLIFY YOUR
CONSENT. If you fail to make full payment to Administrative Agent for it within
45 days after the date of this letter, you are instructed to return all of the
Collateral to Administrative Agent. The preceding provision in no way affects or
impairs any claim or cause of action against you in respect of your Take-Out
Commitment.
This letter binds you and your successors, assigns, trustees, conservators, and
receivers and inures to Administrative Agent, Lenders, and their respective
successors and assigns.
Very truly yours,
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent
By:_________________________________
Name:____________________________
Title:___________________________
ACKNOWLEDGED AND AGREED as of__________________, 199__.
[NAME OF INVESTOR]
By:__________________________
Name:_____________________
Title:____________________
Member FDIC Exhibit C-4
EXHIBIT C-5
TRUST RECEIPT AND AGREEMENT
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This trust receipt and agreement is delivered under the Credit
Agreement (as renewed, extended, or amended the "Credit Agreement") dated as of
July __, 1997, between Co-Borrowers, Parent, Administrative Agent, and certain
other Lenders. Terms defined in the Credit Agreement have the same meanings when
used (unless otherwise defined) in this trust receipt and agreement.
In accordance with Section 4.6 of the Credit Agreement, Co-Borrower
named below requests delivery by Administrative Agent to the requesting
Co-Borrower of the entire mortgage file of Collateral Documents for the Mortgage
Loan, Commercial Loan, or Lease and for the corrections described as follows:
Co-Borrower: ____________________________________
Asset Number: ____________________________________
Original Amount: $___________________________________
Corrections: ____________________________________
____________________________________
____________________________________
The requesting Co-Borrower agrees that (a) these Collateral Documents
are delivered to such Co-Borrower solely for the purpose of making these
corrections, (b) these Collateral Documents are and continue to be subject to
Lender Liens under the Credit Documents, (c) Co-Borrower shall hold these
Collateral Documents as bailee and trustee for Administrative Agent and Lenders,
and (d) Co-Borrower may not deliver any of these Collateral Documents to a
third party unless (i) it is necessary in order to complete the corrections, and
(ii) Co-Borrower notifies that third party that the Collateral Documents are and
continue to be subject to Lender Liens under the Credit Documents, and obtains
from that third party its agreement to hold those Collateral Documents as bailee
and trustee for Administrative Agent and Lenders until they have been returned
to Administrative Agent or the amount of the Borrowing Base attributable to the
related Collateral has been fully paid to Administrative Agent for Lenders to be
applied to the Obligation.
On and as of the date of this receipt and agreement, Co-Borrowers
certify, represent, and warrant to Administrative Agent for Lenders that (a)
Parent's and Co-Borrowers' representations
Exhibit C-5
and warranties in the Credit Documents are true and correct in all material
respects except to the extent that (i) a representation or warranty speaks to a
specific date or (ii) the facts on which a representation or warranty is based
have changed by transactions or conditions contemplated or permitted by the
Credit Documents, (b) no Event of Default, Potential Default, or Borrowing
Excess exists, and (c) this shipment will not result in Collateral Documents for
Mortgage Loans, Commercial Loans, or Leases with more than a total face amount
of $500,000 being outstanding for correction. The requesting Co-Borrower
acknowledges receipt of the Collateral Documents referred to above.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.
By_____________________________
Name:________________________
(1)Title:____________________
----------------
(1)Must be a Responsible Officer of Co-Borrowers.
Exhibit C-5
EXHIBIT C-6
RELEASE REQUEST
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This request is delivered under the Credit Agreement (as renewed,
extended, or amended the "Credit Agreement") dated as of July __, 1997, between
Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms defined
in the Credit Agreement have the same meanings when used (unless otherwise
defined) in this request.
Co-Borrowers request Administrative Agent to release the Lender Liens
under the Credit Documents in the Collateral described on the attached Schedule
1.
On and as of the date of this request, Co-Borrowers certify, represent,
and warrant to Administrative Agent for Lenders that (a) Parent's and
Co-Borrowers' representations and warranties in the Credit Documents are true
and correct in all material respects except to the extent that (i) a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have changed by transactions or conditions
contemplated or permitted by the Credit Documents, and (b) no Event of Default,
Potential Default, or Borrowing Excess exists or occurs as a result of the
requested release other than any Borrowing Excess that has been eliminated by
payment which has been made to Administrative Agent.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.
By_____________________________
Name:________________________
(1)Title:_____________________
----------------
(1)Must be a Responsible Officer of Co-Borrowers.
Exhibit C-6
3
EXHIBIT D-1
BORROWING REQUEST
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This request is delivered under the Credit Agreement (as renewed,
extended, and amended, the "Credit Agreement") dated as of July __, 1997,
between Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms
defined in the Credit Agreement have the same meanings when used (unless
otherwise defined) in this request.
____________________, as the requesting Co-Borrower, requests a
$____________________ Borrowing (the "Requested Borrowing") to be funded on
___________________, 199___(1) (the "Requested Borrowing Date"), as a:
=====================================================================================================================
category amount interest rate category
=====================================================================================================================
Dry Borrowing -- Second-Lien Loan $ [ ] Average-Adjusted-Base Rate
Dry Borrowing -- Commercial Loan $ [ ] Average-Adjusted-LIBOR
Dry Borrowing -- Seasoned Loan $ [ ] Fixed-Rate-Interest Period begins ________ and
Dry Borrowing -- Lease $ ends ___________
Dry Borrowing -- Other $
Dry Borrowing -- Total $ (if no rate of interest is indicated, the Requested
Borrowing will be at Average-Adjusted-LIBOR)
---------------------------------------------------------------------------------------------------------------------
Wet Borrowing -- Second-Lien Loan $ [ ] Average-Adjusted-Base Rate
Wet Borrowing -- Commercial Loan $ [ ] Average-Adjusted-LIBOR
Wet Borrowing -- Seasoned Loan $ [ ] Fixed-Rate-Interest Period begins ________ and
Wet Borrowing -- Other $ ends ___________
Wet Borrowing -- Total $
(if no rate of interest is indicated, the Requested
Borrowing will be at Average-Adjusted-LIBOR)
=====================================================================================================================
Funds for any Wet Borrowing should be wire transferred as follows:
________________________________________________________________________________
________________________________________________________________________________
Exhibit D-1
Co-Borrowers certify that as of the Requested Borrowing Date -- after
giving effect to the Requested Borrowing -- (a) the representations and
warranties of Parent and Co-Borrowers in the Credit Documents are true and
correct in all material respects except to the extent that (i) a representation
or warranty speaks to a specific date or (ii) the facts on which a
representation or warranty is based have changed by transactions or conditions
contemplated or permitted by the Credit Documents, (b) no Event of Default or
Potential Default exists, (c) the extension of the Requested Borrowing does not
cause any Borrowing Excess to exist, (d) Co-Borrowers have timely delivered a
Collateral-Delivery Notice, (e) all Collateral Documents required by the Credit
Agreement to be delivered to Administrative Agent in connection with the
Requested Borrowing have been delivered to Administrative Agent, and (f)
Co-Borrowers have otherwise complied with all conditions of the Credit Documents
to permit the Requested Borrowing to be extended.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.
By_____________________________
Name:________________________
(1)Title:____________________
----------------
(1)Must be a Responsible Officer of Co-Borrowers.
Exhibit D-1
EXHIBIT D-2
COLLATERAL-DELIVERY NOTICE
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This notice is delivered under the Credit Agreement (as renewed,
extended, and amended the "Credit Agreement") dated as of July __, 1997, between
Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms defined
in the Credit Agreement have the same meanings when used (unless otherwise
defined) in this notice.
Under Section 4.3 and other applicable provisions of the Credit
Agreement, the applicable Co-Borrower(s) submit(s) the following Collateral
under (and subject to the Lender Liens created by) the Credit Documents [check
applicable box(es)]:
[ ] Dry Borrowing for Mortgage Loans and Commercial Loans. ABC or
HAC (a) is delivering to Administrative Agent the Collateral
Documents required by Part A of Schedule 4.3 to the Credit
Agreement for the Mortgage Loans and Commercial Loans
described on the attached Annex 1 -- which is a
data-processing print-out meeting the requirements of Part A.9
on that Schedule 4.3 -- and (b) confirms that those Mortgage
Loans and Commercial Loans and all related Collateral
Documents are subject to the Lender Liens created by the
Credit Agreement.
[ ] Wet Borrowing for Mortgage Loans and Commercial Loans. ABC
or HAC (a) is delivering to Administrative Agent the
Collateral Documents required by Part B of Schedule 4.3 to the
Credit Agreement for the Mortgage Loans and Commercial Loans
described on the attached Annex 2 -- which is a
data-processing print-out meeting the requirements of Part B.3
on that Schedule 4.3, (b) shall deliver to Administrative
Agent the Collateral Documents required by Part A of that
Schedule 4.3 for -- before the expiration of the Wet Period
for the Borrowings made on the basis of -- those Mortgage
Loans and Commercial Loans, and (c) confirms that those
Mortgage Loans and Commercial Loans and all related Collateral
Documents are subject to the Lender Liens created by the
Credit Agreement.
[ ] Dry Borrowing for Leases. ABL (a) is delivering to
Administrative Agent the Collateral Documents required by Part
C of Schedule 4.3 to the Credit Agreement for the Leases
described on the attached Annex 3 -- which is a
data-processing print-out meeting the requirements of Part C.3
on that Schedule 4.3 and (b) confirms that
Exhibit D-2
those Leases and all related Collateral Documents are subject
to the Lender Liens created by the Credit Agreement.
On and as of the date of this notice, Co-Borrowers certify, represent,
warrant, and covenant to or with Administrative Agent for Lenders that:
(a) For each Mortgage Loan, Commercial Loan, or Lease described on
any annex to this notice, the applicable Co-Borrower (i) holds
each of the items required by Section 4.4 of the Credit
Agreement, (ii) holds those items in trust for Administrative
Agent on behalf of Lenders, (iii) upon request or instructions
from Administrative Agent from time to time and at any time,
shall deliver those items to Administrative Agent or any other
Person designated by Administrative Agent, and (iv) may not
deliver those items (or grant, transfer, or assign any
interest in any of them) to any Person except Administrative
Agent without first obtaining Administrative Agent's written
consent.
(b) All of the items that any Co-Borrower is required to furnish
to Administrative Agent under the Credit Agreement in
connection with this notice accompany it, all of those items
are accurate and what they purport to be, and all of the
Collateral described in this notice or its schedules conform
in all respects to the requirements of the Credit Agreement,
including, without limitation, the requirements of eligibility
applicable to that Collateral on Schedule 4.1 to the Credit
Agreement.
(c) The representations and warranties of Parent and Co-Borrowers
in the Credit Documents are true and correct in all material
respects except to the extent that (i) a representation or
warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have changed by
transactions or conditions contemplated or permitted by the
Credit Documents.
(d) No Event of Default or Potential Default exists.
AMERICAN BUSINESS CREDIT, INC.,
HOMEAMERICAN CREDIT, INC., and
AMERICAN BUSINESS LEASING, INC.
By_____________________________
Name:________________________
(1)Title:____________________
----------------
(1)Must be a Responsible Officer of Co-Borrowers.
Exhibit D-2
EXHIBIT D-3
BORROWING-BASE REPORT
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This report is delivered under the Credit Agreement (as renewed,
extended, and amended, the "Credit Agreement") dated as of July __, 1997,
between Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms
defined in the Credit Agreement have the same meanings when used (unless
otherwise defined) in this report. Administrative Agent has calculated the
Borrowing Base and its various components as of the date of this report.
===================================================================================================================
face warehouse
===================================================================================================================
1. Reconciliation for Dry Borrowings -- Mortgage Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 1(a) minus Line 1(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 1(c) plus Line 1(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired 270-day limit $ $
-------------------------------------------------------------------------------------------------------------------
(g) Ineligibles -- expired Shipping Period $ $
-------------------------------------------------------------------------------------------------------------------
(h) Ineligibles -- expired Correction Period $ $
-------------------------------------------------------------------------------------------------------------------
(i) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(j) Total Ineligibles -- total of Lines 1(f) through 1(i) $ $
-------------------------------------------------------------------------------------------------------------------
(k) Total Collateral amount-- Line 1(e) minus Line 1(j) $ $
-------------------------------------------------------------------------------------------------------------------
(l) If Administrative Agent or Required Lenders elect -- Market $ $
Value of items in Line 1(k)
-------------------------------------------------------------------------------------------------------------------
(m) Lesser of either Lines 1(k) or -- if applicable -- 1(l) $ $
-------------------------------------------------------------------------------------------------------------------
2. Reconciliation for Wet Borrowings -- Mortgage Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
Exhibit D-3
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 2(a) minus Line 2(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral Balance (today) -- Line 2(c) minus Line 2(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired Wet Period $ $
-------------------------------------------------------------------------------------------------------------------
(g) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(h) Total Ineligibles -- total of Lines 2(f) through 2(g) $ $
-------------------------------------------------------------------------------------------------------------------
(i) Total Collateral Amount -- Line 2(e) minus Line 2(h) $ $
-------------------------------------------------------------------------------------------------------------------
(j) If Administrative Agent or Required Lender's elect -- Market $ $
Value of items in Line 2(i)
-------------------------------------------------------------------------------------------------------------------
(k) Lesser of either Lines 2(i) or -- if applicable -- 2(j) $ $
-------------------------------------------------------------------------------------------------------------------
3. Reconciliation for Dry Borrowings -- Commercial Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 3(a) minus Line 3(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 3(c) plus Line 3(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired 270-day limit $ $
-------------------------------------------------------------------------------------------------------------------
(g) Ineligibles -- expired Shipping Period $ $
-------------------------------------------------------------------------------------------------------------------
(h) Ineligibles -- expired Correction Period $ $
-------------------------------------------------------------------------------------------------------------------
(i) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(j) Total Ineligibles -- total of Lines 3(f) through 3(i) $ $
-------------------------------------------------------------------------------------------------------------------
(k) Total Collateral amount-- Line 3(e) minus Line 3(j) $ $
-------------------------------------------------------------------------------------------------------------------
(l) If Administrative Agent or Required Lenders elect -- Market $ $
Value of items in Line 3(k)
-------------------------------------------------------------------------------------------------------------------
(m) Lesser of either Lines 3(k) or -- if applicable -- 3(l) $ $
-------------------------------------------------------------------------------------------------------------------
4. Reconciliation for Wet Borrowings -- Commercial Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 4(a) minus Line 4(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral Balance (today) -- Line 4(c) minus Line 4(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired Wet Period $ $
-------------------------------------------------------------------------------------------------------------------
(g) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(h) Total Ineligibles -- total of Lines 4(f) through 4(g) $ $
-------------------------------------------------------------------------------------------------------------------
Exhibit D-3
-------------------------------------------------------------------------------------------------------------------
(i) Total Collateral Amount -- Line 4(e) minus Line 4(h) $ $
-------------------------------------------------------------------------------------------------------------------
(j) If Administrative Agent or Required Lender's elect -- Market $ $
Value of items in Line 4(i)
-------------------------------------------------------------------------------------------------------------------
(k) Lesser of either Lines 4(i) or -- if applicable -- 4(j) $ $
-------------------------------------------------------------------------------------------------------------------
5. Reconciliation for Dry Borrowings -- Seasoned Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 51(a) minus Line 51(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 51(c) plus Line 51(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired Shipping Period $ $
-------------------------------------------------------------------------------------------------------------------
(g) Ineligibles -- expired Correction Period $ $
-------------------------------------------------------------------------------------------------------------------
(h) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(i) Total Ineligibles -- total of Lines 5(f) through 5(h) $ $
-------------------------------------------------------------------------------------------------------------------
(j) Total Collateral amount-- Line 5(e) minus Line 1(i) $ $
-------------------------------------------------------------------------------------------------------------------
(k) If Administrative Agent or Required Lenders elect -- Market $ $
Value of items in Line 5(j)
-------------------------------------------------------------------------------------------------------------------
(l) Lesser of either Lines 5(j) or -- if applicable -- 5(k) $ $
-------------------------------------------------------------------------------------------------------------------
6. Reconciliation for Wet Borrowings -- Seasoned Loans
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 6(a) minus Line 6(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral Balance (today) -- Line 6(c) minus Line 6(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired Wet Period $ $
-------------------------------------------------------------------------------------------------------------------
(g) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(h) Total Ineligibles -- total of Lines 6(f) through 6(g) $ $
-------------------------------------------------------------------------------------------------------------------
(i) Total Collateral Amount -- Line 6(e) minus Line 6(h) $ $
-------------------------------------------------------------------------------------------------------------------
(j) If Administrative Agent or Required Lender's elect -- Market $ $
Value of items in Line 6(i)
-------------------------------------------------------------------------------------------------------------------
(k) Lesser of either Lines 6(i) or -- if applicable -- 6(j) $ $
-------------------------------------------------------------------------------------------------------------------
7. Reconciliation for Dry Borrowings -- Leases (Seasoned and
Unseasoned)
-------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
Exhibit D-3
-------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 7(a) minus Line 7(b) $ $
-------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 7(c) plus Line 7(d) $ $
-------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired 270-day limit $ $
-------------------------------------------------------------------------------------------------------------------
(g) Ineligibles -- expired Shipping Period $ $
-------------------------------------------------------------------------------------------------------------------
(h) Ineligibles -- expired Correction Period $ $
-------------------------------------------------------------------------------------------------------------------
(i) Other ineligibles $ $
-------------------------------------------------------------------------------------------------------------------
(j) Total Ineligibles -- total of Lines 7(f) through 7(i) $ $
-------------------------------------------------------------------------------------------------------------------
(k) Total Collateral amount-- Line 7(e) minus Line 7(j) $ $
-------------------------------------------------------------------------------------------------------------------
(l) If Administrative Agent or Required Lenders elect -- Market $ $
Value of items in Line 7(k)
-------------------------------------------------------------------------------------------------------------------
(m) Lesser of either Lines 7(k) or -- if applicable -- 7(l) $ $
-------------------------------------------------------------------------------------------------------------------
8. Borrowing Base
-------------------------------------------------------------------------------------------------------------------
(a) Mortgage Loans and Commercial Loans -- 98% of Line 1(m) plus
Line 2(k) plus Line 3(m) plus Line 4(k) $
-------------------------------------------------------------------------------------------------------------------
(b) Seasoned Loans -- 90% of Line 5(l) plus Line 6(k) $
-------------------------------------------------------------------------------------------------------------------
(c) Leases -- 85% of Line 7(m) $
-------------------------------------------------------------------------------------------------------------------
(d) Total of Lines 8(a) through 8(c) $
-------------------------------------------------------------------------------------------------------------------
9. Principal Debt
-------------------------------------------------------------------------------------------------------------------
10. Commitments $150,000,000
-------------------------------------------------------------------------------------------------------------------
11. Availability
-------------------------------------------------------------------------------------------------------------------
(a) Lesser of either Line 8(d) or Line 10 $
-------------------------------------------------------------------------------------------------------------------
(b) Maximum Total Availability if positive or Borrowing Excess if $
negative -- Line 11(a) minus Line 9
===================================================================================================================
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, Administrative Agent
By_______________________________
Name:_________________________
Title:________________________
Exhibit D-3
EXHIBIT D-4
COMPLIANCE CERTIFICATE
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
PARENT: American Business Financial Services, Inc.
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
SUBJECT PERIOD:____________________ ended _______________, 199___
================================================================================
This certificate is delivered under the Credit Agreement (as renewed,
extended, and amended, the "Credit Agreement") dated as of July __ 1997, between
Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms defined
in the Credit Agreement have the same meanings when used (unless otherwise
defined) in this certificate.
The undersigned officer of Parent and Co-Borrowers certifies to
Administrative Agent and Lenders on behalf of Parent and Co-Borrowers that on
the date of this certificate:
1. Such undersigned officer is the officer of Parent and Co-Borrowers
designated below.
2. Parent's Financials that are attached to this certificate were
prepared in accordance with GAAP and present fairly Parent's consolidated and
consolidating (if applicable) financial condition and results of operations as
of (and for the fiscal year or portion of the fiscal year ending on) the last
day of the Subject Period.
3. HAC's Financials (only applicable to the end of each fiscal year)
that are attached to this certificate were prepared in accordance with GAAP and
present fairly HAC's financial condition and results of operations as of (and
for the fiscal year ending on) the last day of the Subject Period.
4. ABL's Financials (only applicable to the end of each fiscal year)
that are attached to this certificate were prepared in accordance with GAAP and
present fairly ABL's financial condition and results of operations as of (and
for the fiscal year ending on) the last day of the Subject Period.
5. Such undersigned officer supervised a review of Parent's and
Co-Borrowers' activities during the Subject Period in respect of the following
matters and has determined the following with respect to Parent and each
Co-Borrower in connection with that officer's duties as an officer of Parent:
(a) the representations and warranties in the Credit Documents pertaining to
Parent and the other Companies are true and correct in all material respects,
except (i) to the extent that a
Exhibit D-4
representation or warranty speaks to a specific date or the facts on which it is
based have changed by transactions or conditions contemplated or permitted by
the Credit Documents and (ii) for the changes, if any, described on the attached
Schedule 1; (b) Parent and the other Companies have complied with all of their
obligations under the Credit Documents, other than the deviations, if any,
described on the attached Schedule 1; (c) no Event of Default or Potential
Default exists or is imminent, other than those, if any, described on the
attached Schedule 1; and (d) Parent's compliance with the financial covenants
pertaining to Parent in Section 9 of the Credit Agreement is accurately
calculated on the attached Schedule 1.
By_________________________
(1)Title_________________
------------------
(1)Must be a Responsible Officer of Parent and all Co-Borrowers.
Exhibit D-4
SCHEDULE 1
A. Describe any deviations from compliance with clause 2(a) or 2(b) of
the attached Compliance Certificate -- if none, so state:
B. As required by clause 2(c) of the attached Compliance Certificate,
describe any Potential Defaults or Events of Default, if any -- if none, so
state:
C. As required by clause 2(d) of the attached Compliance Certificate,
calculate compliance with the covenants in Section 9 of the Credit Agreement at
the end of the Subject Period (on a consolidated basis, if applicable):
======================================================================================================================
Covenant At End of Subject Period
======================================================================================================================
I. Parent's Tangible Net Worth -- Section 9.1
----------------------------------------------------------------------------------------------------------------------
A. Tangible Net Worth $
----------------------------------------------------------------------------------------------------------------------
B. Minimum $25,000,000
----------------------------------------------------------------------------------------------------------------------
II. Leverage Ratio -- Section 9.2
----------------------------------------------------------------------------------------------------------------------
A. Total Debt $
----------------------------------------------------------------------------------------------------------------------
B. Subordinated Debt $
----------------------------------------------------------------------------------------------------------------------
C. Total-Adjusted Debt -- Line 2(a) minus Line 2(b)
----------------------------------------------------------------------------------------------------------------------
D. Net Worth $
----------------------------------------------------------------------------------------------------------------------
E. "adjusted" Net Worth -- Line 2(d) plus Line 2(b)
----------------------------------------------------------------------------------------------------------------------
F. Ratio of Line 2(c) to Line 2(e) ____ to ____
----------------------------------------------------------------------------------------------------------------------
G. Maximum 4.0 to 1.0
======================================================================================================================
Exhibit D-4
EXHIBIT D-5
ACQUISITION-COMPLIANCE CERTIFICATE
ADMINISTRATIVE AGENT: Texas Commerce Bank DATE:__________, 199_
National Association
PARENT: American Business Financial Services, Inc.
CO-BORROWERS: American Business Credit, Inc.,
HomeAmerican Credit, Inc.
(d/b/a Upland Mortgage), and
American Business Leasing, Inc.
================================================================================
This certificate is delivered under the Credit Agreement (as renewed,
extended, and amended, the "Credit Agreement") dated as of July __, 1997,
between Co-Borrowers, Parent, Administrative Agent, and certain Lenders. Terms
defined in the Credit Agreement have the same meanings when used (unless
otherwise defined) in this certificate.
_______________________[insert name of Company] intends to enter into
the Acquisition more particularly described on Annex 1 to this certificate (the
"Subject Acquisition"), on __________________, 199_ (the "Acquisition Date").
In my capacity as a Responsible Officer of, and on behalf of, Parent
and each Co-Borrower, I certify to Administrative Agent and Lenders on the date
of this certificate that:
(a) I am a Responsible Officer of Parent and each Co-Borrower;
(b) In respect of the Subject Acquisition (i) no Event of
Default or Potential Default exists on the date of this certificate, or
will exist immediately before, or will occur as a result of (or
otherwise will exist immediately after), the closing of the Subject
Acquisition and (ii) the Subject Acquisition will not cause any of the
representations or warranties (unless they speak to a specific date or
are based on facts which have changed by transactions contemplated or
expressly permitted by the Credit Agreement) in the Credit Documents to
be materially incorrect;
(c) The Subject Acquisition is within the Companies' lines of
business;
(d) The attached Annex 1 contains a written description of the
target entity and of its business and operations and of the Subject
Acquisition, which includes a reasonably-detailed calculation of (and
description of the funding sources, if applicable, for) the total
Investment involved, including all Debt for which the acquired Person
is to remain obligated and what portion of it, if any, is to be
guaranteed, assumed, or paid (through merger or otherwise) by any other
Company;
(e) The total of all Investments involved in all Permitted
Acquisitions (inclusive of the Subject Acquisition) under the Credit
Agreement (including, but without duplication, any Funded Debt to be
guaranteed, assumed, or paid by any Company other than Debt owed by the
acquired Person for which no other Company has any obligation
whatsoever) during the current fiscal year of Parent do not exceed
$__________;
(f) The board of directors of the Person to be acquired has
not notified any Company or Lender that it opposes the offer by any
Company to acquire that Person or that opposition has been withdrawn;
Exhibit D-5
(g) If structured as a merger or consolidation, the Subject
Acquisition is in compliance with Section 8.5 of the Credit Agreement;
(h) The Subject Acquisition meets all of the requirements to
qualify as a Permitted Acquisition under the Credit Agreement;
(i) The attached Annex 2 contains calculations of the
compliance of Parent and Co-Borrowers with Section 9 of the Credit
Agreement immediately [check applicable box] [ ] before [ ] after the
Subject Acquisition; and
(j) Attached as Annex 3 is a true and correct copy of [check
applicable box] [ ] the current draft of the (if this certificate is
delivered before the Subject Acquisition) or [ ] the final executed (if
this certificate is delivered concurrent with the closing of the
Subject Acquisition) purchase, merger, or other governing agreement for
the Subject Acquisition.
By_________________________
(1)Title_________________
-----------------
(1) Must be a Responsible Officer of Parent and all Co-Borrowers.
Exhibit D-5
ANNEX 1
DESCRIPTION
[Description of the target entity and of its business and
operations and of the Subject Acquisition, which includes a
reasonably-detailed calculation of (and description of the
funding sources, if applicable, for) the total Investment
involved, including all Debt for which the acquired Person is
to remain obligated and what portion of it, if any, is to be
guaranteed, assumed, or paid (through merger or otherwise) by
any other Company.]
Exhibit D-5
ANNEX 2
[Reflect compliance with Section 9 as of the date of the
certificate to which this annex is attached. The following
table is a short-hand reflection of that compliance and must
be completed fully in accordance with the express language of
the Credit Agreement.]
================================================================================================
Covenant At End of Subject Period
================================================================================================
1. Parent's Tangible Net Worth -- Section 9.1
------------------------------------------------------------------------------------------------
a. Tangible Net Worth $
------------------------------------------------------------------------------------------------
b. Minimum $25,000,000
------------------------------------------------------------------------------------------------
2. Leverage Ratio -- Section 9.2
------------------------------------------------------------------------------------------------
a. Total Debt $
------------------------------------------------------------------------------------------------
b. Subordinated Debt $
------------------------------------------------------------------------------------------------
c. Total-Adjusted Debt -- Line 2(a) minus Line
2(b)
------------------------------------------------------------------------------------------------
d. Net Worth $
------------------------------------------------------------------------------------------------
e. "adjusted" Net Worth -- Line 2(d) plus Line 2(b)
------------------------------------------------------------------------------------------------
f. Ratio of Line 2(c) to Line 2(e) ____ to ____
------------------------------------------------------------------------------------------------
g. Maximum 4.0 to 1.0
================================================================================================
Exhibit D-5
ANNEX 3
[Attach copy of either the current draft or the final executed
version of the purchase, merger, or other governing agreement
for the Acquisition, depending upon if this certificate is
delivered before or concurrent with the closing for the
Subject Acquisition.]
Exhibit D-5
EXHIBIT E
OPINION OF COUNSEL
The opinion delivered by counsel to the Parent and Co-Borrowers must be
in form and substance acceptable to Administrative Agent and its special counsel
and cover the following matters:
1. To the best of that counsel's knowledge, except as described on
Schedule 6.2 to the Credit Agreement (a) no Company has any Subsidiaries, and
(b) neither Parent nor any Co-Borrower has used or transacted business under any
other corporate or trade name in the six-month period preceding the date of this
agreement.
2. Each of Parent and each Co-Borrower is duly organized, validly
existing, and in good standing under the Governmental Requirements of the
jurisdiction in which it is incorporated as stated on Schedule 6.2 to the Credit
Agreement.
3. Each of Parent and each Co-Borrower is duly qualified to transact
business and is in good standing as a foreign corporation or other entity in
each jurisdiction so indicated on Schedule 6.2 to the Credit Agreement and in
each other jurisdiction where, to the best of that counsel's knowledge, the
nature and extent of that Company's business and properties require due
qualification and good standing
4. Each of Parent and each Co-Borrower possesses all requisite
corporate power and authority to conduct its business as is now being (or as is
contemplated by the Credit Agreement to be) conducted.
5. The execution and delivery by Parent and each Co-Borrower of each
Credit Document to which it is a party and the performance by it of its related
obligations (a) are within its corporate power, (b) have been duly authorized by
all necessary corporate action on its behalf, (c) except for any action or
filing that has been taken or made on or before the date of this opinion,
require no action by or filing with any Governmental Authority, (d) do not
violate any provision of its articles of incorporation, articles of
organization, bylaws, or regulations, as applicable, (e) do not violate any
provision of any Governmental Requirement applicable to it or any material
agreements to which it is a party and of which that counsel is aware, and (f)
except for Lender Liens, do not result in the creation or imposition of any Lien
on any asset of any of them.
6. Upon execution and delivery by all parties to it, each Credit
Document will constitute a legal and binding obligation of Parent and each
Co-Borrower party to it, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable Debtor Laws and general
principles of equity.
7. Except as disclosed on Schedule 6.9 to the Credit Agreement (a)
neither Parent nor any Co-Borrower is subject to, or aware of the threat of, any
Litigation that is reasonably likely to be determined adversely to it or, if so
adversely determined, would be a Material-Adverse Event, and (b) no outstanding
or unpaid judgments against any Parent or any Co-Borrower exist.
8. Neither Parent nor any Co-Borrower is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
9. A first-priority security interest is created and perfected pursuant
to the Security Agreement upon (a) each mortgage note that is delivered to
Administrative Agent, (b) each Lease that is delivered to Administrative Agent
or its bailee, (c) each mortgage note and related Take-Out Commitment, if any,
for 21-days after the Borrowing Date of each related Wet Borrowing, and (d) all
Collateral transmitted to any third party acting solely as a bailee for Lenders
under a Bailee Letter pursuant to which such bailee received notice of
Administrative Agent's and Lender's interest (until Administrative Agent
receives payment under that Bailee Letter).
Exhibit E
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into effective as
of _________, 199_, between __________________________ ("Assignor"), and
_______________________ ("Assignee").
AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation,
HOMEAMERICAN CREDIT, INC., a Pennsylvania corporation d/b/a Upland Mortgage, and
AMERICAN BUSINESS LEASING, INC., a Pennsylvania corporation (collectively,
"Co-Borrowers"), certain lenders ("Lenders"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION in its capacity as Administrative Agent for Lenders ("Administrative
Agent"), are party to the Credit Agreement (as renewed, extended, amended, or
restated, the "Credit Agreement") dated as of July __, 1997, all of the defined
terms in which have the same meanings when used -- unless otherwise defined --
in this agreement. This agreement is entered into as required by Section 12.14
of the Credit Agreement and is not effective until consented to by Parent,
Co-Borrowers and Administrative Agent, which consents may not under the Credit
Agreement be unreasonably withheld.
ACCORDINGLY, for adequate and sufficient consideration, Assignor and
Assignee agree as follows:
1. Assignment and Assumption. By this agreement, and effective as of
__________, 199__, (the "Effective Date"), Assignor sells and assigns to
Assignee (without recourse to Assignor) and Assignee purchases and assumes from
Assignor an interest in and to all of Assignor's Rights and obligations under
the Credit Agreement (except if Assignor is the Administrative Agent, any Rights
and obligations pertaining to Assignor's role as Administrative Agent, Lender of
Swing Borrowings, and custodian) as of the Effective Date, including, without
limitation, (a) a ______% interest in Assignor's Commitment, (b) a corresponding
amount of the Principal Debt outstanding under Assignor's existing Warehouse
Note, (c) all interest accruing in respect of the interests assigned above
(collectively, the "Assigned Interests") on and after the Effective Date, and
(d) all commitment and other fees accruing in respect of the Assigned Interest
on and after the Effective Date.
2. Assignor Provisions. Assignor (a) represents and warrants to
Assignee that as of the Effective Date (i) $_______________ is outstanding
(without reduction for any assignments that have not yet become effective) under
the Assignor's Warehouse Note, (ii) Assignor is the legal and beneficial owner
of the Assigned Interest, which is free and clear of any adverse claim, and
(iii) Assignor has not been expressly notified of an existing Event of Default
or Potential Default, and (b) makes no representation or warranty to Assignee
and assumes no responsibility to Assignee with respect to (i) any statements,
warranties, or representations made in or in connection with any Credit
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of any Credit Document, or (iii) the financial condition
of any Company or the performance or observance by any Company of any of its
obligations under any Credit Document.
3. Assignee Provisions. Assignee (a) represents and warrants to
Assignor, Parent, each Co-Borrower, and Administrative Agent that Assignee is
legally authorized to enter into this agreement and each other Credit Document
to which it will become a party, (b) confirms that it has received a copy of the
Credit Agreement, copies of the Current Financials, and such other documents and
information as it deems appropriate to make its own credit analysis and decision
to enter into this agreement, (c) agrees with Assignor, Parent, each
Co-Borrower, and Administrative Agent that Assignee shall -- independently and
without reliance upon Administrative Agent, Assignor, or any other Lender and
based on such documents and information as Assignee deems appropriate at the
time -- continue to make its own credit decisions in taking or not taking action
under the Credit Documents, (d) appoints and authorizes Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Documents as are delegated to Administrative Agent by the terms of the
Credit Documents and all other reasonably-incidental powers, (e) agrees with
Assignor, Parent, each Co-Borrower, and Administrative Agent that Assignee shall
perform and comply with all provisions of the Credit Documents applicable to
Lenders in accordance with their respective terms, and (f) if Assignee is not
organized under the Laws of the United States of America or one of its states,
(i) represents and warrants to Assignor, Administrative Agent, Parent, and each
Co-Borrower that no Taxes are required to be withheld by Assignor,
Administrative Agent, Parent or any Co-Borrower with respect to any payments to
be made to it in respect of the Obligation, and it has furnished to
Administrative Agent, Parent, and each Co-Borrower two duly completed copies of
either U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any
other form acceptable to Administrative Agent that entitles Assignee to
exemption from U.S. federal withholding Tax on all interest payments under the
Credit Documents, (ii) covenants to provide Administrative Agent, and each
Co-Borrower a new Form 4224, Form 1001, Form W-8, or other form acceptable to
Administrative Agent upon the expiration or obsolescence of any previously
delivered form according to any applicable Governmental Requirements, duly
executed and completed by it, and to comply from time to time with all
Governmental Requirements with regard to the withholding Tax exemption, and
(iii) agrees with Administrative Agent and each Co-Borrower that, if any of the
foregoing is not true or the applicable forms are not provided, then
Administrative Agent and each Co-Borrower (without duplication) may deduct and
withhold from interest payments under the Credit Documents any United States
federal-income Tax at the full rate applicable under the IRC.
Exhibit F
4. Credit Agreement and Commitments. From and after the Effective Date
(a) Assignee shall be a party to the Credit Agreement and (to the extent
provided in this agreement) have the Rights and obligations of a Lender under
the Credit Documents and (b) Assignor shall (to the extent provided in this
agreement) relinquish its Rights, other than Rights under Sections 3.10, 7.6 and
7.10 for periods prior to the Effective Date, and be released from its
obligations under the Credit Documents. On the Effective Date, after giving
effect to this and certain other assignment and assumption agreements that
become effective on the Effective Date, but without giving effect to any other
assignments that have not yet become effective, Assignor's and Assignee's
Commitments will be as follows:
Assignor's Commitment - $____________________________
Assignee's Commitment - $____________________________
5. Notes. Assignor and Assignee request Co-Borrowers to issue new Notes
to Assignor and Assignee in the amounts of their respective commitments under
Paragraph 4 above and otherwise issue these Notes in accordance with the Credit
Agreement. Upon delivery of those Notes, Assignor shall return to Co-Borrowers
all Notes previously delivered to Assignor under the Credit Agreement.
6. Payments and Adjustments. From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned
Interests (including payments of principal, interest, fees, and other amounts)
to Assignee. Assignor and Assignee shall make all appropriate adjustments in
payments for periods before the Effective Date by Administrative Agent or with
respect to the making of this assignment directly between themselves. Assignor
agrees to apply any payments and proceeds with respect to the Obligation ratably
with Assignee.
7. Conditions Precedent. Paragraphs 1 through 6 above are not effective
until (a) counterparts of this agreement are executed by Assignor, Assignee,
Administrative Agent, Parent, and each Co-Borrower, and are delivered to
Administrative Agent and Co-Borrowers and (b) pursuant to Section 12.14(a)(iii),
Assignor pays to Administrative Agent an administrative transfer fee of $3,500.
If Administrative Agent is the Assignor, the requirement of Section
12.14(a)(iii) is waived with regard to this agreement.
8. Incorporated Provisions. Although this agreement is not a Credit
Document, the provisions of the Credit Agreement applicable to Credit Documents
are incorporated into this instrument by reference the same as if this agreement
were a Credit Document and those provisions were set forth in this agreement
verbatim.
9. Communications. For purposes of Section 12.2 of the Credit
Agreement, Assignee's address and telecopy number -- until changed under that
section -- are beside its signature below.
10. Amendments, Etc. No amendment, waiver, or discharge to or under
this agreement is valid unless in writing that is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of the Credit Agreement.
11. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
ASSIGNOR AND ASSIGNEE ABOUT ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF ASSIGNOR
AND ASSIGNEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN ASSIGNOR AND
ASSIGNEE.
12. Parties. This agreement binds and benefits Assignor, Assignee, and
their respective successors and assigns as permitted under the documents.
EXECUTED as of the date first stated above.
Exhibit F
TEXAS COMMERCE BANK NATIONAL _______________________, as Assignee
ASSOCIATION, as Assignor and
Administrative Agent
By______________________________
By____________________________________ Name: _______________________
Xxxxxx X. Xxxxxxx, Vice President Title:_______________________
(Address)
_______________________
_______________________
_______________________
Attn:____________________
(Tel. No.)(___) ___-_____
(Fax No.)(___) ___-_____
As of the Effective Date, Administrative Agent (per the above
signature) and Parent and each Co-Borrower consent to this agreement and the
transactions contemplated in it.
AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
AMERICAN BUSINESS CREDIT, INC., HOMEAMERICAN
CREDIT, INC., and AMERICAN BUSINESS LEASING, INC.
By_______________________________________________
Name: ________________________________________
Title:________________________________________
Exhibit F
EXHIBIT G
[ Number ] AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT is entered into as of____________________________, 199_,
between AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC"),
HOMEAMERICAN CREDIT, INC., a Pennsylvania corporation d/b/a Upland Mortgage
("HAC"), and AMERICAN BUSINESS LEASING, INC., a Pennsylvania corporation ("ABL")
(ABC, HAC, and ABL are "Co-Borrowers"); AMERICAN BUSINESS FINANCIAL SERVICES,
INC., a Delaware corporation ("Parent"); TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent for Lenders., and the Lender, if any,
executing this amendment.
Parent, Co-Borrowers, Administrative Agent, and certain lenders are
party to the Credit Agreement dated as of July 31, 1997 (as amended through the
date of this amendment, the "Credit Agreement"). Terms defined in the Credit
Agreement have the same meanings when used -- unless otherwise defined -- in
this amendment. This amendment is for the purpose described in Section 12.10(_)
of the Credit Agreement. Accordingly, for valuable and acknowledged
consideration, the parties to this amendment agree as follows:
[Alternate Provision]
1. Amendments. [Lender's name] 's Commitment has been fully terminated,
and it has been repaid in full the Obligation owed to it in accordance with the
Credit Agreement. Therefore (a) the Credit Agreement is amended to remove that
Lender as a party to the Credit Agreement, and (b) Schedule 2 to the Credit
Agreement is amended in its entirety in the form of -- and all references to
that schedule in the Credit Documents are changed to -- Amended Schedule 2
attached to this amendment.
[Alternate Provision]
1. Amendments. [Lender's name] 's Commitment has been reduced/increased
[select one]. Therefore, Schedule 2 to the Credit Agreement is amended in its
entirety in the form of -- and all references to that schedule in the Credit
Documents are changed to -- Amended Schedule 2 attached to this amendment.
[Alternate Provision]
1. Amendments. [Lender's name] has been added as a Lender under the
Credit Agreement. Accordingly, Schedule 2 to the Credit Agreement is amended in
its entirety in the form of -- and all references to that schedule in the Credit
Documents are changed to -- Amended Schedule 1.1(a) attached to this amendment.
2. Conditions Precedent. Paragraph 1 above is not effective until (a)
Administrative Agent receives counterparts of this amendment executed by the all
of the parties named below, (b) if this is an amendment under Section 12.10(b)
of the Credit Agreement, the Lender named in Paragraph 1 above receives a new
Warehouse Note in the amount of its Commitment, (c) for any officer of any
Company signing below on behalf of such Company but not included in certificates
of incumbency for such Company delivered to Administrative Agent before this
amendment, Administrative Agent receives a certificate of the secretary or
assistant secretary of such Company about the due incumbency of that officer,
and (d) if Administrative Agent reasonably requires, Administrative Agent
receives resolutions of the directors of each Company authorizing this amendment
certified as accurate and complete by the secretary or assistant secretary of
each such Company.
Exhibit G
3. Representations and Warranties. Each of Parent and each Co-Borrower
represents and warrants to Administrative Agent and Lenders that, as of the date
of this amendment and on the date of its execution (a) the representations and
warranties in the Credit Documents are true and correct in all material respects
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Credit
Documents, and (b) no Event of Default or Potential Default exists.
4. Ratification. Each of Parent and each Co-Borrower ratifies and
confirms (a) all provisions of the Credit Documents as amended by this amendment
and (b) that all guaranties, assurances, and Liens granted, conveyed, or
assigned to Administrative Agent or Lenders under the Credit Documents -- as
they may have been revised, extended, and amended -- continue to guarantee,
assure, and secure the full payment and performance of the Obligation
(including, without limitation, all amounts evidenced now or in the future by
any note delivered under this amendment).
5. Miscellaneous. All references in the Credit Documents to the "Credit
Agreement" are to the Credit Agreement as amended by this amendment. This
amendment is a "Credit Document" referred to in the Credit Agreement, and the
provisions relating to Credit Documents in the Credit Agreement are incorporated
in this amendment by reference. Except as specifically amended and modified in
this amendment, the Credit Agreement is unchanged and continues in full force
and effect. This amendment may be executed in any number of counterparts with
the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same
instrument. THIS AMENDMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. This amendment binds and inures
to Parent, each Co-Borrower, Administrative Agent, Lenders, and their respective
successors and permitted assigns.
EXECUTED as of the day and year first stated above.
(address) AMERICAN BUSINESS CREDIT, INC., as a
Co-Borrower
American Business Credit, Inc.
XxxxXxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000 By___________________________
Bala Xxxxxx, Xxxxxxxxxxxx 00000 Name: ____________________
Attn: Xxxxx X. Xxxxx Title:____________________
Chief Financial Officer
Tel: 610/000-0000
Fax: 610/000-0000
Exhibit G
(address)
HomeAmerican Credit, Inc. HOMEAMERICAN CREDIT, INC., as a Co-
BalaPointe Office Centre Borrower
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx By___________________________
Chief Financial Officer Name: ____________________
Title:____________________
Tel: 610/000-0000
Fax: 610/000-0000
(address)
American Business Leasing, Inc. AMERICAN BUSINESS LEASING, INC., as
BalaPointe Office Centre a Co-Borrower
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx By___________________________
Chief Financial Officer Name: ____________________
Title:____________________
Tel: 610/000-0000
Fax: 610/000-0000
American Business Financial AMERICAN BUSINESS FINANCIAL
Services, Inc. SERVICES, INC., as Parent
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 By___________________________
Attn: Xxxxx X. Xxxxx Name: ____________________
Chief Financial Officer Title:____________________
Tel: 610/000-0000
Fax: 610/000-0000
(address)
Texas Commerce Bank National Association TEXAS COMMERCE BANK NATIONAL
X.X. Xxx 000 ASSOCIATION, as Administrative Agent
Xxxxx, Xxxxx 00000-0000 and a Lender
Attn: Xxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000 By:__________________________________
Xxxxxx X. Xxxxxxx, Vice President
(Address) [LENDER]
_______________________
_______________________ By:____________________
_______________________ (Name): _______________
(Title):_______________
SCHEDULE 1
SEASONED LEASE EXCEPTIONS
See Attached
Schedule 2
SCHEDULE 2
LENDERS AND COMMITMENTS
================================================================================
Name of Lender Commitment
================================================================================
Texas Commerce Bank National Association $55,000,000
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Tel (000) 000-0000
Fax (000) 000-0000
(Wire Instructions)
Texas CommerceBank National Association
DDA# 00100381681
Attn.: Mortgage Warehousing
Ref. - American Business Financial Services
--------------------------------------------------------------------------------
The Bank of New York $15,000,000
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Dominus
Tel: (000) 000-0000
Fax: (000) 000-0000
(Wire Instructions)
Bank of New York
ABA# 000000000
Attn.: Commercial Loan Dept.
Ref. - American Business Financial Services
Warehouse Paydown
--------------------------------------------------------------------------------
CoreStates Bank $10,000,000
1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx D'Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(Wire Instructions)
CoreStates Bank, N.A.
ABA # 0000-000-0
Account Title: CoreStates Commercial Loan
Account Number: 0132-0452
Reference: American Business Financial Services
--------------------------------------------------------------------------------
Schedule 2
2
================================================================================
Name of Lender Commitment
================================================================================
Firstrust Bank $5,000,000
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(Wire Instructions)
Firstrust Savings bank PHILA
ABA # 000000000
Attn: Xxxxxx Xxxxxx
For Benefit of American Business Financial
Services
--------------------------------------------------------------------------------
National City Bank $15,000,000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(Wire Instructions)
National City Bank of kentucky
ABA # 000000000
Attn: Xxxxx Xxxxxx
Ref. - American Business Financial Services
--------------------------------------------------------------------------------
Total $100,000,000
================================================================================
Schedule 2
3
SCHEDULE 4.1
ELIGIBILITY CONDITIONS
A. Eligible-Mortgage Loan. A Mortgage Loan:
1. For which the applicable Wet Period has not expired if it supports a
Wet Borrowing.
2. The promissory note evidencing which (a) is the standard form approved
by VA, FHA, FNMA, or FHLMC or a form otherwise acceptable to
Administrative Agent, (b) has a maturity within 30 years of its
origination, (c) is payable or endorsed (without restriction or
limitation) to a Co-Borrower's order (the "applicable Co-Borrower"),
(d) is endorsed without recourse and in blank by the applicable
Co-Borrower, (e) is fully funded, and (f) to the best knowledge of the
Co-Borrowers, is valid and enforceable without offset, counterclaim,
defense, or right of rescission or avoidance of any kind other than for
valid payments made on it and any exceptions to enforceability under
Debtor Laws.
3. For which no default in the payment of principal or interest or any
other default has continued uncured for 60 days, no foreclosure or
other similar proceedings have commenced, and no claim for any credit,
allowance, or adjustment exists.
4. Which is secured by a mortgage, deed of trust, or trust deed that (a)
is the standard form approved by VA, FHA, FNMA, or FHLMC or a form
otherwise acceptable to Administrative Agent and (b) grants a first-
priority Lien (or second-priority Lien in the case of a Second-Lien
Borrowing) on residential-real property described below that will be
perfected upon recording.
5. For which the underlying residential-real property (a) consists of land
and (i) a one- to four-family dwelling, (ii) a condominium unit that is
ready for occupancy, (iii) a manufactured home unit that is permanently
attached to the underlying residential-real property, or (iv) a
residential building, a portion of which may be used for commercial
purposes, but not (v) a mobile home, a co-op, or a multi-family
dwelling for more than four families, (b) is, if required by Appraisal
Requirements, covered by an Appraisal, and (c) is insured against loss
or damage by fire and all other hazards normally included in
standard-extended-coverage insurance (including, without limitation,
flood insurance if the property is in a federally-designated-flood
plain) in accordance with the Collateral Documents for it and the
applicable Co-Borrower is named as a mortgagee for that insurance.
6. Which may or may not be covered by a valid and effective Take-Out
Commitment held by the applicable Co-Borrower (and if it is covered,
the Mortgage Loan conforms in all materials respects with all of the
requirements of that Take-Out Commitment).
7. The Collateral Documents for which (a) are delivered to Administrative
Agent within 270 days after the date of the related promissory note,
(b) are in compliance with all Governmental Requirements, (c) are
otherwise in compliance with the requirements of the Credit Documents
and otherwise in form and substance acceptable to Administrative Agent,
and (d) are subject to no Liens other than Lender Liens and other
Permitted Liens.
8. Which has not (and no Collateral Document for which has) been (except
in respect of reacquisition in connection with the collapse of a
proposed securitization) (a) sold to an investor or securitized and
repurchased by any Co-Borrower, (b) rejected by an investor or
re-acquired by a Co-Borrower from out of a securitization program, (c)
delivered
Schedule 4.1
9. to an investor or securitization custodian or any Person for them for
more than the Shipping Period, or (d) delivered to the applicable
Co-Borrower for correction for more than the Correction Period.
10. Which conforms to the applicable Co-Borrower's underwriting standards
in effect at that time.
11. Which has a maximum loan-to-value ratio of 90%.
12. Which has been held by the Administrative Agent as an Eligible-Mortgage
Loan for 270 days or less.
B. Eligible-Commercial Loan. A Commercial Loan:
1. For which the applicable Wet Period has not expired if it supports a
Wet Borrowing.
2. The promissory note evidencing which (a) is the standard form approved
by VA, FHA, FNMA, or FHLMC or a form otherwise acceptable to
Administrative Agent, (b) has a maturity within 15 years of its
origination, (c) is payable or endorsed (without restriction or
limitation) to the applicable Co-Borrower's order, (d) is endorsed
without recourse and in blank by the applicable Co-Borrower, (e) is
fully funded, and (f) to the best knowledge of the Co-Borrowers, is
valid and enforceable without offset, counterclaim, defense, or right
of rescission or avoidance of any kind other than for valid payments
made on it and any exceptions to enforceability under Debtor Laws.
3. For which no default in the payment of principal or interest or any
other default has continued uncured for 60 days, no foreclosure or
other similar proceedings have commenced, and no claim for any credit,
allowance, or adjustment exists.
4. Which is secured by a mortgage, deed of trust, or trust deed that (a)
is the standard form approved by VA, FHA, FNMA, or FHLMC or a form
otherwise acceptable to Administrative Agent and (b) grants a first-
priority Lien (or a second-priority Lien in the case of a Second-Lien
Borrowing) on commercial property described below that will be
perfected upon recording.
5. For which the underlying real property (a) consists of land and a
commercial building or structure, (b) is, if required by Appraisal
Requirements, covered by an Appraisal, and (c) is insured against loss
or damage by fire and all other hazards normally included in
standard-extended-coverage insurance (including, without limitation,
flood insurance if the property is in a federally-designated-flood
plain) in accordance with the Collateral Documents for it and the
applicable Co-Borrower is named as a mortgagee for that insurance.
6. Which may or may not be covered by a valid and effective Take-Out
Commitment held by the applicable Co-Borrower (and if it is covered,
the Commercial Loan conforms on all material respects with all of the
requirements of that Take-Out Commitment).
7. The Collateral Documents for which (a) are delivered to Administrative
Agent within 270 days after the date of the related promissory note,
(b) are in compliance with all Governmental Requirements, (c) are
otherwise in compliance with the requirements of the Credit Documents
and otherwise in form and substance acceptable to Administrative Agent,
and (d) are subject to no Liens other than Lender Liens and other
Permitted Liens.
8. Which has not (and no Collateral Document for which has) been (except
in respect of reacquisition in connection with the collapse of a
proposed securitization) (a) sold to an investor or securitized and
repurchased by any Co-Borrower, (b) rejected by an investor or
re-acquired by a Co-Borrower from and of a securitization program, (c)
delivered to an investor or securitization custodian or any Person for
it for
Schedule 4.1
more than the Shipping Period, or (d) delivered to the applicable
Co-Borrower for correction for more than the Correction Period.
9. Which has a maximum loan-to-value ratio of 90%.
10. Which has been held by Administrative Agent as an Eligible-Commercial
Loan for 270 days or less.
C. Eligible-Seasoned Loan. An otherwise Eligible-Mortgage Loan or
Eligible-Commercial Loan except either (a) the Mortgage Loan or Commercial Loan
has been included in the Borrowing Base for more than 270 days or (b) the
underlying promissory note was originated more than 270 days before being
included in the Borrowing Base.
D. Eligible Lease. A Lease:
1. Which may not support a Wet Borrowing.
2. The lease agreement evidencing which (a) is payable or assigned
(without restriction or limitation) to the applicable Co-Borrower's
order, (b) is assigned without recourse and in blank by the applicable
Co-Borrower, (c) has been duly authorized by a bona fide, legally
competent lessee (or representative of such lessee), (d) has been
underwritten in accordance with the Co-Borrowers' standard underwriting
guidelines for Leases as disclosed to Administrative Agent from time to
time, (e) is executed as a single original, which original is delivered
to Administrative Agent (i.e. no multiple counterparts of the Lease
have been executed), (f) if copies are made of the Lease, each such
copy is clearly stamped as a "Copy," (g) is accompanied by a listing of
the machinery or equipment covered by the Lease, and (h) to the best
knowledge of the Co-Borrowers, is valid and enforceable without offset,
counterclaim, defense, or right of rescission or avoidance of any kind
other than for valid payments made on it and any exceptions to
enforceability under Debtor Laws.
3. For which no default in payment of lease payments or any other default
has continued uncured for 60 days, no collection or other similar
proceedings have commenced, and no claim for any credit, allowance, or
adjustment exists.
4. Which is secured by a security or pledge agreement (which may be part
of the lease agreement itself) that (a) is in a form acceptable to
Administrative Agent and (b) grants a first-priority Lien (to the
extent the Lease is construed as a financing for which a security
interest is required to reflect the applicable Co-Borrower's interest
in the machinery or equipment) on business machinery and equipment
leased to commercial and industrial customers located in the
continental United States that will be perfected upon recording of a
UCC financing statement (which may be a notice filing for leased
machinery and equipment as permitted under the UCC).
5. For which the underlying business machinery and equipment is insured
against loss or damage in accordance with the Collateral Documents for
it and the applicable Co-Borrower is named as a mortgagee for that
insurance.
6. For which all sums of money previously paid by any lessee as advance
rentals or deposit of security shall have been fully disclosed to
Administrative Agent.
7. The Collateral Documents for which (a) are delivered to Administrative
Agent within 270 days after the date of the related lease agreement,
(b) are in compliance with all Governmental Requirements, (c) are
otherwise in compliance with the requirements of the Credit Documents
and otherwise in form and substance acceptable to Administrative Agent,
and (d) are subject to no Liens other than Lender Liens and other
Permitted Liens.
3
Schedule 4.1
8. Which has not (and no Collateral Document for which has) been (except
in respect of reacquisition in connection with the collapse of a
proposed securitization) (a) sold to an investor or securitized and
repurchased by any Co-Borrower, (b) rejected by an investor or
re-acquired by a Co-Borrower from out of a securitization program, (c)
delivered to an investor or securitization custodian or any Person for
them for more than the Shipping Period, or (d) delivered to the
applicable Co-Borrower for correction for more than the Correction
Period.
9. Which has been held by Administrative Agent as an Eligible Lease for
270 days or less.
E. Eligible Seasoned-Lease. An otherwise Eligible Lease except either (a) the
Lease has been included in the Borrowing Base for more than 270 days, or (b) the
underlying lease contract was originated more than 270 days before being
included in the Borrowing Base.
Schedule 4.1
4
SCHEDULE 4.3
COLLATERAL PROCEDURES
A. Mortgage Loan or Commercial Loan for Dry Borrowing. Delivery of a
Mortgage Loan or Commercial Loan to support a Dry Borrowing requires
delivery to Administrative Agent of the following Collateral Documents
(each of which must be in form and substance satisfactory to
Administrative Agent) in the following manner:
1. A Collateral-Delivery Notice that, among other things,
identifies the documents being delivered to Administrative
Agent for that Dry Borrowing.
2. The original promissory note evidencing the Mortgage Loan or
Commercial Loan, properly payable or endorsed to a Co-Borrower
(the "applicable Co-Borrower") and endorsed in blank by the
applicable Co-Borrower.
3. An assignment from the applicable Co-Borrower of the mortgage,
deed of trust, or trust deed securing the Mortgage Loan or
Commercial Loan, executed in blank by the applicable Co-
Borrower, and in recordable form (which Administrative Agent
may complete and file at its discretion).
4. A certified copy of each intervening assignment to the
applicable Co-Borrower of that mortgage, deed of trust, or
trust deed sent for recording and copies of all previous
intervening assignments.
5. A certified copy of that original mortgage, deed of trust, or
trust deed sent for recording in the jurisdiction where the
property is located.
6. Although it is not any Co-Borrower's current practice, if
obtained either (a) a Take-Out Commitment specifically
designating that Mortgage Loan or Commercial Loan for purchase
or (b) a Take-Out Commitment with the take-out prices
indicated (unless a master Take-Out Commitment has already
been delivered to, and is on file with, Administrative Agent).
7. Evidence acceptable to Administrative Agent of the initiation
of the wire transfer or check for originating the Mortgage
Loan or Commercial Loan.
8. A copy of the first and last page of the Appraisal.
9. A data-processing print-out reflecting that Mortgage Loan's or
Commercial Loan's loan number, mortgagor, origination date,
original amount, outstanding-principal balance, interest rate,
type of loan, and requested advance amount.
10. Any and all other files, documents, instruments, certificates,
correspondence, or other records that are (a) requested by
Administrative Agent and (b) deemed by Administrative Agent in
its sole judgment to be necessary, appropriate, or desirable.
B. Mortgage Loan or Commercial Loan for Wet Borrowing. Delivery of a
Mortgage Loan or Commercial Loan to support a Wet Borrowing requires
delivery to Administrative Agent of the following Collateral Documents
(each of which must be in form and substance satisfactory to
Administrative Agent) in the following manner:
Schedule 4.3
1. A Collateral-Delivery Notice that, among other things,
identifies the documents that must be delivered to
Administrative Agent before the expiration of the Wet Period
for that Wet Borrowing.
2. Evidence acceptable to Administrative Agent of the initiation
of the wire transfer or check for originating the Mortgage
Loan or Commercial Loan.
3. A data-processing print-out reflecting that Mortgage Loan's or
Commercial Loan's loan number, mortgagor's name, property
address, origination date, original amount,
outstanding-principal balance, interest rate, type of loan,
and requested advance amount.
4. Although it is not any Co-Borrower's current practice, if
obtained a Take-Out Commitment covering that Mortgage Loan or
Commercial Loan.
C. Lease for Dry Borrowing. Delivery of a Lease to support a Dry Borrowing
requires delivery to Administrative Agent of the following Collateral
Documents (each of which must be in form and substance satisfactory to
Administrative Agent) in the following manner:
1. The original executed Lease.
2. An original assignment of the Lease in blank, plus any
intervening assignments, if applicable.
3. A data-processing print-out reflecting that Lease's number,
lessee, origination date, original amount, outstanding
receivable (net of unearned discount), interest rate, type of
lease, and requested advance amount.
4. A copy of the delivery and acceptance certificate evidencing
that the equipment covered by the Lease has been delivered and
installed, and accepted by the lessee in good working order.
5. A certified copy of a UCC-1 financing statement sent for
recording reflecting a Co-Borrower as the secured party with
respect to the underlying machinery or equipment, acknowledged
copies of which will be promptly delivered to Administrative
Agent upon their return from the appropriate filing office,
any intervening assignments of such UCC-1 financing
statements, and a UCC-3 financing statement in recordable form
executed by the applicable Co-Borrower evidencing the
assignment of the UCC-1 financing statement to Administrative
Agent for the benefit of the Lenders(which Administrative
Agent may file at its discretion).
6. If the personal property being leased is located in a
jurisdiction for which a UCC-1 financing statement executed by
American Business Leasing, Inc. as debtor, in favor of
Administrative Agent, as secured party, and covering the
personal property subject to the Lease, has not been properly
recorded, an original UCC-1 financing statement in the form of
Exhibit C-2 attached hereto
7. Any and all other files, documents, instruments, certificates,
correspondence, or other records that are (a) requested by
Administrative Agent and (b) deemed by Administrative Agent in
its sole judgment to be necessary, appropriate, or desirable.
Schedule 4.3
2
SCHEDULE 5
CLOSING CONDITIONS
Unless otherwise specified, all dated as of
the Closing Date or a date (a "Current Date")
within 30 days before the Closing Date.
H&B [1.] CREDIT AGREEMENT (the "Credit Agreement") among Co-Borrowers,
Parent, certain lenders ("Lenders"), and Administrative Agent all the
terms in which have the same meanings when used in this schedule --
accompanied by:
Schedule 1 - Seasoned Lease Exceptions
Schedule 2 - Lenders and Commitments
Schedule 4.1 - Eligibility Conditions
Schedule 4.3 - Collateral Procedures
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Schedule 8.14 - Servicing Agreements
Exhibit A-1 - Warehouse Note
Exhibit A-2 - Swing Note
Exhibit B - Guaranty
Exhibit C-1 - Security Agreement
Exhibit C-2 - Financing Statement
Exhibit C-3 - Shipping Request
Exhibit C-4 - Bailee Letter for Investors
Exhibit C-5 - Trust Receipt and Agreement
Exhibit C-6 - Release Request
Exhibit D-1 - Borrowing Request
Exhibit D-2 - Collateral-Delivery Notice
Exhibit D-3 - Borrowing-Base Report
Exhibit D-4 - Compliance Certificate
Exhibit D-5 - Acquisition-Compliance Certificate
Exhibit E - Opinion of Counsel
Exhibit F - Assignment and Assumption Agreement
Exhibit G - Amendment to Credit Agreement
H&B [2.] WAREHOUSE NOTES in the following original principal amounts,
executed by Co-Borrowers, payable to the order of the following
Lenders, and in substantially the form of Exhibit A-1 to the Credit
Agreement:
Texas Commerce Bank National Association - $55,000,000
The Bank of New York - $15,000,000
CoreStates Bank - $10,000,000
FirstTrust Bank - $ 5,000,000
National City Bank - $15,000,000
H&B [3.] SWING NOTE in the original principal amount of $30,000,000,
executed by Co-Borrowers, payable to the order of Administrative Agent,
and in substantially the form of Exhibit A-2 to the Credit Agreement.
Schedule 5
H&B [4.] GUARANTY executed by AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
as Guarantor, accepted by Administrative Agent, and in substantially
the form of Exhibit B to the Credit Agreement.
H&B [5.] SECURITY AGREEMENT executed by Co-Borrowers as debtors and
Administrative Agent as secured party, and in substantially the form of
Exhibit C-1 to the Credit Agreement.
H&B [6.] FINANCING STATEMENTS executed by Co-Borrowers as debtors and
Administrative Agent as secured party, for filing with the following
UCC filing offices, and in substantially the form of Exhibit C-2 to the
Credit Agreement:
================================================================================
Name Jurisdiction Number Date
================================================================================
American Business Credit, Inc. Pennsylvania
--------------------------------------------------------------------------------
Xxxxxxxxxx
County, PA
--------------------------------------------------------------------------------
HomeAmerican Credit, Inc.,
d/b/a Upland Mortgage Pennsylvania
--------------------------------------------------------------------------------
Xxxxxxxxxx
County, PA
--------------------------------------------------------------------------------
American Business Leasing, Inc.
================================================================================
H&B [7.] UCC SEARCH REPORTS for financing statements filed against
Co-Borrowers as debtors with the following UCC filing offices as of the
indicated dates:
====================================================================================================================================
Name Jurisdiction Search File Number File Date Description
Date
====================================================================================================================================
American Business Financial Delaware 07/02/97 N/A N/A No UCC Statements , Federal Tax Liens,
Services, Inc. and EPA/ERISA Liens on file.
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania 06/30/97 22980252 03/31/94 Specific leased equipment.
(Advanta
Leasing Corp.)
------------------------------------------------------------------------------------------------------------------------------------
American Business Credit, Pennsylvania 06/30/97 24310109 05/22/95 All right, title and interest of Debtor under
Inc. (The Chase that certain Sales and Contribution
Manhattan Agreement dated March 31, 1995.
Bank, N.A.)
------------------------------------------------------------------------------------------------------------------------------------
American Business Credit, Pennsylvania 06/30/97 24840969 11/08/95 All right, title and interest of Debtor under
Inc. (The Chase that certain Sale and Distribution
Manhattan Agreement dated October 1, 1995.
Bank, N.A.) Amendment filed on 01/25/96.
------------------------------------------------------------------------------------------------------------------------------------
25240166 03/08/96 All rents and other payments due under Rent
(The CIT Group Agreement dated August 1, 1995.
/ Equipment
Financing , Inc.
------------------------------------------------------------------------------------------------------------------------------------
Schedule 5
2
====================================================================================================================================
Name Jurisdiction Search File Number File Date Description
Date
====================================================================================================================================
25351288 04/15/96 Inventory, documents of title, accounts,
(CoreStates general intangibles, chattel paper,
Bank, N.A.) instruments, guarantees, goods in services,
equipment, deposit accounts, and proceeds
of the foregoing.
------------------------------------------------------------------------------------------------------------------------------------
25351421 04/15/96 All accounts, chattel paper, contract rights,
(Meridian Bank) documents, general intangibles and
inventory. All rights, title and interest,
powers and privileges and other benefits
under all Mortgages and Mortgage Notes.
------------------------------------------------------------------------------------------------------------------------------------
25471199 05/20/96 All right, title and interest of Debtor under
(ABFS 1996-1, that certain Sale and Distribution Agreement
Inc.) dated May 9, 1996.
------------------------------------------------------------------------------------------------------------------------------------
26290387 01/21/97 Receivables, notes, mortgages, deeds of
(FINOVA trust, security agreements, chattel
Capital mortgages, financing statements, guaranties,
Corporation) title insurance policies, surveys, bonds,
insurance policies, files, surveys,
certificates, correspondence, appraisals,
computer programs, tapes, discs, contract
rights, accounts, general intangibles, and
books and records of Debtor.
------------------------------------------------------------------------------------------------------------------------------------
HomeAmerican Credit, Inc. Pennsylvania 06/30/97 24310116 05/22/95 All right, title and interest of Debtor under
(The Chase that certain Sale and Distribution Agreement
Manhattan dated March 31, 1995.
Bank, N.A.)
------------------------------------------------------------------------------------------------------------------------------------
24840963 11/08/95 All right, title and interest of Debtor
under (The Chase that certain Sale and
Distribution Manhattan Agreement dated
October 1, 1995. Bank, N.A.) Amendment filed
on 01/25/96.
------------------------------------------------------------------------------------------------------------------------------------
HomeAmerican Credit, Inc. Pennsylvania 06/30/97 25471192 05/20/96 All right, title and interest of Debtor
(ABFS 1996-1, under that certain Sale and Distribution
Inc.) Agreement dated May 1, 1996.
------------------------------------------------------------------------------------------------------------------------------------
25531141 06/07/96 Mortgage Notes, Mortgages, general
(BankAmerica intangibles, money, securities, deposit
Business Credit, accounts, all books, records, and proceeds
Inc.) of the foregoing.
------------------------------------------------------------------------------------------------------------------------------------
Upland Mortgage Pennsylvania 06/30/97 N/A N/A No UCC Statements on file.
------------------------------------------------------------------------------------------------------------------------------------
American Business Leasing, Pennsylvania 06/30/97 25351291 04/15/96 Inventory, documents of title, accounts,
Inc. (CoreStates general intangibles, chattel paper,
Bank, N.A.) instruments, guarantees, goods in services,
equipment, deposit accounts, and proceeds
of the foregoing.
------------------------------------------------------------------------------------------------------------------------------------
25370470 04/18/96 All chattel paper, inventory, equipment,
(Advanta general intangibles, documents, accounts,
Business and instruments associated with all leases
Services, Inc.) of personal property.
====================================================================================================================================
H&B [8.] TERMINATIONS OR AMENDMENTS OF FINANCING STATEMENTS reflected in
the UCC Search Reports described above that, in the judgment of Agent
and its special counsel, conflict with
Schedule 5
3
the priority of the Lender Liens contemplated by the Credit Documents,
each executed by the appropriate secured party and (if necessary)
debtor, and in form acceptable to Agent for filing with the applicable
UCC filing offices.
================================================================================================================
Debtor Secured Party Jurisdiction File Number File Date Termination Date
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxx Xxxxxxxx XxxxXxxxxx Bank, N.A. Pennsylvania 25351288 04/15/96
Credit, Inc.
----------------------------------------------------------------------------------------------------------------
American Business Meridian Bank Pennsylvania 25351421 04/15/96
Credit, Inc.
----------------------------------------------------------------------------------------------------------------
American Business CoreStates Bank, N.A. Pennsylvania 25351291 04/15/96
Leasing, Inc.
================================================================================================================
Agent [9.] AGREEMENT between ABL and Administrative Agent regarding
calculation of net present value in clause (c)(ii) of the definition
of "Borrowing Base."
Agent [10.] ADMINISTRATIVE AGENT AND CUSTODIAL FEE AGREEMENT.
ABFS [11.] OFFICERS' CERTIFICATE for ABC, executed by the President and
Secretary of ABC as to (a) the due incumbency of its officers
authorized to execute or attest to the Credit Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Credit Documents, (c) its bylaws, and (d) its
corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Corporate Charter
ABFS [12.] OFFICERS' CERTIFICATE for HAC, executed by the President and
Secretary of HAC as to (a) the due incumbency of its officers
authorized to execute or attest to the Credit Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Credit Documents, (c) its bylaws, and (d) its
corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Corporate Charter
ABFS [13.] OFFICERS' CERTIFICATE for ABL, executed by the President and
Secretary of ABL as to (a) the due incumbency of its officers
authorized to execute or attest to the Credit Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Credit Documents, (c) its bylaws, and (d) its
corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Corporate Charter
ABFS [14.] OFFICERS' CERTIFICATE for Parent, executed by the President
and Secretary of Parent as to (a) the due incumbency of its officers
authorized to execute or attest to the Credit Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Credit Documents, (c) its bylaws, and (d) its
corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Corporate Charter
Schedule 5
4
H&B [15.] CERTIFICATES OF QUALIFICATION, GOOD STANDING, AND AUTHORITY
for the following Persons, issued as of indicated dates by the
appropriate Governmental Authorities for the following
jurisdictions:
===============================================================================================================
Company Name Jurisdiction Type Certificate Date of Certificates
===============================================================================================================
American Business Financial Delaware Existence/Good Standing 07/10/97
Services, Inc.
---------------------------------------------------------------------------------------------------------------
Pennsylvania Subsistence 07/10/97
---------------------------------------------------------------------------------------------------------------
American Business Credit, Inc. Pennsylvania Subsistence 07/10/97
---------------------------------------------------------------------------------------------------------------
HomeAmerican Credit, Inc. Pennsylvania Subsistence 07/10/97
---------------------------------------------------------------------------------------------------------------
American Business Leasing, Pennsylvania Subsistence 07/10/97
Inc.
===============================================================================================================
H&B [16.] ARTICLES OF INCORPORATION for ABC, certified as of
______________, by the Pennsylvania Secretary of State.
H&B [17.] ARTICLES OF INCORPORATION for HAC, certified as of
_____________, by the Pennsylvania Secretary of State.
H&B [18.] ARTICLES OF INCORPORATION for ABL, certified as of
______________, by the Pennsylvania Secretary of State.
H&B [19.] CERTIFICATE OF INCORPORATION for Parent, certified as of
________________, by the Delaware Secretary of State.
ABFS [20.] COPIES of Subordinated Debt documents, certified as true and
correct by a Responsible Officer of Parent or the applicable
Co-Borrower.
ABFS [21.] OPINION of counsel to Parent and Co-Borrowers acceptable to
Administrative Agent, addressed to Administrative Agent and Lenders,
and addressing the matters described on Exhibit E to the Credit
Agreement.
[22.] Any other documents and items that Administrative Agent or any
Lender may reasonably request.
Schedule 5
5
SCHEDULE 6.2
====================================================================================================================================
State of States Trade Names Still
COMPANIES Incorporation/ Qualified as Used in Using Chief Executive Other Principal
Name/Ownership Organization Foreign Corp. Last Four Name? Offices Offices
Months Y/N
====================================================================================================================================
N/A N/A 103 Springer Building 111 Presidential Blvd.,
American Business Financial Delaware Arizona 0000 Xxxxxxxxxx Xxxx Xxxxx 000
Services, Inc. Florida Xxxxxxxxxx, XX 00000 Xxxx Xxxxxx, XX 00000
Pennsylvania
-------------------------------------------------------------------------------------------------------------------------------
American Business Credit, Pennsylvania Connecticut N/A N/A BalaPointe Office Centre Same
Inc. - Delaware 000 Xxxxxxxxxxxx Xxxxxxxxx,
Xxxxxxx Suite 215
100% Owned by Parent Xxxxxxx Xxxx Xxxxxx, XX 00000
New Jersey
New York
North Carolina
Pennsylvania
South Carolina
Virginia
------------------------------------------------------------------------------------------------------------------------------------
Schedule 6.2
====================================================================================================================================
State of States Trade Names Still
COMPANIES Incorporation/ Qualified as Used in Using Chief Executive Other Principal
Name/Ownership Organization Foreign Corp. Last Four Name? Offices Offices
Months Y/N
====================================================================================================================================
HomeAmerican Credit, Inc. - Pennsylvania Connecticut Upland Y BalaPointe Office Centre Same
Delaware Mortgage 000 Xxxxxxxxxxxx Xxxxxxxxx,
100% Owned by ABC Florida Suite 215
Xxxxxxx Xxxx Cynwyd, PA 19004
Indiana
Kentucky
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
New Hampshire
New Jersey
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Vermont
Virginia
West Virginia
American Business Leasing, Pennsylvania N/A N/A N/A BalaPointe Office Centre Same
Inc. - 000 Xxxxxxxxxxxx Xxxxxxxxx,
Xxxxx 000
100% Owned by ABC Xxxx Xxxxxx, XX 00000
===================================================================================================================
Direct or Indirect additional subsidiaries of Parent:
Processing Service Center, Inc.
HomeAmerican Consumer Discount Company
ABC Holdings Corp.
American Business Finance Corp.
Schedule 6.2
2
SCHEDULE 6.9
LITIGATION AND JUDGMENTS
LITIGATION
None.
JUDGMENTS
None.
Schedule 6.9
SCHEDULE 6.10
AFFILIATE TRANSACTIONS
See Attached
Schedule 6.10
